The Netherlands Market Overview
-Food Industry Day-
27th November 2008
Presentation Outline
Market Overview
The Dutch Consumer
Retailing
Foodservice
Entering the Dutch Market
Bord Bia Programmes ‘09
Demographics
•
With a population of 16.4 million, and a
land area of just 41,526 sq km, the
Netherlands has the highest population
density in Europe.
•
The highest population density is within
a 50km catchment area that includes
Amsterdam, The Hague and Rotterdam;
the Ranstad.
•
7.1 million households
•
68% of households are of 2 person or
less
Dutch Economy
• The Dutch economy had been performing well until recently,
although the long term effects of the global financial crisis
remain to be seen.
• Measures of performance:
– 7.5m Labour force
– Unemployment [2.6% - July 2008]
– Inflation: [+2.8%]
– GDP: [€481b]
– GDP growth: [+2.15%]
Source: Euromonitor/cbs.nl
Effects of the Economic Downturn?
• Falling Consumer
Confidence
• Renewed Focus on Price?
20
10
0
-10
• Pressure on Retailer Margins
-20
due to food inflation
-30
• Rationalisation programmes
– C1000
2007
-40
J
F
M
A
M
J
J
A
2008
S
O
N
D
J
F
M
A
M
Consumer Confidence Index
Source: CBS
J
J
A
S
Irish Exports
+8%
2006
180
2007
160
140
-9%
120
€m
+1.1%
100
80
60
40
-47%
20
+12%
0
Meat
Dairy
Seafood
Consumer
Foods
Beverages
Irish Food & Drink exports registered a steady performance in 2007
Total value of €374m, a 6% increase on 2006
Meat: €173.6m; Dairy: €80.3m; Consumer Foods: €33.3m; Drinks: €9.2m
- The Dutch Consumer -
Key Lifestyle Trends
Time pressure impacting eating & shopping habits among young Dutch
•
Young Dutch consumers (18-34) are leading busy lives and food preparation time is limited.
•
They like foods that are easy to prepare and are more favourable to meal components and
convenience meals than older Dutch.
Marketing of foods as fresh offers competitive advantage
•
Dutch consumers are very interested in fresh produce.
•
They have a strong preference for fresh over frozen meals and see fresh as very important
on a label.
Competitive Prices.
•
Price is very important to the Dutch consumer.
“The Dutch seek out promotional offers, they’ll look for the best value for money within
store, quality isn’t as important as price.”
Source; PERIscope, 2008
Key Lifestyle Trends
Time saving/convenience products
•
Six in ten 18-34 year olds claim they rarely have time for breakfast – which may represent an
opportunity to market convenience breakfast or on the go breakfast options to this age group.
•
Younger Dutch consumers are looking for easy to cook and prepare options.
•
Older Dutch are more likely to make an extra effort for meals and have good cooking skills more sophisticated meal components may appeal to this group.
Low involvement in local foods and high interest in new foods may make it easier to break into the
Dutch market.
•
Dutch consumers lack of interest in local produce and in country of origin may make it easier to
launch Irish products.
•
Irish products that offers convenience and freshness will resonate well with Dutch consumers
who are particularly interested in new foods.
Source; PERIscope, 2008
Consumer
Trends
Price Conscious …
• The average food spend on a evening meal for 4 is
€6.80 (source Albert Heijn)
Shopping Patterns …
• Many Dutch customers travel to the supermarket by
bicycle, so bulk buying is not so prevalent
• Small houses and therefore kitchens - not everyone
has room for a chest freezer
Lifestyles ….
• Number of working women and smaller households are
increasing
• Driving demand for easy to prepare meal solutions
- Retailing in the Netherlands-
General Observations
Supermarketchannel
channel
Supermarket
consumersales:
sales:€€30.5
30.5billion
billion
••consumer
sharefresh
freshfood:
food:48%
48%
- -share
numberofofstores:
stores:4.700
4.700
••number
privatelabel
labelshare:
share:24%*
24%*
••private
discountershare:
share:17.9%
17.9%(Aldi
(Aldi8.9%
8.9%/ /Lidl
Lidl4.5%)
4.5%)
••discounter
averagesales
salesarea
areaper
perstore:
store:730
730sq
sqmm
••average
grossmargin:
margin:20%
20%
••gross
netmargin:
margin:2%
2%
••net
•
•
•
•
•
Very dense retail environment
Distinction between different retailers is relatively limited, hence the intense
focus on price
Price war started by Albert Heijn (end of 2003) to provoke shake-up in the
Dutch retail scene – Super de Boer biggest casualty.
Price wars have since eased in intensity – but price remains an important
tool for promotion.
Renewed emphasis on price due to economic climate?
Source: Retail Insights/Deloitte
Retail Developments in 2008
•
Ahold sells its 73% stake in Schuitema – acquires 58 C1000 stores for
rebranding.
•
C1000 rationalisation programme – 20% of jobs to go
•
Growth of Superunie through addition of soft discounter Ko-op Consult,
reaching a combined market share of approx 35%
•
Jumbo’s rapid growth coming to a halt
•
Margins coming under pressure
Retail Spending
•
Grocery retail market was worth €28.3 billion
in 2007 (Foodstep)
35
34
•
Food and drink accounts for an estimated
€23.8 billion of this spend
Food accounts for 15.2% of total
household expenditure (Deloitte)
•
Grocery spend in 2008
is forecasted at €30.3 billion (GfK)
Grocery Retail Market €billion
33
•
32
31
30.3
30
29
28
28.3
27.2
27
26
25
24
23
22
21
20
2006
2007
2008e
Market Shares
Hoogvliet
2%
Spar
2%
Other
9%
Dekamarkt
2%
Sligro Retail
2%
Albert Heijn
29%
Co-op Codis
2%
Albert Heijn
C1000
Aldi
Super de Boer
Plus
Jumbo
Ko-op Consult
5%
LIDL
Ko-op Consult
Co-op Codis
LIDL
5%
Jumbo
6%
C1000
14%
Plus
6%
Super de Boer
7%
Sligro Retail
Dekamarkt
Hoogvliet
Spar
Other
Aldi
9%
Jumbo, Plus and Ko-op Consult belong to Superunie, which has a
combined market share of around 35%
Source: Deloitte
Who’s who in Retailing
•
Top 5 retailers accounting for almost 65%
of the market
•
Select number of retail chains have
nationwide presence
– Albert Heijn, C1000 & discounters
•
Strict planning legislation has slowed
growth of larger out of town store formats
•
No general prohibition on below-cost
pricing, although the government has
promised an agency to monitor predatory
pricing.
# 1 Albert Heijn
# 2 Superunie
# 3 Schuitema/C1000
# 4 Discounters
#5 Super de Boer
Retail Market
Segmentation
Relatively low
cost
Bas v.d. Heijden
Jan Linders
Nettorama
Aldi
Poiesz
Digros
Dirk v.d. Broek
Jumbo
Lidl
Middle-market
Price
Relatively
low service
Vomar
Deen Hoogvliet
C1000 BoniPlus
Golf
Em-Té
Coop
Relatively high
service
Albert Heijn
Service
Super de Boer
Relatively high
cost
# 1 Albert Heijn
••
MarketLeader
Leaderwith
with30%
30%market
marketshare
share
Market
Ownedby
byAhold
Ahold
•• Owned
MemberofofAMS-Sourcing
AMS-Sourcing(Euro-shopper)
(Euro-shopper)
•• Member
800stores
storesplus,
plus,ininvariety
varietyofofstore
storeformats:
formats:
•• 800
AH,XL,
XL,To
ToGo
Go
AH,
58larger
largerC1000
C1000Stores
Storesacquired
acquiredas
aspart
partofof
•• 58
Ahold’ssale
saleofofSchuitema,
Schuitema,increasing
increasingmarket
market
Ahold’s
shareby
byup
upto
to5%
5%
share
Albert Heijn cont...
Strongfocus
focuson
onPrivate
PrivateLabel
Label(differentiation
(differentiation&&margin
margingeneration)
generation)––accounts
accountsfor
forapprox.
approx.50%
50%ofof
- -Strong
range. Actively
Activelypromotes
promotesPL
PLrange
rangeas
asalternative
alternativetotoA-brand
A-brandequivalents,
equivalents,eg:
eg:blind
blindtaste
tastetests.
tests.
range.
Widediversity
diversityA-brands
A-brandsused
usedtotostrengthen
strengthenprice
priceimage.
image.
- -Wide
Challengefor
forsuppliers
suppliersisistotooffer
offer‘unique’
‘unique’products,
products,strong
strongbrands
brandsororproducts
productswhich
whichcannot
cannoteasily
easilyby
by
- -Challenge
offeredininaaprivate
privatelabel
labelversion
version
offered
Aholdowns
ownsthe
theGall
Gall&&Gall
Galloff-sales
off-saleschain
chain
- -Ahold
Storeshave
havehistorically
historicallyoffered
offeredaahigh
highlevel
levelofofservice
serviceand
andquality
qualitywith
withprices
pricesatatthe
theupper
upperend
endofofthe
the
- -Stores
market
market
Extensiveprivate
privatelabel
labelininstores
storesincluding
includingpremium
premiumrange
range‘Excellent’
‘Excellent’
- -Extensive
Pioneeringnew
newstore
storeformats
formatsand
andscanning/payment
scanning/paymenttechnologies
technologies
- -Pioneering
# 2 Superunie
€8.1billion
billioncombined
combinedturnover
turnoverinin2007
2007
•• €8.1
Purchasingorganization
organizationfor
for16
16supermarket
supermarketchains,
chains,with
withthe
theaddition
additionofofKoop
KoopConsult
ConsultininJuly
July
•• Purchasing
Combinedmarket
marketshare
shareofofapprox
approx35%
35%with
withthe
theaddition
additionofofKoop
KoopConsult
Consult
•• Combined
Accountmanagement
managementrequires
requirescontact
contactboth
bothatatSuperunie
SuperunieHQ
HQlevel
leveland
andwith
withindividual
individualmembers
members
•• Account
85%ofofall
allproduct
productlines
linesare
arepurchased
purchasedcentrally
centrallyby
bySuperunie
Superunie
•• 85%
PartofofEMD
EMDpurchasing
purchasinggroup
group
•• Part
Formidableplayer
player––‘togetherness
‘togethernesswins’
wins’
•• Formidable
Superunie cont...
Privatelabel:
label:Perfekt,
Perfekt,O’Lacy,
O’Lacy,Plus,
Plus,Markant
MarkantMerk
Merk&&premium
premiumPL
PLbrands.
brands.
Private
Strongfocus
focuson
onbuying
buyingprice
price
•• Strong
Economyofofscale
scale––members
members(often
(oftenlocal
localstore
storechains)
chains)benefit
benefitfrom
fromsimilar
similar
•• Economy
tradeterms
termsas
asbigger
biggerplayers
playerssuch
suchas
asAlbert
AlbertHeijn.
Heijn.
trade
Able&&ready
readytotocounter
counteraggressive
aggressivepricing
pricingby
byAH
AH
•• Able
Able&&ready
readytotoconfront
confronteven
evenmajor
majorsuppliers
suppliers(e.g.
(e.g.boycotts
boycottsofofkey
keySKU’s)
SKU’s)
•• Able
Jumbo in Amstelveen
Successfuland
andrapidly
rapidlygrowing
growingmember
memberofofSuperunie
Superunie
••Successful
Currentlythe
the66ththlargest
largestindividual
individualretailer
retailerininits
itsown
own right
rightwith
withaa
••Currently
marketshare
shareofof5.9%,
5.9%,up
upfrom
from4.2%
4.2%inin2007
2007(Deloitte)
(Deloitte)
market
Significantcapital
capitalinvestment
investmentininnew
newCDC
CDCand
andstore
storeexpansion
expansion
••Significant
Jumbo’s current strategy includes:
•
•
•
Every Day Low Prices – ranked #1 by GfK for
price/service ratio
Aggressive Growth:
Quality in fresh products
45 stores (’04)
High levels of customer service.
98 stores (’06)
114 stores (’07)
118 Stores (Current)
Jumbo Turnover:
2002: €413 mln
2003: €616 mln
2004: €735 mln
2005: €811 mln
2006: €972 mln
2007: €1264 mln
Source: Retail Analysis photo gallery
Lower Price
Higher
Service
Level
Lower
Service
Level
Higher Price
Jumbo Ranks #1 in Price-Service ratio (Source: GfK)
# 3 C1000
Totalofof387
387stores
storesnationwide
nationwide(450
(450inin
••Total
2007)
2007)
Thecompany
companyowns
ownssupermarkets
supermarketsand
and
••The
provideswholesale
wholesaleservices
servicesto
to
provides
independentand
andassociated
associatedretailers
retailers
independent
operatingunder
underthe
theC1000
C1000trade
tradename.
name.
operating
Focuson
onFresh
Fresh––often
oftensells
sellsmeat
meatas
as
••Focus
“lossleader”
leader”
“loss
Changes at C1000
SchuitemaN.V
N.Vwas
waspreviously
previously73.2%
73.2%owned
ownedby
byAhold,
Ahold,with
withthe
the
•• Schuitema
remaining26.8%
26.8%held
heldby
byC1000
C1000store
storeowners.
owners.
remaining
§§
InFebruary
February2008,
2008,Ahold
Aholdsold
soldits
itsstake
stakeininSchuitema
Schuitemato
toCVC
CVCCapital
Capital
In
Partners,and
andacquired
acquired58
58Schuitema
Schuitemastores
storesas
aspart
partofofthe
thedeal.
deal.
Partners,
Reducedturnover
turnoverby
by15%.
15%.
Reduced
§§
C1000had
hadaamarket
marketshare
shareof
of14.5%
14.5%inin2007,
2007,but
butthis
thisshould
shoulddrop
dropto
to
C1000
around10%-12%
10%-12%with
withAhold’s
Ahold’sacquisition
acquisitionofofthe
the58
58stores
stores
around
Currentlyconsidering
consideringrationalisation
rationalisationprogramme,
programme,including
including20%
20%staff
staff
•• Currently
reduction,as
asresult
resultofofturnover
turnoverloss
lossand
andcurrent
currentmarket
marketconditions.
conditions.
reduction,
# 4 Discounters
HardDiscounters
Discounters
Hard
Aldi&&Lidl
Lidl––14.4%
14.4%combined
combinedmarket
marketshare
share
•• Aldi
Increasinglyplaying
playingthe
therole
roleofofaaservice
servicesupermarket
supermarket
•• Increasingly
Introducingaalimited
limitednumber
numberofofAAbrands
brands
•• Introducing
Movedinto
intofresh
freshmeat,
meat,luxury
luxuryfoods,
foods,ready
readymeals,
meals,fruit
fruit
•• Moved
andveg
veg
and
Hard Discounter
SoftDiscounters
Discounters
Soft
Formulas;DirK
DirKvan
vander
derBroek,
Broek,Digros,
Digros,Bas
Basvan
vander
der
•• 33Formulas;
Heijden
Heijden
Dirkvan
vander
derBroek
Broekand
andDekamarket
Dekamarkettotomerge
mergeinin2009
2009
•• Dirk
Combinedmarket
marketshare
shareofof4.1%
4.1%- -purchasing
purchasingvia
via
•• Combined
Superuniesince
sinceJuly
July2008
2008
Superunie
Soft Discounter
# 5 Super de Boer
Formerlyknown
knownas
asLaurus,
Laurus,the
the
•• Formerly
holdingcompany
companyadopted
adopted the
thename
name
holding
ofits
itsonly
onlyremaining
remainingretail
retailformat
format
of
atthe
thebeginning
beginningof
of2008
2008
at
Partowned
ownedby
byCasino
Casino(around
(around
•• Part
45%),ititsold
soldoff
offits
itsKonmar
Konmarand
and
45%),
Edahformats
formatsduring
during2006
2006
Edah
Consistentwinner
winnerof
ofSupermarket
Supermarket
•• Consistent
ofthe
theyear,
year,but
butlost
lostsignificant
significant
of
marketshare
shareas
asaaresult
resultof
ofAlbert
Albert
market
Heijn’sprice
priceoffensive.
offensive.
Heijn’s
Super de Boer cont...
had315
315stores
storesatatthe
theend
endofof2007,
2007,176
176ofofwhich
which
•• ItIthad
areindependently
independentlyowned.
owned. This
Thisrepresents
representsaa
are
reductionofof47
47stores
storesover
overthe
theprevious
previousyear
year
reduction
SinceJanuary
January2006,
2006,Laurus/Super
Laurus/Superde
deBoer’s
Boer’sstore
store
•• Since
rationalisationprogramme
programmehas
hasincluded:
included:
rationalisation
Thesale
saleofof41
41Konmar
Konmarsuperstores.
superstores.12
12were
were
–– The
divestedtotoJumbo,
Jumbo,and
andaafurther
further29
29totoAhold,
Ahold,
divested
splitbetween
betweenAlbert
AlbertHeijn
Heijnand
and
split
Schuitema/C1000
Schuitema/C1000
Thesale
saleofof223
223Edah
Edahdiscount
discountstores
storestotoS+S
S+S
–– The
Winkels,aaconsortium
consortiumincluding
includingthe
thedomestic
domestic
Winkels,
SligroFood
FoodGroup
Groupand
andB.V
B.VSperwer.
Sperwer.
Sligro
Retail Consolidation
Wholesale/Retailoutfit
outfitSligro
Sligroconsidering
consideringmerging
mergingits
itsretail
retailformats
formatsGolff
Golff
•• Wholesale/Retail
(0.9%Market
MarketShare)
Share)and
andEm-Té
Em-Té(1.3%)
(1.3%)
(0.9%
Decisiondue
dueQ1
Q12009
2009
•• Decision
Resultingchain
chainwould
wouldhave
have140
140stores
storesand
and2.2%
2.2%market
marketshare.
share.
•• Resulting
Brand vs Private
Label
•
NL still behind GB in PL but gaining ground
•
Private label market share has grown significantly in
recent years to counter the discounters
•
Increased to approx 24% in 2007
•
PL better margins to retailers and as a weapon in the
price war
•
Demand is in fresh, household articles, sauces, sweets
and crisps.
•
Increasing segmentation in PL – Good, Better, Best
•
Increasing opportunities to cater for niches that are not
of interest to A-brand manufacturers
(Excluding fresh; Including Dairy and
Ready Meals)
January 2005 - January
2008
Source: IRI Nederland
The Dutch
Retailers:
Albert Heijn
Private label range
Private Label
Source – Nielsen, 2008
Private Label
•
Source – Nielsen, 2008
Working with retailers
- Establishing contact
- Parallel approach with retailer & distributor
- Quality standards – BRC accreditation
- Contractual arrangements
- Language
- Promotions
- Shelf space is limited – must have USP to displace competitor
- Foodservice in the Netherlands-
Foodservice
Foodservice
Horeca
€13.6b
€18.9b
Food-to-go
Catering
€3.4b
€1.9b
Source: Foodstep
Horeca .... Facts and Figures
•
Total Horeca turnover is €13.6 billion, representing 7.2% growth on 2006.
•
4 channel categories
– Hotel chains (Van der Valk, Golden Tulip, NH Hotels)
– Restaurants (La Place)
– Bars/pubs
– Catering/fast food (McDonalds, Burger King)
•
About 300,000 people are working in about 42,000 companies.
•
Supply chain management
– at various stages of evolution
Horeca Market
Dutch horeca market
Horeca
Hotels & lodging
Restaurants
Bar/pubs
Cafeteria/fast food
Bed & breakfast
Bistro
Bar/pub
Ice cream parlour
Hotel-bar
Restaurants
Discotheque
Snack bar/Cafeteria
Hotel-restaurants
Bar-restaurants
Coffeeshop
Fast food restaurants
Hotel-café-restaurants
Motorway restaurants
Kiosk
Pension
Lodging accommodation
Shoarma/Grillroom
Horeca at a recreation ground
Lunchroom
Horeca at a sports accommodation
Crêperie
Beach club
Meeting point
Party centre
Station restaurants
Party catering
Foods/snackprovider not earlier
mentioned
Top 10 Horeca Players
Rank
Company
Turnover (€m)
Outlets
1
Van de Valk
470
54
2
McDonalds
462
226
3
Golden Tulip
299
74
4
Center Parcs
271
8
5
La Place
244
427
6
Servex
335
315
7
Accor
235
53
8
NH Hotels
220
220
9
Best Western
207
53
10
Land Greenparks
169
43
Foodservice to 2010
The three most important changes:
1. Rising commodity prices: grains, oil, meat, fish and dairy to
become extremely expensive. Consumer prices to rise
drastically, leading to greater emphasis on price competition and
many outlets seeking alternative suppliers.
2. Sustainability: Still relatively small, but importance growing
rapidly
3. Health and Wellness: already an important trend – will
become even more so.
Source: Foodservice Instituut Nederland
The “7 Cs” in Foodservice
On a scale of 1 to 100, how important are the following trends in
Foodservice?
Consumer
Importance 2007
Projected Importance
2020
Source: Foodservice Instituut Nederland
Food-to-Go
• Total Food-to-Go market estimated at €3.5 billion in 2007
• Largest channel is petrol stations, which account for over €1.9 billion thereof.
• Other major channels include Servex (railway station outlets) and drivethrough outlets, and food-to-go counters in retail stores
• Exploitation of Food-to-Go concept in the Netherlands remains limited to date
– high potential for growth in the next 10 years, led in particular by retailers.
• Key Drivers:
- Growing number of people commuting to work
- Growth in times and distances being travelled
- Growth in time spent in heavy traffic
- Greater variation in working hours
Source: Foodservice Instituut Nederland
Food to Go
Source: Foodservice Instituut Nederland
Catering ... Facts and Figures
• Total Catering turnover is €3.4 billion
• 4 channel categories
• Business
• Institutional
• Educational
• Others (leisure, travel)
• Dedicated service providers
• Albronn
• Sodexho
• Compass
Dutch Catering Market
Dutch catering market
Catering
Business catering
Institutional catering
Nursing home
Basic care
Nursing home
Medical care
Educational catering
Leisure
Other
Travel
Supporting horeca
Amusement parks
funfairs
Inflight catering
Horeca within
retail trade
Museum
Ferry
Petrol stations
Cinemas and
Film theatres
Railway catering
Hospital
Psychiatric
hospital
Medical
children's home
Medical
day-care center
Institution for
disabled
Penitentiary
Theatres
Exhibition and
conference areas
Vending machines
Route to Foodservice
Foodservice
Horeca
€13.6b
Food-to-go
€18.9b
€1.9b
Catering
Service providers - wholesalers
Source: Foodstep
€3.4b
Foodservice – Key
Players
Wholesale Market €5-6billion
10-15%
15-20%
2%
1%
Foodservice - Key Players
10-15%
Wholesale Market
10-15%
5%
4%
15-20%
€5-6b
2%
1%
- Entering the Dutch Market -
Opportunities
•
Affluent & concentrated market of 16.4 million
•
Cost of production in NL is high - land, labour costs, regulations
•
High level of food imports
•
Ireland’s image is excellent
•
English widely spoken, easily accessible, logistics manageable
•
€uroland
•
Demand for innovation in convenience - Irl and UK ahead
Challenges
•
Sustained price-reduction activity will reduce margins for both retailers and
manufacturers, who will both aim to reduce their cost base
•
Environment cues …. Number of new products launched in around organic, animal
welfare
•
Price – Price – Price …Value for money
•
Market segmentation …Value / mainstream / premium
•
Private label growth is set to continue, spearheaded by Albert Heijn
Tips for the Dutch Market
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Understand the Category from a Dutch perspective
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Parallel Approach (Distributor:Retailer/Foodservice)
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Formal business arrangements: Contracts are very strong
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Know your bottom Price
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Don’t go immediately to No.1 retailer
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PL as an option to enter this market
- Bord Bia Activities in 2009 -
Development & Knowledge Hub
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Undertaking Category Analysis Reviews
– Identifying new market opportunities
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Business Mentoring
– Assisting companies in their initial steps to market entry
– Business mentors will be of a high calibre, with a strong background in retail
and/or foodservice
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Directory of food manufacturers in the Netherlands
– Identify market opportunities for consumer food products/ingredients
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Trade Directory/Market Insight
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Networking Opportunities
– Irish Netherlands Business Association
- Netherlands Market Overview -
Declan.fennell@bordbia.ie
Tel: +31 20 575 34 84