The Dutch food processing sector generated net sales of US$391.6 billion in 2019, driven by local demand as well as growing demand from other European markets. Increased attention to product reformulation and growing food awareness of more sustainable production procedures will continue to further shape the Dutch industry in the years to come. Other consumer preferences continue to be affordability, convenience and taste. Dutch food companies are always on the lookout for new ingredients. Exporters from the US compete directly with suppliers from Europe Union (EU) member-states.
Although the Netherlands is a small country geographically, it is the gateway for US products into the EU due to the presence of the Port of Rotterdam, Amsterdam Schiphol Airport, the confluence of two major European rivers, and an excellent road and railway infrastructure.
It is the largest importing country within the EU and continues to be the second-largest exporter of agricultural products in the world, after the US and before Germany. These exports include products produced in the Netherlands as well as imported products that are re-exported, often after further processing and adding value.
Products from other EU member-states lead Dutch imports of consumer-oriented products. In 2019, the US was the 10th largest supplier of these products to the Netherlands, with imports valued at almost US$1.3 billion (Figure 1).
Over 6,500 food companies in the Netherlands generated net sales of US$91.6 billion in 2019, up 3.5% compared to 2018. The meat, dairy and fresh produce sub-sectors each accounted for roughly a quarter of the food processing industry’s turnover.
The Dutch retail sector is rather consolidated, employing over 300,000 people and operating 4,300 stores. The net sales of the food retail industry are estimated at US$46 billion in 2019. High-end supermarkets are gaining popularity as consumers are demanding service, variety, and fresh and convenient products.
The net sales of the Dutch food service market are valued at US$24 billion. While sales in all sub-categories were up, sales in the delivery sub-category, especially for hot meals, saw a double-digit growth of 13%. In addition, consumers are seeking out products that are healthy, unique and tasty.
Business climate
Fundamental strengths of the economy continue to be the Netherlands’ stable political climate, highly developed financial sector, strategic location, a well-educated and productive labour force, and high-quality physical and communications infrastructure.
The Netherlands Bureau for Economic Policy Analysis (CPB), recently adjusted the country’s economic outlook due to the Covid-19 pandemic. The CPB used four scenarios to outline the possible economic impact of the coronavirus in 2020 and 2021. The scenarios used different starting points with respect to the duration of the physical contact restrictions and the severity of the economic impact.
All the scenarios resulted in a recession, with GDP declining by between 1.2% and 7.7% in 2020. In its mildest scenario, the economy will rebound as early as in the third quarter of 2020; in its gravest scenario, problems will expand to also include the financial sector as the situation abroad continues to worsen. This last scenario also projects GDP to decrease by 2.7% in 2021. Under three of the four scenarios, the economic downturn will be more severe than in the 2008-09 financial crisis.
Prior to the Covid-19 outbreak, the Dutch food processing industry was performing well. Since 2014, its net sales have grown on average by 3% per year, and its net sales in 2019 are estimated at US$91.6 billion. The industry has been a steady supplier of jobs. In 2018, roughly 144,000 people worked for a food company, and this number is expected to have grown to 148,000 in 2019 due to increased employment at small food companies (start-ups).
According to the Central Bureau of Statistics, there were 6,525 food companies in the Netherlands in 2019, up 5% compared to 2018. The increase is the result of the growing number of small food companies (with less than 10 employees), which swelled from 3,535 in 2011 to 5,265 in 2019.
Dutch food companies also operate internationally. In 2019, Dutch exports of consumer-oriented products totaled US$77.9 billion, while imports were valued at US$41.7 billion. The Dutch export surplus declined slightly to US$36.2 billion, down by US$0.3 billion compared to 2018. The leading export markets were Germany, Belgium, France, Spain and the UK, accounting for nearly 50% of food exports. However, it remains unclear, at present, what the impact of the UK leaving the EU will be with regard to its importance as a Dutch export market. The other European markets account for nearly a quarter of Dutch exports.
Increased attention to product reformulation and growing awareness of more sustainable food production procedures (in particular energy efficiency and CO2 reduction) will continue to shape the Dutch food processing industry in the years to come. Food manufacturers are increasingly experiencing pressure from society to invest in facilitating healthier choices for consumers.
The challenge is to combine healthier nutrition with other consumer needs such as affordability, convenience and taste. Through innovation and product reformulation, food companies are working on the nutritional impact of food products. They are also working on reducing salt content, saturated fats and portion sizes to make it easier for consumers to adhere to a responsible diet. On the product label, consumers can find information on the composition of the product, presence of allergens, quantity of the product, shelf-life and storage conditions.
Of the three voluntary nutrition labeling schemes, the Dutch government plans to endorse the Nutri-Score scheme from mid-2021. This scheme includes a colour-coded designation from A (best nutritional quality) to E (poorest nutritional quality). Several Dutch retailers and food companies have already voiced their support for a voluntary nutrition-labeling scheme. For example, Dutch food company HAK introduced the Nutri-score on its packaged food products in 2019.
More and more Dutch food companies are also looking at what can be done better in their factories (e.g. reducing energy and conserving water). Increasingly, they are also spending resources on having a more socially responsible purchasing policy in place for their raw materials. As a result, many have switched to sustainable alternatives for palm oil, soybean, meat, fish, coffee or cocoa.
Also, food waste, in part caused by production failures and planning errors, has gained more attention over the past few years. Food companies are endeavouring to minimise food waste, not only from a business perspective, but also from an ethical and sustainability perspective. The Netherlands government has announced that it is striving to reduce food waste by 50% by 2030. Together with the food industry and food distributors, the Ministry of Agriculture is discussing the use of ‘best before’ labels on food products. Many products which have a ‘best before’ date on the label are still edible after that date. Nevertheless, these products are often thrown away out of consumer safety concerns.
Ecologically, ethically and socially responsible production and purchasing of raw materials are an integral part of making the Dutch food industry more sustainable. Companies are increasingly delving deeper into their supply chain, working together with first, second and third suppliers to ensure sustainability throughout the supply chain. This is not easy, especially for smaller companies and in complex international supply chains.
To give a boost to the transition to International Corporate Social Responsibility (ICSR), the Dutch Food Industry signed on to the ICSR Agreement Foodstuffs, together with other food industry groups, NGOs and the government. Together, the parties are working to limit, for example, the risks of human rights violations and environmental damage, and working towards making the production chain more sustainable.
Road map to the Dutch market
Entry strategy
The first step for […] companies that would like to start exporting food ingredients to the Netherlands is to determine whether there is a potential market for their product and if the product is already available locally or in the region. It is important to gain a good understanding of where and who the buyers and end-users are. Trade statistics can help to indicate whether Dutch companies need to import this ingredient, how much is imported, and who the competing supplying countries are. If the product is new to the market, and currently not being imported, then it is recommended you reach out to Dutch traders or distributors for their input.
Import procedure
Animal and plant products are brought into the Netherlands from countries all over the world. To prevent the introduction of animal diseases or pests, and to protect the market from public health risks, the European Commission has established detailed regulations for imports from countries outside of the EU. On this basis, the Dutch Food Safety Authority performs checks on live animals, foodstuffs and plant products. Depending on the product, exporters can expect the following type of checks: a documentary check, identity check and, in some cases, a physical check.
Market structure
The Dutch food processing industry is mature, well organised, and has access to most food ingredients. Companies prefer to purchase food ingredients from specialised traders rather than sourcing directly from a foreign supplier. Only large and/or highly specialised food companies might opt to import ingredients directly from foreign suppliers, including those from the US.
Sector trends
The Dutch population is greying, while consumers are increasingly more ethnically diverse and often live in smaller households. This has led to demand for more convenience, a greater variety of foods and smaller packaging. The main trends include a growing demand for organic and sustainable products, and a growing interest in healthy and nutritious food products.
Foreign Agricultural Service,
US Department of Agriculture
This is an edited version of the GAIN Food Processing Ingredients Report published on April 14, 2020. The full report is available at: https://www.fas.usda.gov/data/netherlands-food-processing-ingredients-3
