<p>According to the Vietnam Trade Office in Sweden (which also covers the Nordic countries), specialized cashew importers represent the most important channel for cashews in Europe. There are also a number of alternative channels, such as agents, food processors or food service companies.</p> <p>Companies that play an important role in the cashew segment include roasting and packaging companies. Some roasting companies have specialized in selling salted and spiced roasted cashew nuts in large quantities to packers. Many packaging companies have roasting facilities in their factories, allowing the development of different products that can be sold directly to consumer segments.</p> <p>In most cases, the importer acts as a wholesaler. They often sell cashews to roasting companies that process cashews and package them for sale to consumers. Some importers also have their own processing and packaging equipment, so they can also supply directly to retail and foodservice channels.</p> <p>Importers are often quite knowledgeable about the European market and they closely monitor developments in cashew producing countries. Cashew importers often import other edible nuts and dried fruit, so supplying products other than cashews can increase competitiveness.</p> <p>For new suppliers, the challenge is to establish long-term relationships with well-known importers, as they are often already working with selected suppliers. Reputable importers carry out inspections and visits to producing countries on a regular basis. New businesses must offer similar quality goods at lower prices than competitors at the beginning of the relationship.</p> <p>The position of food importers and manufacturers is pressured by retailers. The higher demand imposed by the retail industry will determine the supply chain dynamics from the top down. The pressure translates into lower prices but also added value in the form of sustainable, natural, organic or fair trade products. Therefore, transparency in the supply chain is necessary. To achieve this, many importers develop their own codes of conduct and build long-term relationships with preferred developing country suppliers.</p> <p>Agent/broker<br /> Agents involved in the cashew nut business usually carry out two types of activities. Agents often act as independent companies that negotiate on behalf of customers and act as intermediaries between buyers and sellers. Typically, they charge a commission of 2% to 4% for their intermediary services.</p> <p>Another activity carried out by these parties is the supply of private labels to retail chains in Europe. For most suppliers in developing countries, participating in demanding private label bidding processes is difficult. For these services, some agents, in cooperation with their cashew suppliers, participate in the procurement procedures put in place by the retail chains.</p> <p>Retail channel<br /> Retailers rarely buy directly from exporters in developing countries. However, some exporters (processors) in developing countries package their products directly for private labeling. Recently, the retail sector has become increasingly polarized, seeing a shift towards the discount or premium segments. Consolidation, market saturation, fierce competition and low prices are the main characteristics of the European food retail market.</p> <p>Food service channel<br /> The food service channel (hotels, restaurants and catering businesses) is often supplied by specialized importers (wholesalers). The food service sector often requires specific packaging of cashew nuts in weight from 1kg to 5kg, different from the requirements for bulk packaging or retail packaging.</p> <p>World cuisine, healthy food and food enjoyment are key drivers in the European foodservice channel. The fastest growing business types are new (healthy) fast food, street food, as well as restaurants serving international cuisine and sandwich bars.</p> <p>The main distribution channels are the conditions of the European market<br /> According to assessments, specialized importers are the most important channel for the cashew market in Europe. (Illustration photo: VNA)<br /> Which channel is suitable for Vietnamese cashew exporters?<br /> Specialized importers seem to be the most useful channel for businesses wanting to export cashew nuts to the European market. This is especially relevant for new suppliers because supplying directly to the retail segment is demanding and requires significant investment in quality and logistics.</p> <p>Private label packaging may be an option for well-equipped and price-competitive manufacturers. However, private label packaging is often done by importers contracted with retail chains in Europe.</p> <p>Additionally, to have complete control over the processing process, it will be easier to roast and package cashews for the snack segment in Europe. As labor costs in Europe increase, cashew importers sometimes seek more efficient roasting operations, such as in Eastern Europe or developing countries.</p>