THE EUROPEAN UNION
The EU consists currently of 27 member countries, which are in yellow. The blue indicates countries that either have special arrangements with the EU, or are on the way to becoming a member state.
The EU countries are Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.
The EU has over 23 recognised national languages spoken. This could be a considerable problem for the happy baby food company as each country would require different labelling in their own language, which involves translating and reprinting per area this could prove to be costly. We would recommend having split prints on each jar of the 4 most spoken languages which are English, French, Spanish, and German. German is the most widely spoken mother tongue as it is the official language of Germany, Austria and Switzerland and this covers 19% of the EU population. However, English is considered to be the most widely spoken language, which is about 49% of the population.
The way in which the EU was created means there is a legal superstructure which governs other all member countries. Once a law is created member states are expected to introduce into their own legal system. This is a good thing for Happy Baby food as it means most likely once allowed into one country the rest should not be a problem. The EU has a trading mark called the CE which once given means that you product has met EU consumer safety, health or environmental requirements.
It is estimated that the population of the EU will increase to 491,582,852 by July 2009 and the population is growing at the rate of 0.108%. The population of children age 0-14 years is 15.44% of the total population, which is approximately 75,900,000. Within this age group there are 38,975,981 males and 36,925,704 females. This means that happy baby food has a potential of gaining a large market share in the EU.
Internally, the EU goals are to lower trade barriers between member states, adopt a common currency (Euro) and to move toward convergence of living standard. By having a common currency will make it easier for happy baby food as it does not have to deal with currency exchange. Internationally, the EU is aiming to strengthen Europe’s trade position and its political and economic power. However, because of the huge differences in per capita income between member states ($7,000 to $69,000) and historic national animosities, the EU has been facing some difficulties in devising and enforcing common policies and this could be a problem for happy baby food as it will need to follow the laws and policies of each individual country.
The total GDP of the EU is $14.82 trillion in 2008, an increase of $0.16 trillion from previous year. The GDP per capita is $33,400 in 2008, which means that consumers are most likely to be able to afford to buy products from happy baby food. However, Happy Baby Food will need to look at individual country to find out their GDP per capita as some member states will be poorer than others. Also, this is most likely to affect the pricing of happy baby food.
The demographics of the European Union show a highly populated, culturally diverse union of 27 member states. As of 1 January 2009, the population of the EU was about 499.7 million people. Many countries are expected to experience a decline in population over the coming decades, though this could be offset with new countries planning to join the EU within the next 20 years.
The most populous member state is Germany, with an estimated 82.1 million people, and the least populous member state is Malta with 0.4 million. Birth rates in the EU are low with the average woman having 1.5 children. The highest birth-rates are found in the Republic of Ireland with 14.33 births per thousand people per year and France with 12.73 births per thousand people per year. Germany has the lowest birth rate in Europe with 8.18 births per thousand people per year.
The EU faces challenges in its demographic future. Most concerns centre around two related issues; an ageing population, and overall population decline.
The 2006 birth rate is 10 births per 1000 population, while the death rate is 10.1 deaths per 1000 people, making 2006 the first time in modern (non war) history where more people have died in Europe than were born. The total fertility rate is an internationally low 1.47 children born per female,] where fertility rates above 2 per female are generally needed to maintain the current population. These figures mean the population of the EU is expected to decrease, while also suggesting the average age of European society will grow ever higher. While this decline in population could be halted by allowing substantial immigration into the EU, this remains a difficult solution that many refuse to accept.
A low fertility rate means retirement age workers are not entirely replaced by younger workers joining the workforce. The EU faces a potential future dominated by an ever-increasing population of retired citizens, without enough younger workers to fund (via taxes) retirement programs or other state welfare agendas.
A low fertility rate, without supplement from immigration, also suggests a declining overall EU population, which further suggests economic contraction or even a possible economic crisis. While some media have noted the ‘baby crisis’ in the EU, and some governments have noted the problem, the UN and other multinational authorities continue to warn of an impending crisis.
Age structure: (2006 est.)
• 0–14 years: 16.03% (male 37,608,010/female 35,632,351)
• 15–64 years: 67.17% (male 154,439,536/female 152,479,619)
• 65 years and over: 16.81% (male 31,515,921/female 45,277,821)
Birth rate: 10.5 births/1,000 population 2005
Death rate: 9.6 deaths/1,000 population 2005
Net migration rate: 3.6 migrant(s)/1,000 population 2005
Marriage rate: 4.8 marriages/1,000 population 2005
Divorce rate: 2.0 divorces/1,000 population 2005
Sex ratio: (2006 est.)
• at birth: 1.06 male(s)/female
• under 15 years: 1.06 male(s)/female
• 15–64 years: 1.01 male(s)/female
• 65 years and older: 0.69 male(s)/female
• total population: 0.96 male(s)/female
Infant mortality rate: 2005
• total: 4.5 deaths/1,000 live births
• male: –
• female: –
Life expectancy: 2005
• total population: 78.9 years
• male: 75.8 years
• female: 81.9 years
Total fertility rate: 1.43 children born/woman 2008
Live Births outside marriage: 33.0% of total live births 2005
Life expectancy at birth for men and women in the EU-25 (1962–2004)
1962 67.2 72.9
1972 68.6 75.0
1982 70.3 77.2
1992 72.2 79.1
2002 74.8 81.1
2004 75.6 81.7
• European Organic Food Market
Growing consumer awareness about health issues and the potential benefits of a healthy diet, mixed with concerns about genetic engineering, have created an expanding market for natural and organic products. A look at the Mintel Global New Products Database reveals the European food industry is reacting to this increasing demand, with a number of new and interesting products appearing on the supermarket shelves in recent months
After starting out as a “niche” market in the 1990s the organic baby food industry is now mainstream, worth more than £150 million, as more parents say no to pesticides. The presence of pesticide residues is of particular concern in baby foods as infants have a much larger food intake per unit of body weight than adults, which means they potentially absorb more toxins
Organic baby food is in vogue because parents everywhere want healthy, safe food for their children, and they are willing to pay for it. Organic baby food manufacturers prominently mention the fact that their products are free of commercial pesticides, a significant concern with conventionally grown produce. A January 2006 analysis by Consumer Reports, a US organization, concluded: “For those wanting to limit their children’s exposure to the pesticides, hormones, antibiotics, and other toxins found in some nonorganic products, organic baby food should be purchased as often as possible.”
• European Market, Brands, Label
The European baby food market is toddling along as well, but the growth in organic baby foods is not as dramatic as in the US. The French are the world’s largest consumers of baby foods, buying about 95 kilos of baby food per year, according to the US Department of Agriculture. They’re followed by consumers in Germany.
Two companies are battling it out for European organic baby food market share: Germany’s HiPP and the UK’s Organix. HiPP, the European leader according to TNS, says it pioneered organic baby food. The Organix brand, “Goodies,” won the 2007/2008 Mother & Baby award for “Best Baby Food.” In Germany, Holle competes with HiPP. The UK has a rash of organic baby food brands, including Fresh Daisy, So Baby and Truuuly Scrumptious. The reason that have made Organix Brand “Goodies” number one is the effective CRM after selling of the product. As it is obviously seen in the table below, ratings are directly related with ethical concerns’ level in each of the brand. If we are to compare the brands, we should give Hipp’s creating value by giving information with each product.
In every Hipp Organic food product, it wrotes behing the package as: Please Note: The formulation of HiPP milk formulas has been changed in line with the new EC Directive and UK Regulations for infant and follow-on formulas which came into force last year. These changes have resulted in the powders having different densities and therefore the size of the scoops have changed.
It is therefore important that you use the scoop included within the pack. HiPP Organic Infant milk is a nutritionally complete infant milk, providing the nourishment a baby needs from birth onwards.
HiPP Organic Infant milk is intended to replace breastmilk when mothers cannot or choose not to breastfeed. It is recommended that it is used only on the advice of a doctor, midwife, health visitor, public health nurse, dietitian or pharmacist.
Numico, a Dutch brand is regarded as the market leader in producing organic foods for EU.
Table – 4 European Organic Food brands
Source: www.ethiscore.org, The higher the rating, the more ethical the brand.
USDA’s National Organic Program accredits certifiers and they, in turn, certify organic producers and processors. Other terms found on food labels, such as “natural,” “free-range,” and “hormone-free,” don’t mean organic. Only food that has been certified to meet the USDA organic standards can be legally labeled “organic.” Company has met the standards required by USDA which are Baby food labeled “USDA organic” must meet standards set by the United States Department of Agriculture and be at least 95 percent organic, meaning that all but 5 percent of the content was produced without conventional pesticides and fertilizers. Organic food can’t be irradiated (a one-time exposure to radiation intended to kill pathogens such as salmonella, listeria, or E. coli), genetically modified (a technique that alters a plant’s DNA), or produced with hormones or antibiotics. Animals used in meat products must be fed organically grown feed
The profile of the consumer across the EU is changing with less stereo-typical consumer now consuming organics although, in the UK, just 8% of consumers account for over 60% of organic consumption. Even the largest players in the organic foods market seem to have a relatively poorly developed understanding of what really motivates the organic consumer and what might encourage them to buy organic products on a more regular basis and how sensitive they really are to price issues. There is evidence to suggest that consumers are becoming increasingly unsure as to what constitutes “organic” per se.
Regulations on entering EU market from the US
A consolidated, legal set of rules for organic farming and processing based on Council
Regulation (EEC) 2092/91 exists and is considered a strength of organic farming policy in a large number of countries as it serves to protect organic farming and to safeguard consumers’ trust. This set of rules is supported by a well established and reliable inspection and certification system, which is also considered an asset of organic farming policy most countries involved. In these countries, the organic inspection and certification system seems to be credible among farmers and consumers. To communicate this credence the existence of one strong organic label is considered a merit of policy and an advantage for consumers as they are not confused by several labels.
In the U.S., the 1990 Organic Foods Production Act (OFPA) required that USDA establish national standards for U.S. organic products. The three goals of OFPA were to (1) establish standards for marketing organically produced products, (2) assure consumers that organic products meet a consistent standard, and (3) facilitate interstate commerce. The legislation targeted environmental quality by requiring that an organic production plan pay attention to soil fertility and regulate manure application to prevent water contamination. It also included environmental and human health criteria to evaluate materials used in organic production. Along with the USDA organic logo, the USDA National Organic Standards (NOS) were implemented on October 21, 2002, replacing the prior patchwork system of State organic standards .
Both the EU and U.S. rely on accredited agents to certify organic farmers and handlers. The EU system is more complicated, largely because member states have some latitude as to how they approve and supervise certifying entities, resulting in a great deal of diversity among the states. A national authority from each member state certifies that organic products comply with EU law. These bodies, in turn, approve other entities that are allowed to certify organic production and handling processes. Most member states have government-approved private certification bodies, but some have public member state certification. In addition, some member states and certifiers have additional public or private standards, as well as standards for products not covered under the EU Regulation, such as fish and nonfood agricultural products. Some certifiers require stricter standards than those of the EU legislation. As a result, not all EU certificates are acceptable to each certification body. In contrast, in the U.S., agents are accredited by USDA to carry out organic certification, and the certification process is well defined so that all farmers and handlers are certified according to the same standard.
In December 2006, the federal government announced a unified regulation plan, after the European Union had threatened to ban Canadian produce. The Organic Products Regulations come into full force Dec. 14, 2008 The Canadian General Standards Board has published a substantial list of substances or techniques that are forbidden in either the production or handling stages, if a product is to earn the Canada Organic label. They include:
• All materials and products produced from genetic engineering.
• Synthetic pesticides, wood preservatives or other pesticides, except as specified in CAN/CGSB-32.31.
• Fertilizer or composted plant and animal material that contains a prohibited substance.
• Sewage sludge used as a soil amendment.
• Synthetic growth regulators.
• Synthetic allopathic veterinary drugs, including antibiotics and parasiticides, except as specified in this standard.
• Synthetic processing substances, aids and ingredients, and food additives and processing aids including sulphates, nitrates and nitrites, except as specified in CAN/CGSB-32.311.
• Ionizing radiation and forms of irradiation on products destined for food.
• Equipment, packaging materials and storage containers or bins that contain a synthetic fungicide, preservative or fumigant.
Canada’s biggest organic cash crop is wheat, half of which is exported to Europe. Most of the rest goes to the United States, which has had government regulations on organic farming for several years. The EU has also adopted tougher regulations on organic imports. After 2006, only countries on a list of those meeting EU guidelines have been allowed to sell their products in Europe. Canada was not on that list. The updated Canadian regulations were designed to allow access to the European market
PACKAGING & LABELING REGULATIONS IN ORGANIC FOOD MARKET IN EU
Packaging & Labelling
Article 24 of 834/2007 provides that where a product is described as organic (that is at least 95% of its agricultural ingredients have been produced organically) the packaging (or tickets or labels at point of sale where products are sold loose) must carry an EU organic logo and a declaration of origin as specified in Article 24 of 834/2007. If less than 95% of the content of agricultural ingredients of a product has been produced organically the logo cannot be used. The logo may be used on products imported from third countries which comply with the 95% rule but it is not compulsory for such products. However, where third country organic products carry the EU logo they must also carry the declaration of origin. However, the operation of the provision of Article 24 on the logo and the declaration of origin has been deferred until 31 July 2010 pending the European Commission finalising a design for an appropriate EU organic logo .
Packaging which complies with Council Regulation 2092/91 may continue to be used until 1 January 2012 provided that the product otherwise complies with the requirements of 834/2007