CBI Product Factsheet:

CBI Product Factsheet: Chia seeds in Europe CBI Market Intelligence Product Factsheet Cloves in Germany 1

Introduction Chia seeds are becoming increasingly popular in Europe due to their nutritional- and health-related properties. They are used as a food supplement and are popular in vegetarian and gluten-free diets. Additionally, they are used in the bakery industry as an ingredient in bread or as a topping. Due to legislative limitations, their use in large industries is still restricted, but potential market opportunities in Europe are abundant. Product description Chia is a plant originally known as Salvia hispanica and is native to Southern Mexico and Guatemala. The original colour variations of chia seeds are speckled brown / white. They have a faint nutty aroma and a free flowing texture. Chia is grown commercially for its seed, which is rich in omega-3 fatty acids and can be used as an additive in food, as a nutritional supplement and as a base for beverages, mainly in Mexico and the Southwestern United States. Its nutritional properties are similar to those of sesame and chia seeds are therefore becoming significantly popular in other markets. Chia seeds are produced primarily in Paraguay, Bolivia, Argentina, Mexico and Australia. Smaller producers are located in Nicaragua, Guatemala and Ecuador. There is no specific Harmonised System (HS) or other codes applicable to chia seeds. Chia seeds are part of a product group oilseeds and oleaginous fruits. Table 1: CN Code for Chia seeds Statistical Number 1207.99.96 (from 2012) Product Oilseeds and oleaginous fruits, whether or not broken (excl. for sowing and edible nuts, olives, soya beans, groundnuts, copra, linseed, rape or colza seeds, sunflower seeds, palm nuts and kernels, cotton, castor oil, sesamum, mustard, safflower, melon, poppy and hemp seeds) 1207.99.97 (until 2012) Source: Eurostat (Comext) Oilseeds and oleaginous fruits, whether or not broken (excl. for sowing and edible nuts, olives, soya beans, groundnuts, copra, linseed, rape or colza seeds, sunflower seeds, cotton, sesamum, mustard, poppy and hemp seeds) Product specification Quality General Avoid long delays between harvesting and transportation of chia seeds. Chia seeds should also be free from sand, stalks, plant debris and other foreign materials. Some of the most important quality factors concerning chia seeds are: moisture content, uniformity of seeds, purity and quantity of damaged / mouldy seeds. Most suppliers include the purity level (in %) in their offers. Purity levels of 99.95% and higher are regarded as premium quality, and purity levels of at least 99.6% are expected in the European market. Chia seeds should also be free from aflatoxins. Aflatoxin contamination is known to be a problem for many producers, and buyers monitor this aspect closely. Prevent adulteration and contamination by foreign materials (such as dust) by keeping facilities and equipment clean. Ensure proper storage and transportation (see Packaging ). Organic (if relevant) Comply with organic standards for the production of chia seeds. Refer to the section on Niche requirements for further details on organic production and labelling. Labelling Ensure traceability of individual batches. Use English for labelling purposes, unless your buyer has indicated otherwise. Labels must include the following: o Product name o Manufacturer s lot or batch code o Whether or not the product is destined for use in food products CBI Market Intelligence Product Factsheet Chia seeds in Europe 2

o o o o o Name and address of exporter Product s country of origin Shelf life: Best-before date / use-by date Net weight / volume in metric units Recommended storage conditions Foodstuffs containing Chia (Salvia hispanica) should be labelled as Chia (Salvia hispanica) seeds. Additional labelling of pre-packaged Chia (Salvia hispanica) seed is required to inform the consumer that the daily intake should not exceed 15 g. Organic (if relevant): Name / code of the certifying body and certification number. Packaging Chia seeds are transported as break-bulk cargo in 25 kg polypropylene (PP) bags. Buyers might have specific packaging requirements, such as the use of paper bags instead. When chia seeds reach Europe, they are re-packed in quantities of 250 / 500 mg, for instance (for private customers), or 25 kg (for commercial customers). Organic chia seeds should remain physically separated from conventional seeds. Ensure preservation of quality by: o Thoroughly cleaning the holds or containers before loading the seeds. o Protecting the cargo from moisture during loading, as to avoid mould, spoilage and self-heating. o Ensuring appropriate temperature, humidity / moisture and ventilation conditions during transportation. o Protecting the cargo from pests such as beetles, moths, etc. What is the demand for chia seeds in the European market? The trade statistics for chia are indicative. The category other oilseeds (HS 12079996) provides relatively reliable estimates for the leading producers of chia seeds, as these suppliers are not known to produce other oilseeds within this statistical group. Figure 1. European imports of other oilseeds/chia (HS 12079996) from selected countries, in 1,000 tonnes 5 4 3 2 Australia Bolivia Mexico Argentina Paraguay 1 0 2012 2013 2014 Source: Market Access Database (Comext) CBI Market Intelligence Product Factsheet Chia seeds in Europe 3

Jan. 2013 Feb. 2013 Mar. 2013 Apr. 2013 May. 2013 Jun. 2013 Jul. 2013 Aug. 2013 Sep. 2013 Oct. 2013 Nov. 2013 Dec. 2013 Jan. 2014 Feb. 2014 Mar. 2014 Apr. 2014 May. 2014 Jun. 2014 Jul. 2014 Aug. 2014 Sep. 2014 Oct. 2014 Nov. 2014 Dec. 2014 Jan. 2015 Feb. 2015 Mar. 2015 Apr. 2015 May. 2015 Jun. 2015 Figure 2. Development of European volume and value of other oilseeds/chia from selected supplying and importing markets 3.000 2.500 2.000 1.500 1.000 500 0 Volume (tonnes) Value (x 1,000 euros) Source: Eurostat (Comext) Supplying countries: Paraguay, Argentina, Mexico, Bolivia Importing countries: Germany, the UK, France, the Netherlands, Spain, Italy Trade Paraguay, Argentina, Mexico and Bolivia are the leading suppliers of chia seeds in Europe. Australia exports chia seeds to the European Union as well, mainly to the United Kingdom (UK). In the future, competition from new producing countries can be expected to increase. For example, initial trials have been held in Kenya and Tanzania. Germany is the largest importer of chia seeds, with an estimated 2,700 tonnes in 2014, followed by the Netherlands and the UK, each with around 440 tonnes. Denmark is a relevant buyer of chia seeds as well, although the import statistics for Denmark are not displayed within the same category. This assumption is based on the market activity of specific Danish buyers. Production Production of chia seeds has increased significantly in recent years. Although there are no official data, it is generally assumed that the worldwide production volume reached 150,000 tonnes in 2014. Sources in Bolivia indicate that the latest production (2015) is many times smaller and more in line with the actual global consumption. The import value decreased at the end of 2014, due to a drop in chia prices, which was largely due to the increasing production of chia seeds worldwide. As a result, imports slowed down as well. The first half of 2015 showed signs of a recovery. What trends offer opportunities on the European market for chia seeds? Healthy properties of chia seeds at the centre of attention. The growing demand for chia seeds in Europe accompanies a general consumer interest in healthy diets. According to industry sources, chia seeds are most popular in countries such as the Netherlands, Germany, the UK, and those in the Scandinavian region. The most significant health benefit which drives the market for chia is its high omega-3 fatty acid content. In general, the positive prospects for chia accompany the upward development of the Omega-3 market. According to Grand View Research, the global market for Omega-3 ingredients is expected to grow at a compound annual growth rate (CAGR) of 13.7% from 2014 to 2020. As the largest market for Omega-3 ingredients in 2013, Europe accounts for more than 60% of the world s consumption, and it is expected to maintain its position until 2020. In terms of value, the global Omega-3 market is expected to reach a value of US$ 7.32 billion (approx. 6.61 billion) by 2020. The increased attention given to the health benefits of chia seeds has led manufacturers and retailers to market them as a super food. Recently, however, also more sceptical opinions have come up (see for example The Guardian, 2015 and Time, 2014). These predominantly criticise the marketing strategies of super foods promoting health CBI Market Intelligence Product Factsheet Chia seeds in Europe 4

benefits which are not backed up by scientific evidence (for example, that chia seeds can prevent cancer or stimulate weight loss). Promote the various applications and health properties of chia seeds. Make sure to provide your buyer with accurate product specifications and composition. Do not make health or nutritional claims that are not substantiated by scientific evidence. The EU Regulation on Health and Nutrition Claims strictly ensures that any claim made on foods' labelling, presentation or marketing in the European Union is clear, accurate and based on evidence accepted by the whole scientific community. Check the EU Register of nutrition and health claims to check the permitted health and nutrition claims and their conditions of use. Make sure your product characteristics and quality match your target market and end-user in terms of: Taste and odour Purity level & uniformity Stay informed on the news for Supplements and Nutrition trends in the EU market by visiting the Nutra Ingredients website. Take advantage of the vast amount of information on the growing Omega-3 market and promote your product s properties accordingly. Popularity among vegetarian consumers Chia seeds are also a source of fibre, rich in numerous vitamins & minerals and are naturally gluten-free. These characteristics make it ideal as a supplement in vegan/vegetarian diets, thus creating further consumer interest. In Europe, vegetarian and vegan consumers represent a growing population. In Italy, for instance, 10% of the population is estimated to be vegetarian. In Germany and Switzerland, around 9% of the population does not eat meat. However, vegans still account for less than 1% of the total population in most European countries. Stay informed on the vegetarian market trends in the EU. For more information visit the European Vegetarian Union s (EVU) website which is an umbrella organisation for vegetarian societies and groups in Europe. Chia seeds for gluten intolerant population The gluten-free aspect of chia seeds also creates a strong interest among consumers suffering from gluten intolerance (celiac disease) or those who simply avoid gluten intake. The prevalence of celiac disease in Europe ranges between 0.5% and 1.0% of the total population, with the highest incidence in Ireland, Italy and Sweden. Global sales of gluten-free foods are expected to reach US$4.3 billion (approx. 3.9 billion) by 2015, according to a recent analysis by Datamonitor, thus indicating growth opportunities for products such as chia seeds. Explore your opportunities in this niche market by staying informed on the Gluten-free food applications and legislation developments. You can visit the Gluten Free website for information on the various gluten-free products and companies. The European Commission s page on Gluten-free food is another source of good information. If you have the opportunity, attend events which reveal market opportunities stemming from this condition. Various trade shows and exhibitions in Europe have specific areas dedicated to free from products (for example, gluten-free and allergen-free). Examples include Food Ingredients Europe, SIAL, Anuga and BioFach. Product launches 2014 As an ingredient, chia seeds are most prevalent in the snacks, cookies and candy category, as well as in the nutritional and cereal and breakfast food categories. Following the Novel Food authorisation in 2009, several product innovations containing chia seeds have been launched in Europe. For example, Danish Bakery introduced a chia bar marketed as being rich in protein. The primary ingredients are whey and potato protein, chia seeds, almonds and pumpkin seeds. CBI Market Intelligence Product Factsheet Chia seeds in Europe 5

In 2015, the Irish bakery brand BFree launched quinoa and chia seed wraps in Tesco stores in Ireland. In addition, Marks & Spencer in the UK has just launched a range of products containing chia seeds including bread and pita (Daily Mail 2014). Lifefood has launched a chocolate bar containing 10% chia seeds in several European countries, and bakeries have started to include chia seeds in breads (e.g. the Swiss bakery Bäckerei Hug). Primroses kitchen, a British company, has launched an organic spread of Raw Almond & Chia Butter as an alternative to peanut butter. Another British company, Nourish Kefir, has started to blend kefir with chia seeds. Legislative developments for chia seeds Chia seeds have only recently been allowed for food used in the EU market. In 2009, a decision of the EU Commission authorised chia seeds to be placed on the market as a novel food ingredient. However, the initial licensing was limited to baked products subject to a maximum content of 5%, which represented a major restriction for the use of this product in large-scale industries. After a few years on the market, a change in legislation came about in the beginning of 2013, when the use of chia seeds was expanded to: o Baked products: not more than 10% o Breakfast cereals: not more than 10% o Fruit, nut and seed mixes: not more than 10% o Pre-packaged chia seed as such: not more than 15 g per day In addition, and as indicated under What legal requirements must my product comply with?, Novel Food authorisations are only granted on an applicant-specific basis through a simplified notification procedure. Individual companies which are interested in using chia seeds within the categories specified in the Chia Company s decision, should provide substantial equivalence to the product as described in the Application Dossier. Refer to the website of the UK Food Standards Agency to follow the recent authorisation process of one of the applying companies, Andean Grain Products. This company received approval on equivalence from the UK Food Standards in October 2014. What is seemingly a small legislative step is in fact a giant leap in terms of market opportunities for this seed. The growing use of chia seeds in other applications / industries (for example, breakfast cereals, snack mixes) has been automatically translated into market growth in spite of persistent limitations. For more information on novel food legislation, you can visit the European Commission website, designed particularly for that subject. Research your target markets and learn about existing legal provisions. The CBI database on Market Access Requirements for Oilseeds can be a useful point of departure. With which requirements should chia seeds comply in order to be allowed on the European market? Novel Food: The Novel Food Regulation covers foodstuffs that are newly developed by industry, but also natural foodstuffs or ingredients which were not consumed to a significant degree within the EU before 15 May 1997. Chia seeds were banned for food use in the EU until 2009, when the product was recognised and approved as a novel ingredient which could be sold and consumed within the EU. This approval followed a positive opinion of the European Food Safety Authority on the safety of chia seeds and ground whole chia seeds as a food ingredient. Since then, Novel Food authorisations have been granted on an applicant-specific basis through a simplified notification procedure: Simplified procedure notification: A novel food or ingredient may be marketed through a simplified procedure called notification. The company notifies the Commission about their marketing a novel food or ingredient based on the opinion of a food assessment body that has established substantial equivalence (i.e. composition, nutritional value, metabolism, intended use and level of undesirable substances as set out in Article 3.4 of the novel food Regulation EC No 258/97). Individual companies which are interested in using chia seeds within the categories specified in the Chia Company s decision, should provide substantial equivalence to the product as described in the Application Dossier. If the company is interested in using chia seeds for a wider range of food categories, then a full novel food assessment will be required (UK Food Standards Agency). Although the Chia Company s decision has expanded the use of chia seeds compared to the initial Novel Food authorisation in 2009, there are still limitations to its use in the food industry. Read more under Market trends. CBI Market Intelligence Product Factsheet Chia seeds in Europe 6

Learn about the legislation for chia seeds and the Novel Food restrictions still applicable to this product. Contaminants in food: The EU has established maximum levels of contaminants in food, including ingredients (e.g. oilseeds). Check out the maximum levels for contaminants in food set by EU legislation. Maximum Residue Levels (MRLs) of pesticides in food: EU legislation has been laid down to regulate the presence of pesticide residues (MRLs) in food products. If the product has been treated with pesticides, verify that residues remain within limits. For additional information, consult the specific EU legislation: Maximum Residue Levels (MRLs) of pesticides in food. Hygiene of foodstuffs: Food business operators shall put in place, implement and maintain a permanent procedure, or procedures, based on the HACCP (Hazard Analysis and Critical Control Points) principles. This also applies to the import of food to the EU and export from the EU. Ensure compliance with EU legislation on Hygiene of foodstuffs (HACCP). What additional requirements do buyers often have? Food safety management: Buyers commonly require that their suppliers have a quality / food safety management system in place. These systems require companies to demonstrate their ability to control food safety hazards in order to ensure that food is safe at the time of human consumption. Suppliers can apply a basic HACCP system. However, if they aim to supply food manufacturers more directly, it is necessary to have a certified food safety management system recognised by the Global Food Safety Initiative, such as ISO 22000, British Retail Consortium or International Featured Standards: Food. Visit the website of the Global Food Safety Initiative for more information. What are the requirements for niche markets? Regulation (EC) 834/2007 on organic agriculture: The EU has established requirements on the production and labelling requirements with which an organic product of agricultural origin must comply in order to be marketed in the EU as organic. Tips: In general, the market for organic groundnuts is still a niche segment; organic chia matches the health trend in Europe. If you do choose to obtain a certificate for organic production, find out more about Organic production and labelling. Make sure that your organic certification is harmonised with the EU/EFTA legislation. Fair Trade: FLO International is the leading standard-setting and certification organisation for Fairtrade. Products which carry the Fairtrade label indicate that producers are paid a Fairtrade Minimum Price. FLO has a minimum price for groundnuts. Other fair trade standards available in the European market are Fair Trade Ecocert and IMO s Fair for Life. CBI Market Intelligence Product Factsheet Chia seeds in Europe 7

Tips: Before engaging in a Fairtrade certification programme, make sure to check (in consultation with your potential buyer) that this label has sufficient demand in your target market and whether it will be cost beneficial for your product. Although FLO certification is the leading fair trade certification scheme in Europe, you can also check out other schemes such as IMO s Fair for Life and Ecocert Fair Trade. What do the trade channels and interesting market segments for chia seeds look like in Europe? Market channels Figure 3: Trade channels for chia seeds in Europe Developing country European market European market segments Chia seed producers DC exporters Traders Importers Brokers Processing industry (incl. crushers) Food manufacturers Packaging Retailers Food service The general trade structure for chia seeds is not very different from the general structure for other oilseeds. However, chia seed trade channels and segments revolve around the consumer market. This is a segment directly accessible to end consumers, who purchase chia seeds almost exclusively at niche retailers (such as health shops). The seeds are then consumed plain or combined with other foods (like yoghurt, salads or oatmeal). Chia seeds are rarely used in the European food service sector. Within the food manufacturing industry, chia seeds are only used for bakery products, breakfast cereals and fruit, nut & seed mixes (up to 10% of the product content). EU legislation still restricts the use of chia seeds in other largescale industries. Both retailers and industries source chia seeds through traders. A small amount of chia seeds is also processed by crushing into chia seed oil, which is also sold mostly by niche retailers. Additional information on chia seed oil is provided in the CBI Product Factsheet on Chia Seed Oil in Europe. Due to the low volumes commanded by the chia seed market, there is no evident clustering of trade hubs or processing industries; most imports are carried out directly by specialised importers. Tips: Traders are the most suitable entry point for chia seeds, since the exported volumes are generally small and are directed to a very specific niche market. When approaching a trader, make sure to provide them with the appropriate product documentation (composition, properties) and be realistic about the volumes you can deliver. Meet specific quality requirements when targeting specific buyers: uniformity in colour and shape (whole seeds) and a high purity level are key. Comply with sustainability standards required by your specific segment and stay up-to-date on developments in this respect. For examples of various uses and applications of chia seeds you can visit the websites of Wellnessmania and Burgerbread. CBI Market Intelligence Product Factsheet Chia seeds in Europe 8

Market segments Chia seeds are mostly used in the food market, where it can be segmented into consumer market and food processing industry, as explained in the section above. Figure 4 describes the main uses of chia seeds in Europe within these two segments. Chia seeds can be further segmented into commodity and speciality. However, chia seeds are not traded as a commodity, thus a distinction within the speciality segment could be made between conventional and certified chia seeds (as mentioned in Figure 2). The main certification standards applicable to chia seeds are described under the Additional requirements section of this factsheet. Figure 4: Segmentation of chia seeds in Europe Food market segmentation Consumer market (packaging): To be consumed plain or mixed with yogurt, oatmeal, Food manufacturing: Bakery only (novel food restriction) Commodity Speciality N/A Chia seeds are not traded as a commodity Chia seeds are considered as speciality seeds, either conventional or certified. Certification scheme: organic, fair trade, organic plus Useful sources For information on the latest market developments in the oilseeds sector, visit The Public Ledger: publicledger.agranet.com/oils For information on novel food and legislative developments, visit the European Commission s website: ec.europa.eu/food/food/biotechnology/novelfood/index_en.htm Novel Food and Novel Food Ingredients (European Commission): ec.europa.eu/food/food/biotechnology/novelfood/index_en.htm The UK Food Standards Agency: https://www.food.gov.uk/science/novel/faqs CBI Market Intelligence Product Factsheet Chia seeds in Europe 9

CBI Market Intelligence P.O. Box 93144 2509 AC The Hague The Netherlands www.cbi.eu/market-information marketintel@cbi.eu This survey was compiled for CBI by ProFound Advisers In Development in collaboration with CBI sector expert Michel Peperkamp, Jim Fitzpatrick and Paula Salazar Disclaimer CBI market information tools: http://www.cbi.eu/disclaimer December 2015