In order to explore the reasons for the development in each of the categories, the comments of the
companies in our survey will be displayed:
Export of capelin has fluctuated highly during the research period. The export was conducted
through the leading fish meal factories in Iceland. According to the exporter who replied to our
survey, the cost of fish meal rose considerably around 2004 which lead to dramatic decrease of the
demand in Finland as in many other export markets. Shift in demand due to price increases together
with reduced intensity in sea transport between Iceland and Finland are the main reasons for the
dramatic reduction of export revenue for capelin meal.
Export of salted herring has been in a steady decline throughout the research period. The exporter
involved declares that demand has been falling throughout the whole period due to changes in
consumer behaviour and where salted herring has lost ground to frozen herring. They expect current
export level to remain stable for the next few years at least.
The main export companies of lamb meat were contacted. One of them responded and stated that
generally speaking they were more interested in selling to European markets than to the US since the
European markets were much more „convenient to operate on“. Finland is however not on their
radar screen and they didn‘t expect to take any initiative to establish some export to Finland in near
future. However if opportunity arises they are quite positive to start to do business with a distributor
on the Finnish market. According to Erlendur Garðarsson (agent for lamb companies in Iceland) a
marketing strategy for lamb meat in Finland is already in progress. It is a process that could take
some time and effort and worth looking into. The plan would be selling restaurants the idea of selling
Icelandic lamb meat and to promote it as Icelandic and also as premium. Also, the chefs at the
restaurants would have to take lessons from Icelandic chefs to learn how to cook and serve the meat.
Exporters of food additives and dairy products are optimistic about future export to Finland and
predict that the general positive image of Iceland in the eyes of the Finnish people will continue to
support export of high quality consumer goods from Iceland to Finland. Both exporters state their
satisfaction with their distributors in Finland and stress the importance of the good relationship and
cooperation they have had with them so far. In an interview with Sami Salmenkivi, Mikka Eskola and
Mika Leppajarvi who represent the Finnish marketing company Skyr Finland OY, (Mbl. 2/28. 2014) it
was stated that the Icelandic Skyr was becoming one of the most popular dairy products in Finland.
The sale of Skyr this year is expected to reach up to 1.800 tonnes creating revenue of Euro 10 million.
Around 1.400 tonnes will be produced in Denmark and 400 tonnes will be exported to Finland from
Iceland, reason being the applicable EU quota system on trade of agricultural products between
Iceland and EU.
Similar views are given by the two exporters of arctic char who responded to the survey. Both of
them declared that market for arctic char (bleikja) were fast increasing in Finland. However market
conditions and growing competition from Sweden is pushing prices downwards and the Finns have
proven to be relatively price sensitive. A very important parameter in their positive outlook for future
export of arctic char is the direct flight of Icelandair between Iceland and Finland. The Finns
appreciate fresh fish and therefore flight transport suits such products excellently.
An Icelandic producer of fish leather and lamb skin claims that the current conditions are favourable
for export to Finland and that their export is slowly growing. However, their export to Finland is
currently only marginal (0-5% of their total export).
An Icelandic global leader of food processing equipment has been selling small scale to Finland. He
claims that they would indeed be interested in the Finnish market in general, but since this market is
apparently highly subsidised and consisting of small companies to large extent selling to the local
market, it is less interesting for them. The Finnish market is characterized by a predominant meat
sector. Fish processing is rather limited in the Baltic countries in general, due to the poor quality of
the eco system in the Baltic Sea (the catch has far too high mercury content).
A producer of hi-tech fish farming equipment means that the Finnish market is slowly growing for
him, reason being the increased emphasis on environment protection and the EU „Water Resolution“
(Vatnatilskipun ES). Their export to Finland is however only marginal at the moment (0-5% of their
One company producing cosmetics is rapidly expanding on the Finnish market and claims that the
current export revenue originating from that market is more than 50% of their total export revenue.
They started in year 2012 and have increased their presence from 3 sales outlets to 40 at end of 2013
and they expect their revenue from the Finnish market to increase considerably in the years to come.
Two companies in design related export articles replied to our survey. One of them is exporting
design products of Icelandic wool and expects their export to increase in the future. Their current
export to Finland is however only marginal (0-5% of their total export). Design companies in general
outsource their production to foreign manufacturers, preferably within Europe. This causes problems
since complications in VAT issues between Iceland and Europe make it a financial necessity first to
move the product to Iceland and then export to the distributor on the targeted export market.
Transport cost is therefore considerably higher than if the product was produced in Iceland and
exported directly from the place of production to the final export market.
Since 2012 (Helsinki: World Design Capital) Nordic countries have been joining forces in Nordic
design. They are finding new ways and strategies to help companies (specially the smaller ones) in
the design sector to sell and market their end-product. According to an expert in the design sector
they are on the right track.
Table 2- Export of services to Finland €; Source: Statistic Bureau of Iceland
Transport and tourism 21,17
Other services (e.g. IT) 1,64
When looking at export of services to Finland, information is scarce. The Icelandic Statistic Bureau
(Hagstofan) took over the data base for „export of services” as from 2009. Prior to that, the Central
Bank of Iceland was in charge of collecting this information. Their collection method did not allow for
split up of export of services into countries so the only available time frame is the period 2009 till
As can be seen from table 2, the tourism and transport sector, basically consisting only of air
transport and tourism (sea transport only marginal), is by far the largest category and has grown
considerably within the last 4 years. This goes of course hand in hand with the fast growing tourism
into Iceland in the same period.
Icelandair is offering their passengers from USA/Canada and Iceland to benefit from their extensive
hub and spoke model flying to Finland through Iceland. Their activities into Finland are fast growing
due to their increase in seat availability to this destination. The fast growing number of Asian tourists
visiting Europe is also expected to increase Icelandair’s revenue through Finland.
The two IT companies who responded to our survey declared that their export was limited so far.
One of them is expecting export to increase in the future due to the fact that they have recently
established distribution channel into the Finnish market and currently their export to Finland is in the
range of 15-20% of their total export. The other IT company who responded is not expecting any
export to occur until they have translated their software into Finnish, which is not going to be on
their agenda in the near future. IT businesses mostly state that the Finnish market isn´t that different
from others. Their market strategy does not aim on specific markets since all their trade is performed
Collaborative survey between Icelandair, Lysi and MS (Skyr) executed in year 2013 revealed that
most Finns find Iceland interesting and link Iceland with the expressions „healthy“ and „quality“. The
survey is based on responses from over three thousand Finns.
Picture 1- Collaborative survey
The results of the above survey are very valuable when evaluating the future potential of Icelandic
export and the type of product categories that might be feasible to focus on. Consumer trends and
economic development in Finland are also indicating that opportunities for selected Icelandic
products might be emerging. The people of Finland are experiencing a healthy increase in their
purchasing power and trends in consumption are all in favour of high quality products. The survey
mentioned above, show clearly that Finns have positive attitude towards Icelandic products and the
increased attention of Finns towards healthy lifestyle have proven to affect positively the export
revenue of companies such as Lysi and MS. Furthermore both nations share common appreciation on
good design and high quality lifestyle.
It therefore seems highly appropriate to explore export opportunities of carefully selected product
categories which represent the attributes that are highlighted in the above mentioned research, i.e.
categories representing high quality, high end pricing strategy, healthy lifestyle, beauty and
cleanness. Consequently cosmetics, health articles, natural medicine products and design articles in
addition to food articles of various kinds, should be ideal categories for further exploration.
However, some of the companies producing the above product categories and who could be
considered having high potential for success with their products for export to Finland, might at the
same time also be considered small and with limited financial capabilities to invest in marketing and
sales into new markets.
Promote Iceland, in cooperation with the Icelandic embassy in Finland might therefore be the right
partner for them when seeking funds for this purpose through government, investors and export
funds available for special export projects. Training and preparation for such export projects would
also be highly appropriate and could be managed by Promote Iceland as well, as a part of Promote
Iceland‘s current export consultancy support. Guidance into the Finnish market through sector
exhibitions and B2B meetings would thereafter be the last piece in the puzzle to make them
overcome the market- to- entry threshold.
Trade between Iceland and Finland
The trade balance between Iceland and Finland is unfavourable for Iceland as can be seen on picture
2 below. Main import categories from Finland to Iceland are all sorts of industrial products, wood
articles, raw materials and chemicals.
The picture below is derived from Ice stat’s data base and covers only export of goods (services is
excluded). The import upswing in 2010 is caused by one delivery of gasoline.
Picture 2- Trade Iceland Finland €; Source: Statistic Bureau of Iceland
The obvious imbalance of import and export between Iceland and Finland should be an
encouragement for both countries to strive for an increased balance in the long run.
2004 2005 5 2006 2007 2008 2009 2010 2011 1 2012 2013
Documents you may be interested
Documents you may be interested