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Trends and opportunities in the UK food service market

Healthy food options are the hottest trend in the enormous market formed by the food service sector in the United Kingdom, says a new GAIN report.

Healthy food options are the hottest trend in the enormous market formed by the food service sector in the United Kingdom, says a new GAIN report.

Reporting on opportunities for American exporters in the hotel, restaurant and institutional (HRI) market in the UK, the report says fresh and dried fruit are among the US products doing well, along with snack foods, nuts, salmon and seafood, cooking sauces, salad dressings, confectionery, dips and salsas, frozen foods, wine and beer.

“The UK government is increasingly promoting healthy eating and healthy lifestyles. There are opportunities for U.S. products that are natural, wholesome and healthy,” GAIN advises.

As an example of the focus on healthier living, it says fruit and vegetable juices are now more popular in the UK than carbonated drinks.

But despite the preference for healthy eating being the most significant trend in recent years, obesity rates in the UK – about 24% of the adult population is now technically obese  – are now the highest in Western Europe.

Other trends in food service in the UK

Burgers remain the number one item on menus, but other trends are becoming more mainstream in the UK, such as world cuisines, healthy food and indulgence.

“Consumer demand for new foods is strong in the UK and is continually driven by high numbers of non-UK citizens making the UK their home. Fastest growing business types are likely to be new fast food, street food, pop up restaurants, international cuisines, and coffee shops and sandwich bars,” the report says.

The report’s snapshot of major food service trends in the UK includes the following:

  • BBQ foods – Southern US foods or South American influences. Things like pulled pork, brisket.
  • Provenance – Products marketed with a focus on the country of origin, how the product was cooked, farm names and references to smaller, family owned business’ on labels and menus.
  • Street Food – Quality ingredients, seasonally sourced, quick food.
  • UK growth hot spots in 2014 – Glasgow, Leeds, Manchester, Bristol and London.

Growth forecast for UK food service market

In 2014, the UK food service sector (food and beverage sales to consumers) was estimated to be worth £46.6 billion ($74.5bn), up 2.9% on 2013.

GAIN says the sector has picked itself up after the economic crisis and predicts this year it will continue to grow, returning to the spending levels of 2008, a previous peak.

Source: GAIN report: “United Kingdom: Food Service – Hotel Restaurant Institutional”
Veggie burger image: By divinemisscopa ( [CC BY 2.0 (], via Wikimedia Commons

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Fresh cuts and berries among priorities for BAMA

The Oslo-based BAMA trading group is expanding its offering of organic produce and Norwegian-grown vegetables and is committed to helping people choose healthier foods.

The Norwegian market leader for sales of fresh fruit, vegetables, berries and potatoes, BAMA Group (BAMA Gruppen AS) last year posted consolidated sales of BNOK 13.5 (€1.45b). Through its five business areas – including Grocery and HoReCa – each year 500,000 tons of fresh fruit, vegetables, berries, drinks and flowers – from a network of more than 1,300 producers in Norway and abroad – pass through its terminals on their way to 15,000 customers in Norway. Berries are BAMA’s top fruit category in value and bananas in volume, while for vegetables it’s tomatoes in value and potatoes in volume.













Competition in the Nordic grocery market is razor-sharp, Oslo-based BAMA said in its 2014 annual report, but in its favour is the growing interest Norwegians have in healthy diets, natural foodstuffs and food of Norwegian origin. BAMA Group CEO Rune Flaen says it’s the health trend that’s fuelled significant growth in products such as berries, avocados, spinach, root vegetables and kale. (In the last three years, sales volumes have shot up 856% for sweet potatoes, 1386% for kale and 80% for spinach.) BAMA’s overall volume growth for fruit and vegetables in 2014 was 2.6%.

Also favourable is that fruit and vegetable consumption continues to rise in Norway, in marked contrast to the rest of Europe. However, despite climbing 35% in 20 years, consumption in Norway remains below official dietary recommendations. The growth potential for BAMA’s product groups is therefore significant, BAMA said in the report. With excess weight emerging as Norway’s main health challenge, it has adopted a strategy of actively working to improve public health through increased focus on healthy diets and exercise.

Berries: 15% annual growth target

BAMA has certain focus areas for which it sets yearly growth targets. Berries is one of these, with a target of 15%, and by late September sales were already up 13% in volume. BAMA is the Norwegian market leader for berry sales and over five years logged spectacular growth of 140% to reach about 18,000 tons last year.

Instead of taking big volumes from external suppliers, BAMA now sources berries through its Rotterdam-based partner Nature’s Berries. “We also work directly with major Netherlands-based strawberry producers, cutting out expensive middlemen.”

Aiming for 20% growth in fresh cuts

BAMA Industry is one of BAMA Group’s five divisions and produces freshly-processed products, including fresh ready to eat/heat food, for the group’s HoReCa and Grocery business customers. It generated strong sales growth in 2014, a third of which came from products launched in just the last four years. Among these, new vegetable wok mixes and salad products, including two organic salad mixes, showed the most growth.

BAMA sees great promise in such convenience foods. Some European countries have market shares of up to 30–40%, but in Norway it’s still under 5%. “We see a huge market there in the future,” Flaen said. BAMA plans to grow the category through high speed product development, reliable quality, space management and good marketing. “We already have about 15% growth in fresh cuts grocery this year (first 38 weeks of 2015). The target for the category is 20% yearly growth, so we are well on track,” he said.  

Demand for organic, short-travelled & Norwegian produce

  • BAMA’s organic offering includes carrots, potatoes, onions, broccoli, bananas, apples and citrus.
  • Organic produce represents about 3% of BAMA’s total fruit and vegetable sales volume.
  • Demand for Norwegian-grown organic products rose 29% in 2014.

BAMA reports that its consumers show increasing interest in organic, short-travelled and Norwegian produce. In 2014, 60% of products were locally produced, no more than two hours away from the sales outlet. BAMA is collaborating with Gartnerhallen, Norway’s largest farm cooperative, to increase its proportion of Norwegian produce.

Future focus on smaller formats

In terms of goals for BAMA in the next 12 months, Flaen said one is to work on obtaining even better quality across all products. In doing so it will be examining logistics and temperature control, and working a lot on product development. Acknowledging there’s more focus today on food waste, he sees a need for BAMA to develop more products in smaller formats, “so a single household can have their solutions.”

“There will be a lot of focus on smaller packs in years to come,” he said.

source: BAMA annual report 2014 and interview with BAMA CEO Rune Flaen


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Colruyt Group sees increase in citrus sales

Priorities for the Colruyt group include innovation in e-commerce, and helping consumers choose healthy and sustainable products via ‘simplicity in retail’.

Belgian retail group Colruyt reports that it gained market share in 2014/15 despite tough competition. In Belgium, where the retailer competes with the hard discounters Aldi and Lidl as well as Carrefour and Delhaize, it says its market share rose to 31% based on revenue from its store concepts Colruyt Lowest Prices, Spar and OKay. (The group is to focus its expansion efforts even more on OKay, its proximity store concept.)

Colruyt Group also managed to keep its operating margins stable in 2014/2015, with a gross margin of 24.9% of revenue and EBIT margin of 5.6% of revenue. In what it described in its 2014/15 annual report as a “challenging market environment”, its reported revenue grew 3.1% to €8.9 billion. “Due to the pressure on the sales prices, the volume growth was not fully reflected in revenue growth. Price pressure was brought about by price deflation, competition and the consumer trend towards cheaper products,” it said. The group’s net profit was weighed down to €331 million after recording a fine of €31.6 million imposed by the Belgian Competition Authority.

Wholesale & Foodservice

Colruyt’s wholesale and foodservice segment accounted for 17.1% of its consolidated revenue. Revenue from these activities rose 3.5% on last year to €1.5 billion. The wholesale segment includes deliveries to independent storekeepers in Belgium (Retail Partners Colruyt Group) and France (Coccinelle, CocciMarket and Panier Sympa). Wholesale revenue declined slightly (-0.5%) due to food price deflation.

source: Colruyt Group 2014/2015 annual report

Managing complexity to offer simplicity

“Our stores and wholesale activities in Belgium, France and Luxembourg continue to operate in an environment with fierce price competition and low consumer confidence,” Colruyt said in the report. One of its strategies in light of this is ‘Simplicity in Retail’. “Offering simplicity means, for example, helping consumers to make healthy and sustainable choices. This is why we continue to work on the quality and nutritional value of our own brand products, and on a more sustainable range of fish products and better working conditions at our suppliers and partners in risk countries,” it said.

“In order to be able to offer simplicity, we are also focusing on innovation. This is why we are targeting retail solutions in the e-commerce market and why we are the first Belgian distributor to make mobile payments possible in all of our web shops and stores. We are also pleased with the federal government’s plans to amend the laws governing e-commerce so that we can become a bit more competitive in relation to our neighbouring countries.”

Using audits to improve working conditions

In keeping with its commitment to improve working conditions at its suppliers and partners, Colruyt Group started carrying out regular audits in the food sector in 2013 and reports that they “do really lead to an improvement of the working conditions.” It plans to carry out at least 270 audits this year, representing an investment of over €200,000. “With this, we are well on our way to achieving our targets: all food-processing companies have to be audited at least once by June 2016 and all vegetable and fruit producers have to be audited at least once by June 2018.”

New headquarters for Retail Partners Colruyt Group

Among other highlights in the report, Colruyt said its wholesale division, Retail Partners Colruyt Group (including Spar and Alvo stores, independent Mini Markets and independent storekeepers), finalised its relocation to a new head office in Mechelen (in Antwerp province) at the end of October 2014. Two automations were also implemented in the high-tech distribution centre also located there, one in the empty goods section and another in the collection circuit for vegetables and fruit. The offices and the distribution centre have a combined surface area of 62,100 m2.

Support for Belgian pears and apples

A large-scale campaign was started at the end of August 2014 to promote the sale of Belgian pears. The Belgian pear growers had a surplus of pears due to the Russian import ban on European agricultural products. The group purchased 160 tons of pears of Belgian growers at the fruit auction. Around 550 stores of Colruyt, OKay and Spar offered the pears to their customers.

Similarly, Colruyt and OKay supported Belgian growers of Jonagold apples with a short-term campaign at the start of November last year. “Due to the abundant harvest and export problems with Russia, the Belgian apple growers were faced with a surplus. Colruyt and OKay offered pure pressed apple juice made from 100% Belgian Jonagold apples. The apple juice was sold under the own brand Boni Selection. Each store was supplied with around 500 bottles, which amounted to a total of 165.000 bottles,” according to the group’s 2014/2015 annual report.

Citrus sales at Colruyt

Sales of lemons were up 25%, oranges 12% and grapefruit 6.5% in volume for the first six months of this year, compared to the same period last year according to Colruyt’s product promotion manager Tony De Bock. “In citrus fruit we sell oranges, clementine, grapefruit and lemons,” he said. Over the course of the year, Colruyt offers lemons from Spain and South Africa, and oranges from the following countries: Spain (for eating and juicing), South Africa (for eating and juicing), Italy (“blood” oranges), Morocco (for juicing) and Egypt (for juicing). Clementines are sourced from Spain, Cyprus (mandora), South Africa (the Orri Club has been introduced) and grapefruit comes from the US and South Africa.

Colruyt’s product promotion manager Tony De Bock

Rise in sales of iceberg and multi-colour lettuce

In terms of lettuce sales, De Bock said the sales volume from January to June was up 3.5%, compared to the same period last year, with 75% of the lettuce grown in Belgium. “We import from Spain and Holland, but that is mainly the iceberg lettuce. We see the most positive evolution in iceberg and multi-colour lettuce,” he said.

Produce quality requirements

“Our quality requirements are always the same,” De Bock said. Colruyt requires Global G.A.P. and BRC certification.



Video about Colruyt Group’s 2014/2015 annual report

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Secrets to Reynolds’ success supplying the UK foodservice market

" Historically, our business has been quite heavily weighted towards restaurants and restaurant groups, supported by a good amount of hotel custom. We're now placing quite a lot of focus on the education sector."

From its origin about 70 years ago as an east London greengrocer, Reynolds has evolved into a national supplier to the catering industry, with annual turnover of £200 million (€281m).

Dedicated to supplying the UK’s foodservice market, it has a particular focus on restaurants – which account for about 60% of its business – and supplies the likes of Pret a Manger, Pizza Express, Carluccio’s and Bill’s. It also serves pubs, hotels, schools, colleges, universities and healthcare establishments.

At the London Produce Show in June, ED spoke to Reynolds’ head of marketing Andy Weir and senior buyer Matt Jones – both based at Reynolds’ National Distribution Centre in Waltham Cross – and started off by asking them what makes such businesses choose Reynolds.

AW: There are a number of reasons they use us. We have a national presence, which obviously means that wherever they open a new store, we can deliver. We have our national distribution center in Hertfordshire, where all of our fresh produce and dairy comes into, and then we truck that to our five satellites. We have one QC team at the office and that means that wherever they’re based, our customers’ outlets get the same produce into their stores – from the same grower, checked by the same people. That means they get absolute product consistency across their stores. That’s really important for any operator building a brand.

MJ: Another key benefit we offer our customers is fixed pricing for 6 month periods, which, because they know their products’ prices are fixed, guarantees their margins. That’s really important because the prices of fruit and vegetables can be quite volatile. So what we do is we lock our prices down with our suppliers and then we pass that security on to our customers. That’s a key difference between us and most of our competitors.

Who are your main competitors?

MJ: There are a couple of other large national produce suppliers in the UK, but they are owned by larger companies, whereas Reynolds is still very much a family owned and run business. There are a whole host of small suppliers, especially in London, within the markets such as Covent Garden.

Where are you making changes?

AW: Historically, our business has been quite heavily weighted towards restaurants and restaurant groups, supported by a good amount of hotel custom. We’re now placing quite a lot of focus on the education sector.
When you’re focusing on one particular market you tend to get sales peaks and troughs. By targeting other markets, such as the education sector, they tend to mirror the rest of the sector quite well. When the schools are off, the restaurants are quite busy, and vice versa. A more diverse mix of business helps us manage our fixed costs better and our technical expertise is very well suited to the education sector, where food safety is clearly very important.

What about in your supply chain?

AW: When our customers order what we call splits, which is single items – a twin pack of peppers, a cucumber, an iceberg lettuce and a punnet of tomatoes, for example – historically they’d all go in one cardboard box or several, depending on the order size. Over the last years we’ve tried to move customers away from disposable packaging and we now use returnable crates.
The driver takes the crate in, leaves the produce with the customer and then takes back the crates on the next delivery. That works really well because our customers have to pay disposal costs to get rid of waste cardboard. I think where we can get any packaging out of the chain completely it’s got to be great for everybody. It saves us money, it saves our customers money and it’s good for the environment.

What’s your biggest challenge?

AW: It’s managing the demand and supply side because we don’t know from one day to the next exactly how much of a single product our customers are going to order. Obviously we don’t want fresh products sitting in the warehouse as shelf life is limited. Equally, our customers expect us to have the appropriate stock levels to meet their demand.
Trying to predict exactly what a customer is going to order, and having the foresight to order the appropriate quantities in advance, is a very difficult balancing act. The average turnaround time in our warehouse is about a day and a half. The idea is that it comes in and goes out. We spend a lot of time fine-tuning our forecasting model to make sure we get that balancing act absolutely right and work closely with customers to understand what drives their demand, such as weather and menu changes.

What are your biggest volume products?

AW: Believe it or not, our biggest selling line overall is milk – because everybody uses it – but for fresh produce tomatoes would probably be number one. We have a couple of dozen different tomato lines, everything from standard round, single M’s, double M’s, Marzaninos, English heritage tomatoes on the vine, and everywhere in-between.

But we don’t just bring these things in and let them sit in the warehouse and hope they sell. We work with our customers to establish what product works best for them. Do you want provenance? Do you want great flavour? Do you want a product that’s going to last a long time? You tell us what you want and we’ll source the right product for you. That’s how the business has evolved.

MJ: On stock at the moment, I’m probably doing about 22 different SKUs, 22 different products of tomatoes. I would say we do 16,000-18,000 boxes a week on tomato, across all the ranges.

What else is big?

AW: Avocados are another line that’s really important for us and for our customers. Obviously when they get the avocados delivered to their store, they need to know they’re ready to eat and ready to prepare, they’ve got to be at absolute peak ripeness. If they’re too hard and they can’t use them, well they don’t have the storage space to leave them out or leave them in the fridge for a few days. It’s really important that we get that absolutely perfect. So yes, we sell an awful lot of avocados and again, we’ve got quite a few different lines depending on customer requirements.

MJ: We do about 13,000 boxes of avocado a week, which I believe is up there with some of the larger retailers. It’s a product that’s heavily used in our industry, around sandwich manufacture, guacamole, etc.

Where do you source your avocados from?

AW: It very much depends on the time of year. At the moment they will be predominantly Peruvian, supported by some South African fruit. On a product like avocados we tend to let our supplier partners manage that decision-making process for us. That’s what they’re best at and we stick to what we’re best at, which is distributing short shelf-life chilled products to our customers.

Please tell us what you do in grapes.

MJ: In grapes we just run two lines, a red and a white grape year-round. We run through about 8 seasons over the year and it’s controlled by one supply base, which manages the Brix, colour and the size of berry, according to our specifications.

What varieties are they?

MJ: Multiple. It could be Superior to Thompson. It could be anything all the way through. We take the best grapes for the time of the year, for the customer base.

AW: Having said that, there are certain customers, like maybe 5 star hotels in London, that want something different. So we do obtain specialty varieties for them, and obviously they cost a lot more than the standard red or white grape. Again it’s back down to what the customer wants, and we can source pretty much anything they want, as long as it is in season somewhere in the world. With our connections and extensive supply base we’ll find it for you.

How is demand for tropical fruit such as pineapple? What kind of volumes do you do in pineapple?

MJ: I do two types of pineapple. I do an extra sweet size 6, a large pineapple, which I do about 1,200 boxes, and a 10, which is a smaller pineapple, at about 600 boxes. About 1,800-2,000 boxes a week in total.

What are your top sellers in salad?

MJ: Cucumber would probably be the biggest, at about 6,000 boxes a week. Peppers would be next, probably roughly around 3,500 boxes of peppers a week, across the three colors, and a little bit in orange and black.

Foodservice is often where emerging culinary trends are seen first. What are you noticing?

AW: More and more demand for provenance. For the majority of our customers it’s about British produce and it’s well-known that consumers like to know now – particularly post Horsegate – where the food on their plate comes from. Whether it’s Kentish strawberries or asparagus from Hampshire, it all about menu appeal and authenticity.
Our food development team spend a lot of their time advising customers on where their produce comes from, so they can market it to consumers. If you take for example, Bill’s, which is one of the fastest growing restaurant groups in the UK – they’re one of our customers – they do a fantastic job at promoting great British produce. If you look on the menu you’ll see the appropriate product for the time of year. At the moment, there’s kale on there, and there’s strawberries, but they don’t have strawberries on there at Christmas time.
We work closely with our customers to help them map out what’s going to look good, what’s going to be appropriate on the menu in three months, in six months’ time, because these operators need to plan in advance exactly what they’re going to have on their menu and if they put something on their menu for the summer and it’s not available, obviously that’s not great for anybody. So we play a large part in advising them on what’s going to be best at what time of year, what’s going to be in season, what’s going to be British, to make sure that they satisfy their consumers’ appetite for fresh, seasonal produce.

London Produce Show


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Strawberries wilting amid California’s extreme heat and humidity

Record level extreme heat and humidity are causing significant quality issues for strawberries out of California, reports Atlanta-based foodservice distributor Royal Food.

Record level extreme heat and humidity are causing significant quality issues for strawberries out of California, reports Atlanta-based foodservice distributor Royal Food Service.

It said the situation is being experienced by all growers in the area. Quality issues being reported from the fields are bruising, soft spots, smaller sizes, some mildew, white or soft shoulders, and over-ripeness. 

“To avoid further quality issues, it is very important to keep these strawberries cold until ready to use. Royal is doing everything possible to ensure that the cold chain remains unbroken,” Royal Food Service said in news published on its web site on July 1.

Image: by National Oceanic and Atmospheric Administration (public domain) via Wikimedia Commons

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Makro: the greengrocer for Spain’s food service sector


Offering extensive fresh produce product choices – so food service businesses can differentiate themselves – is a feature of the cash & carry giant’s approach in Spain

Makro Spain
2013/14 consolidated sales: €1.23 billion (2012/13 €1.21b)
37 stores
3,700 employees
About 1 million registered customers
Logistics platforms: Madrid 9,000m2, Guadalajara 31,000 m2, Valencia 6,000 m2
45,000 different items, more than 400 in fruit & veg
Part of Cash & Carry division of Germany’s Metro Group, world’s 3rd biggest distribution group

Fruit & veg at Makro Spain
Delivers 10% of total/food turnover
6 in 10 Makro clients buy fruit & veg
80% Spanish, 20% imports (over full year)
Imports: mainly Costa Rican pineapple, Mexican & Brazilian limes

Imagine being the greengrocer for every kind of eatery ranging from the pub next door to a Michelin star restaurant. You must stock the simple spud through to the latest fad in exotic citrus and fungi. Meeting those diverse needs is the remit of Jorge Hernández, fruit and vegetable category manager for Makro Spain.

Part of the global Makro chain of warehouse clubs, also called cash & carries, for more than 40 years Makro Spain has specialised in supplying small and medium-sized catering companies. Today it is a multi-channel business – now also offering a delivery service – but still focused on hotel, restaurant and catering (HoReCa) firms and seeking to differentiate via an extensive assortment, differentiation, communication and innovation. Its 37 stores offer more than 400 items in fresh fruit and vegetables alone.

Speaking at his base in Mercamadrid, Hernández stresses Makro aims to be the best partner to its clients. “We want to simplify their business management and help boost their profitability.”

One way Makro does this is to shield clients from market fluctuations by locking in prices for Horeca customers on certain fresh produce for three months at a time. “It saves them a lot of price calculations,” Hernández said.

Double digit growth in convenience food

And the philosophy particularly applies to the provision of fresh cuts, “because they are meant to save our clients a lot of time and money.”

“We provide a lot of options based on what we see in our work with them. For example, when you put a salad based on iceberg lettuce on a plate it’s quite flat, it doesn’t fill it much, so we offer other mixes, such as with baby leaves or escarola, that add more bulk for the same quantity.” Hernández said.

“We’ve seen double digit growth every year for the last four years in both volume and value in our fresh cuts, and keep in mind prices in this category don’t change much,” he said. Pre-cut salads account for about 50% of total pre-prepared sales, with the rest mainly cut raw vegetables such as potatoes, garlic and onion. Makro also supplies peeled orange, sliced lemon, and watermelon and melon balls, and in ready-to-eat has popular Spanish foods such as roasted red pepper.

The key categories: fresh cuts, lettuce, tomatoes, potatoes

Along with fresh cuts and lettuce, potatoes and tomatoes complete Makro’s four pillars in fruit and vegetables. In the latter, it is adding very practical value for clients via a soon-to-be-released usage guide to the many varieties.

Makro offers more than 30 kinds of, although  the type that accounts for most of its tomato sales is the “firm salad tomato”. (This is also an area illustrating the importance of Makro’s regional buyers, as in the south of Spain they tend to like their salad tomatoes greener than they do in the Cataluña.)

Such a guide has already been released for Makro’s onions. Need to caramelise an onion? Try a mild white one. Making a sauce? Use a shallot. Granos are good for casseroles, Chata (flat) onions for baking, and so on, it explains.

Big demand for microgreens

Sales have also been increasing for one of Makro’s specialty items  – micro-mesclun. Sourced from Valencia, this mix of very young leaves and shoots  provides great volume and colour on a plate and is proving very popular. Makro is expanding its range of such products, including sprouts and edible flowers, as well as mini–vegetables such as zucchini, eggplant and cauliflower, plus algae and “living” lettuce (with roots in water).

Another specialty is the broccoli hybrid Bimi. So far it is better known in the UK but Makro is working with an exclusive supplier in Spain “with good results.” “Such products help our clients differentiate themselves,” Hernández said.

Wild about wild mushrooms

Another increasingly popular product is the wild mushroom. “Every year we’re seeing really strong growth in sales of them. They are the seafood of the grocery section – they’re exclusive and delicious but expensive, and all the time more chefs want to use them.”

The importance of fruit ripeness and rotation

As for fruit, Makro sells less of it than vegetables as in food service it is mainly used only in desserts. But of the fruit used in the sector, oranges in particular, but also the pineapple, lemon, melon, watermelon and strawberries, are the most important.

As its clients are not the end consumers, all Makro’s fruit is bought ready–to–eat either the next day or within a set number of days. It withdraws produce from shelves preemptively, usually 2-3 days – or in some cases 4-5 – before it becomes overripe.

Citrus: cost certainty and exotic options

Oranges are another key product for Makro and mainly end up in desserts or juices. Another illustration of Makro’s efforts to make running their businesses easier for its clients is its orange range that literally promises “3 oranges will provide 200 ml of orange juice.”

“Having a fixed cost like that is highly valued in hospitality,” Hernández said.

Makro’s citrus range also includes (according to season) exotic options such as citrus caviar, bergamot, and the ancient Buddha’s Hand. Mainly sourced from Elche, in Valencia, the latter is used in cocktails and desserts in upscale venues.


Recovering wild strawberry flavours

Berries – and by far strawberries – are another important category, particularly for pastry goods and desserts.

And as part of its Alma Makro (Makro Soul) project, the company is working with small-scale farmers in Aranjuez, south of Madrid, to recover wild strawberry (Fragaria vesca) varieties – and their different flavours – that centuries ago grew in extensive market gardens there.

New strategy for private label products

In terms of fruit and vegetables, Makro’s own brands – Horeca Select and Fine Life – currently account for 40% of sales. The three key values for its own brand strategy are traceability, freshness and food safety.

However, Makro plans to stop working with Fine Life, to focus on Horeca Select, and, under a Metro Cash & Carry project shortly to be piloted in Spain and Belgium, will generally reduce its involvement in own brand products while adding more value to those it does offer. It will be also be even more selective in the branded lines it stocks, maximising the value for clients, “not just in the product but the packaging and the communication on it.”

Potential but small sales in organic

Though Makro is seeing stable sales for its small but growing range of organic produce (mainly of products that can be eaten raw), 99% of its produce is still conventional as there aren’t many organic restaurants in Spain yet. “But there is a market trend there and so we want to be there,” Hernández said.

Regional, national and international purveyance

Makro tries to offer a range of local products in every store. Its emphasis on sourcing local produce not only helps local producers, it results in a smaller carbon footprint in transport and fresher produce. Local produce is sourced by regional buyers, of which there are four: one each in the north, south and east of Spain, as well as the Canary Islands. The national level is looked after by staff at Mercamadrid and the Metro Group’s international procurement office in Valencia sources certain imports and local products.

Overall fruit and vegetable category management comes under the wing of Hernández and his team – Beatriz Dominguez, José María Rubio and Miguel Heras – at Makro’s Mercamadrid platform. “We aim for long term relationships with our suppliers and three quarters of them have been with us more than a decade,” he said. These suppliers must comply with strict product specifications, such as on colouring, degrees Brix, weight, ripeness and firmness.

Makro’s clients and competitors

Makro’s clients – who tend to buy from it at least once a week – fall into three main categories: HoReCa (food service), resellers and office services, accounting for 75%, 5% and 20% respectively of its fruit and vegetable sales. Its strategy, however, is to increasingly focus on the hospitality sector, especially tapas bars and casual and fine dining restaurants.

As for its rivals, there are about 10,000 fruit and vegetables distributors in Spain. “It’s a very fragmented market,” Hernández said, admitting it’s a challenge, “as our clients could also shop at supermarkets, local stores, specialty suppliers or via our main competitor – the door-to-door distributor.”

Preference for ‘green’ packaging

Because it supplies the hospitality market, Makro can’t sell loose product. “We have to have traceability,” Hernández said, “everything has to have a bar code so you know who grew it.” Apart from that, Makro values “packaging that is attractive, that communicates according to what’s inside and is appropriate for its category.” It also prefers it to have the least net environmental impact – ideally recycled or recyclable – and tries to avoid double packaging, e.g. boxes with bags inside.

And in transport, multi-temperature trucks – for example with separate sections for frozen and chilled food – are used, which make groupage easier and increase efficiency.


This article was originally published on pages 18-19 of edition 136 of Eurofresh Distribution magazine. Read it online here.