The 2019/20 global citrus crop is down for all categories, except grapefruit. Orange production is down 11% to 47.5 million, due to weather-afflicted seasons in Brazil, the EU, Morocco and Egypt, with small increases in China and the US unable to compensate for these losses. The global mandarin crop is down 1% to 31.7 million tons, with drops in all major production regions, especially Turkey (-9%) except China. The world’s lemon crop is estimated to be down 7% to 7.9 million tons, with Argentina (-11%), the EU (-13%), Turkey (-9%) and the US (16%) all suffering challenging seasons due to weather events. Mexico’s and South Africa’s lemon and lime production are both expected to be up. Lastly, grapefruit was the one citrus category that registered a larger crop in the 2019-20 campaign, with larger harvests in China, South Africa, Turkey and the US more than offsetting the 18% fall in the EU’s crop.
BFV increases its portfolio of successful brands and supplies 120,000 tons of exceptionally high quality pears.
With 120,000 tons of pears, BFV represents more than a third of Belgium’s production. Its CEO, Filip Lowette, has confirmed the more acceptable price levels recorded this year compared with the 2018/2019 campaign, which was affected by heat and drought. The Sweet Sensation pear is the only variety registering a poorer season, with a 50% reduction in the harvested volumes. BFV enjoyed a good season, with a 40% increase in turnover during the last trimester of 2019 compared with 2018, thanks also to the more balanced EU crop, which totalled around 2.1 million tons. BFV increased its supply of organic fruit to 5,000 tons, with 245ha of certified orchards and more under conversion.
Belgica, Morgana & Joly Red rising stars
The Belgica variety propelled BFV once again to a successful start to the apple season, with 2,000 tons marketed at a good price, due to its splendid fruit quality, colour and taste. Introduced four years ago, Joly Red is the second youngest variety club. It appeals to consumers in the Middle East and Far East due to its attractive flavour (Envy and Fuji type), high levels of colour (80% red) and sugar (+15º brix). Morgana is the latest variety club, launched by BFV in 2019, and with 40ha planted so far in Belgium. Its superior eating qualities are positioning it in the higher segment of the apple market. Significant volumes will be offered from 2020 in partnership with Melinda in Italy, Krings Obstbau Vertriebs in Germany and Margraeten Fruitveiling in Holland. Jonagold and Jonagored are still the major apple varieties at BFV. The smaller calibres of this season make it more suitable for export markets like India and the UK.
BFV’s berry success story
The firm continues its strong growth in the berry and cherry category, with 3,000 tons of strawberries and 3,500 tons of cherries (+50%) marketed in 2019. The cherry season runs from mid-June until mid-August, with the main varieties being Kordia, Regina and Sweetheart. Every fruit is graded and hydro-cooled using Unitech technology. Strawberries are supplied for over 9 months from March, combining all growing systems of soil, covered and hydroponics.
Jinhua’s new Fruit Wholesale Market is now one of the top ten fruit markets in China. In 2018, the volume of business of the old market exceeded 2.43 million tons, with turnover reaching 14.2 billion Yuan. Thus, a new star is born and the new market is expected to shine brightly. At present, the new market is composed of a business district, a trading district (including a vehicle-mounted trading district), and living district. 185 pioneering enterprises have entered the market and 805 business rooms are in use. It is estimated that by 2020, thanks to a total investment of 2 billion Yuan, the logistic volume of the new market will reach 3.5 million tons, and total logistics will amount to 22 billion Yuan. The market is set to become a first-class professional fruit wholesale market, integrated into a modern network consisting of a logistics centre, a distribution centre, an information centre, and a trading centre.
Lorenzo Carrasco, marketing manager of Central Dica, an importer and marketer of fruits and vegetables, says that 2019 was a good year for the firm’s growth and its continued specialisation in imported products, such as the Ercolina pear from Chile, mango, avocado, and grapes. Central Dica always looks for products with a twist to their quality and taste. The vehicle for current and future growth is La Pequeña Holanda SCA, with its conventional and organic production on over 260 hectares, both for domestic and export customers. The company continues to develop its marketing in all distribution channels: wholesale, retail, food service, online, export and, of course, large-scale distribution, the last of which is where growth and specialisation has been greatest in recent years. “And we will carry on working like this since, fortunately, we have the know-how and capabilities to continue growing by offering the kinds of service that few companies in our sector can match,” said Carrasco. “We continue to specialise in exports by air, a project that we started a few years ago. We’re targeting the UAE, Africa and Asia with all kinds of products of Spain origin as well as cross-docking from international origins.”
With the UK all but certain to leave the EU in 2020, the European fruit and vegetable industry is viewing with great concern the potential impact this will have on intra-EU trade flows. A recent Rabobank report found that fresh produce will be the most affected food sector following Brexit, along with animal protein. At a time when the EU agricultural sector is still adjusting to the fallout of the Russian embargo, the potential loss of another key market could have devastating consequences.
Loss of trade would be costly on both sides of Channel
For many years now, the industry has benefited from frictionless trade thanks to single-market provisions, with the EU Mainland being a net supplier to the UK. In fact, the UK is the third largest destination for EU fruit and vegetables, receiving 3.1 million tons (€4 billion) of fresh produce each year. The two-way flows between the EU and the UK are worth €3.6 billion and account for about 10% of all intra-EU fresh produce trade. Besides generating large revenues for EU suppliers, this dynamic has left the UK heavily dependent on the EU for its fresh produce, with 55% of all the country’s imports coming from the EU-27 Member States. The main EU imports to the UK are tomatoes (480,000 tons), apples (245,000 tons), onions (230,000 tons), sweet peppers (175,000 tons), and soft citrus (164,000 tons). The largest source by far is Spain, which represents 45% of the total, followed by the Netherlands (22%), France (7%), Germany (6%) and Ireland (6%), with significant volumes imported from third countries via other EU Member States.
The UK itself produces around 2.2 million tons of fresh produce (1.8 million tons of vegetables and 450,000 tons of fruit). Its exports to the EU total around 310,000 tons, most of which are shipped to Ireland (101,000 tons), France (90,000 tons) and the Netherlands (30,000 tons). The main trade is the re-export of bananas (64,000 tons) and other exotic fruits.
So, how is Brexit likely to change this picture? To answer this, multiple aspects need to be considered, such as tariffs, potential quotas, logistical hurdles, customs operations, certification, and tracing. At this point, we can only speculate about the terms of the eventual deal, as the final details of any agreement are still to be established. If the UK leaves the EU without a withdrawal agreement, then it will automatically revert to WTO trading rules in dealing with the EU. This would lead to a new tariff regime in place which would increase costs for operators in the EU and the UK who had previously benefited from zero-tariffs. What is clear, however, is that no extra tariffs will be applied to fresh produce for up to 12 months after the UK leaves the EU.
Bottlenecks and rotting produce
Secondly, border procedures and customs operations could lead to delays along the supply chain. This could have drastic consequences in the fresh fruit and vegetable trade given the perishability of the products. Trade flows are dependent on swift border procedures and customs clearance. Currently, 130,000 containers of highly perishable products arrive in the UK from the EU each year, with 55,000 containers sent from Spain alone to the port of Dover. The main bottlenecks of the EU-UK fresh produce trade are located at the ports of Dover and Rotterdam, and at the Eurostar connection in Calais. Dover is a very narrow transit port, lacking parking and storage facilities. Any new procedures will place great burden on ports and lead to backlogs, which in turn would compromise the timing of arrival and the quality of the perishable products. Morrisons supermarket chain has announced contingency plans that include switching to alternative ferry crossings, such as Le Havre-Portsmouth, if the Dover-Calais route becomes gridlocked. In turn, the Co-op supermarket chain has stated its intention to use air freight to bring in fruit to avoid empty shelves.
Ireland is particularly vulnerable given its relative geographical isolation. New border controls could result in lower supplies and higher prices for Irish consumers, too. Goods shipped between Mainland UK and Northern Ireland will also be subject to checks by UK and EU officials, which is causing particular distress in Belfast.
The UK may introduce different food safety regulations. This would lead to increased certification requirements, including certificates of origins, quality and phytosanitary certificates, which would constitute a further financial burden on operators. As fresh produce often arrives in mixed containers, with an average consignment comprising 10 different product categories, then based on an annual average of 130,000 containers, this would result in additional cost of up to €65 million in certification, according to a Freshfel report.
UK to turn into a rival for the EU?
The EU is concerned about what steps the UK may take to make itself a more attractive market, to the potential detriment of its European neighbours. When the UK becomes a third-country trading partner, new transhipments rules will need to be defined, governing how produce is stored and handled. If the EU wishes to retain its competitiveness as a logistical hub, it must ensure it continues to be a more attractive logistical environment than the UK, or risk losing trade. Another fear is that the UK will loosen MRL and phytosanitary requirements in order to attract imports from around the world. Such changes would have a knock-on effect on trade within the EU, where stricter rules are in place.
Less movement, less collaboration
While the movement of citizens is to be guaranteed during the transition period (up to December 2020), the current shortfall in seasonal labour in the UK is likely to be exacerbated and result in higher costs for UK producers. The field of research and innovation is also certain to be affected, with the UK one of the largest beneficiaries of Horizon 2020 funds, receiving €3.3 million in grants. For instance, the “Raditom” research project is investigating the preservation of tomato flavour, while the “EUFRUIT” project involves 12 countries focussing on coordination and information sharing.
The ideal scenario
Ultimately, the industry fears that the complexities of fresh produce trade with not be adequately considered given the limited time for negotiating exit conditions. Ideally, there would be a longer transitional period than the currently proposed 11 months (until December 2020) to allow a new free-trade agreement to be concluded and grant businesses sufficient time to adapt to any changes. An undertaking to protect the supply of EU fresh produce to the UK would defend jobs and economic growth on both sides of the Channel.
Moreover, if the UK integrates its digital customs services with those of the EU, this would help lubricate trade flows. It is vital not to reverse the great progress the sector has made in recent times. The issuing of electronic organic and phytosanitary certificates via ‘traces’ has greatly improved the monitoring and risk analysis of trade in plant products. The fine balance that has allowed the sector to flourish could be greatly undermined by any variation in price or conditions.
“The Internet of Things and connectedness will change how we all market fruit and vegetables”, Lisa Cork at Asia Fruit Logistica
These are the megatrends fresh produce marketers must prepare for
Generation Voice will revolutionise digital retail. And it’s just one of various global macro trends set to shake up every fresh produce business. Lisa Cork, CEO of Fresh Produce Marketing Ltd, says we’re in a time of unprecedented disruption, but this brings opportunities for incredible differentiation. The way to survive and thrive is to understand what’s coming, she says. In a session on September 5 at Smart Horticulture Asia, part of the Asia Fruit Logistica show in Hong Kong, the New Zealand-based expert shared her advice on just how to do this.
The era of Voice activation
When she started out in fresh produce marketing over 25 years ago, Cork said there was one clear target to influence – the female household shopper. But fresh produce marketers today face a never before seen degree of demographic diversity. Now there are 6 main demographic groups to take into account – Silent, Boomers, Generation X, Millennials and Generation Z – plus the game-changing Generation Voice. The latter will be the generation that, from a very young age, verbalises commands into all sorts of audio devices, including phones and home speakers, and has the power of purchasing and influence in its hands from a far younger age than ever before. The fact that this generation will grow up with voice as its predominant interaction with technology “changes everything about how we do everything,” Cork said.
Capitalise on increasing
The Internet of Things, or IoT, is all about connectedness. This trend has been driving us for the last decade and it’s only getting stronger. “We are seeing a whole new way of connecting with the devices in our homes,” said Cork, who went on to share examples including the Samsung smart fridge. Aptly called the Family Hub, this fridge allows people to manage their fresh food like never before, including to see inside it from anywhere with built-in cameras, create and share digital shopping lists, look up recipes on its touchscreen, scan product barcodes, and order groceries online. Cork urged fresh produce companies to start thinking about the implications of the latter, namely how to get their brand into consumers’ hands when doing replenishments via a smart fridge. “The Internet of Things and connectedness will change how we all market fruits and vegetables,” she said.
What’s the biggest food trend now? Cork says it’s probably “food mindfulness”, which is all about plant-based protein and diets. Some people say it’s a fad but Cork is adamant it’s here to stay. “Two generations from now, they are going to look at those of us who ate meat in horror and wonder how we allowed our diet to do the damage it did to the planet,” she said. This goes well beyond things like non-dairy milk and yogurts to things like chicken and egg replacements that taste just as good, and even meats made from real meat cells. And people are voting with both how they eat and their money. The brand Just has already sold 10 million egg equivalents of its “Just egg” product made of mung bean and Beyond Meat saw its shares surge more than 500% after its May initial public offering. Who is interested in such new foods? Consumers who are environmentally aware, against animal cruelty, who want to avoid saturated fats and those against mass scale farming and degradation. People are becoming incredibly food conscious, from preteens choosing to be vegetarian through to 40-50 year olds and even senior consumers who are starting to spend with companies who are more mindful about food production.
Protect your brand
The digital revolution is causing major disruption in retail and not all of its impact so far has been good for fresh produce brands. One thing Cork is regularly seeing in western countries is a loss of brand identity online, “and the moment you lose that, you lose the ability to command a premium,” she warns. Produce companies that have made double-digit million dollar investments in branding, logos, product photography and marketing in brick and mortar stores can find that online all that aesthetic is lost and instead generic photos of the relevant fruit or vegetable are used to represent their products on sites such as online stores and shoppable recipe platforms. Similarly, the product descriptions are often bland and fail to transmit what is special about the brand. The fact that these problems are not the norm in China, which pioneered online retail and appreciates brands, shows all this is not due to a lack of technology, Cork stressed.
How to proactively prepare for the future
- Sign up for omni channel shopping – it’s the fastest way to learn about what’s happening with brands, replenishment and recipe lists, and so on. Download and try shopping apps and services like Amazon Go, Peapod, etc.
- Say your brand’s name into voice – assisted shopping apps and see what happens. Cork says you may be surprised – most brands don’t cut the mustard because their name is too complex or associated with another, non-produce brand.
- Be clear on your brand strategy – you need to define who you are and who you are targeting because voice will completely change the way you need to market your product.
- Learn how to optimise how your brand looks online – including creating high impact tiny images for people shopping on phones.
- Prepare to make mistakes – that’s the only way you’ll learn what works, especially in places like China where you have to jump in and adapt your brand strategy on the fly.
- Find plant based protein products and eat them. Participate in the trend.
- Seek out the leading companies among AgTech startups and understand the
innovation they bring to the industry.
BY JULIE BUTLER
Since 2001, GO MANGO has been producing Keitt mangoes in Puerto Rico. It currently has 1,000 acres in production, representing 200 annual export containers, and 500 acres are now being incorporated. “When we started the company, we planted the trees in a more compact area with the idea of acquiring more land in the future, moving the trees and expanding. We have just acquired a transplant machine and expect to double production in less than three years,” said Eileen Rodríguez, quality & compliance manager. The main market for GO MANGO is the EU, where 75% of the fruit is destined and where the largest customer base is concentrated. “The Netherlands and Germany are the main markets, although we are seeing that the UK is demanding more and more volume. Our interest is to continue expanding and raising brand awareness,” said Rodríguez. The firm also exports green mango to the US, especially for Asian consumers in that country. Rodriguez announced that the company’s next acquisition is a system of “forced cold”, a technology that cools the fruit quickly, slowing the ripening process and extending the life of the fruit. In addition to having certificates such as GLOBALG.AP, GRASP, Tesco and SMETA, in 2011, GO MANGO completed the integration of the fruit washing process with solar thermal heating, which allows it to heat all the water necessary for sterilising and processing mangoes before refrigeration and shipment. This saves 80% of energy resources. Similarly, the firm has installed solar panels on the roof of the packaging house, which allows it to produce 100% of the energy for its operations.
The “food city” ratifies its commitment to guarantee economic, environmental and social sustainability.
Mercabarna continues to deepen its most social commitments and has published for the second consecutive year a Sustainability Report. The report analyses the impact of the activity of the central food market on its economic, social and environmental environment. This makes Mercabarna a pioneer among Spanish wholesale markets for its development based on sustainability criteria.
In drawing up the report, Mercabarna followed the indicators established by the Global Reporting Initiative (GRI) – the reference institution in terms of sustainability reports endorsed by the United Nations (UN). This transparency exercise details Mercabarna’s strategic objectives, the actions that are carried out and the challenges presented, which are aligned with the Sustainable Development Goals (SDGs) of the UN 2030 Agenda.
In accordance with the SDGs, Mercabarna’s main corporate social responsibility actions have been articulated in terms of six aspects: Competitiveness and Employment, Fight against food waste, Healthy food, Environmental responsibility and Solidarity partnerships.
Labour market: 74% of the trained students find work
In 2018, Mercabarna gave 17 occupational training courses (butchery, fishmonger, greengrocer, florist, international trade, storekeeper and forklift) in which 210 unemployed people participated. The index of labour insertion of these courses, according to the data provided by the Catalan Employment Service of Catalonia stood at 74%.
To train the workers of the 800 companies in the food court, Mercabarna organised 71 continuous education courses in which 720 professionals took part. The courses were for butchers, fishmongers, greengrocers, charcuterie, occupational risk prevention, information technology, hygiene and handling of foods and languages, among others.
As for the ‘Mercabarna Grants’ occupational program (grants to companies for the hiring of unemployed people or recent graduates, equivalent to the minimum inter-professional salary for 6 months), a total of 83 scholarships have been awarded since the beginning of the program. 4 years. 75% of the scholarship holders have continued working in the companies where they did the internship during the scholarship period, once this one is over.
Fight against waste: 1.3 million tons of food for 21,000 people
Mercabarna and the Food Bank have collaborated since 2002 so that consumable but non-marketable food reaches people in need. For this reason, in 2018, Mercabarna Food Bank distributed 1,275,000 tons of fruit and vegetables among 67 social entities, which were distributed among some 21,000 vulnerable people in Barcelona and its metropolitan area.
Promotion of a healthy diet among 12,800 children
Mercabarna promotes healthy habits and respect for the environment among children, especially among schoolchildren who participate in their educational campaigns as well as among their schools and families. During the 2017-2018 school year, 12,300 children participated in the educational programmes: ‘5 a Day’, ‘Grow with the Fish’ and ‘Flowers and Plants Every Day’.
In addition, for 3 years, Mercabarna has been organising the ‘Refresh with 5 a Day’ summer camp, aimed at vulnerable children from social organisations in Barcelona and its metropolitan area. In 2018, 467 children and 96 monitors participated in this activity.
Respect for the Environment: 76% of all waste is recycled
In 2018, a record 76% of the waste generated by the activity of the 700 companies located in Mercabarna was recycled.
Mercabarna supports the social initiatives of 29 solidarity organizations
Mercabarna has supported the initiatives of 29 social entities that share its solidarity objectives. This support has been provided through the organisation of occupational training courses and sporting events; donation of food and financial contributions.
Economic Responsibility: €10.4 million
Mercabarna carries out the responsible management of its economic resources to guarantee growth, incorporating sustainability issues as a vector of success. In 2018, the food market reached a profit figure before taxes of €10,419,618.
Main social responsibility projects
In terms of the abovementioned aspects, Mercabarna carried out various initiatives in 2018: Inauguration of the Aula del Fresco; the organisation of the Congress of the World Union of Wholesale Markets with the slogan ‘The Future Markets: Efficient and Responsible’; first Summer University, focused on ‘Sustainability in the Food Chain’; and the start of the construction of the Biomarket, the first wholesale market and organic agricultural cooperatives of Spain.
More and more European distributors of berries pay attention to honeysuckle. “This year, Ukrainian growers for the first time launch to the market the tastiest varieties of honeysuckle; we are sure, all over the world the consumers will like them,” states Alexander Yareschenko, PhD for agrarian sciences, deputy director of Ukrainian horticulture Institute. The participants of the largest berry conference “Ukrainian Berries-2019, fresh and frozen” will discuss the potential of honeysuckle too. The conference is taking place this May the 21st in Kiev and focuses on export opportunities for Ukrainian berries.
Last February, local municipalities of several Turkish cities launched direct sale points to balance sharp growth of consumer foodstuff prices, offering agricultural products to average consumers at an affordable price. The direct sale points were established as part of the Treasury and Finance Ministry’s counter- inflation campaign. The Turkish economy has been tackling high inflation for the last year. Consumer prices peaked in October and hit 25.24 percent. In February, inflation fell below the 20 percent threshold for the first time since September. Sustainable tight monetary policy, fiscal discipline and other measures such as direct sale points have made a major contribution to the improvement in the inflation rate.
The sale points, launched to circumvent intermediaries, have seen widespread demand from citizens. Some 30,000 tons of goods, including 15,000 tons of fresh fruits and vegetables and 15,000 tons of grains and legumes have been sold. With the start of vegetable sales at municipal direct sale points, prices in wholesale vegetable markets and supermarket chains dropped by half.
Stating that sales have so far reached 111 points in eight cities, Fahrettin Poyraz, general manager of the Agricultural Credit Cooperatives of Turkey, said the practice was initiated in order to avoid the rambling price increases in the market. “We are not saying we will sell every product. We will only sell products that have seen an exorbitant price increase,” he added. “After launching our sales, large markets also decreased their prices,” he continued, adding that the project has accomplished its objectives.
In addition, the state-run postal service, Turkish Post and Telegraph Organization’s (PTT) online marketplace www.epttavm.com has also started selling vegetables.