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Spanish stone fruit sector under immense pressure

Spanish stone fruit sector under immense pressure, credit. Alexandra Sautois, Eurofresh Distribution
© Alexandra Sautois, Eurofresh Distribution

 

Spain’s Afrucat stone fruit committee has agreed an Emergency Plan to protect the sector through a range of short- and long-term measures, including a request to the Ministry for a start plan consisting of 10,000 hectares throughout the Spain in Catalonia, Aragon, Murcia and Extremadura. This plan would remove about 300 million kilos of peaches and nectarines from the European market (25% of which is controlled by Spanish production). According to the director general of Afrucat, Manel Simon, this measure could be enough to reverse the negative trend that has seen the sector hit by a series of losses since the end of summer 2014 when the Russian veto began.

The association estimates that Cataluña’s stone fruit sector alone will lose €90 million this campaign and expects the Spanish ministry to invest €50 million in the aforementioned plan. Sisco Palau, president of the Afrucat Stone Fruit Committee highlights the need to apply the measures “in a sector that has been heavily affected by losing three consecutive campaigns and suffering cost increases.” Palau insists on the importance of uniting the entire sector (organisations and unions) and extending this union to other state organisations.

Other measures proposed include investments in reducing production and plant costs with the implementation of existing innovations, as well as campaigns for promoting consumption and the opening of new markets for Spanish fruit.

The 2019 stone fruit campaign was marked by a full European production of peach and nectarine, with a 10% increase in volumes. The calibres were fair and there was a saturation of markets caused by the high amount of stone fruit in the traditional European markets due to the ongoing Russian veto.

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Mercadona to build its main warehouse in Valencia

Mercadona said that what it refers to as its new “main regulating warehouse” will in turn supply the company’s other warehouses across Spain, ensuring the necessary stocks of all types of products, regardless of their origin and final destination.

Spanish supermarket chain Mercadona has chosen a business park in in Sagunto, Valencia, for a new logistics block.

It said Parc Sagunt’s strategic location makes it one of the best options for the company’s main warehouse, which will be built in stages and in time supply Mercadona’s entire logistics network.

In a press release on December 7, Mercadona announced its €24 million offer for a 358,270 m2 plot in the park had been accepted by the park owners.

“This new project will allow us to increase our productivity and optimise the efficiency of the rest of our warehouses, in aid of achieving our objective, which is to continue to transport more and more, using fewer resources,” said Mercadona’s managing director of logistics Oriol Montanyà.

Map image ©2016 Google, Inst Geogr. Nacional

Mercadona said that what it refers to as its new “main regulating warehouse” will in turn supply the company’s other warehouses across Spain, ensuring the necessary stocks of all types of products, regardless of their origin and final destination.

Mercadona’s logistics network currently consists of 13 logistics blocks and 3 satellite warehouses.

Mercadona’s logistics block in Abrera, Barcelona (source: Mercadona)

In 2007, it opted for a new warehouse model and an “intelligent, innovative and fully automated logistics block.”

The company foresees replicating the intelligent warehousing model in the new logistics block in order to avoid unnecessary handling, strain and accident risk for employees while increasing productivity.

As at October 28, Mercadona had more than 1,600 stores in Spain, having opened 32 new supermarkets this year.

It has inaugurated 32 new supermarkets in 2016 and refurbished a further 28 stores to adapt them to its ‘atmosphere store’ model.

Mercadona closed 2015 with revenue of €20.8 billion, a 3% increase on the previous year, and with profit of €611 million, up 12%.

It is expanding to Portugal, where it plans to open four supermarkets in 2019 with an initial investment of €25 million.

Source of images other than map: Mercadona 

Read more articles about Mercadona here.

 

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Fresh food still shaping FMCG evolution in Spain

Fresh food continues to be key in the evolution of Spanish FMCG

Fresh food remains pivotal in the battle to get into consumers’ regular – and now smaller – shopping baskets in Spain, reports Kantar Worldpanel.

However, In its latest analysis of the Fast Moving Consumer Goods (FMCG) sector in Spain, it says both the volume and value of retail sales of perishables over January-September were 2% lower than that for the same period last year.

It attributed this to more Spanish consumers buying their fresh food in modern retail outlets – and paying less for it – instead of in specialist and traditional greengrocers.

The report Retail trends 2016 shows Mercadona – with 23.0% of Spanish FMCG expenditure, up 10% on last year – continues to lead the Spanish retail market by far.

The growth is based on the chain’s stake in the fresh food area and the battle is now centred on winning consumers in regions where Mercadona does not yet lead, Kantar Worldpanel said.

Next comes DIA, which has reinvented itself, improving its image and winning more consumers through measures such as its La Plaza (marketplace) fresh food model. As at September 11, DIA held 8.7% of the Spanish market, up 0.1% points on 2015.

Lidl is Spain’s fastest growing retailer. It currently holds 4.0% market share, having gained 0.5 points on 2015, and has improved its rating in the last year in attributes such as store cleanliness and layout and the possibility for consumers to do all their shopping there.

While hypermarkets (superstores) have maintained a 13.6% market slice – with Carrefour at the top with its 8.5% share – these stores are losing out with the trend to smaller shopping baskets.

Regional supermarkets and online channels: two growing purchasing options

In contrast, two channels are gaining ground and filling consumers’ shopping baskets: regional supermarkets and e-commerce.

Regional supermarkets are emerging as an alternative to national retailers, having moved up 0.2 points since last year to achieve an 11.1% market share.

“Brands like Consum, Ahorramas and Eroski stand out for their importance in their areas of origin and each have found themselves to be in the Top 3 retailers in their respective regions.

“These chains are often ranked higher in small or routine shopping baskets and are more geared towards fresh food products. They also place more importance on their own manufacturers’ brand lines, Kantar Worldpanel said in a press release.

But the most high-profile player of recent months has been e-commerce, which now represents 1.1% of Spanish expenditure in FMCG, attracts 3.7 million Spanish households and is generating new shopping habits.

Florencio García

Kantar Worldpanel retail sector director Florencio García said ‘pure’ online retailers are taking off and this is “shaking up distribution and causing the large groups to make a move.”

Amazon, El Corte Inglés, Carrefour and DIA are driving Spanish consumers’ interest in online purchasing with their movements, pending the sector leader’s movements, Mercadona, where one in every five online buyers now making purchases on the brand’s website,” García said

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Mercadona increases by 3% to €20.8 billion

Mercadona’s commitments in 2016 include investments in 60 new stores, 2 logistics centres in Barcelona and Vitoria-Gasteiz and a second data processing centre.

Mercadona shared €277 million among its employees by way of performance-related bonuses and paid 326 back to society in taxes. From its €611 million net profit (+12% on 2014), 495 were reinvested and the rest issued as shareholders’ dividends. Net profit has risen by 12% to €611 million, and investment reached €651 million.

Mercadona’s integrated supplier-manufacturer industrial cluster in Spain boasts more than 240 factories and over 47,100 employees. Mercadona’s economic impact is estimated at 1.8% of the country’s GDP (€19.5 billion), providing 3.8% of the total posts in the country (640,000 employees), and the firm also carries out 85% of its purchasing in Spain, adding up to a total of €15.4 billion.

In 2016, Mercadona plans to carry out an investment of approximately €650 million, which will mainly be destined towards opening 60 new stores, refurbishing 35 supermarkets and the ongoing construction works for the Abrera (Barcelona) and Vitoria-Gasteiz logistics blocks, while continuing to foster technological transformation by starting to build the Villadangos del Paramo (Leon) Data Processing Centre.

Breakthroughs in technological and digital transformation

In 2015, Mercadona managed to move forward in its technological and digital transformation project, in which it has invested more than €90 million. All of this seeks to achieve a double objective: placing information at the service of employee decision-making and improving the shopping experience for customers.

In 2016, and as part of this digital innovation process, Mercadona plans to start building the second Data Processing Centre in Villadangos del Paramo (Leon), at an initial foreseen investment of €6 million. Furthermore, it will re-engineer its website to make it more seamless, agile and visually appealing. In 2015, online channel sales grew by 8%, contributing 169 million euros to the total revenue.

Sustainable Agri-Food Chain: from theory to action

Mercadona’s commitment to development of its Sustainable Agri-Food Chain (CASPOPDONA) continues to move forward, and in 2015, caused a positive impact in the Spanish primary sector. A good example of this is the productivity increase in sectors such as rice, where together with farmers in Extremadura and Valencia, integrated supplier Arrocerías Pons has managed to increase its crop yields by 15% while cutting costs by 20%, increasing profitability while minimising environmental impact.

Mercadona’s industrial cluster also accounts for more than 240 factories in Spain. They have a joint workforce of 47,100 people, as they have hired 2,600 new employees in 2015. This long-term investment plan has allowed for Mercadona and its 125 integrated suppliers to own more than 240 factories in Spain, making it one of Europe’s most dynamic, innovative agri-food clusters.

Commitment to fresh local produce

Mercadona is committed to the Spanish primary sector, a key area of the Spanish economy, and to providing customers with top quality, locally-sourced fresh products. To this end, Mercadona maintains stable agreements with 7,500 producers, 4,300 livestock farmers and 12,000 fisheries throughout Spain. In addition, more than 85% of Mercadona’s total buying volume consists of products cultivated and manufactured in Spain, in purchases to the tune of €15.4 billion a year.

30% more citrus purchased in 2015

Mercadona rounded off the 2015 Spanish orange campaign with the purchase of 130,000 tons of oranges of national origin, 30% more than in the previous season.

The oranges sold in Mercadona from November to August are domestically-grown. Mercadona supplies oranges from the Valencia Community, Murcia and Andalusia which are successfully sold in supermarkets throughout Spain. The oranges in Mercadona, from the season start-up in November until the following August, all come from Spain. For example, in the Valencia Community, Frutas Tono and Martinavarro, intermediate citrus suppliers to Mercadona, have more than 2,000 local orange suppliers and over 1,700 hectares of crops. So, 90% of oranges that Mercadona sells are of domestic origin.

This article was published on page 20 of the March/April 2016 edition, number 142, of Eurofresh Distribution magazine. Read that issue online here.