"At Core Fruit all our markets are important, the traditional as well as those new fast growing ones such as China and India," states Van Staden.
Pieter Boekhout (AGF.nl) and Nico van Steden
"For us it is important to sell all the fruit on a tree to get the best returns, we have various markets to allow us to do this, the UK, Europe and North America take the high quality products. Africa is a fast growing market but obviously there are big risks involved there."
South Africa as a whole still sends 75% of fresh produce exports to Europe but Core Fruit is now only sending 55%, "It is still very important and we have some very long term customers there, these days you need to spread the risk." Africa, Middle East, India, SE Asia and China are the countries which have gained here.
Core's office in Paarl
In Africa it is the oil producing countries which are the main importers, but these markets are also becoming more competitive.
The company's apples were among the first shipment ever to go to China last week.
"This is a massive opportunity for us, we have a good customer base in China as we already do citrus and grapes and it is nice to add apples now. China is a very specific market which demands big fruit with high colour."
Nico said that they have programs with retailers as well as wholesalers, "The retail market is growing in China. We don’t speculate, we like to have programs even with the importers, wholesale.
"It is nice to have a wide range for our customers, it also distinguishes us from other suppliers. 50% of our citrus is now easy peelers, we believe that is where the world trend is going. We do oranges and grapefruit because you need these. We are also looking at niche products like cactus pears, our growers are also looking for new products as long as they are sustainable."
Lychee is another of those niche products, it is exported mainly by air freight, as Madagascar is a big lychee exporter and cheaper than South Africa, Core don’t want to compete with them on cost, but do have the window around mid November when they can send by air then a few by sea to end the season. Volumes are low but the value is high.
Pomegranate is a growing business and lots have been planted in South Africa, but Nico reckons this will remain a niche product too.
"Berries as well as pomegranates and avocados are definitely fast growing products, we are also looking into Medjool dates in very small volumes," explained Nico.
According to Nico avocado is the shining star just now, demand is growing very fast and there is huge market potential. In the US 3kg per capita is consumed while in the UK it is only 1kg, so there is big potential there. China also has huge growth potential for avocados.
"Topfruit will be tough in Europe due to the big volumes already on the market, we will definitely send less, we need to focus on products which are still in demand such as Pink Lady, so we will probably send normal volumes, but we will send much less Goldens. Varieties such as Pink Lady will always be in demand, you don’t see the top retailers without it on the shelves these days. Our Fuji is popular in the east, and with Gala we only did small volumes as prices are under pressure. There is an opportunity for smaller size fruit as the EU crop had big fruit. Poland is big competition for us in the Middle East as they are supplying at very low prices, but they are having to look for alternative markets now that Russia is closed to them which I understand.
"We were very concerned about the pear market but the first results are fine, Argentina shipped less and we have done well with our Bon Chretiens, Southern Europe especially likes these. Currency value is also a concern, the Euro is weaker and the dollar stronger, so just taking the Euro into consideration we could be down 15%"
As for the coming citrus season South Africa is predicting a big crop with smaller sizes, according to Nico prices in the UK should be around the same as last year, continental Europe will be difficult as there is a lot of citrus still around. "Russia is a big market for us but they are buying less. I think it will be a tough season, but I hope that our strategy towards easy peelers will help us a bit. We will spread our fruit over a few markets to lessen the risk and black spot is much less of a problem with easy peelers. Lemons should do well again this year as there is a good demand."
When asked about the future and the ability to increase production in South Africa Nico said that he didn't see availability of land as a problem but water will become an issue.
"Growers also need to have a good replacement strategy, most are still growing older varieties so they need to replant each year with new, more profitable varieties, for example French apple growers are replanting at 5% a year. New Pink Lady varieties give 80% packout whereas some of the older ones only give 50%, this is the kind of advice we give to our growers. We also need to look at the world trends such as increasing demand for easy peelers."
"We can’t predict what will happen in any market so you need to spread the risk and offer a wide range of products that stay important for you customers. We are marketers, we try to have a very effective cost chain but you need to be focussed. The competition is tough and you need to provide consistent quality at a good price."
As for political situations and currency, he said that will always be a challenge, but those are things that you can’t influence so you need to concentrate on what you can change. "One of our biggest challenges is to controlling cash flow, it is easy to deliver your product but can be difficult to collect your money. We have to put out a lot on logistics and advances to growers, since 2008 it has been tough but we love what we do and once you are in the fruit business you are in the fruit business to stay."
For more information:
Nico van StadenCore Fruit
Tel: +27 21 863 6312
Email: nico@corefruit.com
www.corefruit.com