FreshPlaza.es visited CASI's facilities in La Cañada, Almeria. The cooperative specialises in the cultivation of tomatoes, which account for 99 percent of its production; 230,000 tonnes from about 2,160 hectares, making it the largest tomato cooperative in the world. We spoke with Commercial Director Manuel Segura, who talks about the current campaign and the projects they plan to carry out this summer, with significant changes in its sales model.
"We could say that this tomato campaign has so far been slightly better than the previous one, although this comes after several seasons with low prices and tight profit margins, due to which we are trying to reduce costs in the production and handling," explains Manuel Segura.
Visit to CASI's warehouses, with more than 1,000 workers. The merchandise is brought in in the afternoon/evening; the auction starts at 9 am and continues until the entire production has been marketed.
"We are constantly looking for innovative varieties that can allow us to offer added value in terms of quality and taste, and consequently better prices and greater profitability," he adds. "I am talking about specialties, including cherry, cocktail and coloured cherry; tasty tomatoes, such as the Bicolor, Cocktail, Pink tomato or Sacher tomato, etc. In addition to them providing value in terms of quality and taste, we want them to be productive and to adapt well to the greenhouses of Almeria."
Move towards a European auction model
The cooperative is expanding its operations outside Spain. "In the past, CASI didn't even consider working in countries like the UK or Germany because of our characteristic auction model, in force since 1944. At CASI Airport, we are now working to expand in these markets, and also Scandinavia, where we collaborate with retail chains. We also aim to expand in Eastern Europe. This is a clear change in our strategy," says Manuel.
Three different types of packaging are used at the auction. They work with all tomato varieties, from the most conventional and rounded to specialties like the Raf or Rebelión. An increase in the number of specialties available at auction is expected.
In the words of Manuel Segura: "As agreed by most of our partners, we are transforming our auction model and adapting it to the needs of the European markets. For example, we are changing plastic containers for cardboard, making use of Europalet and including BRC and IFS certificates. We are adopting a model which is similar to that of other European auctions, working closer to distributors and allowing any client to access our products."
Auction room with a capacity for 120 buyers. CASI is a leading name when it comes to the setting of daily tomato prices. These are paid between 7 and 10 days after their sale.
According to Manuel, the idea is also to find "a balance, through the combination of a European auction model and direct marketing." In fact, 30% of the cooperative's operations are already direct sales, and next season this percentage is expected to increase to 50% thanks to the incorporation of new members.
Bringing in produce from other European countries, like the Netherlands and Poland
The cooperative is trying to diversify geographically with associated producers in countries where it already has some market share. Recently, it rented a warehouse in ABC Westland, which is used as a logistics platform, and has kicked off CASI's internationalisation process.
"We want to have a European profile; to be able to provide continuity in the supply with Dutch produce, taking advantage of the strategic position of the Netherlands in the EU."
"Once the project in the Netherlands starts taking shape, and remaining within Europe, we thought it would be interesting to move also into Poland, where tomato production is growing at a rapid pace, but whose campaign only overlaps with Spain's in November," continues Manuel. After hearing that CASI was setting itself up in the Netherlands, Polish producers themselves have become aware of the future opportunities to become CASI partners.
CASI tomatoes are loved and appreciated by consumers in Poland and the company is well-known amongst producers.
Every year, new growers become members, something not very difficult in Almeria due to the province's great horticultural tradition, but this season it has been proposed to regulate entry due to the increase in the number of applications
Morocco and Turkey's domestic consumption increasingly greater
At certain times of the year, "there appears to be some oversupply in the market; for example, when the Netherlands overlaps with Almeria, or Morocco with Almeria. This is compensated in January, February and March, when we face a lot less market competition, but in any case, profitability windows are getting tighter."
"I would say Morocco's sector can be divided in two distinct segments: those who work very well at brand level and those who use Perpignan as a base to flood the European market and push prices down; something which hurts us all," he points out.
Turkey's contingent is also growing, but with nearly 90 million inhabitants, the country is capable of consuming its own production. The same is happening in Morocco or Algeria, where domestic consumption is clearly on the rise."
However, Manuel believes that neither Morocco, nor Turkey or the Netherlands are the main competitors of Spanish tomatoes. "Our biggest hurdle is the 'mess in the sector' and the imbalances in production."
Asia and UAE never fully consolidated
"Lately, there has been talk and speculation about these markets," says Manuel.
"They are still really small for the majority of operators working with these countries. No European operator has great business with them in the tomato market. Asia may look like a good destination, but for now it has not been so, at least for the products managed by the Cooperative. Whenever an opportunity arises in these countries, we try to make the most of it, but we never manage to lay the foundations for further growth due to difficulties in logistics, planning or prices. At one time, we even shipped a significant volume to the United States and Canada, but in a few years these markets have gone back to the background."
CASI to be one of the largest operators in Europe
"A further development of European agriculture without it finding the extra room to market its products, with the consequent loss in profitability, is the main threat to this sector," states Manuel Segura.
"I predict CASI will be in a very good position within about five years, since it will be among the few larger operators with the highest turnover in Europe, even though the small ones will never cease to exist, or will become specialists devoted to specialties. If we continue in this line and remain specialists in tomatoes, we will lead our segment."