“Revenue model of most growers is out of date”

Growth rates are reported across the full length of the mushroom segment. That’s good news for the sector, but the air hasn’t completely cleared. New challenges are shooting up: local-for-local, Polish competition, Brexit and a consumer who is more aware, are the most important ones. Maurice Koppen from Oakfield Champignons talks about these developments on the basis of the British market and puts the challenges in a wider perspective.

All four challenges meet on the British market, but the developments can also be seen in other countries. Traditionally, Oakfield, from Stamproy in the Netherlands, is better known as subsidiary of the British Oakfield Farm Products Ltd. The entire sales went to British retail through the British parent company, until about six years ago. “The devaluation of the British pound sterling was already happening then, and we chose to make Oakfield Champignons a stand-alone organisation,” Maurice explains. The company works according to the same principles as the British parent company, and is personally responsible for sales.

“I think the revenue model of most growers is out of date,” Maurice says when explaining how the company works. The traditional supply chain, simplified to three links of grower, trader and retailer, has been cut into loose links, after which a new chain consisting of much fewer links was forged: grower and retailer. “From production, we look for direct contact with retail and food service, both nationally and internationally. That can naturally only happen when you are a certain size,” Maurice explains. “And you have to know both the language of the cultivation and the language of the trade.”

The company isn’t active on the free market, but grows ‘on order.’ Based on data, predictions are made about how many mushrooms a customer might request in any given week, and the cultivation is set up focused on that. To prevent shortages, slightly more is produced than expected based on the figures. The surplus is traded on the free market.

 “If we were to lose a client, we’d first disengage production,” Maurice exemplifies Oakfield’s methods. It’s a major advantage that supermarkets pay growers directly, and no value is left in the chain between grower and retailer, according to Maurice. “The complete purchasing price is to the benefit of the grower, who invests in the cultivation and development of the product.” The assortment consists of, among other things, portobellos, oyster mushrooms, shiitake, eryngii, maitake, nameko, shimeji and of course chestnut and white mushrooms.

Although Brexit causes many uncertainties, Maurice is convinced trade will continue. “I don’t know what the consequences will be for paper work, but agreements will be made about that,” he says. The changeable exchange rate of the pound mostly makes the market more difficult now. “And you can also see European retail, British retail still included, asks for more local-for-local,” Maurice mentions the second challenge. Dutch production is much higher than domestic consumption, so that export is necessary. “The problem is that local-for-local is becoming an increasingly more important trend,” Maurice says. French consumers want French mushrooms. German consumers prefer German product. “The advantage is that these markets are growing, but not self-supporting in mushrooms, so they import them.” In the Netherlands, the number of growers are under pressure. That’s not just due to scaling-up in the sector, but also due to this development.

While retail is asking for more domestic product, the number of sales options remains limited. Maurice continues explaining this by means of the British market. “You can sell to everything that isn’t retail, such as food service and wholesale, but that’s where you’ll find Polish trade. It becomes a matter of price.” For a long time, the Netherlands was at the top of the list of largest producers, but by now the Poles harvest more Polish mushrooms than the Dutch sector produces. “Within Europe, we had a good position with volume, but the Poles also bring their mushrooms on the European market, making them our competitors.”

Traditionally, white mushrooms do well. In recent years, demand for chestnut mushroom increased, and demand for exotic mushrooms also started increasing recently. “Shiitake, eryngii, maitake, nameko, oyster mushroom and shimeji,” Maurice sums up some varieties that are becoming better known. A growing awareness regarding the healthy characteristics of mushrooms and the position of mushrooms as meat replacer are boosting the market. “Two years ago, I saw burgers made from half mushroom and half meat in Canada.”

The market is also growing in Europe, although clear differences are obvious. For example, French consumers tend to stick to white mushrooms, Maurice has noticed, while German consumers prefer chestnut mushrooms. The most exotic mushrooms now showing a development curve have been grown for a while, although not in large volumes. “As a sector, we don’t know much yet either,” Maurice acknowledges. Research into cultivation techniques and substrates is lifting the cultivation up to a higher level. “The volume is increasing, but all those varieties have actually been around for years, just not at that scale.”

Far-off destinations still offer plenty of opportunities. “Consumption and production are still low in many countries in the world,” Maurice says. As soon as those markets start growing, they will have options for the Dutch sector. “Dutch growers have a good mushroom that can be moved across the globe, in part thanks to history. We have good materials and techniques, and much experience in the sector. Because of that combination, we can look further than the European market.”

Oakfield recently invested in a top-seal machine. That purchase isn’t unique in the sector, but because the company is in charge of its own sales, it wants to have all of the possibilities in-house. Packing is used more and more as a means of communication to the consumers, who are becoming ever-more critical. Recipes can boost the sales of exotic mushrooms, but consumers are also increasingly aware of the origin of the products. “A few years ago, I noticed in English retail that not just retail or food service know who grew the mushrooms, consumers also knew,” Maurice says. “Packaging showed pictures of the growers, saying: this is who we are and what we do.” And that also works on purchasing level. Buyers for retailers are looking for ways to buy directly from the grower more and more often. “As a producer, you have much experience and knowledge of the product,” Maurice concludes. “You can work together to do new things then, but it does require some effort from you as a producer.”

Oakfield Champignons

Maurice Koppen