How is Fruitmasters doing at the moment?
Kees: "The results are good, and have been fairly stable in recent years. For the past three years we have achieved satisfying revenue."
What major developments are currently at play?
Kees: "What strikes me is that the increase in production scale is very fast. With our central infrastructure, we are pretty unique in the Netherlands. Just a few years ago, we were handling about 80 million kilos of fruit. This year we’ll be nearing 120 million kilos. So you really see a huge increase due to low cost and innovations in the sorting process. And that again leads to growers starting to refocus."
Leonard: "In addition, growers today are becoming more process-involved and tend to opt for continuity. This, by the way, is noticeable in the club varieties we have now. Those sell according to an annual plan, offloading a fixed amount every month. With the free varieties it’s different. Here, the grower must choose for a free marketing plan, week mediation or clock auctions. It's all or nothing. This is a gamble many growers simply don’t want to take anymore. They want a safe bet, and that’s why they join us throughout the year.”
What percentage of your sales goes under the clock and what percentage is exported?
Leonard: "About 20% goes up for auction under the clock. The remaining 80% is domestic sales and export. If you look at the total volume, approximately 60% is export."
Would you say the clock is becoming less important over time?
Leonard: "The clock is not an end but a means to sell something. During the last twenty years auction by clock hasn’t always been the most fortuitous venue, as there was increasing variation in packaging. Private labels in particular have increased. Also, the world changes. The grower wants strict agreements nowadays. Our customers also want to be linked to growers."
Do you notice increasing competition in the European market?
Leonard: "In Eastern Europe they’re on the move. That is why we decided to cease with the commodities. We downsize them to a manageable volume for the domestic market. Competing with hourly earnings of € 1.50 to € 2.50, as is happening in Poland, is something we just don’t want.”
Kees: "Suppose we deliver Jonagold to Scandinavia that in terms of costs, can be easily grown in Poland. Then you’ll lose that output on the export markets. That is what’s happening. But the moment the Conference doesn’t grow there, for whatever reason, than it’s another matter altogether, and you can keep supplying. In addition, you should always make sure varieties like Elstar and Jonagold are future proof in your own market. From that viewpoint, you should try to optimize your own production.”
Leonard: "With commodities things simply didn’t work out. We knew that ten years ago. Therefore, we have gradually changed our process, and implemented innovation and expansion in the range. In that respect, we are at the forefront now. Our growers are now aware that commodities are getting increasingly difficult and that they shouldn’t put their eggs in that basket.”
But does that mean focusing on niche products in the long run?
Kees: "No, won’t just focus on niche. We are still able to sell on a large number of markets via the export, something that many other countries might never get around to."
Leonard: "We are not afraid of Poland, even though they can produce more cheaply. In Poland, they have a cost price, but that doesn’t bother us at all. The Polish growers will never be able to keep that up. They have received a great deal of government grants to make it this far, but now they have to produce for next to nothing. Thus, the cost price of fruit in Poland will go up, as has happened in Spain in the past. We must create an offer that doesn’t depend on what others are doing. The sales of commodity varieties are declining further, as there is no interest. In short, we are not afraid of what is happening, but must ensure that we keep doing our own thing."
Do you seek partnerships with growers in Eastern Europe?
Leonard: "No, we are looking for added value for our members. So what we do is find good uses for the products we produce here, and with which we distinguish ourselves from low-wage countries. We won’t set up fruit production in other countries just to earn a quick buck, and in doing so become competition for our own growers. For that matter, the sector in the Netherlands still displays a wrong tendency. We should not only focus on bigger and cheaper. No, you have to make a better product with added value. That is what we believe."
Is it true that supermarkets prefer a Dutch apple to imported ones from Chile or South Africa?
Leonard: "Supermarkets want to move with the seasons and would like some products, such as Conference, to be on offer year round. As long as good Dutch product is available, they’ll go for that. However, there are varieties that do not grow in the Netherlands, such as Gala, Braeburn and Pink Lady, and that need to be imported.”
Are retailers more reluctant to buy import than, say, ten years ago?
Leonard: "Yes, because we have better products than ten years ago. But it does depend on the availability. Last year we had a small harvest and there was plenty of room for imports. This year the marketing year started four weeks late, and the European stocks are still readily available. I also see 'local for local' as a continuing trend in Europe. Our Dutch top fruit varieties are improving, with the result that less import is needed."
Where would you say is the primary focus now?
Leonard: "What we do now in the Netherlands, is to ensure that the shelf quality improves. So we try to get top-Elstar on the shelves so that consumption remains stable and the consumer keeps coming back. Then we can ask decent prices. And if Germany has some frost damage, like this year, we also sell Elstar to Germany. But if they do become self-sufficient, we know to go somewhere else. A country like Poland will always try to offload products in Europe, because of the lower cost price. The only question is whether we’ll need cheap Polish produce, when prices are already low here. Retailers aren’t likely to mess with their image just to get their apples a few cents cheaper. That is not in their interest."
You recently introduced a new concept: Bob's. What’s that all about?
Kees: "Bob's stands for 'Best of Berries’. It is a new, year-round concept for retail, where we introduce consumers to the world of soft fruit. The concept incorporates both Dutch and imported fruit. In addition, the top segment of soft fruit by Fruitmasters, is marketed under the name Prestige, the brand for the hospitality industry and wholesale renowned for its excellent quality and shelf life. Bob's is an extension of this year-round concept, but for the retailer."
How important is soft fruit for Fruitmasters?
Leonard: "We sell about 55 million in revenue in this category; so for us it is an important product. We want to focus on the better, more attractive markets and sell products in various markets around the world. Prestige is really on its way to become a household name, enabling us to ask higher prices.
Kees: "A major difference between soft and hard fruit is that in the latter, the consumer is more involved in purchasing a specific variety, say a Conference or an Elstar. With soft fruit it’s all about the concept. That’s why we have Bob's and Prestige."