"European retailers want programs with Israeli growers"

Oron Ziv checking the grapefruit

After a bad season last year for Israeli citrus exports, the start to this year's citrus export season has been promising. BeFresh, an importer and exporter of fresh produce based in Tel Aviv, has benefited from the good prices in Europe for their grapefruit. With low avocado consumption in Europe, they also see potential in expanding the market for that product across the continent.

Workers in the pack house, packing the grapefruit

“It was a tough season for grapefruit last year, but we started in a much better market situation this year,” said Oron Ziv of BeFresh. “Prices were low and there was no demand this spring, so shipments from South Africa stopped around August. Because there was a lack of grapefruit, we came into a good market.” The dearth of fruit on the market, a result of an early exit by South African exporters who weren't getting good returns, cleared the pipeline for Israel's exports in September.

“Historically, November is a dead month for us for grapefruit, and we usually find ourselves with a big stock of fruit,” explains Ziv. “But nobody has fruit in stock this year.” That lean pipeline is encouraging to Israeli shippers, because when the market for their grapefruit warms up again there won't be a glut of product on the market bringing down prices.

Stapling the boxes that are ready

Most competition on grapefruit comes from Turkey. Though fruit from Florida and Spain is also available when Israel exports their fruit, they don't compete for the same share of the market that Israel seeks. Florida fruit is the gold standard when it comes to grapefruit, and it commands prices that put it on a different level from any other fruit, and the Spanish season doesn't overlap significantly with the Israeli season. But Turkish fruit is, roughly, on the same level as Israeli fruit in terms of price and quality, though Ziv believes Israeli fruit still holds an edge.

The forklift brings the pallets that are ready to the palletizer

“Turkey has large quantities, so they need to sell their fruit, and they do it at low prices during the winter,” said Ziv. “But I think people are willing to pay more for Israeli fruit because of the taste and appearance of our grapefruit.”

Oron Ziv holds a box of Sweetie

Easy Peelers
Easy peelers have also been good for Israeli exporters, though there have been some markets lost to competing products in other countries. Spanish and Moroccan mandarins have edged out Israeli fruit in Europe. The cheaper production costs in both those countries make it hard to compete, and the shorter transit times for Spain gives that country's exporters an advantage. As a result, Israeli exporters have largely ceded Europe in that category.

The bright spot for Israel, when it comes to easy peelers, has been the Or clementine. The wildly successful product has spurred increased acreage for a product that is in demand and commands premium prices. The challenge, as more growers look to cash in with the Or, is in the marketing.

“The acreage of new plantings is massive for the Or,” said Ziv. “There are more and more plantings every year. In that past few seasons, Israel has exported about 50,000 to 60,000 tons, but this season's forecast is around 100,000 tons of fruit that is ready for export. If this figure is realistic, then it will be a big challenge to market the Or.” But he added that even if Israel produces enough Or clementines to fully satisfy European demand, North America and Asia are also potential markets for expansion. The qualities of the Or have made it a hit in Europe, and it's reasonable to believe that those same qualities can make it a hit in other markets.

Avocado
An area in which BeFresh sees much potential is their avocado program. It's estimated that avocado consumption in Europe has grown by 25% over the last five years, and there are signs that consumption will continue to rise. Ziv noted that while per capita annual consumption of avocados in Israel is about seven kilograms, it's only about two or three kilograms in Spain and France, and it's under one kilogram in Holland. That leaves a lot of room for more avocados.

“If you can make avocados more available in Europe, there's huge room to develop that market,” said Ziv. Most European consumers prefer Hass avocados, which leaves the green-skinned variety that Israeli consumers prefer, out of export programs. The slow-maturing nature of avocado trees, however, could slow expansion, as it takes over seven years for an avocado tree to bear its full yield potential.

Melons
Melons were a tough product for BeFresh last season, with the traditional gap between Spanish production and Brazilian production greatly diminished. While Spanish shipments of melons to Europe usually come to a halt near the end of August, supplies lasted into September last season. At the same time, Brazilian supplies, which don't typically arrive in Europe until October, hit the European market much sooner. That meant that the September and October window that Israeli shippers use to sell their melons in Europe was largely gone last season. But this year looks better.

“It was not a big success for the Galia melon season for us last year because we were squeezed out,” said Ziv. “But we produced less this year, due to our bad experiences last year, and we're now enjoying a good situation.” While they shipped about 30% less volume of melons this year, a sharp drop from last year's shipments, their profits were much better because of higher prices.

BeFresh's success with melons this year was also due to their partnership with the largest melon grower in Israel. That gave them direct access to a steady supply of melons with consistent quality. Though BeFresh is a small company, they are able to consistently deliver melons to retailers. Large supermarkets appreciate that, and Ziv explained that those ties give them an advantage when dealing with retailers.

“The advantage is that I work with the grower, so the retailer is getting product straight from the farm,” said Ziv. “But you also need a combination of supermarket programs and open market selling.” While the retailer programs are attractive because they offer steady payments for a set period of time, retailers typically only ask for a few sizes. Ziv's job with BeFresh, is to find a home for all of the product he receives from growers, not just for the handful of sizes supermarkets want. That's where the open market comes in.

“You need a good combination with the packing house, the local market and the export market,” said Ziv. “It's like a puzzle, to find the right market for each segment of your produce. It's easy to sell just the best sizes, but it doesn't help the grower if you can only sell 20 percent of his produce.”

For more information:
Oron Ziv
BeFresh Europe Ltd.
Phone: +972 3 968 2929
Fax: +972 4 672 5001
Email: oron@befreshcorp.com
www.befreshcorp.com