“In three years there'll be an abundant supply of avocado’s”
The rise of ready-to-eat fruit is the most important development on the exotics market, according to Ralph Fischer from Inter Weichert. In the past, unripe fruit was offered on occasion, which resulted in disappointed consumers. The largest product in the assortment of the German importer, however, is the banana. According to Ralph, the low prices on the banana market are mostly a problem of oversupply.
The market for fruit such as avocados and mangoes has grown considerably thanks to ready-to-eat in recent years. “Unripe fruit used to be offered, which disappointed consumers,” Ralph says. “The situation is changing, and we also see prices for these products coming under pressure.”
About two or three years ago, discounters Aldi and Lidl also entered the market for ripened mangoes and avocados. As a result, prices have decreased. “Although the fruit offered isn’t always perfectly ripened, it does help increase consumption of avocados, mangoes and papayas.”
The German importer is specialised in bananas, pineapple and exotics. Within that last category, melons, mangoes and avocados are the most important products. The company doesn’t trade European product.
Avocados are like MD2
Ralph expects the avocado market to stabilise in coming years. “It also depends on variety, everyone wants the Hass avocado, because it’s the easiest to ripen. Production is still behind, but I think this will be different in two to three years, and that there will be plenty of supply on the market.” He indicates that the shortages on the market are often temporary, for example, when Mexican volumes are lower and American importers are looking for avocados as a result. “It’s a sort of hype, but there’s potential for growth.” Ralph compares it with the rise of MD2 or extra sweet pineapple from a few years ago. “That market doubled due to MD2.”
Thanks to the Formosa papaya, the market for this fruit grew. Besides, some smaller varieties that suit the size of households better also do well. “The Formosa is too large for many consumers. The papaya is also offered sliced or cut in half,” Ralph says.
Europe gradually lowered tariffs for Ecuadorian bananas until the tariffs were at the same level as for other Latin American countries. “That is known, and some parties on the market think this should be factored into prices, but I don’t think it will have much effect,” he says. Ecuador has much dominance on the banana market, despite higher import tariffs, and that will not change anytime soon, according to the German importer.
Running risks can cost money
“It’s a fact that many retailers are looking for their own import, so that established brands lose market share, but I think the trend is stagnating,” Ralph continues. “Not all retailers have good experiences when it comes to own import. Importers run much of the risk, and it isn’t simple to start your own import. Running the risk can cost a lot of money.”
Just as in many other countries, prices for bananas in German retail are low, but Ralph doesn’t point to supermarkets as the cause. In many arguments, supermarkets are blamed with the reproach that they put pressure on the supply chain. Ralph mentions that overproduction as the problem: “In the past approximately 30 years, not much has changed in price, but volume has increased considerably. Many producers and traders have to sell their product. When supply is larger than demand, there’s no balance.”
The problem has existed for years, and there does not seem to be a solution. “That’s our problem. There aren’t many other products that can be grown instead of bananas,” Ralph explains. Some regions have a historic connection to bananas as well. Alternatives such as MD2 pineapple, avocado or papaya have also grown in large volumes in recent years, and “prices dropped. It’s therefore very difficult to change the volume of bananas.”
Organic or Fairtrade cultivations are other options, but these also have their limitations. “Those volumes have also grown considerably in recent years. If you want to switch to organic cultivation, it’ll take three years before you can market the product as organic.” Furthermore, the market for organic products no longer shows the same growth figures as ten years ago, according to Ralph. “Naturally, consumers are willing to eat healthy and organically, but changing diets is expensive.” He also adds that the size of family incomes can be a limiting factor in the growth of organic.
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Publication date: 9/29/2017
Author: Rudolf Mulderij
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