“Volume isn’t the only way to make money”
For the international company SanLucar, the importance of a brand comes first. The company name is directly linked to the products. Brand new CEO Michael Brinkmann talks about the company’s method of working. In production, new technologies can help absorb the effects of extreme weather. But technology can’t absorb everything. In future, it will be a challenge to attract good staff, he indicates.
Daan van der Giessen (commercial manager Netherlands) and Michael Brinkmann (CEO)
Due to San Lucar’s method of working, the company’s name has become a brand.“For us, a brand is very important, it’s how we do business. We have to make clear to consumers they’re buying a sustainable product of high quality,” the new CEO explains. Like in other sectors, the label has to provide clarity. “The biggest problem is that consumers don’t know what they’re buying. They don’t know varieties, and each product is different, this can be prevented with a brand. This way, we guarantee the consumer they’re buying a product with a great flavour and quality, and we ensure the same variety is available year-round.”
While most consumers know the various apple varieties, that isn’t the case for other products. “Besides, a variety can change. This year we still have the raspberry variety Adelita, for example, but a better variety is already available for the next years. But it is hard to explain to the end consumer this change of variety. Consumers who buy SanLucar products know they’re buying the best products.”
Good staff a challenge
This requires shopkeepers to make the necessary adjustments. Part of the shop has to be reserved for the products of the international company. “Shopkeepers trust us, and in return they’ll get higher returns and better margins,” Michael says. Not the entire fresh produce department is taken over. The shopkeeper will still have room to offer other products for different prices. “Between 20 and 25 per cent of consumers is willing to pay more for good quality in fruit and vegetables. We have to make sure consistent quality is available, and we have to prove it works. If something goes wrong, the shopkeeper has to ring us right away.”
To ensure that quality guarantee, the company invests in knowledge among employees. “We have our SanLucar Academy specialists for each product who know everything about, for example, grapes or strawberries. They visit growers, follow developments of new varieties, and see how the product is presented in shops. They can be proper specialists and completely focus on one product. When I get questions from customers, I pass these on to the experts. It will be a challenge to find good staff in future,” Michael says.
Bigger impact of extreme weather on global trade
Everyone in the sector can mention some examples of extreme weather in 2017 that affected the market. Because of this, it seems as if weather is becoming more extreme. “I recently spoke to a scientists and he said extreme weather doesn’t so much happen more often, but that we hear about it on the news more. Because of that, it seems as if the weather is becoming more extreme, but he didn’t see this in the long term,” Michael says. That doesn’t mean he trivialises the consequences of extreme weather. “Trade has become more international, so we feel the impact of extreme weather more.” If the grape harvest is 30 per cent lower in Peru, that can be seen in European supermarkets. Ten years ago, European supermarkets didn’t have Peruvian grapes.
In production locations, SanLucar invests in new techniques to limit the consequences of extreme weather. One example of that is South Africa. The drought in the country is leaving deep marks in society in the Cape region. “It has an enormous impact on people’s lives and the local production. It’s worrisome, but thanks to investments in new technologies, we can irrigate precisely those plants that need water.” This technique measures water levels and indicates exactly which parts of the area need to be irrigated, and which parts still have plenty of water. Because of this, less water is used in the production.
Elevating products to a higher level
“It’s very important to have a good relationship with the growers,” Michael continues. “We have growers that have been affiliated with us for 25 years. Growers are more willing to experiment with new varieties then, so that we can market new products.” He would prefer if the general trend on the market would change, so that supermarkets stop paying per kilo and they’d have to pay more for more flavourful products. “We’re striving for flavourful products, from our own fields or our own partners. We want to supply products consumers enjoy eating.”
Although SanLucar is vertically integrated and works closely with supermarkets, Michael sees room on the market for trade. “Pure trade is declining, but will continue to exist. To be influential, it’s necessary to be in control of the entire supply chain. That way, if something goes wrong, it’s easier to find out where the mistake occurred in the chain.”
According to Michael, the biggest challenge in the sector is elevating the fruit and vegetables to the level they should be in coming years. “Many products are treated as a commodity, with a low standard, but we have to elevate as many products as possible to a higher level. Volume isn’t the only way to make money in our sector.” For the company, the biggest challenge is remaining true to the roots of the company. “We have to look for the best way to grow, and for that, we have to focus on the best consumers. It has to become better throughout the supply chain. Better varieties, fewer plastics, a better packaging.”
For more information:
Press Department SanLucar Fruit
T: (+34) 96142 40 40. Extension 2410
Publication date: 2/28/2018
Author: Rudolf Mulderij
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