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"Challenge to increase efficiency and adapt to market's needs"

UK market pushes Spanish onions away



How can a small firm find a place within such a competitive market? According to Fermín Utrilla, of Allium Integral, the key is in differentiation and the search for niche markets.

"I tried to differentiate myself by looking for markets where the big companies did not arrive; that is how I developed red onion microbulbs to cover niche markets in the UK and extra early grano type microbulbs in Spain, which allow you to enter the market one month in advance. The key is to use the varieties and growing techniques, adapting to situations and specific market demands. Small firms like ours have a better capacity to adapt to changing markets, as big companies are generally occupied handling larger volumes."



Fermín Utrilla is an agronomist with plenty of experience as a consultant at horticultural companies in the processes of production, processing, packing, preservation and implantation of quality management systems. Such businesses fell as a result of the recession, which led him to found Allium Integral 4 years ago; a firm devoted to the production, processing and selling of onions from Albacete, Spain's largest production area.

Allium Integral produces red and Grano type yellow onions, with its own varieties created through hybridisation and later breeding of microbulbs.

"Our techniques for the creation and development of varieties through microbulbs are so interesting for onion producers that we felt compelled to open our own onion seed company as an associated firm to Allium Integral."



The result of such work includes the red variety Red Emperor, which usually enters the market in August. "Our production from microbulbs can be harvested now, in late June. This way we can fill the gap that there was in the British market between the end of New Zealand's red onion season and the start of the European campaign," explains Fermín Utrilla.

"This, however, was only interesting until they allowed Egypt to enter Europe with rock bottom prices, and from there onwards the niche was no more," he explains. "European supermarkets have double standards in the purchase of their products, demanding all sorts of quality and good agricultural practice certificates to EU producers, but nothing at all to third countries like Morocco, Turkey or Egypt, which offer prices against which nobody can compete."



As for Grano type onions, European trends, according to Fermín, are increasingly more price-oriented. "Demand is so fragile that, even in a context of low supply, prices rise up to a certain point, and from there onwards they do not slow down gradually, as they used to, but they plunge."

"The one factor that European producers can take advantage of is the decadent situation of Southern Hemisphere onion imports. The off-season supply from countries like New Zealand, Argentina and Chile keeps falling as a result of the high logistic costs. This is not felt as much in products with more value added, but the price differences are still noteworthy. For this reason, a country like Argentina exports most of its production to Brazil."



The main market for Allium Integral is still the UK, where the program "Local for Local" has pushed Spanish onions away from supermarkets. "Spanish onions have always held a good position and superior prices in the Premium segment, for their mild flavour and characteristics that make them suitable for fresh consumption, unlike British onions, whose quality is much inferior."

This, however, has been changing in recent years and supermarkets are replacing Spanish onions with the British counterpart, selling them at the same price as the former, which could be considered consumer fraud."



For this reason, Fermín is finding more interesting markets to be able to adapt. "We have started in Algeria, which we find quite interesting, as they do not demand such high quality standards as the UK, allowing us to offer lower prices. Brazil is another interesting market for smaller calibres."

"I believe the only way to survive nowadays is to adapt to the new market demands, which require us to reduce costs in order to reduce prices. For this it is necessary to be greatly efficient in all processes to obtain a quality that equals the cost," concludes Fermín Utrilla.


For more information about Allium Integral:
Fermín Utrilla
T: +34 967245160
M: +34 670333363
fermin@agrocalidad.es


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