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Galilee Export to expand avocado, mango programs
Out of the vacuum left by the liquidation of Agrexco, Galilee was formed as a cooperative to help growers ship their products to other markets. Through expanding acreage and the addition of new growers to the cooperative, Galilee cemented their position as one of the top exporters of fruits mainly Avocado. Currently, they sell about 17,000 tons of avocados to foreign buyers every year, and not wishing to rest on their laurels, Dror Eigerman, Galilee's new CEO, is looking to build on that success by increasing the volume of fruit they handle.
“This year we signed an agreement with ZEMACH that will bring us extra avocados,” said Eigerman. The deal could boost Galilee's annual exports to 23,000 tons, and it will also bring an added benefit of increasing the volume of mangos they sell. Currently, Galilee exports around 1,600 tons of mangos annually, but the new production they've acquired could yield an additional 3,000 tons of mangos per year. The area in which Galilee's new partner grows its avocados also means they'll have fruit earlier in the season, which could allow them to reap the better prices often seen at the start of the export season.
Galilee is also looking to bring more aspects of their mango operation in-house. The vertical integration would give them a better command of the process, would be more cost-efficient and would allow Galilee to stay on top of evolving market trends.
“Ready-to-eat is the future with avocados, so we're investing in ripening rooms in France,” explained Eigerman. “Supermarkets are asking for 12-month supplies, so it makes sense to invest in ripening rooms that will help guarantee supplies and guarantee us a place on the shelf. So I'd prefer to be the one leading.” The ripening rooms will be located in the southern part of France, where Israeli shipments can quickly reach Europe. Once there, avocados can be ripened and efficiently distributed throughout Europe via France. Eigerman noted that they need the kinds of advantages this move will bring in light of increasing competition from Chile. While Spain is their biggest rival in Europe when it comes to avocados, Chile is making big strides in Europe.
“Chile is the one we're colliding with on Hass avocados, and they're growing,” said Eigerman. “As long as Chile continues to develop, we'll be in a competitive market. At the moment we have an advantage in quality, volume and ability to deliver, but they are coming with volumes later and later in the season.” South Africa & Peru still ships avocados to Europe when Israel begins their export season, but at that point, Israeli growers only have Ettinger avocados, which are sold mainly domestically, so Israeli exporters don't really compete with South Africa.
Eigerman sees mangos and medjool dates as products they can grow their market presence with. Aside from the additional mango production from ZEMACH, he wants to bring additional growers into the fold. But he noted that new growth needs to be balanced in order to preserve the unique character they've built so far.
“Coming from Mehadrin, the difference between there and Galilee has been that Mehadrin was like an armada and Galilee is like a commando unit,” said Eigerman. “This company was started with avocado and citrus, and later on growers brought in mangos and sharon fruit. So we're getting more products in, but only the ones we choose. One product I believe in is the medjool date. It has a good shelf life, we have a good area behind us now, it's easier to grow than avocados and I think it will keep growing.” He mentioned optical sorting machines as a way to make their date program more efficient, though they've not yet installed those machines.
While they don't have the advantages with dates and mangos that they do with avocados, Eigerman said they'll proceed in a growth pattern that prioritizes control. Much like the in-house ripening they're building in France, integrating all aspects of the export program for each commodity is key to retaining control over the things that can be controlled.
“The biggest threat we face is the rising costs of water, electricity and labour,” said Eigerman. “It's nothing critical at the moment, but it is a problem. The currency, it's strong, but I would prefer a better currency situation. But we can't control it.” The exchange rate with the Russian ruble has made it so that Russian importers, who are suffering under a ban on European goods, are looking to Israel in greater numbers for fresh produce, but they often can't offer the competitive prices needed to secure that produce. So Eigerman doesn't think they'll expand into that market. In the future, he mentioned Asia as a possibility for expansion, but Chinese phytosanitary regulations must first be dealt with at the government level.
But those challenges can definitely be dealt with, noted Eigerman, especially given their company make-up and strong ties to growers. Because they're small and nimble, they can adapt quickly, and the fact that they're actually a cooperative of growers also helps.
“At the moment, we are slim, and we have to keep it like this,” said Eigerman. “Our future is bright because our strength is that we are growers. Growers understand what clients need and then we have the strength to give them what they need.”
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