“No party is interested in low prices”

Conference might be a unique product, but according to Alex van Ieperen, it’s becoming a bulk product more and more. “Its distinctiveness will have to be improved.”

More than five years ago, Direct Fruit Services was founded. The company is specialised in marketing apples and pears, and has a large number of growers in the Netherlands, Belgium, Germany, Portugal and France at its disposal. Manager Alex van Ieperen talks of a number of special years. “In the short time we’ve been active, we’ve dealt with various hail storms and frost, not to mention the Russian boycott. Yet, in part thanks to the dedication of our employees, we managed to create an increase of seven per cent each year, both on the existing European market and new destinations including China and India.” In coming years, Alex hopes to continue growing with the company’s growers. “Although growers don’t have to sign up for membership, we still talk about ‘our’ growers. Our vision about that won’t change. We continue to do things with our growers, and each year we want to prove we can compete with our colleagues when it comes to prices, services and standing by agreements. By now, our current team consists of nine enthusiastic people that are passionate about their trade.”

Alex mentions much is written and said about combining forces. Although multiple attempts have been made in the sector, only few have been successful in his opinion, and the mental legacy to combat fragmentation doesn’t exist without reason, according to him. “Retail has a very strong position, and will not just give up on this. We dare to say no party is interested in low prices. Retail doesn’t sell less fruit when top fruit on shelves is ten per cent more expensive. Due to the current fragmentation of supply, growers don’t earn enough from the market on average, so that cost prices have been around or below average for them for years now. Only the slightest thing has to go wrong due to frost, hail or similar for the consequences to be disastrous for the grower involved. The sector-wide consequence is that there are hardly any investments left from growers, and young entrepreneurs are less interested in continuing as growers.”

As an example, he mentions the end of the 2016/17 growing season, when much unplanned pears arrived on the market. “That is bad for all parties concerned: growers, retailers and service providers. As a sector, much can still be gained, but it’ll have to be done mutually. We think it should start with the growers, they should make a clear decision about sales. Make a sales plan with this party, and help each other to stick to it.” Furthermore, the sector will have to make a catch-up effort, according to him, to continue to automate all processes to keep control of costs, and to minimise the competition position compared to other fruit producing countries in Europe. “It’s hardly news that we in Europe belong to the top regarding labour costs. On the other hand, we’ve also managed to achieve the highest possible yield per hectare for certain varieties. To retain this strong position, progress is necessary.”

When asked about Direct Fruit Services’ strength, Alex answers they are the translator between grower and retailer and vice versa. “Long before the season starts, we, for example, tell retailers about the growing conditions. This year we had to deal with frost. We informed customers about the situation in May, about the consequences to be expected, and how to manage this. For that, we need input from both growers and retailers. In coming years, we’re dedicated to a cautious growth, partially due to the increase of mostly Conference pears from our growers, and by retaining our market share of this main variety.” Furthermore, the professionalisation of the working method and cooperation of and with sorting stations is high on the agenda. Another point of attention is Conference, which will have to improve its distinctiveness compared to other fresh produce products, according to Alex. “Despite Conference being a unique product, it’s becoming a bulk product more and more in retail. Within our company, we’re constantly working on being distinctive and adding value. Besides, we’ve noticed growers are starting to expect more openness and transparency. Whether growers are ready to see their prices recalculated from our sales prices to retail, remains to be seen.”

It appears as if a regular pear harvest will be available in Europe this season. “This means promotions can be planned to move the volume and to get pears onto customers’ plates. We’ll have to wait and see if this’ll be successful, and if the sector is willing to work on this,” Alex says mid-October. He says the flavour of the pears is excellent this season, with high to very high sugar contents. The sizing of other pear varieties is mostly large to very large. This is also true for Conference that have been irrigated. The non-irrigated plots mostly yielded smaller sizes. And finally, according to him we’ll have to await how consumers respond to the damage to the cores. “We as ‘experts’ don’t care much about this, but consumers are the ones who decide.”

Direct Fruit Service

Alex van Ieperen

aieperen@directfruitservices.nl

www.directfruitservices.nl