In Europe, banana demand is usually good in the first 18 weeks of the year, with higher market prices. This year, however, differs from previous years, says Maik de Groot. He and his team are responsible for the banana segment at the Dutch company De Groot Fresh Group. "Prices have increased significantly in the countries of origin," Maik says.
He attributes this mainly to transport costs that rose $1,500 - $2,000 per container, which quickly translates to $2 more per box. "But, post-COVID-19, growers and packers have also incurred plenty of costs to work safely." The banana importer says cardboard, plant protection products, and fertilizer costs have risen too. All this has resulted in a hefty price increase, easily explained to customers and consumers.
"Clients received this price increase well, especially the regular ones, who usually trust our cost price structure. Fortunately, they, and the public, understand bananas were far too cheap. They consider us a long-term partner, especially in this unpleasant time. We're not taking advantage of the price increase. Buyers know we pass on only cost price increases, one-to-one," Maik adds.
Long-term partnerships
The De Groot Fresh Group prefers to form long-term partnerships with both customers and suppliers. Although rising costs have had an impact, this banana-ripener says these partnerships have not been jeopardized. An essential aspect in this has been communication and transparency, says De Groot.
"We haven't abused price increases and have included our clients in everything. We do that when prices fall too, due to, say, changes in the dollar exchange rate." The De Groot Fresh Group says it is still unclear how these increased costs and associated price increases will affect the banana sector. In any case, this banana team has not lost any buyers, and neither have import volumes decreased.
More planning
When it comes to logistics, the banana importer and his team have to deal with delays caused by sea freight issues just about every day. This situation requires a little more attention and planning, but since it is only a few days, it does not lead to problems. Another aspect the De Groot Fresh Group pays considerable attention to is certification. "If that and social compliance isn't in order, we don't do business," Maik explains.
Organic bananas
The De Groot Fresh Group imports and exports bananas and specializes in ripening these and other exotics. "That's important. A product must be ripened correctly, with the right guidance, and under the right conditions. That affects the taste and certainly contributes to the fruit's longevity. It's vital that people can keep bananas for several days. Whether that's two or four days makes a difference."
The De Groot Fresh Group sees more demand for organic bananas, especially when it comes to ripening for third parties. The company follows developments in the organic segment closely, but its assortment does not yet include these. That is because, due to the absence of plant protection products, organic bananas are somewhat more sensitive, so there is a relatively high chance of quality issues. Also, consumers are interested in organic, but not in the associated, somewhat higher price, which could inhibit that segment's growth.
"We don't know if it will expand; we're not sure it actually will," says De Groot. Still, they expect this segment to evolve from a trend to a standard and say demand is mostly regionally driven. There is far more focus on organic in, for instance, Western Europe or Scandinavia than in Southern or Eastern Europe. "As soon as those countries, too, start paying more attention to organic, it will have much more of a future," Maik concludes.
De Groot fresh group
Drielseweg 23
5321 NC Hedel
+31 (0)73 599 88 88
info@degrootfreshgroup.com
www.degrootfreshgroup.com