CEO Herbert Scholdei, KÖLLA Hamburg:
“Difficult products are the safest long-term bet in the fruit importing business”
KÖLLA Hamburg deals exclusively with fruit, but the other subsidiaries of the firm in Germany include KÖLLA Kaarst, KÖLLA München and KÖLLA Valencia also handle various vegetables, with focus on both the wholesale and the retail markets, as even though the latter moves larger volumes, the best prices are paid by the former. The group sells some of its fruit in other European markets, like France or Italy, although the core of its business is in the German market.
What distinguishes KÖLLA from other importers, according to Scholdei, is that it is smaller and more focused on products that are harder to work with. The group stopped being a trader and became a provider that is deeply involved in the production process, with a quality department fully devoted to controlling production and pesticides. “It is no longer enough to pick up the phone to buy and sell; you need to have a deep knowledge of what you are buying, from whom you are buying and how reliable the producer is,” affirms Scholdei. This strategy, in turn, makes the group more trustworthy, which is a worthier asset nowadays than just offering the cheapest prices.
Table grapes
Table grapes are KÖLLA Hamburg’s specialty, representing around 80% of the company’s revenue. The firm works with suppliers in many countries worldwide, starting the season with Brazil, then moving on to Peru, for which they are one of Europe’s largest importers, continuing with South Africa, later with Argentina and from there going directly to India. The firm’s grape season starts in October and finishes in late June, early July, with Egypt.
According to Scholdei, the quality of each country’s grapes depends on the season and the weather conditions. This year, for example, the worst ones came from Argentina and especially South Africa, because it rained excessively. In general terms, however, you cannot say one country is better than the other, as they all produce the same seedless varieties, especially the Thompson.
Over the past five years, Scholdei assures that, condition wise, India has become one of the best grape suppliers. “Sometimes the documents arrive late, but they are learning fast and the quality next year is likely to improve even more.”
In terms of logistics, KÖLLA exclusively uses reefer containers, delivered wherever they are needed in order to meet its customers’ needs. For Germany they arrive to Rotterdam and for other destinations they can be sent to other ports, like Helsinki or Oslo. If there ever is any doubt about the quality of any shipment to Scandinavia, quality checks are carried out on arrival to Rotterdam.
Reefer containers are more expensive, although grapes are ensured to have a longer shelf life. With regular containers you pay 170-180 dollars per pallet (one layer more with apples and three layers more with grapes), while with reefer ships this figure goes up to 240-250 dollars. This entails a higher cost and 10% less cargo, which is why many have been abandoning this form of shipment.
Benefits German importers
Scholdei explains that, in recent years, more and more supermarkets prefer to work with German importers, and this is mostly due to German laws. In Germany, if a product with exceeding MRL’s (Maximum Residue Limit) is detected, liability lies on the first party to bring the fruit into the country; consequently, if a German importer is used, the supermarket buyer is safe, but by resorting to foreign importers, the buyer would be the one facing legal action. This naturally motivates companies like KÖLLA to put plenty of emphasis on quality control and on working with reliable suppliers.
As for the market situation, in Germany, supermarkets like ALDI usually pay market prices and work with fixed margins. This means that if their buying prices go down or up, sales prices drop or increase in the same direction. When it comes to fruit, bananas are the only exception to this, as they are an item like milk, butter or coffee, which are normally sold for the buying price plus VAT.
Grapes reached very high prices in January last year as a result of the blockage of around 150-200 containers from Aussenkehr farms in Namibia caused by a trade conflict between Dutch importers, but once it was resolved and the containers released, oversupply caused prices to plunge. This year, grape prices are a lot more stable, with lower production volumes due to South Africa and Argentina’s weather conditions.
This season, the apple sector is the one facing problems, as 30% of New Zealand’s production is being redirected towards Asia, while the grape market has stabilised. In any case, the interest in grapes significantly drops in June, as this month marks the arrival of better strawberries, stone fruit from Spain (plums, nectarines, Saturn peaches, etc.) and many other kinds of summer fruit.
There is a constant search for new seedless grape varieties that are easier and cheaper to produce, but as a counterpart, not all varieties are accepted by the market. If good and popular varieties, such as the Crimson or Flame, suffer shortages, new varieties, like the Scarlota, can achieve great results, but on equal terms, the Scarlota is heavily outsold by the Crimson.
Worldwide markets
The two largest worldwide markets are still the European Union and the United States. The Middle East is still small and very price sensitive, and Asia, which is gaining popularity, is a very hard market to enter directly and very demanding in terms of quality. In terms of production, countries like Brazil, Argentina or Peru have still plenty of potential to grow.
Nowadays, the biggest threat to global trade is the financial recession. For instance, Russia used to take a large chunk of Argentina’s pear exports, but with the 35% devaluation of the rouble they cannot buy, because they cannot sell, and they prefer to buy European fruit, because it is cheaper, and the same will happen with apples.
India has also seen a 20% devaluation of the rupee, and consequently imports are hampered by 20% higher prices in rupees plus 50% import taxes. For its part, the Chinese market is only accessible to European exporters through Hong Kong, but in that case, prices are no longer profitable.
KÖLLA attended the latest addition of Asia Fruit Logistica in order to get a feeling of what is happening in these countries and, quite naturally, look for opportunities, although the future is still unclear.
In any case, Herbert Scholdei believes that the overseas market for difficult products, like plums or grapes, is guaranteed to survive, as fewer importers are willing to get involved in those sectors and no competition comes from logistic companies that do not offer any guarantees to supermarkets. He is also convinced that the number of firms is likely to drop by around 50% within the next ten years; a context which should ensure a bright future for KÖLLA Hamburg.
For more information:
Herbert Scholdei
KÖLLA
Tel.: +49 (40) 30 37 27 111
Fax: +49 (40) 30 37 27 100
Email: [email protected]
www.koella.com
