The main reason for the decrease in greenhouse vegetables this year is the surplus in production caused by the good weather in Europe. The Russian boycott is now cited as the straw that broke the camel's back, but the core of the problem lies deeper. At least that is what ABN Amro has concluded in the industry update on greenhouse vegetables. That there was a surplus in production this year, does not mean that the Dutch area is too large. The breaking down of greenhouses is not a panacea to improve prices. "It is often cited as the major problem regarding price pressure. The biggest problem is the fragmented supply and insufficient emphasis on the positive features of the product," explains Frank Rijkers ABN Amro far.
Export opportunities for growth
The export of Dutch greenhouse vegetables increased in the first nine months of 2014 by nearly 6% compared to last year. However, this season prices for cucumbers and peppers (depending on colour) are, to date, 20-30% lower than in the same period last year, and 10-30% lower compared to the long-term average. Although the Russian Boycott plays a role here, the main cause is the high production in Europe, due to the good weather. "This year the weather conditions were such that the Dutch sector suffered from competition from Southern Europe," says Frank Rijkers ABN Amro. Dutch production started early due to the warm weather. Nevertheless, there is no talk of the acreage in the Netherlands being too large. In fact, there are growth opportunities for Dutch exports to countries within and outside the EU. Two things need to be there, though: the fragmentation of the sector, and the promotion of the product.
Cooperation without cartels
The fragmented range of the Dutch sector creates problems, according to Rijkers. "The sales organizations should join hands more, particularly in marketing, to achieve international retail through a manageable number of channels." By joining forces, strengthening the chain and sharing market information consumers can be better served. "If this was done, the Dutch could make a significant impact on the vegetable sector." It is not known how many parties there is space for. "It should be a manageable number. Each with it's own segment for example, so that they do not get in each others way. Look at the dairy industry," says Rijkers as an example, "There are a large number of parties and they are not in each others way. It is a fine example for marketing in the vegetable industry." The sector does not need to be afraid of cartels forming. "If you do it the right way, like the ACM, at the European level, then you don't have to attack each other. You find this among dairy processors in Europe as well, and there are even more examples. If you handle it the right way, then you do not have to go after each other."
Creating demand for the product in the market (and promoting it) is, according to Rijkers, the second most important point; but this should be dealt with together. "It is often translated into giving a brand name to a cucumber or pepper, but that is reserved only for a niche in the market. It is important that you bring the product as a whole positively to the market. For consumers, Polish and Israeli cucumbers look the same as Dutch cucumbers. But the Netherlands has a unique position in sustainable, efficient production, and can deliver a unique, uniform product that is in demand.
Bankruptcies, sales and further up-scaling
This week it became clear which companies will continue next year and how many companies will be forced to stop. The online offer on www.glastuinbouwaanbod.nl has made it clear that a number of cucumber and paprika businesses will have to stop. It leads to further economies of scale, according to the report this is one of the causes of structurally low selling prices. Yet having sales today does not have to hinder development of the sector. "If the market has a need for more uniform parties, that does not have to be a barrier. Ultimately, what is important is that a sufficient amount of the product is being brought to the market, and that sufficient demand is being created."End of the boycott
How will the market develop when Russian borders open again in August? It is not wise to fully focus on Russia, at least that much is clear. "But the Dutch like to be where the opportunities lie, and Russia will once again be an important market. In the last few years Russia has had the most important growth in the market, and there is still a lot of potential. The contacts are there and products will go there again." The expansion of Russian growing land will not hold them back. "The expansion is well known, but the figures mentioned are ambitious. Even with the growth, there is still room for Dutch products. It meets the requirements of the Russian consumer, and opportunities will still be there." Lees de heel branche-update glasgroenten hier
(read the entire greenhouse vegetable branch update here)