"Hein Deprez: "We are ruining our image every day"

Dutch horticulture can form coalitions, build brands, work together and remediate all they like, but as long as the base of the system is wrong, the profitability in the sector isn't going to improve. This is according to Hein Deprez of Greenyard Foods at the Westland Event.

Horticulture has the future. Hein Deprez is convinced of this. It is the only way to feed the growing global population with healthy food. But, as he said at the Westland Event, the sector is hardly taking chances. "We have a good product, but we're ruining our image every day. A consumer hears global warming, greenhouse gasses and thinks the grower is destroying the ozone layer," Deprez gives an example. "Greenhouse cultivation is the best example of Urban Farming. But we don't mention it. We use CO2, an environmental pollutant, sustainably in our cultivation. We don't get money for this, we have to pay for it. We don't communicate it well." This is despite there being hundreds of millions of European money available, for that communication. "We can't sell our sector. We only use the European money to build brands."

Deprez has nothing to do with building brands. "No one considers the functions of a brand in the fruit and vegetable sector. A brand is a results of trust. Trust is developed by standardisation: supplying the same every day." You might be able to do that with a hamburger, but fruit and veg is very diverse. This is why brands don't work in the fruit and vegetable sector. "Pink Lady and Chiquita aside, investing in brands is lost money. Brands only serve to serve the retailer and get on the shelf. But the focus shouldn't be on the retailer. The assortment has to be fully in the function of the consumer."

Leaving tomatoes
Deprez uses the example of a consumer who has 'big, red tomatoes' on their list. "They see the tomatoes and grab them, because they're on their list. Then they continue. They see more tomatoes and wonder what the difference is. That's when they consider the price. One is cheaper? Then they'll put the more expensive one back. We think we differentiate, but we're just destroying our price. The consumer walks away and sees twice as expensive organic tomatoes. If they're that expensive they must be healthier than the other tomatoes. But the consumer finds organic too expensive and the rest seems unhealthy. So what do they buy? Nothing. No fruit or veg. Ketchup. Yogurt with a picture of fruit on it." Deprez sees a similar situation in the competition between fresh, convenience and frozen fruits and vegetables. "We're sending disruptive signals and the consumer ends up buying nothing."

How can situations like this be prevented? Deprez doesn't believe in horizontal chain collaboration. He doesn't think there is a solution through collaborations within and between the growers unions. "They were founded with the right goal: to create added value for the tomato. But that function has been turned around in two generations. Now the tomatoes is needed to cover costs that have nothing to do with the reality of this sector." There's only one solution to this. "Clear out."

Unite fresh, convenience and frozen
Instead of horizontal chains we need to work on vertical funnels: from producer to retailer. By providing the complete assortment for a retailer, suppliers can prevent competition between themselves. This is why he wants to unite fresh, convenience and frozen in his concern: to stop those three from competing. "You only create opportunism in the market with the horizontal bundling of product without the final customer in mind. You can collaborate all you want, you can pay people to step out of the sector, but it doesn't work and never will. With vertical funnels you are lowering the price pressure and can work with the retailer on what the consumer wants." He says multiple columns can still arise: one above every retailer. "You are serving different consumers and you don't have to compete among yourselves. The whole chain earns." In the Netherlands we have more than our fair share. Our assortment is good. We are creating added value in the market. That's how we were able to cannibalise the sector."

Consumption
Together with the retailer Deprez wants to work on raising the fruit and vegetable consumption. "Our first priority is doubling the consumption in Europe with a focus on the consumer. The sales price will not rise, but we can develop an optimally organised chain. We have the organisation, we have the logistic possibilities. It's the easiest way to work efficiently and raise the added value in the chain."