The largest producer and marketer of fruit in Spain, the Murcia-based AMC Fresh, has reached a pioneering agreement that promises to change the relationship model between distributors and fruit and vegetable producers. The company has sealed an alliance with the world's largest retailer, Walmart, to design exclusive new table grape varieties that will reach supermarkets in the US chain within three to five years.
Given Walmart's size, the contract "has the potential to generate hundreds of millions of euros," says a representative of AMC Fresh. The retailer buys more than 1,000 million dollars' worth of table grapes each year. Last year, the US giant had a turnover of 500,343 million dollars, so the agreement's potential could be huge. Also, both companies are already working to expand it in the future to include other fruit varieties. The company is also specialized in citrus fruits.
AMC Fresh, which distributes its products in 60 of the 100 largest retailers in the world (Walmart, Marks & Spencer, Morrisons, Sainsbury's or Edeka, etc.) as well as El Corte Inglés, Eroski or Consum in Spain, is also already negotiating similar alliances with other distributors, what could help it achieve "exponential growth," says Ursula Mejia, marketing director of the group.
The agreement with Walmart
AMC Fresh uses biotechnology to obtain varietal innovation in the fruit sector. "We are not talking about genetic modification, but domestication of varieties," says the company, which crosses different types of grapes in order to create new products by hybridization. In the case of table grapes, the company has 400 plants from different parts of the world that provide specific characteristics to the crosses: a different flavor, a lack of seeds, an extension of the product's season, etc.
The system aroused the interest of Walmart, with which the Murcia-based company has been working for years as a supplier. Walmart's goal is to develop table grape varieties, and later other fruits, tailored to the tastes of their customers, as this can help in differentiation and allow it to sell outside the product's usual season. It can also help in extending the average shelf life of traditional fruits and make it possible to market them for longer.
This year, the retailer has already chosen five crossed varieties (two with unique flavors, two that can be sold out of season and another whose shelf life is greater than the average). These products will be developed and those that work best will start hitting the shelves of their supermarkets in about three years. "The agreement will help us strengthen our relationship with Walmart, because what we are offering them is the capacity to choose what they want to sell, which is common for other types of products, but not for fresh ones. We are going to help change the chain's strategy. Now, whatever the client demands will be planted," says Mejía.
The idea is for the alliance to last 15 years, giving Walmart exclusivity over the varieties that are developed. The company has made the commitment to buy at least 30% of AMC Fresh's production (thousands of tons), while the remaining share will be licensed to other producers who also work for Walmart. AMC Fresh is now studying to diversify to other products, such as vegetables.
Source: expansion.com
