The Pundit had an opportunity to put the Romaine Crisis in perspective and to challenge a flawed understanding of risk by penning an essay for the Wall Street Journal.
Many saw it in the physical newspaper, and it is available for those who have subscriptions on the Wall Street Journal website right here
Through special arrangement with the Wall Street Journal, we’ve been able to arrange for anyone to read the essay, even without a subscription, here on the Pundit website:
Read the complete article here.
Each year, it is our privilege to unveil a unique group of industry leaders. Some are from the local market, some from across the country and some from around the world.
It is truly a gathering of thought- and practice-leaders who are committing of their time to share ideas with the broader industry in the hope of making this industry stronger.
It is with great pleasure that we unveil the Perishable Pundit’s Thought-Leader Panel for The New York Produce Show and Conference 2018:
C&S Wholesale Grocers Inc.
Meg Buchsbaum is a classically trained chef who began her career as a food photographer and stylist. Her career in the food industry has taken her from working as a chef in Italy, to a Culinary Chef Instructor in NYC, to a Produce Buyer. She was a Local Forager for Whole Foods Market and a frequent guest on the TV Food Network. Her passion for food was developed early in life by growing up on the family farm in the Berkshires. On summer weekends you can find her tending her vegetable garden where she grows over 22 varieties of tomatoes. She is also is a bee keeper producing delicious wildfl ower honey. Currently she is the National Produce Merchandiser for C&S Wholesale Grocers Inc. At C&S she takes care of hundreds of independent customers across the country, where she helps create ads and promotions to grow their sales.
Bronx, New York
Marc started his career at Waldbaums in 1978, where he worked for 10 years until opening his own foodservice wholesale business. Eventually, he took a position with Food Emporium, where he worked for three years. Marc joined Morton Williams for the first time as a produce manager more than 15 years ago. In 2006 he went to Wakefern as a supervisor for the SRS stores. He returned to his current position at Morton Williams eight years ago.
Allegiance Retail Services
Iselin, New Jersey
A produce industry veteran with over 30 years of experience in procurement and category growth within the supermarket industry. Kelly currently serves as the Director of Produce and Floral for Allegiance Retail Services. Her responsibilities at Allegiance include managing sales, coordinating advertising, merchandising and operations activities, and managing a procurement team and merchandising team. She began her supermarket career at Wakefern Food Corporation where she served 31 years honing her skills in a variety of departments including Grocery, Commercial Bakery and Produce. In her 18 years in the Produce Division, she was a Category Manager and successfully managed a multitude of commodities and was instrumental in the yearly growth of sales for the Division. Kelly was also a Regional Sourcing Category Manager in South America, South Africa and California where she became a seasoned expert in field agriculture. Kelly is a graduate of the Kean University where she earned a Bachelor of Science Degree in Marketing.
Elizabeth, New Jersey
Steve Oroszlany began his produce career at the age of 16 and in 1990 became a produce manager. He left Foodtown to join King’s Supermarkets as a manager in 1996. Steve came to Wakefern as a produce merchandiser in 2006 and joined the procurement staff in 2011 as a category manager. Steve was promoted to Procurement Manager for Produce and Floral at Wakefern in October of 2017. He lives in Bloomingdale NJ with his wife Kristen and daughters Kaitlin and Lauren.
Greensboro, North Carolina
Vic joined the fresh-focused grocer, The Fresh Market, Inc. in April of 2018, based out of their corporate offi ces in Greensboro, N.C., where he oversees management of the company’s seasonally fresh produce departments across all 161 stores in 24 states. Vic’s extensive supermarket, produce and management career spans more than 35 years across the retail and produce sectors. Before joining The Fresh Market, Inc., he was senior director of produce and fl oral at Iselin, N.J.-based Allegiance Retail Services for more than a decade, in which capacity he led all produce and fl oral operations and functions, including sales management, advertising, merchandising and product procurement for almost 100 stores in three states under the Foodtown, D’Agostino, Brooklyn Harvest and Market Fresh banners. He also previously worked for more than two decades at another grocery cooperative in the state of NJ, Wakefern Food Co., holding the role of produce category manager for 15 years, serving the Shop Rite and Price Rite banners. Vic has served two terms as president of the Eastern Produce Council (EPC), on whose board he has served since 2006, as well as chairman of the New York Produce Show, EPC Strategic Planning Committee and Eastern Produce Council Golf Outing committee. Vic previously sat on the PMA Fresh Summit committee and is a member of the Southeast Produce Council and the New England Produce Council. He is a graduate of William Paterson University and is married to his wife Maria for 27 years and they have two children, Dante and Mia.
Lake Zurich, Illinois
Tony Stallone comes from a long line of people passionate about food. Tony’s family goes back over 100 years in the produce industry. His great-grandfather was one of the largest buyers and sellers of lemons and oranges in the US. Some say he was bigger than Sunkist at the time. Tony’s fresh food history began at age 5, when, after church, Tony and his father would travel to the terminal produce market to repack tomatoes for the Monday morning business (back in those days the fi rst customers arrived just after midnight). Each summer thereafter, Tony worked at the market. The market at that time was a collection of jobbers (or merchants) who sold to independent grocery stores, wholesalers delivering to restaurants, and peddlers who typically sold their products out of the back of their trucks. Tony learned the art of buying produce from his father who would bring him along each morning as he did his daily purchases and working alongside chefs as they honed their trade. Our “Produce Guru” has been in training for more than 40 years! After 20 years in the family business, Tony started his own food consulting fi rm in 1996 with Scotty’s Home Market (online grocer) as one of his customers. Tony helped raise a 10 million investment for Scotty’s from Nordstrom. In 1998, Tony went to work for Scotty’s as the Vice President of Merchandising. In October of 2000, Scotty’s/Streamline was bought by Peapod - Ahold. At Peapod he has helped Peapod grow into the largest most successful internet grocer in America. Tony has standing television segments on ABC 7 in Chicago and is an annual lecturer at Cornell’s Produce Executive Development Program. Food is Tony’s destiny and he truly enjoys sharing his passion with consumers.
99 Cents Only Stores
City of Commerce, California
Caitlin Tierney is the Director of Produce for 99 Cents Only Stores, Commerce, California. Over her 14-year career in the produce industry, Caitlin has gathered a unique perspective of up-and-coming trends such as e-commerce, grocery delivery, prepared foods, packaged produce, discount retail and seed science. Her retail career started as a category assistant to produce for Michigan-based Spartan Stores, where she spent several years as a buyer before joining New York-based Fresh Direct as a senior produce buyer. Prior to joining 99 Cents Only, she was the produce and floral Purchasing Manager for Fresh & Easy Neighborhood Market, and Produce Chain Marketing Manager for Bayer CropScience.
Maria is the Senior Category Manager for fruit, vegetables and flowers at supermarket chain ICA Sweden. Since joining ICA, she has held several different positions within the retailer’s fruit, vegetables and flowers business. Before her current position, Maria was the Head of Business Development at ICA, where she looked after issues such as sustainability, among others. Maria graduated in economics and management from Lund University in Sweden in 2004. Before joining ICA in 2008 she worked in the paper and packaging industry for SCA Packaging, which has since become DS Smith.
Stephan Weist is National Category Director fruit, vegetable, flowers and plants for REWE, one of the leading and most innovative supermarket chains in Germany. He is also Brand Manager for Rewe Regional, the company’s cross-category brand for all regional products. He studied Economics at the University of Cologne (VWA) and is an alumni of INSEAD. Stephan started his career as a trainee at REWE in 1984 and was a buyer for overseas, exotics and organic fruits before moving to Chiquita in the year 2000. As Managing Director, he managed the development of Chiquita’s non-banana business for Northern Europe before taking on total responsibility for Chiquita’s D-A-CH (German-speaking European region) as Business Director. In 2009 he joined Landgard, Germany’s largest produce and flower producing cooperative where he headed up the fruit, vegetable, organic and convenience divisions as Managing Director, while seeing through a successful restructuring period. Stephan returned to Rewe in 2014 and his current role. This summer, Stephan was elected as President of Freshfel, the European Fresh Produce Association, the industry’s representative body in Brussels, Belgium.
Tim York started working in the produce industry more than 35 years ago at H. Hall & Company, a grower/shipper of strawberries and mixed vegetables. In addition to being a founding employee and the current President of Markon, Tim also has held numerous committee and task force positions, including Member, USDA Fruit and Vegetable Industry Advisory Council; Chairman of the Produce Marketing Association (2002); Director of the PMA; Chairman of PMA’s Foodservice Division; Chairman, Center for Produce Safety Advisory Board; and is a founding member of the Stewardship Index for Specialty Crops.
We owe a great debt to these individuals and their companies that support them in sharing their expertise with the industry. These are people and organizations committed to building a better future for the whole industry and they merit our thanks.
Come to The New York Produce Show and Conference and learn from the best and brightest. Be part of building a brighter future… for yourself, your organization and the industry at large.
You can register right here.
Request a hotel room here
The website can be found here
And feel free to email with any question right here.
With a Thought-Leader Panel like this, you can count on the opportunity to SOAR ahead.
When the Pundit was cutting his eye teeth in the produce business, one of his customers was ICA Gruppen in Sweden, so we have a special connection when we have Maria Wieloch of Ica participate in our events:
She has served on panels:
2018 London Produce Show’s Thought-Leader Breakfast Features All-Star Cast of Industry Luminaries
Lessons from Sweden: Leading food retailer steps up sustainability initiatives
And she has even accepted important awards on behalf of ICA:
London Produce Show: ICA scoops international award for marketing produce to kids
At the Global Trade Symposium, co-located with The New York Produce Show and Conference on December 11, Maria will be focusing on how special promotions can boost sales of produce and move the needle on consumption.
We asked Matthew Ogg, Contributing Editor at Pundit sister publication, PRODUCE BUSINESS, to find out more:
Senior Category Manager:
Fruit, Vegetables and Flowers
Q: Working with Sweden’s largest retail chain and within a business model where store owners can act independently, how would you say your role as category manager differs to your counterparts at other retailers?
A: It’s quite a big difference to be honest. The main difference is, of course, that the assortment we put forward to the stores is not automatically offered to the customers, so we need to be very good at internal marketing towards the stores. We have to very carefully listen to what they want and combine that with our expertise of fruit and veg to make sure we have the best offering for the stores as a wholesaler, but also be able to promote the reasons why they should have the assortment that we recommend.
If you’re an integrated chain, you basically decide what the stores are going to sell and you make the deliveries, but we offer an open assortment so the stores can pick and choose themselves. We really have to have a close communication with the department.
We have a Facebook group where most of the department managers are active and where we can communicate and share inspiration between them. When we have a new product, we always put it on the Facebook group and say why it’s good for them, what’s the unique selling point with the product and how it’s supposed to fit in the assortment. Then we get immediate reactions from the stores if they like it or not. We also have sales support with people who go out to the stores and help them to sell.
We have to think carefully about what we put in the assortment and we have to make analysis after we’ve taken the product in to really assess whether it was a good decision or a bad one.
Q: And because you’ve researched so thoroughly, would you say you get better results in the end?
A: I think we have a very good understanding of what Swedish consumers want. In an integrated chain, you put it out there and if it sells it sells, but we have more of an offering where the stores get to choose and we can see what the stores believe their customers will value. They meet their customers every day, and they have very different customers. Sweden is not a very big country, but it’s a very long country and is very different between the cities and the countryside.
Of course, the department manager is closest to his customer base, and hence if we have a broad assortment, he or she can choose what works on his or her customer base rather than us trying to be a central unit that says this is what you should have.
Q: So, it’s a mix of you studying the market and knowing the supply chain, putting the advice and options out there, but the store managers have the specialized knowledge of their areas and you can find a balance between the two.
A: Exactly, and maybe pinpoint the market in such a way that’s a bit more difficult if you are an integrated chain where you just work with volume and you’re portioning out the volumes. I haven’t worked in an integrated chain, so I can’t say for sure how it works, but that’s my simple idea of it.
We are the link between the suppliers as well. We have buyers — the buyers are the main connections to our suppliers, but they always feed us with new things — and we have stores with even closer contact, so we can have dialogue with both of them and ask if they think this is a good idea. Either one of these stakeholders might say ‘it’s a very good product, but because of our logistics system, it wouldn’t work because of this and that’.
Q: Does the fact you can’t centrally determine where the volume goes make it more challenging to negotiate deals with suppliers?
A: I’m not in charge of buying at all... I just have the category so we have a buying manager who is more into those things — we have very good historic knowledge as we are the market leader in Sweden, and we have a very experienced staff. I wouldn’t say that is in my view a problem to think about the volumes, because we have good historic data.
If you take a totally new product, it might be that that is the case, but you often have sister products to a new product where you can see historic volumes and you know what kind of campaign support it’s going to have. You have talked to people at the stores.
Q: That’s good to hear. And I see from the latest results that consolidated net sales were up 6.2% in the last quarter. That’s quite impressive in a competitive retail environment. There were several categories driving this, but the report mentioned fruit and vegetables were one of the strong performers. So, looking at that quarter and the trend over recent years, how has the produce department been tracking with its sales and what have been the key drivers in your view?
A: To be honest we have a situation where the Euro to the Swedish Crown is very strong, so it’s a lot of price I must say. Prices have been going up in Sweden due to this currency change, but we are seeing a very strong trend – well, it’s not a trend anymore; it’s a a shift towards eating more vegetables.
We have the ‘flexitarians,’ where people don’t go vegetarian or vegan, but they tend towards a more vegetarian way of eating. There is meat-free Monday that the press is using here in Sweden. There are more and more people adopting this, and for two reasons: first is good for your health, but it’s also good for the environment. Swedes generally are very environmentally conscious; for example, we are very good in recycling.
People eating more fruit and veg is driving sales strongly I think. I would say that’s the main driver. That’s the underlying driver, but people also understand that when you start eating more vegetables, you come to realize it is something different to what you were served in school, which was overcooked carrots and yucky broccoli. When you do it in other ways it actually tastes good, and taste is also something that we work very hard on at ICA.
We work very hard on choosing the tastiest varieties because I believe to get that permanent change, you need to have good taste.
Q: So that’s the demand side of the equation, but, of course, to succeed in such an environment and capitalize on it, you as a supermarket need to take certain steps as well. So, from your side what else have you been doing to get more volume moving?
A: We haven’t really changed that much in the number of spots we have in our leaflets. I’m going to talk about it at the New York Produce Show, but we do a lot of big campaigns where we connect social aspects. We have, for instance, a collaboration with the Red Cross where we donate money to the Red Cross from produce sales, and those kinds of activities tend to also get a bit more publicity, they get more spots in the store, and they also sell more.
We have, of course, the campaign with Halloween that I’m going to talk about as well, so we do some bigger campaigns. But we are a big supermarket, and there are many different categories that drive sales, so we haven’t really shifted the percentage of fruit and vegetables in our campaigns.
I think there has been an exponential shift in demand for eating more greens in Sweden, and that’s something we’ve been trying to drive for a long time through our different customers’ magazines, having more and more vegetarian recipes; it’s been a long journey.
We said at some point this shift had to come, and we really saw that after the summer period the sales started to increase. We also had a very hot summer in Sweden and because of the fire risk we were not allowed to barbecue, which for us is a catastrophe because in Sweden that’s what we do in summertime. But it means you had to find other ways of cooking instead of barbecuing a lot of meat, which is normal in summertime, so I think that also had a part in the shift to eating more vegetables.
There was a shift in the summer, and after summer that’s really made a big boost; now we want to keep the momentum and drive more sales of fruit and veg.
Q: So, you can adapt to issues as they arise, but also make the most of events like Halloween. Would you be able to give us a sneak preview of what you’ll be revealing about that in New York?
A: This is the second year we did Halloween, which is a phenomenon in Sweden. It has not been around for a very long time, and it’s always fun when you do something for the kids and it’s a lovely holiday. But what’s not so lovely in my sense is that it is candy-driven; our Swedish kids don’t need to eat more candy.
You shouldn’t exclude anything and they should be able to eat candy, but if you look at Swedish kids’ consumption of sweets and unhealthy things, we actually have some of the worst numbers in the world. That research was done by the Swedish National Food Administration saying that 17% of Swedish kids’ daily calorie intake comes from sweets, crisps, cakes, these power bars, power drinks, and other unhealthy foods. That’s really terrifying— we’re actually one of the worst in the world even though we are a country with good living standards.
With this in mind we said: ‘Okay, let’s put an alternative out there to see if we can make something of these new holidays for the kids not just having to do with candy’. So, we gave the mission to our design bureau and they had a blast of course. They said this was the most fun they’d ever had, and they came up with names and characters and so on.
We launched it last year and got incredible media from Sweden and of course around the world, because nobody has done this before. And the sales, of course, were good as well. Here you have the issue where you cannot press the stores and say ‘this is how you’re going to do it’; we are depending on the stores to pick it up themselves and really make a success out of it.
Q: We will look forward to hearing more about that at the New York Produce Show. I’m sorry to hear about those statistics though. I wasn’t aware that the situation was so bad with children’s diets in Sweden.
A: We weren’t either. It’s very bad. That’s why we try to find ways of getting kids to eat more fruit and veg, but you know kids are the most difficult customers because if they don’t like it, they just spit it out and you can’t do anything about it. They don’t understand the concept of health and you cannot force them — I have a 2.5-year-old and a five-year old. I’m painfully aware of this.
What we have to use is more this nudging technique that’s now arising from last year’s Nobel Prize winner, and really try to nudge them in the right direction. Halloween is a way of doing that — making it fun, making it playful, making them pick the products themselves, because if they pick it up and say ‘Mum, I want to try this’, it makes it easier at home
We want to do the same for Easter because Easter is also very connected to sugar in Sweden when it comes to kids. You have the Easter eggs filled with candy, but we want to try to go in a different direction or offer an alternative.
Q: And will you be doing something for Christmas as well?
A: In Christmas, we do a lot of other things at ICA centrally so it becomes quite difficult. We are thinking about doing it next Christmas, but we haven’t decided yet if we should be doing it or not. The thing is at Christmas, we brand a lot of our products with a Christmasy feel and that’s already being done in the store with other products and produce as well. We already have one rebrand in the department, so adding a kids’ line… we don’t know.
Q: And with the busy Christmas trading period underway, a lot of retailers generally are thinking how much is online going to steal from physical stores, and I suppose that’s a constant issue for a supermarket. What are your strategies in e-commerce to promote fruit and veg sales and position yourselves for that future?
A: Online is still quite small in Sweden to be honest, so we are actually right now working on our strategy. I’m not really able to talk too much about how we’re going to do this, but we are looking into these questions as we go along.
How do we increase the sale of fruit and veg online? Fruit and veg is a category where people like to feel it themselves and pick the produce themselves; it’s been shown in studies that Swedish consumers rely on their own judgment in terms of what is quality for fruit and veg. So, it is a difficult question — online is growing, but fruit and veg is still quite bound to the physical store.
Q: Do you have a delivery option for example?
A: It depends on the store. The store owners decide themselves if they want to have online and if it’s a pick-up at the store or they offer delivery, so it’s not centrally managed in that way. It’s not a central ICA system — we supply the system to the stores but I still have to choose a physical store where I want to do my shopping, whether it’s my local store or an ICA Maxi store, which is a hypermarket.
It’s actually picked in the store, and it’s either picked up by the customer in the store or delivered to the customer. In the Stockholm area, we have a central picking area, but elsewhere in Sweden it’s managed by the stores.
Q: There’s also the rise of subscription models elsewhere. Is that taking off as well in Sweden?
A: Not in supermarkets as I know. There is more of a subscription market where you get a delivery with weekly menus, so you get a delivery on the Monday with ingredients for four people; that’s quite big in Sweden, but not subscription on your everyday groceries in that sense. Of course, that’s going to come but it’s not something I’m involved in.
As we see online is growing, the physical experience in the store becomes more and more important. That’s what we’re also trying to do with Halloween and those kinds of things. It becomes an attraction area — a reason for the consumers to go to the store. It’s hard to get the Halloween feel online, but if you have a whole expo to make it a destination, you can do something good in the store to make it an experience for the shopper.
Q: At last year’s Amsterdam Produce Show, you discussed how organics had grown within the fruit and vegetable category, reaching around 15%. Has the percentage increased and what have we seen in organics?
A: We were quite early in organic in Sweden, and we have now reached a percentage where it has actually been for more or less the last two years. Sometimes it goes up and sometimes it goes down. It’s really driven by the media — if they say organic bananas are better than conventional bananas for your health, then we can see a small increase for a period but then it quite often goes down and stabilizes at 15%.
But as I was saying, over the summer period it was quite hot, and it’s put a big strain on our Swedish farmers — both the meat farmers but also the fruit and veg farmers. We’ve become a bit more patriotic I would say. There’s an increased demand for Swedish produce, and we see also that a lot of customers put an equal mark between sustainability and Swedish produce.
My interpretation of this is that sustainability before was more or less with organic as the only option, but now sustainability has a much broader perspective. What’s sustainable for one person might be organic, but for their neighbor, sustainability might be to buy Swedish produce. Sustainability as a subject has really arisen on the agenda of consumers, but we have more options now — locally-grown, nationally grown and then organic, and also people who say ‘I buy everything without plastic, that’s my way of being sustainable’.
So, the demand for Swedish produce has really increased more than the demand for organic.
Q: But there’s still very much a place for the imported fruit and veg?
A: Of course, and there are things that we cannot grow in Sweden. They co-exist. There is an increased demand for locally produced, but we cannot grow oranges here. In Sweden there are many things that we cannot do here, and the supply is what it is, so when the supply is done we have to import.
Q: So, for example, Swedish apples or pears would be preferred over the same fruit from other parts of Europe?
A: There are some people who care and some people who don’t care. It’s very important for us to give the consumer what the consumer wants. And that’s why we often have the option in our stores to buy both imported and Swedish — also transportation and diesel prices are increasing, because of transportation costs, it’s cheaper to not import. But it’s a big equation.
It’s demand-driven, so if we put out an option to our stores to buy imported and Swedish, we see where the demand is from that store and we go for that option.
Q: You spoke about plastics as well earlier with some people trying to remove that from their shopping. Are you experimenting with sustainable or recyclable packaging initiatives?
A: Regarding packaging, we are looking into more environmentally friendly options. There is a lot of packaging in fruit and veg, but it is often there for a reason, to protect the produce and prolong the shelf life. Without packaging, sometimes waste would go up, which is also not sustainable. But with that said, we need more environmentally friendly materials.
In the meantime, we are exploring were we can change plastic to either paper or green plastic without affecting the shelf life or the experience for the consumer. Paper is not see-through and hence covers more of the product, which sometimes is not appreciated by consumers.
One example that we have done is to exchange plastic crates for paper crates in most of our packed private label tomatoes. That’s a great saving in plastics. We are also to some extent using natural branding on our organic plastics — for example, laser marking. This is an innovative technique that is not very widespread, and it has its limitations for example in what produce it works on and the speed of the machine.
We see that the industry as a whole in Europe is working on plastics, which is good. There needs to be big steps taken by the packaging companies going forward in order to solve the equation of protection of produce versus environmental impact.
Across the globe, operators that cannot control their affiliated independents have challenges.
In the US, the problem is often that individual stores can buy outside the system and buy less expensively from producers or wholesalers that don’t have the same food safety, traceability and sustainability standards.
If the independents are strong, properly capitalized, etc., when they combine with a strong wholesaler/distributor, they are often unbeatable with local market knowledge that no chain can match.
But, it is also true that many weak independents have simply disappeared as Walmart has rolled out across America.
ICA seems very string, though, with an incredible distribution infrastructure across that very long country.
Ica is innovative as well. Come to New York and see some real-world examples of how to boost sales and help increase consumption, with ideas coming direct from Sweden!
You can register for the event right here.
Let us know your hotel needs here.
Check out the website here.
And if you have a question, just email us here.
Come to The Global trade Symposium, come to New York, SOAR into the future.
We were fortunate to have Jelger de Vriend present at our event in Amsterdam a year ago:
Amsterdam Produce Show Speaker Jelger de Vriend Will Examine What Is Necessary To Be ‘Best in Fresh’
It was a very well received presentation. No surprise for someone who was Senior Sourcing Manager at Royal Ahold/Albert Heijn and has, more recently, devoted his efforts to finding ways to create systemic change in a way that is designed to help retailers deliver the kind of quality that will increase sales and boost consumption.
Produce has been a business in which knowledge was once passed down informally. One’s first boss taught “the tricks of the trade,” but these tricks were never evaluated in any formal or scientific way. Jelger is looking to create a set of tools that will lead the industry away from relying on the “gut” and, offer a more scientific alternative.
We asked Matt Ogg, Contributing Editor at Pundit sister publication, PRODUCE BUSINESS, to find out more:
Jelger de Vriend
Q: Before we talk about developments at your company, let’s talk about what quality really means in fresh produce. How would you define it?
A: Maybe the best way to start is with a simple question: Do you like avocados?
Q: Yes, I’m a big fan.
A: And have you ever bought avocados and thought they were ready to eat, and when you brought them to the kitchen and cut them open, you realized that they weren’t?
Q: Maybe when I was less educated about avocados, yes.
A: I can tell you this is what happens with most consumers. We’re not very educated as consumers — we like to try new things, we buy avocados, the packaging says ‘ready-to-eat’ and then you’re in the kitchen, you’re having a party on Saturday evening and you wanted to make guacamole or a salad, but when you cut the avocados, you realize one is not ready to eat and it basically spoils the fun of the dinner that you had planned.
Q: And sometimes you’ve bought it unripe and waited till what you think is the right moment, but you’ve jumped the gun.
A: Exactly. As a matter of fact, quality is meeting the consumers’ expectations at the moment when they want to consume the product, and I would say preferably exceeding consumer expectations — adding the ‘Wow’ factor to fresh produce.
That’s really where I start, so not from an ‘industry standards’ view of quality, asking are there eight pineapples in a box? Or is there a pound of grapes in a punnet? We need to ask: ‘Are we exceeding consumer expectations around quality?’ And most of that has to do with flavor balanced with shelf life; not maximum shelf life but sufficient. Flavor is much more important.
Q: And because it’s about palate, it’s not necessarily about how it looks or anything like that?
A: Exactly. A lot of emphasis in our industry historically from the retail side or from the grower or supplier side has been on external quality — appearance, defects, and then everything that is needed to make trade possible. Do we have an agreement about how many kilos or pounds are in a box? But that has very little to do with how consumers perceive quality.
The test that you can do as a produce professional is… if I have a product in my warehouse or if I’m a buyer in a retail organization and I need to decide on buying or selling a certain product, would I actually give it to my kids? If the answer is ‘yes’, then go ahead and sell it. If you are not really sure, maybe you should give it another look and think again.
Q: That also comes back to the importance of branding, because if you’ve gone to all the effort of developing that flavor, your berry, grapefruit or whatever product it is still might look the same as someone else’s.
A: Totally. And don’t forget, originally brands were introduced to guarantee a certain quality level; a certain expectation from a consumer. When you bought trousers in the Wild West in the U.S., you wanted to be sure that they were good trousers, and you trusted Levi’s that they would last while you were digging up gold right?
Now in produce, we’ve kind of taken brands for granted in a sense that a lot of emphasis has gone into branding just for the sake of branding, when really the same principle applies. Is the brand meeting or even better exceeding consumer expectations?
Q: And that extends to supermarket branding, which we all know is so common in your part of the world.
A: Correct. A customer of a service supermarket chain in Holland or the U.K. is expecting a certain level of quality. I believe there is a lot of room in produce to still improve on the exceeding side of the experience.
Q: How do you feel quality has advanced in recent years?
A: A lot. I’ll give you a simple example. Historically tomato production, the biggest item in the vegetable department, has been all about lowest cost, highest productivity, etc. So, it has been a classic supply-driven, grower-focused category. Of course, no one in retail talks about it like that, or in the supermarkets, but it had all the characteristics; it was all about maximizing production per square foot or square meter, and there was very little focus on flavor and delivering a product that was meeting consumer expectations.
And the Dutch I think played a particular role in that. We’ve been the masters of maximizing tomato production, and there were historically good reasons to do that, but over the past 10 or 15 years there has been a really interesting shift going on. It started with the smaller tomato types — the cherry tomatoes, plum tomatoes, where you started to see that the segmentation of the tomato assortment around flavor accents that really started to pay off.
The focus initially in those smaller tomato types was on better varieties. And as that happens, consumers picked up. They came back to stores and started to buy more of these tomato types. This has resulted in a shift where I’ll increasingly see choices being made by growers, suppliers and retailers based on those flavor characteristics.
If you add the convenience element to that, a much bigger focus on flavor and, of course, that they are healthy as well, that basically summarizes the development of tomatoes in the past 10 years.
Q: Yes, well I remember being in the Netherlands for the Amsterdam Produce Summit and visiting an Albert Heijn. I was impressed to see how they had snacking tomatoes and snacking baby bell peppers in little punnets where you would normally see chocolates and sweets.
A: Absolutely. That is really something of the past seven years. And the beauty of it is this development continues. As a company, we are monitoring the quality of tomatoes continuously in retail in supermarkets, and we noticed what started as a development in the smaller tomato types is now advancing into the bigger tomatoes types — the round tomatoes, the vine tomatoes, the cocktail tomatoes.
Q: Often you hear people talk about how tomatoes or many fruits and vegetables ‘tasted better in their day’ — this is particularly people from the Baby Boomer generation. They might have had a tree in the backyard that produced the ‘best’ fruit, and ‘you can’t get anything like that anymore’ because everything became focused on size and appearance. Do you think that a lot of the shift towards flavor has been overly oriented towards sweetness as a measure of flavor rather than the whole balance of flavor characteristics?
A: That’s a good question. I think the end result is often higher sweetness or sugar content, but then you also need to recognize where we come from. Tomatoes from Holland 20 years ago were called ‘waterbombs’. In the German market, there was a boycott 20 years ago and a lot of German consumers still try to avoid Dutch tomatoes because they were called waterbombs.
So, we’ve gone from very little flavor — everything focused on the lowest cost, i.e., the lowest retail price — and now we have a greater emphasis on flavor in our products, and to a large extent that means increasing the sugar content. We’re not selling a product like Coca Cola, if you compare that in sugar content. Our produce is nothing like that, and we come from a period where flavor was almost the last thing you really cared about.
Q: Does this development make you think the basket of fruits and vegetables will taste different in 15 years’ time?
A: No, I would say my feeling is that there’s a lot to choose with what we currently have in terms of varieties. There is a lot we must do around production; a lot of buttons around production that you can push to increase the flavor, but that does not alter it in such a way that it’s not recognizable anymore. We just need to make flavor in the mix more important, and that’s what we’re seeing everybody’s doing right now.
Q: We’ve gone a bit philosophical here, but going back to the practicalities of it all, what do you think some of the most common mistakes are being made in the fruit industry around quality?
A: Again, the overemphasis on just meeting trade specifications that are designed to be able to trade with each other, and not thinking about what is necessarily most important for consumers.
There is a research company in Europe called GfK. For years they have been analyzing what is the key reason for a consumer to choose a certain supermarket, and you would think it is things like lowest price, best promotions, proximity, but really the Number One reason why consumers choose a supermarket is good quality.
It shows the importance of focusing on that quality aspect, and consumers don’t care about whether a cucumber costs 29 cents; if that cucumber does not have good flavor, you think you wasted your money and your time. There is no lowest price point where you’ll think it’s acceptable that flavor is not good. Even if you paid five cents, consumers would still feel cheated if they had a bad tasting product, whether it’s a peach or nectarine or whatever.
Q: Are there any other categories that have very much inspired you in how they’ve improved flavor?
A: The biggest developing categories in retail are the ones where flavor is the most obvious button that is being pushed — the whole berry category… if you talk about developments in strawberries, raspberries, blueberries, it’s all about flavor and quality consistency.
If you look at the development of avocado and mango, it has really taken off when we started to ripen mangos and avocados, making sure that when consumers eat it, the fruit is ready to eat with just the right flavor. If you look at the grape category and all of the developments there with varieties that are taking place right now, those are all choices that are being made around flavor and consistency. Those are the categories that can grow easily 10%, if not 20%, in turnover every year in retail.
So, the proof of the importance of flavor is right in front of us — we don’t need to do scientific research. It’s right there — the categories that grow the fastest are those that are making the biggest improvements in flavor right now. Just look at blueberries and where that’s come from, it's almost ridiculous how that’s grown and continues to grow.
Q: Consumer education is also an important issue. For example, from different markets around the world, I have heard misconceptions where people think a passion fruit is bad just because it’s wrinkled, or that avocados aren’t ripe unless they’re green. How proactive do produce marketers and retailers need to be to actually get these messages across to consumers so that they understand what makes a good product and what indicates the right time to eat it?
A: We briefly spoke about branding. In an ideal world when something has a brand, whether it’s a supplier brand or a retailer brand, as a consumer you would sufficiently trust that what is being sold in a supermarket is the perfect product. Our problem is that that’s not the case, so we’re asking the consumer to continuously think with us, ‘is this avocado really ready to eat?’
I think that’s the wrong starting point. I think by definition an avocado should be ready to eat, and if it requires some additional information about ‘leave this for the next two days and then eat it’, then we should communicate that.
This is only in fresh produce and does not happen in other grocery departments at retail. In produce our starting point is different, oddly enough, but that’s how it is. Often, we need to take consumers by the hand and explain a bit more about the product, especially if it’s about how an avocado that’s ready to eat turns brown.
I worked in retail when we moved from the greenskin avocados to Hass, and really what we did for quite a long period was communicate on the packaging that when the avocado turned brown, it was actually good. That was a simple way for us to communicate with consumers and convince them that this was the right thing.
What is more worrying is something else. We need to educate consumers, but more importantly we probably need to educate the personnel in the stores. When you’re a consumer and you don’t know avocados are ready to eat, preferably you would ask somebody. We used to have those people in stores; the produce experts who would be able to tell you what to do with a product and when it’s ready to eat.
But we’ve kind of lost that. There are reasons why that is, mostly cost pressure, but the education of store personnel I think is fundamental to bringing back the feeling of trust that when you as a consumer can talk to somebody who has a bit of understanding about fresh produce and can help you.
Also, in our head offices in retail and on the supplier side, there is in general not a course or a program that you take where you’re being educated about fresh produce in such a way that it really helps you to make educated decisions about fresh produce.
Education in fresh produce, in general, is a big part that is missing. People tend to learn on the job about fresh produce. Often, we start in the warehouse, learning by doing, and then over time we get into positions where we get to decide huge contracts with suppliers without ever having had a decent education about quality or about fresh produce. I think that’s the reality of our industry — there is not a master’s degree in the fresh produce trade or fresh produce quality.
Q: And when it comes to lifting the game of quality of produce at retailers or suppliers, holding their hand much as you would with consumers… is that part of what your company Innovative Fresh is all about?
A: Yes. We came to realize that we all have opinions about fresh produce, but there’s very little data in fresh produce about the performance of fresh produce for consumers. So, both on the retailer side and grower-supplier side, we often make huge decisions about which variety to choose, when to end the season, when to start the season, and often those decisions are not based on data.
That lack of data is something we started to work on 10 years ago to monitor the quality of fresh produce in supermarkets. So really the way consumers perceive fresh produce when they buy it — not when the product is in the warehouse or in the field, but when you buy a product. What are you experiencing?
We generate data, monitor the quality of fresh produce on retail shelves, and make data available to retailers or fresh produce companies.
There are two things missing there. One thing is the education part. You can generate data, but when people don’t know how tomatoes are being produced or the quality requirements for a specific product and what you can do to improve it, then you’re just providing data and not really using the full set of tools to make a difference for consumers.
So over the past 12 months, that education side we’ve developed together with a partner offering 200 courses in quality in fresh produce that really help to lift people’s knowledge levels to help them make decisions, not just at store level because that’s an ongoing process where people need to be educated better, but also at head office level — educating the tomato buyer of a retailer about tomatoes. That’s how deep it goes.
Q: When you talk about 200 courses, is that 200 times the course has been run or 200 separate courses?
A: No, they are 200 individual courses.
Q: Wow, that’s a lot.
A: Yeah but don’t forget, if you’re talking about avocados, you can literally speak for a day about avocados and the avocado supply chain. If you talk about the cold chain of the fresh-cut category, you could talk two or three days about that; if you’re talking about the food safety risks of the fresh-cut category, you can talk for five days about it.
Q: Have you been doing this in all the countries where you operate?
A: Yes, so we do it together with a partner. They’re an education partner, and they’ve been doing this for 25 years and have all the experience across the entire fresh produce range, so it’s a fantastic way we think to elevate the level of knowledge not only at retail and the supplier side, but also at the store level to get people better educated.
Q: And how does your program InQuality tie into that?
A: InQuality is a combination of three things:
It’s better decisions based on data rather than opinions;
It’s educating people and making sure that when they have data they can make better decisions;
When you identify something needs to be improved, you also have to take action and do it.
That is also where we support companies, because we’re all busy, particularly if you’re in the produce area of a big organization. We often find that people need help with that. We support people to help them improve that experience with their products right there in stores. That is a unique integrated concept that is extremely powerful to drive the experience of consumers in fresh produce.
Q: Would you be able to confirm which markets you are running this InQuality program?
A: InQuality was started in Sweden. We are rolling it out in Germany now, and we also run it historically in Holland but not yet as InQuality. And then we’re also active with individual elements in the U.K., Belgium, Denmark and Norway, so seven countries.
Q: That’s an interesting choice of countries. May I ask why you chose Sweden to start it off?
A: Sweden is logistically a very challenging country. It’s very big; 2,000km from north to south, and that means you need to control store operations across a huge area, which means the quality challenges in Sweden are probably some of the most extreme in Europe. When you drive a truck from Spain to the south of Sweden in Helsingborg, you’re still only halfway because after that you still need to distribute to stores, and some can be 700km north of Stockholm.
These are extreme distances, and as a result we think the opportunities to really drive the improvement of quality perception of consumers are big in Sweden. And it’s proving to be that. We’ve been in Sweden for two years now and the way it’s been rolled out has been fantastic.
Q: We have covered a lot of ground, but is there anything else you’d like to add in terms of overarching ideas around quality?
A: If I could summarize it, we all want to increase the consumption of fresh produce — everybody, whether you’re a supplier, a grower or a trader. Anything that increases consumption is good for the entire industry, and the best way to increase consumption is to exceed expectations around fresh produce.
Q: As a journalist you never know how an interview is going to go, so thank you for exceeding expectations today as well with your insights! We look forward to hearing your presentation in New York.
A: Thank you too.
In store, it would nice to have more and better trained staff — but we are not going to get that. At headquarters and procurement desks, it would be great to have staff with a better understanding of produce, but we are going to get the opposite.
We once ran an interview with Bruce Peterson, founder of Walmart’s produce program, in which he discussed the transformation of what retail giants valued — from previous years where industry experience was prize to today’s world of credentials gained through spreadsheet analysis. You can read that piece here:
Bruce Peterson, Founder Of Wal-Mart Produce Program, Will Urge Industry To Rage Against Mediocrity, Value Experience Over Education, And Merchandise To Wow The Consumer At The London Produce Show And Conference
So we will never again be able to expect the VPs of produce to grow up in the industry and acquire great produce knowledge.
So, we need the kinds of data and information systems that will allow the likes of Amazon or Walmart to take the guy who was in charge of electronics, put him in produce for a rotation on his way up the ladder, and somehow have him succeed.
Que up Jelger de Vriend!
So, come to New York. The Global Trade Symposium is co-located with The New York Produce Show and Conference, and you can engage with Jelger on the tools that will build this new produce industry — and, with a bit of luck, even manage to boost consumption.
The New York Produce show and conference Web site is here
Let us know if you need hotel rooms here.
You can register for the event here.
And feel free to email us here if you have questions or need help.
Come to New York. Be a part of the future being created. Help us see how far the industry can SOAR.
Predicting the future is very difficult because if we really knew what people would do in the future, we would do it now! Nic Jooste has taken on the difficult task of trying to understand the future and the way the produce industry can conduct itself to take advantage of what the future holds.
He has presented in New York, London and Amsterdam, always to wide acclaim. We’ve profiled these presentations in articles such as these:
The Disruption Of Established Markets: How Four Strategies Can Help Transcend Today’s Dilemmas
Can Retailers Show A Little Love For Produce Marketing? Dutch Marketer Nic Jooste Will Share His Thoughts On Swimming Upstream At The Global Trade Symposium
PRODUCE AND GENERATION Z
Can We Make Our Pitch Effective In Eight Seconds Or Less?
There’s a Dutch Saying... Amsterdam Produce Show To Bridge Cultures And Channel Innovation
Making Produce Marketing Everything It’s Not: Creative, Innovative, In-your-face, Non-conventional, Digitally Driven, Attitude- And Adventure-oriented… Nic Jooste Of Cool Fresh Guides The Trade On How To Capture Gen Z And, Next, Gen Alpha!
Nic is up to disruption again… this time having participated in a unique program that brought together captains of the produce industry with the best and the brightest of university students. This program sought whether this combination of deep experience and youthful attitudes could imagine the future.
We asked Matt Ogg, Contributing Editor at Pundit sister publication PRODUCE BUSINESS to get into Nic’s head and engage in a wide-ranging discussion as to the ideas that will inform Nic’s presentation at the Global trade Symposium in New York.
Partner and Director of Corporate Communications, Marketing & CSR
Cool Fresh International
Q: The British writer L.P. Hartley coined the phrase: "The past is a foreign country; they do things differently there." At Cool Fresh International, you make a point of not relying too much on past examples, but rather harnessing the ideas of university students as a kind of lens into the future. Could you please discuss the premise and applications of the Market Match program you launched this year, and how it helps future-proof your business?
A: The background is that in February 2018, I was invited to a so-called “Vice Presidents’ Dinner.” Some 10 senior executives from the fresh produce industry were invited. I had just turned 60, but I was the youngest at the table. The purpose of the evening was to listen to a presentation by a consultant who wanted to sell a project to us for doing research into the ‘future of fresh produce, and how new consumer generations were going to see our products’.
At the end of the meeting, the chairman of the group asked us for our personal observations. I was last to go, and this was my response: ‘I am surprised that WE are being asked for our opinion regarding the future. If I look around the table, I see people with a very limited future. Shouldn’t we be asking the youth – who have a bright and statistically much longer future than all of us — what THEY think of THEIR future?’
My purpose was to get them out of their boxes, and man, did I succeed! There was a stunned silence. And then the reactions started coming. They said stuff like: “My company has been very successful for the past 50 years,” “I have been on the board of innovation for 26 years,” and “I have worked with many industry leaders on various supply chain projects.”
These ‘oldies’ were all looking back in history over their shoulders, and they had real difficulty in understanding how difficult it is to fast-forward yourself into the future. In the end, I convinced them.
The premise of Market Match was to get together a group of industry leaders with vast experience and partner them with bright young minds from various universities, colleges and different fields of study, and see what develops. The idea was to see whether we could cross-pollinate by combining our practical business experience in the fresh produce industry with the ‘no limitations’ thinking of the youth.
My personal objective was primarily to see if we could get our ‘dinosaur employees’ to become enthusiastic about getting out of their boxes and start thinking creatively. For instance, these are some of the ideas:
Instead of seeing trucks, think drones.
Instead of seeing a leek, see a vegan taco.
Instead of seeing a human being at work behind a computer, think of artificial intelligence.
Instead of thinking mainframe, servers and Excel, think about blockchain.
The bottom line is rejuvenating the workforce, not only in terms of the age of our employees, but also of the youthfulness of how we think.
Q: How practical do you find the ideas these students bring to the table? Do the ideals or visions expressed always stack up with the economic reality?
A: With this question you are actually falling into the trap that most of the ‘oldies’ do. It is not about the economic reality as it stands right now; it is all about grabbing the opportunity to try to understand how future consumers will look at fresh produce.
Will they see pills instead of pepper?
Right now, we are not interested in a new smoothie or a different juice. We want to understand the psyche of the new generations specifically as it applies to food and fresh produce.
That being said, yes, we are seeing ideas with an immediate practical application. For instance, a range of veg-based breads. Or, in our case, single-garlic cloves packed in a convenient, hygienic packaging — this we have now given to a university food science and innovation laboratory to do the necessary research.
Q: And are there any other practical applications from Market Match that have been taken on board in your operations, or in discussions with suppliers?
A: The cooperation agreement with the partners in the Market Match program was that ideas and concepts would be linked to the most suited partner. Forty concepts were created, so we are still working through it.
Our range of partners in the project included banks and consultancy firms. We do know that two of the four prize winners have been approached to develop the concepts further, like the veg-based breads just mentioned, and a veg-based topping of sprinkles and confetti for pizza, lasagna or pancakes.
Another one is a fresh produce recruitment app based on Tinder.
Q: Now that’s something different. Swipe right on the next candidate! How will that work exactly?
A: Let’s take a step back first… One of the issues that we put to the students is that it’s very difficult to get young people into the produce industry, and one of the reasons is that the whole recruitment process is still very traditional.
All these students also did a field trip. They visited a number of companies and they said “wow, this is really a cool industry.” The particular group that developed the app, when they were doing their preparations, they said, “but we cannot find the passion and the excitement of the fresh produce industry in the recruitment processes,” because it’s all so traditional and doesn’t inspire anyone to want to apply for a position.
So, they said you should make it sexy, friendly, more dynamic. It was basically the same principles as Tinder — applicants create a profile and they upload their story.
Q: Is that something they’re going to be working on with these banks or consultancies to develop further?
A: Yes, and it was very interesting because for us we had taken a risk of forming the teams on the basis of diversity. We took people from the north, south, east and west of Holland and put them into one team. They didn’t know each other at all. At the same time the mix was also taking people from university level to technical college level.
In the Tinder-style produce recruitment app team, it was a technical guy who put together this app on his telephone and he could demonstrate it to us while we were standing there. In some cases, you had people with really high levels of academic education taking the lead, whilst in others you had people from a lower academic level but with a social or technical insight taking the lead in the process.
I must also say that I haven’t seen all 40 projects yet. I am asking for a summary of all of them so that I can give more insight. Because we had a number of partners within the project, we agreed on a specific way of working where the projects would go to the local government of Rotterdam first, and then we would have access to it.
Q: And will you be including more of those examples in your presentation at the New York Produce Show?
A: It depends on what comes out of it. My presentation in New York is a lot more built around the process and its background, because there’s a three-year background with Cool Fresh. It’s around how companies could use the inspiration of working with universities to create new thinking capacities.
Within the 10 groups I worked with in Market Match, I could probably give you more examples like the Tinder recruitment app, but I think one is enough. It’s about the principle. At the moment, I have a university guy working on mobile commerce within my company. He is doing something that nobody else is even thinking about. He is Dutch-Chinese, so I’ve put him onto researching what is happening in China and how could the best practices in China be applied to the Netherlands.
Most fresh produce companies would take a young person and say, “here’s a box of apples… let’s take a look at how we can innovate it in packaging,” for instance. We are doing stuff that’s not even close to home, but only in doing that will we see where the future is moving.
What we are doing with the young people who are moving in and out of the company is to get the young guys to understand that, yes, they have unique insights and skills, but, no, they don’t know everything. And for the older people, they have all the knowledge and all of the skills of trading etc., but don’t know futuristic and strategic planning. So, we should keep both these groups and get them to work together.
Q: A couple of years ago, you spoke with the Perishable Pundit about the eight-second attention span of Generation Z shoppers. Like Olympic sprinter records, are these times getting shorter?
A: My youngest son turned 18 today. I spent the early morning drinking coffee with him, and the answer is a resounding yes! At the time of doing the Gen Z presentation, the average attention span on a mobile phone was eight seconds. I counted him swiping through at least four applications or pages in eight seconds.
My son of 21, who is a mobile whiz, says that in terms of advertising if a digital advertisement does not hit the spot within two seconds the youth simply swipes it away.
Q: As they're getting older, what has changed with the Gen Z consumer cohort and the industry's approach to them?
A: I do believe that the fresh produce industry has taken some cognizance of the changing face of the consumer. Are we doing enough? Absolutely not! Trading companies are under much pressure in terms of stock, and every day is a new challenge to move fresh produce as fast as possible.
But there is light at the end of the tunnel. Last night, I enjoyed a glass of wine with a very good friend who is the owner of an old fresh produce trading company. He is making a substantial investment in setting up a sushi factory, which produces all-vegan sushi products in the most amazing variety of sizes, styles and combinations.
My son of 21 says that this is where the answer lies for fresh produce companies: stop seeing ingredients and start visualizing food items that appeal to the new generations of consumers. Obviously, not every fresh produce company can set up a vegan sushi factory, but I firmly believe that every fresh produce company can take a step forward in terms of innovation.
Look at your product with different eyes. Take a look at what other industries are doing in terms of packaging and communication. Travel to your clients and take a look at the shopping behavior of their consumers. In other words, get off your chair and out of your box.
Q: What are some interesting retail campaigns targeting this generation, or others, that you've seen in the Netherlands or other European markets where the fruit and vegetables you import are traded?
A: That is the point — I have not really seen any! Other industries, companies like Vodafone, Axe and Adidas have implemented strategies aimed completely at Gen Z. In Europe, the most innovative approach that I have seen was a company using tattooed models in their B2B communication. I still believe that Cool Fresh International’s ‘gorilla video’ showed what communication with Gen Z is all about.
Even with an actual content length of 21 seconds, I have yet to meet a Gen Zer who will swipe it away. This video was made to show that a ‘simple’ fresh produce company can actually produce a communication concept which talks to Gen Z.
Q: I’d like to chat about current trends. It’s common to hear about an emphasis on local and sustainability, and I say both because they are often mentioned in the same breath. So as an importer, how does that direct your marketing strategy, as well as the actions you undertake?
A: Good question! We have been involved in CSI (Corporate Social Investment) for 15 years and have seen all the arguments come and go. And they keep on coming and going.
As the only fresh produce company in Europe with the high Level 4 standing in the CSR (Corporate Social Responsibility) Performance Ladder management system, we continuously evaluate our operations against the latest developments. Yes, local is an important issue right now, but not the overruling one.
We are not yet able to grow pineapples or bananas in the Netherlands so we have to import. However, we are working with many local growers in Europe — such as Spain, Germany, Netherlands, Belgium, France and Greece — in order to maintain a good balance between imported and local.
And remember, the market is really a seasonal one, with retailers demanding the best possible produce 365 days of the year. I have yet to find a retailer who will say to a consumer ‘Sorry, we cannot supply you with mandarins right now because we refuse to sell imported ones’.
In terms of the sustainability aspects of our overseas products, I do believe that we have our ducks in a row. We focus heavily in the shortest, most environmentally friendly supply chain. We work with our growers on water and environmental issues. We have a really heavy focus on trading integrity and labor conditions.
Q: There has been a heated discussion for some time now about plastics in the ocean and a push, both from retailers and legislatively within the EU, to move towards recycled plastics. But on the other hand, a lot of the advancements in packaging technology have reduced food waste, and thus help conserve the input resources that go into producing fruits and vegetables. How do you see this trend and the apparent dilemma between these conflicting ideas playing out?
A: Don’t get me started. Yes, the retailers are pushing for a decrease in ‘traditional’ plastics, and the packaging industry is doing great work with producing more and more packaging based on recycled plastics, yet in Western Europe, every time I visit a supermarket I see more and more pre-packed fresh produce.
This is largely due to high wages, with retailers minimizing the amount of handling required on the shop floor. Go to Eastern Europe, the Balkans and other areas where the modern retail modus operandi is not yet dominating, and you will see a vast percentage of fresh produce still being sold unpacked. I believe that these markets are doing more for sustainability with regards to packaging than most modern markets.
In the Netherlands we even have a ‘packaging-free’ store, where the consumer has to bring his or her own containers or bags. The specialists all agree that these types of stores do not have a realistic chance of survival. Why? Because of the power and reach of ‘big retail’.
In the end, the retailer decides what is offered to the consumer. As suppliers, we have a duty to keep on pushing approaches and concepts that add to sustainability in the broadest sense, yet ultimately the retailers decide.
At the same time, the cost of the new generation of recyclable plastics is prohibitively high. A retailer will not absorb the extra cost of using such packaging, and neither will the consumer. In the end, the grower will wind up paying, and then we would end up in a totally different discussion.
One of the all-time Dutch football greats — Johan Cruyff — once said: “Every disadvantage has an advantage.” If one reads the literature, different people and institutions offer different perspectives.
Q: Thinking about a simple practical example, just the other day on the other side of the world here in Australia, I did my weekly fruit shop at a specialty grocer and there were some great value promotions in black polystyrene trays. I have been trying to reduce my consumption of such packaging as I understand it’s one of the slowest to biodegrade because of the thickness. However, this particular store had signs up offering to take the fruit out for you so they can re-use these trays in further promotions. I thought that was a marvelous idea – do you think there is more potential for policies like that amongst European retailers?
A: You know, probably in Western Europe, the supermarkets tend to have as few hands as possible within the store, and every single extra thing that needs to be done is costing money. That is my biggest dilemma. Yes, they’re all talking about reducing plastics and reducing packaging and protecting the environment, but every time somebody comes with a practical or environmentally-friendly idea that is a bit more expensive, it cannot be done.
So yes, I do see that there’s a willingness to think about these types of things, but they consider how it affects labor cost. In this example, the cashier actually has to do something else and another handling action is going to take more time, so we they need more cashiers.
I think it depends largely on the type of retailer. The bigger the retailer, the more difficult it is to get those practical things at store level done, because the bigger guys who need the big volume tend to go mostly for pre-packed products.
On my desk, I have probably 20 examples of those trays which are 100% organic, made from fruit pulp and I don’t know what else, but it’s 20% more expensive. So, at this point in time, the packaging companies don’t yet have the economy of scale to produce a big amount, and it’s too expensive right now.
It’s something that won’t go away, but as more and more retailers step into fully biodegradable packaging, the price will also come down. At the moment I think it’s a case of who is going to take the first step. In the Netherlands we have one supermarket chain that is fully focused on sustainability at also an environmental level.
I am seeing for instance in Lidl, which is a main discounter in the Netherlands, that a lot of their fruit is not pre-packed. You go into the store, you take your five apples or your 10 apples, you don’t even have to weigh it; it’s weighed at the cashier, and it gets charged directly. The only problem is they still use plastic bags.
I’m still seeing a lot of the smaller chains that need to have a different story coming up with paper bags, for instance, which does have a cost effect, but you tend to see that consumers who go to specialty retailers don’t mind paying five cents extra.
So, the difficulty of giving a clear commentary on something like this is simply because of the fact that we have such a wide range of retailers within our small country, and the bigger guys are into the lowering of labor costs, and the smaller companies need to have a different story.
Q: Yes, and this is one of those specialty stores. This is not one of the main supermarkets so that does fit with what you’re saying.
A: We have wonderful things going on. One of the main items within our retail now is every single store has an orange juicing machine, so you put your bottle into the machine, the oranges get squeezed and you take it away.
But you end up with a whole lot of orange peels at the end of the day, so the smaller guys are doing all sorts of projects with people who are difficult to employ for whatever reason, and they are making marmalade or essential oils and all those types of things from the orange peels from the juicing machine.
Q: Another big macro trend is the shift towards online shopping. How do you feel this is changing the game of the produce industry? I'd be curious to hear particularly about what you're seeing in the Netherlands and neighboring countries.
A: As The Donald would say — “It is huge!” We are seeing new online concepts and companies being introduced regularly. Every day, I see small delivery vans from just about every supermarket in the vicinity of my village doing the rounds. The most talked about online supermarket with no stores is Picnic, which uses small electric vehicles to do their deliveries.
Already servicing consumers in 60 cities, including some in Germany, Picnic still has tens of thousands of consumers on the waiting list. From a personal perspective, this shopping option has changed my busy life. However, fresh produce remains a challenge, in the sense that the order picking for such perishable products remains a challenge. It is, however, just a matter of time before order-picking robots are also able to pick and handle fresh produce on the basis of freshness, color, etc.
We are also seeing a rapid growth in the online ordering of fruit for delivery to offices. The trend is moving towards offering companies a broad offering of ‘healthy’ products all in one basket: juices, nuts, fruit. I believe that this is a major opportunity for the fresh produce industry — we just have to get our distribution and communication models right. Loren Zhao of Fruitday in China is a real inspiration!
Q: Another fascinating topic in a similar arena is the trend towards convenience deliveries and meal kits — is this an area that the fresh produce needs to explore or is already exploring?
A: Again, from a personal perspective, I love this development. Whilst I consider myself to be a good hobby chef, my busy life has prompted me to use meal kits, specifically Marley Spoon, on a regular basis. Whilst the concept is great, the content in terms of fresh produce is still too low. Our major retailer Albert Heijn offers the same concept, delivered together with your normal groceries — good variety, solid volume, and really easy recipes. It is a salvation for busy people.
Another amazing development of the past two years is the so-called ‘fresh packs’ or ‘meal packs’. These are packs that contain all the fresh ingredients necessary to prepare a healthy meal. Various types of soups and stews, chilis and curries — every retailer has jumped on the bandwagon, and I see this as a real innovation in getting consumers to ‘buy and eat healthy’. It is simple yet brilliant. And where did it originate? With a packaging company. Makes you think, doesn’t it?
Q: Moving away from these consumer trends, I’d like to go more macro. This is a Global Trade Symposium after all, and in the world right now we are seeing a lot of socio-political uncertainty, whether that be issues like Brexit, tense relations between major powers with tariffs, and fluctuating currencies. For a produce company like Cool Fresh International, how do you future-proof yourself for the supply-side and market challenges of this environment?
A: We have recently launched our ‘Connecting Fresh’ strategy. This is based on making the very best use of the extensive and really well-developed skills within our company. Instead of trying to maintain a grip on our position as importer and supplier of fresh produce, we now have positioned ourselves as a service provider, which is able to offer a solution across the entire spectrum of the supply chain.
The world has become completely transparent, making it unavoidable for a company to understand that it will only be awarded for adding value. In the ‘old, non-transparent days,’ companies earned a lot of money simply because growers did not know who the retailers were, and vice versa.
That has all changed, and as a result a fresh produce company has to change its game as well. In some instances, we act only as quality controller for an overseas grower; in another instance, we are the marketing partner for a grower and take all decisions jointly. We assist a major retailer with cross-docking, sometimes also selling a product to them.
In some instances, we supply a retailer with just one product, whilst in other instances we supply a full range of items which we source overseas and locally. Basically, we now have a full menu of possibilities that we offer to growers and retailers. Our main focus is never to say ‘no’, and to never have a client going to a competitor for something that we could have done. This strategy makes our lives a lot more complex and definitely never boring! It is all about keeping your clients close to you.
Q: I'd like to finish the topic by discussing your native South Africa. Now, the Western Cape has had issues with drought for a while now and it was only in April that people were talking about "Zero Day" in Cape Town. What are you seeing as the effect of this drought on South Africa, and what do you think the implications of it will be?
A: It is estimated that farmers in the Western Cape had to abandon at least a quarter of their high-value vineyards and deciduous fruit orchards because of a lack of water for irrigation. This had a knock-on effect on rural employment, with the loss of about 30,000 seasonal farm worker jobs during the harvest season.
Academics think that the loss of this production would have a long-term impact on the agricultural sector. The consensus is this 25% reduction can only be incrementally salvaged if and when farmers can afford to replace those orchards and vineyards. For most farmers, it is impossible to suddenly reinvest in 25% of the farm. However, some friends in the fruit industry say that farmers usually replace their orchards and vineyards in cycles when the plants reach the end of their lifespan after 15 to 20 years.
There have been some effects on fruit exports since the drought became world news, but traders all agree that in some instances this also had a positive side on pricing.
To give a positive dimension to the discussion, it is clear that this crisis was a major wake-up call to the Western Cape in particular, and to the country as a whole. The national and local governments now understand that water is a key economic ingredient and should be treated as such. There have been many solid reports and advisory commissions on this subject, but in the past, nobody was confronted with a disaster of these dimensions.
Consumers also got the greatest scare of their lives. After centuries of turning on their taps and seeing water flow from it, all of a sudden even the affluent consumers had to fill up bottles and buckets. Let’s hope that everybody will be respectful of water, although in this modern society I have my doubts.
In this regard, I must say that the problem does not lie in the disadvantaged areas (so-called townships), as most people there collect their water from a communal tap in any case. The problem lies in the affluent and middle-class neighborhoods, where people just view water as part of their privileges. I mean, the swimming pool should be refilled regularly, right?
Q: And on a more sensitive note, earlier this year the South African President Cyril Ramaphosa was talking about confiscating land from white farmers. Now, my apologies if this topic hits too close to home, but where do you see this political issue headed, and what could it mean for the fresh fruit industry? And how should fruit growers and exporters respond?
A: It is an emotion-charged topic, and I do not have to go into South Africa’s history to explain it. In September 2018, President Cyril Ramaphosa appointed a panel of heavyweights to advise him on this issue, including agricultural specialists. I have no single doubt that this panel will come up with a plan that will be ‘good’ for the country.
The outcome of the land reform issue will, however, depend largely on the position of power which President Cyril Ramaphosa will be able to exert on the ANC (African National Congress) leadership after the elections of 2019. If he is able to take firm control of the ANC - which currently is split into several camps - I am sure that the land reform plan will be honest, clever and of economic benefit.
If one reads clearly between the lines, Ramaphosa’s plan will firstly focus on unused government land. In terms of the fruit industry, there have been recent discussions between Ramaphosa and representatives of the agricultural community. Whilst it was a preliminary discussion, the feeling was that Ramaphosa’s focus was firstly and foremost on finding an equitable solution.
My opinion of Ramaphosa is that he is an extremely competent economist and statesman. If it comes to him, no fruit farmer should have fear. The big threat comes from the radical elements who want to see anarchy instead of ‘Nelson Mandela’s South Africa’. Let’s hope and pray that Ramaphosa is able to turn them around!
The issue of the vegan sushi is another way of saying that as businesspeople we have to always be reassessing what our job or function really is. When this Pundit started in 1985 by launching PRODUCE BUSINESS magazine, we might have said our function was producing magazines.
In time, though, we reassessed and said that we did two things: First, we provided information and insight to the trade; second, we brought together buyers and sellers. We soon reimagined our business and said we can do those things in print, online and in-person.
With cooking and food consumption patterns changing and with consumers less interested in ingredients and more interested in meals, many industry executives may have to rethink their future in the produce industry.
The Global Trade Symposium is co-located with The New York Produce Show and Conference. Join us in New York to talk with Nic and dig deeper into the future of the industry so that you are able to capitalize on that future:
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But come to New York, And SOAR into the future!