Chile vs. California:
marketing to the
Indian middle class
Small no more:
Peruvian exports
blossom in China
Spain: home to the
world’s most desired
table grape?
Index
INTERNATIONAL SPECIAL EDITION
Grapes of the World 2014
Adverse year puts
The industry
6
Chile to the test
in numbers
14
(iQonsulting)
California
marketing: a global
force
12
International Special Edition
is a publication produced and
distributed by
10 Spain’s ‘Ideal´offering
18 Fruit Logistica: innovation in
grape processing
24 Italy’s seedless future
Editor : Kayla Young
Design : mleyton.com
Email : [email protected]
22 Advertorial: Quimetal
20 South Africa: labor and market
ISE are specialized produce industry
publications. Distribution is in both
English and Spanish, reaching the
whole supply chain from growers to
retailers, exporters to distributors and
all service companies linked to the sector.
transformations
26 Australia: going abroad for
better prices
28 Peru sets sights on China
Cover photo: Shutterstock.
30 Marketing to India’s middle
class
3
4
Editor’s note
Dear Readers,
The year may be young but it has already brought plenty of stories to share.
Between untimely port strikes, changing labor laws and new competitors, the
Southern Hemisphere has gotten off to a lively table grape season.
As we prepared this edition, exporters were anxiously awaiting the arrival
of the Chinese New Year, a peak sales period for many of our readers. By
publication, the year of the horse will already be out the gate and over the
season’s first hurdles.
If the start of the year is any indication, we can expect another fast-paced
season to keep us on our toes and charging ahead into new opportunities.
In this edition, we have sought to include the sector’s most promising players,
new and old, as well as highlight growing import markets. You will find analysis
from traders and marketers in Europe, Latin America, North America, Africa,
Australia and Asia.
As a global voice in horticultural news, we strive to keep our magazine and
online publications increasingly international and on the pulse of the industry.
We hope you will continue to share your stories with us online on our sister
sites Fresh Fruit Portal, Portal Frutícola and China Fruit Portal.
Thank you to our team for another special edition magazine and to the industry
representatives that took the time out of busy schedules to share their passion
with us.
Happy growing and smooth sailing
- The International Special Edition Team
5
Feature
Photo: Shutterstock.
Chile:
bearing the fruit of an
uncertain harvest
Between drought, frosts and port strikes, Chilean fruit exporters have not faced
an easy year. With grape exports already underway, the Southern Cone nation will
need to play its cards right to reassure importers, explained Subsole commercial
manager Juan Colombo.
O
n the tail-end of a three-week strike in San Antonio
port, commentary from Chile’s fresh export sector
had turned naturally tense by late January. In a last
call to finalize work stoppages and keep commerce flowing, Fedefruta president Cristián Allendes described the
situation as a “festival of indignation” before the strike’s
second ending on Jan. 29.
better product here and you see the response. That is a
success.”
Colombo asked importers to consider Chile’s historical role as an export leader to look beyond the season’s
hiccups.
“Importers should look at our historical performance.
Chile has had very good and very unique business
development for table grapes. We are a high-volume
industry. For importers, instead of buying from many
places, they can buy from just one origin and have a
robust business for many weeks,” he said.
Following a year of drought to the north, frosts to the
south and strikes in the central port, Chile has faced no
shortage of challenges or sectorial frustration.
Chile’s advantages
Exporters cannot ignore, however, the difficulty Chile
will face this year in meeting such demand and fulfilling
Stepping away from the pessimism that has so easily
captured dialogue, Subsole commercial manager Juan
Colombo reflected on the table grape season currently
underway, and the positives amid difficulties.
“There is a lot of interest in what we have in Chile. … We
have a varietal development program for new products.
These new products mean tastier bunches with better
eating quality and more kilos per hectare that lower
costs,” he said.
Photo: Shutterstock.
“This comes from a combination of new and more
productive varieties, and good farm management with
different techniques like plastic coverings and irrigation management. This creates a virtuous process that
generates more demand. You make changes to have a
6
pre-established agreements.
harvest.
Northern drought
Starting with drought in regions III (Atacama) and IV
(Coquimbo), Colombo said production capabilities have
been severely compromised.
“With the heat, the harvest is compromised. We would
typically harvest during four weeks. This year, due to
the dry conditions in the soil and air, we are harvesting
in two weeks,” he said.
“In the North, it has created a direct effect on volume
because there are farms that could not produce and the
size is smaller, which gives a lower number of boxes,” he
said.
“Once the ripening process begins and all of the fruit is
ready, you have to begin a very important and detailed
operation to be able to harvest all of that fruit in a very
short amount of time.”
“In the Central Valley, the effect is lower on the
number of kilos and fruit size but it has an effect on how
the fruit is coming out and the speed that it is ripening. It
has shortened the harvest window.”
South-central frosts
January,
Coexpects lower
This glut in volume could make it difficult for importers
to properly prepare for volume arrivals. And as the harvest season moves further south, such buyers will need
to prepare for a different sort of volume shock – shortages.
“In the critical zones like Ovalle, it is very complicated
and there is no short-term solution. It just needs to rain.
Ovalle counts on an important irrigation system. The
zone’s reservoirs are dry,” he said.
“The other climatic element that was critical this year
was over the freezes that violently affected the central
region. It was not equal everywhere, but it produced
strong damages in places like San Vicente de Tagua
Tagua or early zones of Region VI (O’Higgins),” he said.
During
Ovalle’s
harvest
in
lombo said the industry now
production due to water shortages.
An effect of this was that a lot of plantations were frost
bitten and the number of shoots was low, so it did not
make economic sense to manage them for export. That
is going to attract less volume.”
Photos: Shutterstock.
“We are at the limit; there is not much that can be done.”
In central production regions, the harvest has shown
the effects of hot and dry conditions in the length of its
7
Colombo estimated overall table grape volume from
Chile would dip 15% as a result of these combined
climatic events. Much of that dip, however, should
come later in the season.
“Importers are really worried. In their position, their
job is to bring the fruit. If Chile continues this way,
places like Europe and the U.K. will certainly bring more
volume from India. By going to India, Chile’s advantage
in Europe and the U.K. is restricted. Anytime buyers go
to a new origin, it’s very difficult to get it back,” he said.
“That lower volume will begin to be noted now because
this is when the affected zones begin their harvest. But
it is being a little camouflaged because the available
fruit that wasn’t burnt is maturing quickly,” he said.
“So it’s possible that this gap will be filled in by the
premature fruit all coming in at once. At the end of the
season, this will build up into a more severe situation.”
Although exporters can reassure buyers, patience can
only run so far, Colombo explained.
Although supermarket programs do not always have
much flexibility, Colombo said importers will need to
be prepared to manage varying levels of volume.
“The image is ours. As a private company you can say,
‘It’s not my fault, I had all of the boxes to fill the program
but it’s the fault of the ports.’ There’s a moment when
the company on the other side says, ‘I know it’s not your
fault, but I have to change to someone else,’” he said.
“This will require strategic sales changes in arrival
markets. If they keep a sales strategy based on modest
volume and then it turns out to be high, that is going to
cause a problem with the offer,” he said.
This will be a time for Chile to evaluate its cards and
reassure buyers to continue betting on the Southern
Cone producer.
“The arrival markets need to be active. If they are not
active, in a few weeks, they are going to have significant
volume that may begin to deteriorate, which translates
into costs.”
Following port strikes that defined a significant part of
January, the task of promoting flexible supermarket
programs has become even more complicated.
“Working with supermarkets directly, they don’t
have much time to stop and understand. They need a
business partner that provides them certainty.”
Photo: Shutterstock.
Central port strikes
“If the supplier is an intelligent business person, he is
going to take advantage of the opportunity and try to
leave a good impression because in the world of fruit,
that is key. It’s the product but also the form. Now, 50%
of grape placement is in direct business,” he said.
8
9
Photo: Uvas
Uvas Doce
Doce.
Photo:
Feature
Spain: Chasing an ‘Ideal’ in
Spanish orchards
In Spain’s Vinalopó Valley, table grape growers claim their orchards
produce the most desired grape in the world, the Ideal Embolsada.
From set until harvest,
clusters of Ideal Embolsada
grapes are individually
covered in white paper
sacks. The technique
allows growers to delay development and
give the fruit its classic
muscatel flavor, as well as its
consistent golden coloring.
The practice derives from
a long history of grape
growers in Spain’s Alicante
comarca that has created
the reputation that the
fruit enjoys today, explains
UvasDoce
marketing
director Miriam Cutillas.
“It is a white variety
with seeds with special
characteristics that was
born in the Vinalopó Valley. We bag it branch by
branch. It’s unique. They
say it’s the most desired
grape in the world,” she
says.
She compares the fruit
to a high-end wine.
When consumers buy
Vinalopó Valley grapes,
they are buying into a
tradition that has become
synonymous with quality.
“People know exactly
if they are buying from
Vinalopó or somewhere
10
else. Spanish producers
promote the tag ‘Grapes
from Spain’ because Spanish
grapes are very valued
outside the country.”
About 50% of UvaDoce’s
production
goes
to
export markets, including
England, Ireland, France
and Italy. In years to come,
the company also expects
to expand its presence in
Photo: Uvas Doce.
the Middle East, Asia and
South Africa.
Even in Europe’s top table
grape producing nation,
Italy, Spain has found a
complementary market
for the fruit.
As the Italian harvest
trickles out at the end of
the calendar year, Ideal
Embolsada enjoys its peak
production. On the other
end, Italy keeps Spanish
supermarkets
supplied
with
Italiano
grapes
before Ideal has come into
full swing.
“We have realized that
when we are left without Ideal grapes in the
supermarket, we can
bring in Italiano grapes,
which are very similar.
The month after, it is the
opposite situation. They
buy our grapes because
they don’t have them,”
Cutillas says.
By
December,
the
Vinalopó Valley increases
its exclusivity with a
late-season complement
to Ideal, the Aledo
variety grape. By this time,
Italy has left the market,
providing this bagged
variety full access to the
end-of-year holidays.
“Aledo has a more neutral
flavor. It is still sweet and
has a golden color. Aledo
is a very beautiful grape
and well commented,”
Cutillas says.
“It is known because it is
the traditional grape for
the New Year’s tradition
of twelve grapes at
midnight. It’s also the only
grape that is exclusively
grown in the Vinalopó
Valley.”
As the rest of Europe
moves
toward
the
convenience of seedless
varieties, Cutillas says
Spanish buyers insist on
taste above all.
introduced here like in the
rest of Europe,” she says.
While UvasDoce also
produces notable quantities
of Red Globe and Crimson
Seedless, Ideal and Aledo
continue to carry the
crown.
“We continue to be a
traditional market. We
are used to certain
varieties and flavors. We
find the seedless varieties
too different because
they have a different
flavor and are sweeter.
They also haven’t been
“The seedless ones are
easier to eat because the
seeds bother some people.
But the truth is that the
varieties with seeds are
very popular in Spain.
They have fantastic flavor
and people continue to
enjoy them,” she says.
to this variety.
The Aledo variety provides
the company’s namesake,
UvasDoce – Spanish for
“12 Grapes.” According
to Spanish tradition, now
popular in much of Latin
America,
party-goers
must eat 12 fresh grapes
to bring in the new year
with good fortune.
With its image firmly
tied to luck and tradition,
Cutillas says Spanish
consumers have held tight
11
Photo: Uvas Doce.
Feature
California reclaims old
ground and conquers new
territories
The California Table Grape Commission has thrown a broad
promotional net, leaving no market unconsidered and no
competitor without due pressure.
With a US$17 million a
year marketing budget
across 25 countries, the
California Table Grape
Commission (CTGA) has
created an image for itself
that few of its competitors
rival. Through consistent,
coordinated messaging,
the Golden State strives
not just to compete on
the world’s top markets
– it intends to be the
competition.
Commission
president
Kathleen Nave explained
that the images associated
with California – blue skies,
lush fields and healthy
produce – have not surfaced entirely without
forethought. They have
arisen as the fruit of
decades of work from a
carefully planned industry,
with clear, long-term goals.
California table grapes
than ever before.
“We want to have access
to all markets, everywhere
and within those markets,
we want to be in as many
places as possible,” Nave
said.
Following
a
2012
season
of
record
volume
and
record exports, Nave
anticipated
another
record year of upwards of
107 million boxes. With
over 40% of that crop
slated
for
exports,
international
markets
will have more access to
“Any place there is a growing
middle class population,
there is a population than
can afford imported products. … We want to make
sure they have ample opportunity to buy California
table grapes. We are
looking at every market
and at every niche within
the market.”
A consumer in India will
see the same images and
the same slogans as a
consumer in Colombia or
back home in California,
Nave said. Through retail
and trade promotions, the
California industry has
followed a similar marketing path as Coca- Cola.
No matter the location,
the product provides
recognizable consistency.
12
“We have a global
campaign that is fielded
in all of our markets. So
anywhere you go in
the world, the point of
sale material, the advertising
campaigns,
are all part of the same
campaign,” Nave said.
Locally, California has
also
created
strong
competition, defined by
new varieties to extend the
state’s offering into the late
season.
“I would say that what we
are seeing right now is
the end result of20 years
of planning, preparation
and investment by the
California table grape
industry. It is very much
about new varieties and
about new production
practices, new planting
densities,” Nave said.
“The goal has been to be
able to pick, pack and ship
grapes into early December and continue shipping
into January and perhaps
February. In the past
Kathleen Nave, Photo : CTGA
could complicate sales and
force fruit into alternative
markets.
that Chile send its fruit elsewhere and maybe even into
January.”
“Chile has historically come
in in the end of November
and has quite a bit of fruit in
December through end of
May. What we are doing is
reclaiming what we think is
ours.
Although Nave welcomed
Chilean fruit later in the season, she said the local market in years to come should
expect much more homegrown fruit.
“There was a time long ago
when there were no Chilean
imports into the U.S. and
California had seeded varicouple of years we have eties that were available into
seen that start to come March. That changed in the
1980s and into the 90s,” she
into fruition.”
said.
For counter-seasonal
providers like Chile, Cali- “What we would like to see
fornia’s late-season plans in the month of December is
13
“They will continue to send
fruit to the U.S. Having
year-round availability of
grapes is a good thing. We
would just prefer they fill
in the gaps when we aren’t
there,” she said.
In years to come, Nave
added consumers should
continue to expect wellorganized campaign’s from
California, driven by
modern varieties.
“The big story about the
California table grape
industry, about where it
is right now and where
it’s headed in the future
is about the ability to
look ahead and decide
what is needed 10-to15 years from now and
invest in development,”
Nave said.
“I see continued growth
in the California table
grape industry. I see
expansion of export
sales and maintenance,
and hopefully an increase in domestic sales
as well.”
World table grape production
In recent years, supplying countries such as Chile have shown
greater interest in the Asian market.
fresh grape
W orldwide
exports reached 3.9
million MT in 2012, 12%
less than in 2011. The
main exporting countries
were Chile, Italy and the
United States with combined export volume of 1.6
million MT or the equivalent of 41% participation
in global exports.
In 2013, exports grew by
an estimated 7% in relation to 2012, reaching 4.2
million MT.
General manager of
iQonsulting,
Cristobal
González, said Peru led
this growth with a 13%
increase in its own export
volume, followed by Chile
with 7% and the United
States with 6%.
In Chile’s case, González
explained that in 2012 the
nation led the way as the
world’s largest fresh table
grape exporter with over
790,000 MT in volume.
to North America in 2013,
historically its top market.
In the last three years,
however, González said
North American participation in Chilean exports has
fallen 9 percentage points
due to greater interest
in other markets, such as
Asia.
“This volume corresponds
to an 8% decrease with
respect to 2011. However, volume in 2013 grew a
reported 8% over 2012,”
González said.
Interesting
countries
in the region have been
China, Hong Kong and
South Korea, among
others.
“On the other hand, Italy,
the second largest supplier with 489,000 MT,
had 12% participation in
total volume. In the case
of the U.S., 340,000 MT
were exported in 2012,
5% more than in 2012. In
2013, the nation reached
360,000 MT.”
“Since 2009, this market has received 11% of
exports, but in the past
five years, participation
has reached 21%. What is
behind this growth? First,
China’s economic growth
means a significant quantity of people have access
to imported fruit. Second,
With regard to fruit
arrivals, Chile reported
shipments of 423,000 MT
14
price levels are attractive for the industry in
general,” González said.
In 2013, Asia achieved
equal participation with
Europe,
the
second
traditional destination for
Chilean grapes.
In Italy’s case, countries in
continental Europe have
been and were the main
destination with 93% total
participation in exports,
followed by Russia and
the United Kingdom with
5% total participation.
The United States sent
most of its grapes to the
Asian market, followed
by other North American
destinations, mainly Mexico and Canada.
“The scenario was dif-
Photo: Shutterstock.
In numbers
ferent than before 2009
when North America was
always the main destination. However, the appeal
of the Asian giant has
made some industry actors opt for this market
over traditional destinations. The local market,
however, continues to
be large and attractive,”
González said.
World area
production
and
The planted surface area
of these three biggest providers totaled 137,000
hectares in 2012. Chile
and Italy had the greatest
area, each passing 50,000
hectares.
Chile’s growth rate in the
last six years has been only
5%, while Italy has decreased 26% since 2006.
The U.S., in contrast, has
grown 6% over the same
time period.
“Where are the plantings
concentrated for these
suppliers? In Chile’s case,
regions V (Valparaiso)
and VI (O’Higgins) had
the greatest surface area.
Combined, the regions account for 49% of Chile’s
plantings,” González said.
“In Italy, orchards are con-
15
centrated in Apulia with
32,000 hectares, followed
by Sicilia with 16,000
hectares. Both regions
account for 92% of the total surface area.
“In the U.S., the greatest production zone is in
California’s San Joaquin
Valley, followed by the
earlier production zone of
Coachella.”
Regarding total production, the largest grower
was Chile with 1,580,392
MT, followed by Italy
with 1,063,957 MT and
the United States with
987,000 MT.
“It is important to
mention that while these
suppliers are among the
top in the world, China
leads total production.
Most of this production,
however, is made up of
local
varieties
and
destined toward internal
consumption,” González
said.
WORLD TABLE GRAPE EXPORTS FROM MAIN SUPPLIERS, IN TONS
Exporters2009201020112012% VAR
2013 E*
CHILE862,154777,799856,277790,074-8%
849,9278%
ITALY397,791484,247501,513489,106-2%
472,000-3%
USA304,179328,731322,695340,1195%
360,0006%
THE NETHERLANDS
346,550226,907255,910241,254-6%
243,2001%
SOUTH AFRICA
221,366215,735206,101234,03614%
224,500-4%
TURKEY188,449237,860239,577209,525-13%
210,0000%
MEXICO128,167171,325137,531167,85422%
150,000-11%
PERU46,26178,262121,736154,28027%
174,50013%
OTHERS1,406,0891,225,3441,879,9601,364,586-27%
1,622,477
TOTAL3,901,0063,746,2114,521,3003,990,834-12%
4,269,6777%
Source: SAG - ASOEX / TradeMap / USDA / inf@rmacción / SATGI / iQonsulting
E* Estimate
CHILE, TABLE GRAPE EXPORTS IN TONS BY MARKET
Market20092010201120122013% VAR
NORTH AMERICA
501,128430,326439,430374,960423,68213%
CONTINENTAL EUROPE
131,979109,516125,650110,859103,333-7%
RUSSIA30,74141,69336,32328,72334,43120%
UNITED KINGDOM
55,64351,85351,91049,15141,521-16%
ASIA98,17897,662146,831158,897179,16213%
L ATIN AMERICA
39,53839,40247,94758,87257,168-3%
MIDDLE EAST
4,0895,5156,7017,3827,8416%
OTHERS8581,8331,4841,2302,790127%
TOTAL862,154777,799856,277790,074849,9278%
Source: SAG - ASOEX / iQonsulting ITALY, TABLE GRAPE EXPORTS IN TONS BY MARKET
MARKET20092010201120122013% VAR
CONTINENTAL EUROPE
376,410453,628470,722448,143437,745-2%
RUSSIA8,30713,95112,14216,88513,861-18%
UNITED KINGDOM
8,09910,45710,57211,42610,488-8%
MIDDLE EAST
1,2563,0374,4107,8285,852-25%
NORTH AMERICA
1,5181,1571,5271,5301,457-5%
L ATIN AMERICA
342065871,245877-30%
ASIA1,3461,2459771,2121,045-14%
OTHERS821566576837675-19%
TOTAL397,791484,247501,513489,106472,000-3%
Source: TradeMap / iQonsulting
USA, TABLE GRAPE EXPORTS IN TONS BY MARKET
MARKET20092010201120122013% VAR
ASIA117,753134,086140,115152,017176,10716%
NORTH AMERICA
114,316127,537133,460126,243120,787-4%
L ATIN AMERICA
34,39437,53231,98534,93133,366-4%
CONTINENTAL EUROPE
10,0707,4122,8613,6435,56753%
MIDDLE EAST
3,7074,4702,5393,2923,4013%
RUSSIA2,3503,8151,9928789417%
OTHERS21,58311,8739,73919,11519,8324%
TOTAL304,179328,731322,695340,119360,0006%
Source: USDA / iQonsulting 16
TABLE GRAPE SURFACE AREA OF MAIN WORLD SUPPLIERS
SUPPLIER2006200820102012% VAR.
ITALY70,93171,14366,73752,480-21%
CHILE50,95252,18752,65553,5232%
USA30,79230,80531,62731,9691%
TOTAL152,675154,135151,019137,972-9%
Source: ODEPA / ISTAT / USDA / iQonsulting
TABLE GRAPE PRODUCTION AND SURFACE AREA BY WORLD SUPPLIER
SUPPLIERITEM2006
2007
2008
2009
2010
20112012
USAPRODUCTION, HA
30,792
30,530
30,805
31,431
31,627
31,16931,969
PRODUCTION TOTAL
717,000
791,000
773,000
876,000
1,011,000
1,032,000987,000
ITALYPRODUCTION, HA
68,458
68,713
68,967
66,547
64,127
56,71249,297
PRODUCTION TOTAL
1,528,160
1,459,553
1,390,945
1,388,695
1,386,445
1,225,2011,063,957
CHILE
PRODUCTION, HA 50,952
50,846
52,187
53,339
52,655
53,851
53,523
PRODUCTION TOTAL
1,403,878
1,406,680
1,516,071
1,585,993
1,446,994
1,588,0271,580,392
Source: ODEPA / ISTAT / USDA / iQonsulting
17
Stem-free
grapes,the easy way
A Dutch company’s new destemming machine was considered
among the top fruit innovations of the year at Fruit Logistica in
Berlin.
The
philosophy
and
motivation behind ZTI
Mechatronics B.V.’s grape
destemming
machine,
GDM-35, come down
to one basic concept:
simplicity.
Bunches of fresh grapes go
in one end of the machine
and come out the other,
stem free and ready for
processing.
As the Dutch company
describes it, the process is
“simple and effective” for
fruit processers.
The potential of the
technology to speed up
processing caught the
attention of the Fruit
Logistica
planning
committee
and
the
machine was short listed as
a contender for the event’s
Innovation Awards in
Berlin.
developer of the machine
that gently separates fruit
from the vine.
the need for touching or
making excessive contact
with the fruit,” Honig said.
Machiel Honig, technical
director and brains behind
the invention, exhibited
the technology at the German trade fair this Feb. 5
-7.
Just before Christmas,
the annual trade fair organizers announced this
year’s ten candidates for
the prestigious accolade.
Among them was Dutch
firm ZTI Mechatronics B.V.,
“The beauty of the grape
destemming machine is
that it’s so simple to use,
easy to maintain and very
effective. It will speed up
the whole process of destemming grapes without
“One operator feeds
bunches of grapes into a
gap which sits at the top of
the machine and they are
rolled between two soft
cushions which gently rolls
the grapes off the bunch.
They are unscrewed from
the stem and then come
out onto the conveyor
belt.”
18
With only two GDM-35
machines manufactured
Photo: ZTI Mechatronics B.V
Innovation:
so far, Honig said the
company is ready to roll
out orders if and when
they come. He hoped
presenting his creation
this month could kick start
requests
from
fruit
factories, wine-makers and
packing houses.
“A major selling point is
that it does not damage
the fruit because we do
not make use of brushes
and there is no need for
operators to use their
fingers to pull or touch the
grapes in any way once
they are inside,” he said.
Following the machine’s
processing,
operators
will then need to finish
manually sorting the
batches in the usual
manner before moving on
to the next process.
ZTI Mechatronic B.V.
believes
using
the
equipment will speed
up the entire process
with a maximum of 240
kilograms
of
grapes
being destemmed in one
hour. The exact number
of grapes destemmed in
an hour depends greatly,
however, on the variety
and condition of the fruit.
“What companies have
Photo: ZTI Mechatronics B.V
19
been doing with say 10
people, they can now do
with just three of four, and
so that represents quite a
big saving,” Honig said.
“We are very happy to be
short listed in this year’s
Fruit Logistica Innovation
Awards. As a company,
it’s great that we have got
into the spotlight, especially given the fact that we
have been recognized for
innovation. Of course we
are very pleased about
that.”
The awards, now in their
ninth year, recognize ex-
ceptional new products
and services that have had
a positive impact on the
international
fresh
produce trade and are
regarded as one of the
industry’s
most
sought-after
accolades.
ZTI Mechatronics B.V.
was judged by a panel
of production, quality
management,
wholesale, retail and packaging
industry
professionals,
alongside the nine other
nominees.
Photo: Shutterstock.
Renovating South African
orchards from the inside, out
Following a season of social unrest, South Africa’s table grape industry hopes
to enter a period of greater social stability. To achieve that, SATI’s Johan van
Niekerk described a broad transformation focus, starting with the worker and
moving across the world’s markets.
While fiery labor clashes shook much of South Africa’s
2012-13 harvest, table grape orchards have remained
comparatively quite this season. A higher minimum wage
– risen from R69 (US$6.22) a day to R105 (US$9.47) in
February 2013 - has calmed much of the tension that
literally brought farms alight and temporarily halted exports.
ter place than they used to be. So there are no riots or
uprisings at the moment. The labor market seems to
be quite calm,” the chairman said.
“The downside of that is that a lot of people lost their
jobs because it was just too expensive to keep everyone. Most of the guys have cut back on their staff. I
would say the labor market is stable right now but
there is a huge focus on efficiency.”
To maintain stability in years to come, the industry will
need to move forward with a keen eye toward efficiency
and, above all, quality of life, explained board chairman
Johan van Niekerk of the South African Table Grape Industry (SATI).
In an industry that relies heavily on seasonal labor,
van Niekerk explained unemployment is no small concern. Workers without jobs mean workers without
sustainable living standards.
“A lot is happening in terms of skills development and
training. The labor situation all together has become
much more stable because the wages are at a much bet-
“Our industry is quite seasonal, so we need to make
sure workers are in good social surroundings when
20
they are not busy working on grapes,” he said.
“Part of the compact is to tell government that if you
want people to have better lives, it means famers
have to make more money out of the industry and
the only way to make more money is through more
marketing options,” he said.
“We had these communities that grew up around
grape farming that were in a mess financially when
there was no work. The government and industry
have a long-term strategy in place to make the whole
social situation around labor more livable. That’s
helping a lot with the stability.”
Representing South African
diversity
In broad terms, van Niekerk’s remarks refer to the
Fruit Industry Social Compact, a joint effort between
various sectors, including pome fruit, stonefruit and
citrus.
On the ground level, SATI’s social strategy cannot ignore the historic lack of black ownership in South African agriculture. While trade agreements may bring
more money back to the industry, new business approaches hope to share such growth with a greater
diversity of people.
“It’s a social compact between industry, government
and labor to make sure in the long run we think beyond the farm gate and also the social environment
that people live in, as well as education and training,”
van Niekerk said.
“The industry is very bought into our government’s
black empowerment strategy. The grape industry in
South Africa is currently the single industry with the
highest percentage of black ownership,” he said.
“The social compact, before it got that fancy name,
was called the Industry Development Plan, which is
something that is basically focused on growing the
industry. We think that when all of these elements
come together, the fruit industry will grow a lot in this
country.”
“The industry has transformed a lot in the last eight to
ten years whereby the industry is constantly striving
in terms of ownership and management to be more in
line with the racial composition of the country.”
Crossing new frontiers
Van Niekerk said a successful approach has been investment in shared ownership.
On a market level, the chairman said development
comes down to market access – the more South
Africa can export, the more money it can bring back
home.
“In many of these farms that are starting to transform, the farm would be owned in part by the original
entrepreneur but also by the management and labor
working on the farm,” he said.
“If government is spending money on job creation,
they also have money to help the industry with market access and research and development. We’re trying to align all of these different elements to kick the
industry in gear to move into a phase of sustainable
growth,” he said.
“The system that seems to have had the best results
is where there is joint ownership, where the original
owner has the entrepreneurial skills. A lot of that business acumen is being transferred slowly but surely.”
He estimated 20% of SATI’s budget goes toward
transformation efforts, such as business assistance
to create co-ownership models.
“The SATI office is spending a quarter of its money
on market access and that is basically based on lobbying of markets and making sure that we don’t have
markets that are closed to us. … There is almost not
a viable market you can think of where there is not a
specific activity going on.”
Photo: Shutterstock.
“One of our main goals is to make sure we transform
the industry into being more representative than it
was.”
SATI’s approach embraces the idea that if export markets produce greater profits, the industry as a whole
will feel the effects.
21
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Feature
Italy: ‘the future is seedless’
Among European nations, Italy maintains its historical position
as the region’s primary and most recognized grape exporter. With
changes in consumer tastes and growth in competition, however,
Italy cannot depend on its reputation alone to stay on top.
Based in Apulia, the heart
of Italian table grape production, the Schiavone
Group brings together
growers from across the
nation to source eight
grape varieties, among
other fruits, to Scandinavia, Eastern Europe and
the Baltics.
Now, a growing preference for seedless varieties
will demand a transition in
the company’s and Italy’s
offering in years to come,
24
said Claudio D’Alba, export sales manager of the
group.
“It’s a moment of passage
from some varieties to
others. It’s still not well defined. Some seedless varieties released from laboratories some years ago
are regressing and others
are getting higher. At the
end of the day, seeded table grapes are going to be
finished soon. The future
is seedless,” D’Alba said.
“At the moment, I would
say it is still 70% seeded
and 30% seedless but this
trend will change soon. In
10 years, it is going to be
opposite.”
Beyond a simple distinction between seedless and
seeded, he added that exporters must understand
their markets. As borders
change, so do fruit tastes.
“Every nation has its own
preference. The Swedish
ask for a different kind
of grape than the Finnish, Germans or Hungarians. Everyone needs and
wants a different kind of
grape because everyone
has their own culture,” he
said.
“You
cannot
permit
yourself to send grapes
that you know are not
interesting due to taste
or color because everyone has their own culture
in fruit. Something that is
good in Italy may not be
good in Germany.”
In general, however, he
said Crimson will lead the
way into future markets.
“The tendency is going
to be focalized on seedless and especially on
Crimson, which is the
most recognized. It is
strong, tasty, and crunchy,”
he said.
Focusing in on promising varieties will be key
to keep up with growing
25
competition.
Although
Italy is the first to
enter the market among
European producers, it is
quickly followed by Spain,
Turkey and Morocco –
nations that often offer
cheaper fruit.
“There is more competi-
tion every year with other
nations. I don’t know what
will happen in the future
but I can see a harder situation. It’s not easy. The
competition is big and
small nations are increasing their volume. It’s not
going to be so easy,” he
said.
Photo: Australian Table Grape Association
Australian grapes set sail to Asia
Low domestic prices and a favorable exchange
rate are driving more and more Australian
grapes abroad.
On the tail of one of the nation’s largest export campaigns on record, Australia
expects to hit international
markets with yet another
bumper offering this year.
“A reason for our export
focus is that our domestic
market, in terms of prices,
is not good. Because of
that, a lot of growers have
an export focus,” Scott said.
With a keen eye toward
foreign shores, Australia’s upward trend abroad
comes as no coincidence,
explained Australian Table
Grape Association (ATGA)
chief executive officer Jeff
Scott.
“Australia has two major supermarkets and they have
a policy of allegedly looking after the consumer and
about driving prices down.
By driving prices down, at
some stage they’re actually
buying fruit for less than
the cost of production,
which going forward is not
sustainable.”
The export market, primarily in Asia, has surged not
just as a profitable business
option for Australia but
as the answer to a floundering national market,
plagued by unsustainably
low prices.
abroad.
“At times, the growers are
happy with the prices they
get, but on the main, growers are concerned about
the price on the domestic
market,” Scott said.
“This means there is more
fruit available for export.
The export market, in terms
of demand for Australian
product, is very strong. It’s
always had that reputation
of producing very good,
sweet fruit, which is sought
out by Asian consumers.”
On their current path, Scott
said Australian supermarkets are driving farmers
out of the domestic market
and forcing them to look
for greater opportunities
With an improved exchange rate, international
opportunities
appear
sweeter than ever next to
sour domestic prices, he
said.
26
“What will support our
growers this year will be
the fact that the Australian dollar has come off by
about 15 to 20 cents on
the dollar compared to last
year,” Scott said.
“So the return to growers
should be quite beneficial
to them, which has been
needed because the exchange rate being abnormally high did hurt the
bottom line last year, so
we’re hoping to get back to
normal this year.”
In recent years, Australia’s main export partners
have been China, Thailand,
Vietnam and Indonesia.
With the recent opening
of the Korean market, the
Feature
“It’s a new market for
us. Market intelligencewise they are looking for
white varieties, so that will
certainly
be
an
opportunity for us. We’re
hoping to build the market
up over the next three to
five years, but we do see
it as a premium market to
send quality fruit,” Scott
said.
The focus on high-end
markets will also mean
greater demand for top
quality fruit. Scott said this
will serve as a focal point in
Australian industry development in years to come.
“I see better quality grapes
coming out of Australia.
We’re putting in practice
improved processes to
ensure the grapes we export are free from any con-
taminations of pests and
disease. We are striving to
improve those practices all
of the time,” Scott said.
“We now are looking at
tight quality control procedures. We are well aware
that when we export, we
need to export the best
grapes that we grow, at the
expense of the domestic
market.
our growers over the past
three or four years, particularly in terms of quality, in terms of processes
of delivering a high quality
grape, free from any imperfections.”
“We’ve been educating
Photo: Australian Table Grape Association
nation has yet another reason to continue pursuing
sales growth in Asia.
27
Feature
Photos: Shutterstock.
Peru rising:
tackling the
Asian giant
As Peruvian table grape exports skyrocket, the
Andean nation has its sights set on the world’s
most populous import market.
Peru’s table grape exports have enjoyed a major growth spurt in recent
years, pulling this once
small player up among
the ranks of the world’s
top suppliers.
The nation has risen from
a modest export volume
of just over 46,000MT
in 2009, to an estimated
174,500MT in 2013, experiencing over 275%
growth, according to
data from iQonsulting.
Nowhere has this growth
stood out more than in
China, where the South
American nation has
not only experienced remarkable expansion but
also expects to steal a
28
top spot as a supplier this
year.
an-Chinese Chamber of
Commerce (Capechi).
For the current season,
the Peruvian export
sector has expressed
ambitious turnout in the
Asian nation and expects
to climb to the number
two supply ranking, said
Miguel Gálvez, general
manager of the Peruvi-
“We are currently third
as a supplier to China.
We are on our way to
displace the United
States in 2014 and take
the second spot, behind
Chile,” he said.
“While it is true that the
“Total grape exports to
China during the period
from January to October
2013 grew more than
134% in comparison to
the same period in 2012.
What this means
basically is that it has
grown in line with
demand,” Matos said.
“This obviously comes
from necessity from
China, which wants to
buy more grapes. You
have to look at the niches
in the market. It doesn’t
help us to go to big cities
where we cannot satisfy
their demand.”
Given its sheer size
alone, Peru’s attraction
to China has come naturally, Gálvez explained.
“The world market for
table grapes is 4.4 million
MT, representing US$8.5
billion – 11% of this
market is consumed by
China and Hong Kong,
which are increasing
their share every year,”
Gálvez said.
“In 2013, they imported
US$870 million, putting
them in second place
after the United States.”
According
to
the
Capechi
general
manager,
Peru
has
exported a total value of
US$320 million in grapes
to Hong Kong and the
Chinese mainland,
equivalent to 135,000MT.
“In 2013, exports to
China bordered US$40
million, which represents
25%
growth.
In Hong Kong, they
reached US$33 million, with a 35% drop.”
Regarding export businesses, Gálvez said participation has become
more diverse and that
approximately 50 Peruvian companies currently
ship to both Hong Kong
and the Chinese mainland.
Grapes from Peru enter
the market starting in the
third week of November
and extend until the third
week of April. The range
allows Peruvian fruit to
establish availability in
the Asian market for a
total of 20 weeks and to
take advantage of peak
prices during Chinese
New Year.
At the beginning of
Peru’s
season
during the last quarter, he
said they compete with
U.S. grapes. In the first
quarter of the year,
competition comes from
Chile, the U.S. and South
Africa.
Gálvez noted that Peru
has made strides in
reaching new corners
of the market, in an effort to stand out from
competitors.
“Peruvian grape exporters are doing good work
on the Chinese market.
We are always entering
new cities in the interior
of China, working strongly with distributors, participating in markets, and
working to promote the
fruit’s quality, brand and
place of origin,” Gálvez
said.
“We all see the opportunities in China, but few
understand them. The
potential of this market is
unlimited. We are
recently discovering the
market, which is growing
in impressive numbers.
China offers a lot of opportunities but it takes a
lot of work.”
Photo: Shutterstock.
U.S. and other countries
cover the big gaps in
Chile, Peru has had an
advantage in regard to
quality and flavor of the
product.”
If trends from 2013
continue, Peru’s forecast may not be far off,
explained Pablo Matos,
Capechi’s foreign trade
minister.
29
Feature
Entering the
unknown:
India’s
untapped
table
grape
market
Photo: Shutterstock.
With a greater marketing focus, could
Chilean table grapes follow California’s
path in India?
While India’s population
alone may catch the eye
of international suppliers,
the road to the south
Asian nation is not easy.
Just 10 years ago, India
effectively
prohibited
most food imports and
today, tariffs remain restrictively high for many
products. Logically so, imported foods remain novel or out of reach to most
Indian consumers.
Indian importer Manish
Sharma, however, says
sellers who invest in establishing market relationships have enjoyed
the fruits of their labor.
To build his case, he contrasts the initiative taken
by two major table grape
suppliers: the United States and Chile.
table grapes, Sharma
says. The California agriculture industry has gone
the extra mile to promote
a number of key horticultural products.
“Most of the importers
buying other foods do
not wish to import table
grapes to India. But California grapes are doing a
lot of activities to market
their product. If you compare a grape from a different part of the world to
California, California is
going fast,” says the managing director of Fresco
Fruits N Nuts in New
Delhi.
“You have to do continuous efforts like people
from the California Table Grape Commission
or Washington Apples or
California Pears or the
California Almond Board,”
he says.
“They are making continuous efforts. That is
something that is making
the product popular in India and now people know,
these are California grapes, these are California
pears, these are Washington apples, these are Ca-
“Except for the California
Table Grape Commission,
no one is doing any activity.”
California’s
dedicated
marketing goes beyond
30
lifornia almonds. Unless
you do that, it’s not going
to work.”
The efforts carried out
by California reflect in
the trade statistics. As of
2012, California held a
55% share of the fresh
grape import market,
74% of almonds and 43%
of fresh apples, according
to data from Global Trade
Atlas.
On the other end of the
spectrum, table grapes
were one of the few categories where Chilean
fresh products registered
among top traders, with a
13% share.
Sharma says this has not
resulted from lack of in-
Next to an estimated price of US$1.50 per kilo of
Indian grapes, imported
fruits face a tough marketing task.
terest in Chilean produce.
The importer says he has
pursued ties with Chile
but to no avail.
“I got a call from the Chilean Embassy. They wanted to work with me and
told me there was going
to be an exhibition held
in Chile. They said they
would be sponsoring me
for that to go there and
be a part of that,” he says.
“But after that, they
haven’t had a meeting with
me and they disappeared.
I called them almost 10
times but they were never available. There are
continuous efforts that
have to be done. You have
to come meet the people
and call the people. Chilean people have to come
here.”
Sharma says Chile has potential as a grape supplier
in India, but first the
South American nation
must invest in building a
market there.
“As an importer, I am only
going to import a product
when I have a market to
sell it. The market is something I cannot create individually. You guys
have to come and talk,” he
says.
The caveat, however, is
that reaching India and
finding success there is
not a simple task. If Chile were to place greater
focus on India, it would
need to be prepared with
its best fruit and transportation technology.
“Grapes are very highly
perishable and if I import
a container from Chile, it
takes 55 to 60 days. By
the time the container
arrives to an Indian port
and gets clearance and
arrives to my warehouse,
it takes 70 days,” he says.
“After 70 days, the quality of the grapes is not
31
that good. When it comes
to India after 70 days,
the quality deteriorates.
Much of the time the importer doesn’t get the
pricing. If that importer
doesn’t get the prices, he
is in loss.”
Beyond quality concerns,
imported grapes also face
competition from lowpriced, local fruit.
“Because of the higher
price, the middle class
and lower middle class
are not able to consume
imported grapes. It is only
the people of the upper
higher class. Higher class
people are the only ones
consuming imported grapes,” he says.
“That is why the consumption is not that much
compared to other fruits
such as apples and citrus.
If you calculate the pricing of imported grapes
in India at the moment,
it’s about US$7 per kilo.”
An estimated 10 million
individuals in India have
the capability to shop for
luxury goods, according
to the United States Department of Agriculture. Although a relatively
small number compared
to the total population,
Euromonitor reports the
luxury market grew 270%
between 2007 and 2012.
Sharma also says India’s
demand for grapes aligns
with one of Chile’s main
varieties, Red Globe.
While many markets are
moving away from seeded varieties, this option
remains a favorite in India.
“There are many things
that can be done from
Chile. A lot of business
can happen but it has to
be a continuous effort. It’s
not going to be a one-day
thing,” he says.
“I think Chilean people
are good suppliers and
they can send quality grapes.”
Photos: Shutterstock.
Photo: Shutterstock.
Of benefit to importers,
however, will be India’s
growing middle class.
32