Now I’m not one to blow my own trumpet, but back in March 2007, I suggested that, at some point in the future, the world’s largest food retail group might end up being Tesco-Ahold. In fact, without wishing to create an unfortunate mental image, I was blowing someone else’s trumpet; talk of such a merger has been around for at least a decade, with analysts pointing to the British and Dutch retailers’ 'highly complementary geographical spread'. The thing about recessions is that these theories about mergers and acquisitions tend to resurface (as the Tesco-Ahold one did last month), particularly if the companies involved is thought to be struggling – just take a look at the planned fusion of British Airways and Iberia and you’ll see what I mean.

As you can tell from our front cover and several of the key interviews we have put together for you on the pages of the January issue of Eurofruit Magazine, consolidation is a phenomenon we firmly believe will be here to stay in all parts of the fresh produce supply chain over the coming decade. More and more companies are going to find themselves having to organise better in order to survive in an increasingly consolidated marketplace. To extend the musical analogy, if that means joining a larger ensemble to orchestrate sales more effectively, so be it. Taking the lead is all very well, but the repercussions of being unable to drum up trade because you’re playing second fiddle to a more finely tuned competitor are likely to be severe.

In fact, consolidating is precisely what many companies in this business are doing. While modern retailers become more and more powerful, suppliers like Univeg, Total Produce, Unica and VOG to name just four are strengthening too, as are many of the industry’s service providers. Zespri may have come under fire in the past few weeks for its monopoly on New Zealand kiwifruit exports, but several of the country’s apple exporters have told me they support that kind of consolidation and feel it’s something they lost after deregulation in their own sector. Conducted in the right way, much like an orchestra, consolidation can result in individuals becoming worth more than the sum of their parts. Good luck in 2010!

Topics