Given the mounting challenges facing fruit and vegetable suppliers, it is hardly surprising that firms like Egypt-based Bloom Fruit Consultants, which specialises in commercial consultancy in the agribusiness sector, are seeing an increase in demand for their services. According to managing director and founder Omar El Naggar, a combination of multiple crises is currently a threat to almost every business.
'Some are calling it a perfect storm, with recession and inflation rising,' he says. 'There's a big recession tsunami coming very soon, not just in agribusiness, but in all sectors. We are seeing delays and shortages of important items like microchips for the automotive industry, semi-conductors and timber, and crazy logistics issues that we've never experienced before. We need to highlight the issues on the ground and recommend solutions.'
The result of such issues has been a spike in costs of fertiliser and other chemicals for production and many packaging materials. 'You name it, the cost of everything is up 20-25 per cent,' says El Naggar. 'The supermarkets won't welcome this news. We have been involved in a lot of discussions and negotiations with retailers on behalf of small to medium-sized growers. At the moment, the goal for both producer and retailer is to keep food as affordable for consumers as it's always been. The question is how?'
Many producers in Egypt are contemplating even slimmer profit margins, he says, despite already being stretched to breaking point. Some are trying to be innovative to come up with solutions. 'At the moment, there's a lack of business strategy and use of IT in the industry,' says El Naggar. 'There is not enough digitalisation when it comes to promoting fruit and vegetables. This is what we're trying to push. Online shopping is very advanced in places like China, the US and UK, and we're looking at why growth has been so slow in North Africa and the Middle East.'
Transportation is another area where technology is sometimes lacking, according to El Naggar. 'At the moment, Egyptian strawberries are largely limited to airfreight, with very small volumes going by sea,' he says, 'but with Chinese demand for airfreight continuing to grow for all sorts of Chinese exports, Egyptian exporters need to start shifting to seafreight more and more. We are examining how more Egyptian strawberries can be transported by boat and guarantee their quality on arrival.'
Moving greater volumes by sea and utilising transportation technology would also benefit the environment, and El Naggar says more investment is needed in this area. 'It is time to invest more in sustainable packaging materials; better, more affordable shipping technologies; better use of chemicals and, last but not least, the role of software and IT in addressing climate change issues.'
According to El Naggar, bringing consumers closer to the production process will help. 'There’s a disconnect between consumers and agriculture,' he states. 'It’s one of the lowest paying industries and one of the most affected by climate change. Consumers can change this by paying extra for fruit and vegetables. As climate change continues to affect the price of produce, it is important to show the consumer what’s going on inside the industry, particularly the challenges that growers face. I think retailers are a bit too reluctant to talk about these challenges.'
