“I feel certain Chile will be exporting 10m cases of blueberries within four more seasons, and that we will double that figure yet again in an additional five years,” says Edmundo Ruiz, chief executive at Hortifrut SA (Santiago), one of Chile’s leading berry export firms. “Our studies show that demand for off-season blueberries, especially in the US and UK markets, is very, very deep. It seems that the more off-season blueberries we supply, the stronger the demand grows. I think it has a lot to do with the industry’s ability these days to put berries on the supermarket shelves 12 months of the year. This makes it an even better business for retailers, who help us push demand.”
A similar projection is shared by Juan Ignacio Allende, chief executive at Vital Berry Marketing SA (Santiago) another top-ranked Chilean berry firm which sells its berries into the UK through BerryWorld. “Our studies show that world demand will continue to grow at a very healthy rate, so we believe that volumes from Chile will double during the next four seasons. We are projecting a 100 per cent increase in our UK-bound blueberry exports this season alone,” Allende says. “It makes things look very attractive for Chilean berry producers. But in the longer term, of course, we have to be concerned about how to best distribute this sharply increased production so that prices don’t fall.”
The optimistic forecasts made by Ruiz and Allende are substantiated by the tremendous kick-off Chile’s berry deal enjoyed this 2004/2005 season.
“The market this year in the US has been exceptional for our blueberries,” says Julio Giwings at Sun Belle Berries (Santiago), a medium-sized berry export firm that has been in the deal for only three seasons. “Initial prices were as high as US$40 per tray, compared to US$28 at the beginning of the 2003/2004 season.”
Growers are agreed that Chile’s berry production this season will outstrip last season’s record volumes - notwithstanding exceptionally long lasting rainfall in southern Chile that has dampened growth forecasts in that part of the nation’s berry growing area. Cool spring weather in the rest of the country has delayed the berry harvest by about one week. The harvest normally runs from mid October in the north of Chile to mid March in the southern part of the country.
“Production in the central and northern regions is going to be very good this year,” says Giwings. “The growing season there has been almost completely free of freezes, so we are expecting production equal to or better than last season. And, of course, there are more berry plants this year to harvest than there were last season.”
Chile’s ability to keep supplies in line with demand, say industry leaders, will be a function of various factors: new blueberry varieties and new growing technologies, together with new and extended planting areas to latitudes north (La Serena) and south (Osorno). Some companies are employing growing tunnels to advance the harvest date of their blueberries, and newer, more densely planted blueberry bushes (3,500 plants per hectare) can now produce 12 to 14 tonnes of berries per hectare.
Hortifrut, for example, is in the second year of a four-year development plan that contemplates an investment of US$5m each year in its facilities in Chile, Mexico and the US - all done with an eye to have sufficient supplies to meet the growing demand for blueberries.
Hortifruit’s expanding horizons
Hortifrut has its soft-fruit roots and holding company in Chile, but its international network of subsidiaries and strategic alliances allows regional manager for the European market, Francisco Ortuzar, to place a global perspective on his berry business.
Ortuzar is based in Seville, working for Hortifrut’s European sales and marketing arm, Euroberry Marketing SA. The Hortifrut group also includes fully-owned production operations in Chile, Argentina (North Bay Argentina), Mexico (Hortifrut Del Campo Berries and Hortifrut Mexico), and the US (Hortifrut North America Inc, Panamerican Berry Growers). In the US, the company has united with Michigan Blueberry Growers and Natureripe Berry Growers to form a sales and marketing alliance, Global Berry Farms. In Argentina, a partnership with North Bay Argentina gives Hortifrut access to large volumes of blueberries and in Spain, a link with blueberry pioneer Atlantic Blue taps into one of the largest EU blueberry producers and by far the biggest in Spain.
So the Chilean berry season is just one piece of an increasingly complex jigsaw for Ortuzar. “We are still the major grower and shipper of bush berries from Chile,” he says. “And in Europe, that means primarily blueberries, followed by raspberries, blackberries and redcurrants in that order.”
He outlines the changing focus on Chilean soft fruit in Europe, both from the source and the end customer. “As a regional manager, my focus is to ensure that Hortifrut has a year-round presence in the berry market - whatever the source,” says Ortuzar.
“Chile used to have its raspberries available from early November for the European market, but this year volumes will not begin to come through until December. The early Spanish season has been badly disrupted as the vast majority of the cane planted in August for November and December died, due mainly to excessively hot weather. And Mexico has also lost around 30 per cent of its production for that window, so we are going to see very limited availability in December and therefore some high prices right through to Christmas.
“We have been selling at e17 ex-farm per kilo this week for instance, which is much higher than at the same time last year. In the past, Chile’s export season into Europe for raspberries extended through to May, but because the Spanish have enhanced their techniques and extended their season, the Chilean window is much smaller. This year, in particular, we won’t see many Chilean raspberries in Europe after the New Year, as the market in north America will be very hot,” says Ortuzar.
There is a similar picture emerging for blueberries, a sector in which Hortifrut is a major player from October through to early July. Although the volume of exports to Europe are increasing, the length of the Chilean window is not. “Chile used to start in mid-October and because of its CA shipping capabilities, run through to the end of March with blueberries,” says Ortuzar. “This year, the US season ended early and a lot of the early Chilean fruit was directed into the US market - only a few trays came to Europe in October. The US producers ending early let a huge window of opportunity for Chile, and also Argentina. We have sent fruit there from both countries, but we are also keen to build our European market for Argentinian blueberries.
“The UK is by far the most important market in Europe for us and we have been sending 20t of mixed shipments of Chilean and Argentinian blueberries a week to our two partners in the UK - Redbridge and Well-pict. It is a totally different market for us, as the UK retailers have a lot of belief in blueberries whereas many of our continental customers are served on a spot basis. Chile’s fruit has a good reputation in the UK and compares very well with competing sources. However, in Germany for instance, if there is cheaper citrus around, retailers might just not take blueberries. There is less of a category management approach and that makes it very difficult to build consumption in a planned way.
“The Chilean season should still carry through to the end of March this year and our volumes increase every year. In three years, we will have 9,000 metric tonnes of blueberries in Chile alone. We then run our Chilean programmes into the new season Spanish blueberries in April - we have 70 per cent of the Spanish blueberry production with Atlantic Blue - and also fill any gaps in April with product from Florida.”
In terms of blackberries, Ortuzar says Chile finds it hard to compete with sources such as Mexico, from where Hortifrut will produce 2,000t this year. “I don’t think there are more than 100,000 trays of blackberries exported from Chile to Europe now, and we have one third of those,” he adds. “For the UK, Mexico has become the main source and the November to April season runs right through to Spain’s early fruit. And the Chilean redcurrant export to Europe is negligible, with maybe 50,000 trays sold through the wholesale markets and catering outlets.”
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