South African topfruit has experienced a late start, says Capespan’s Martin Dunnet. A delay of up to two weeks has been the result of mixed climatic conditions that delayed the onset of fruit development. “We are only just getting going with Royal Gala so that has been slightly disappointing,” says Dunnett, “but we are expecting a good reception for the fruit and first arrivals have already been well received. Royal Gala is in line with expectations - it has been a small fruiting year but that is of no concern to the UK, which takes smaller sizes anyway.”
Overall South Africa’s topfruit offer is a mixed bag, but reflective of a new-found confidence in Golden is the fact that South African apple producers have now grouped together in an attempt to reinvigorate the UK market for their Golden Delicious and distinguish South African fruit from Golden from other sources.
A grower-funded campaign has gained the support of many of the leading multiple retailers and will start at the end of this month.
“Generic promotion was lost after deregulation and so there was a very strong feeling that a new campaign should go ahead,” explains Nigel Mudge, chairman of the South Africa Apples and Pears Association. “We decided to start with Golden because in essence South Africa is the only exporter of Golden in the Southern Hemisphere and we send up to two million cartons a year into the UK.”
Andy Macdonald has co-ordinated the effort in the UK, working with many growers he was already involved with through his company’s promotional work with Pink Lady and Sundowner apples.
“Many of the producers that grow Pink Lady and Sundowner are Golden Delicious producers too,” he says. “And there has been growing concern in South Africa that their Golden Delicious does not get anything like the recognition it deserves, both within the trade and from consumers.
“There is a genuine belief in South Africa that the Golden produced there is superior in quality to fruit from other sources in the market at the same time. When South Africa’s fruit arrives in the UK, its main competition is stored French product. Growers have recognised the fragility of the industry, and put their hands in their own pockets to launch a campaign to increase the profile and awareness of their fruit.”
The campaign is aimed more at raising understanding of the value of South African Golden Delicious rather than increasing volume. “The Golden crop in South Africa is mature, there are no new plantings. So this is a case of the producers trying to achieve the most that they can out of the volumes they have available,” says Macdonald.
“The objective is to use tastings, offers and point-of-sale material to make consumers aware that the apples they are eating have come from South Africa, and are therefore juicier, fresher and have a superior eating quality. Once the consumer comes to understand these virtues, additional demand will be created and Golden from South Africa will be preferred over its competitors. The long-term hope is that South African Golden will become a more valued product and producers might be rewarded by being able to make a bit more money out of their crop.”
Producers have clubbed together to design a Proudly South African label to adorn the fruit’s trays and bags and give it greater identity. The design is in the colours of the South African flag and will be accompanied by a PLU label on the fruit.
“I have been tremendously encouraged by the response of buyers and category managers in the UK. They have all supported the idea and expressed a preference for South African Golden during its season and, where possible they have got involved with the concept,” says Macdonald.
“If this works it means that South African exporters who are traditionally very competitive will understand the benefits of working together,” says Mudge. “There has been a huge amount of de-branding going on in the UK supermarkets but the country of origin is important if consumers are to recognise superior taste. This year we are concentrating on Golden but if the campaign is successful and makes a difference then we will look at promoting other varieties such as Gala, and Granny.”
The Journal was in South Africa last week to see how a new method of supply has emerged in the country’s topfruit industry. In the last five years Hart Worldwide has developed an innovative and efficient model for importing fruit. Consistent produce quality has been achieved through minimal handling, and the company has significantly improved grower returns, giving the confidence to reinvest.
“Fundamentally our business model is very simple,” says Daniel Hart, executive chairman of Hart Worldwide. “We strive, with our grower partners worldwide, to actively eliminate waste from all parts of the supply chain. By maximising efficiency we are able to deliver superior returns to our growers and offer the best value product to the UK market.”
“It is a business model dedicated to getting it right first time round,” explains Bert Venter, project marketing manager at South African suppliers, Dutoit. “It means getting rid of waste and making the supply chain as efficient as possible. We have the security of growing to programmes, meeting exact specifications and are able to achieve the very best in terms of colour, size and eating experience.”
One of the key innovations of this model has been the achievement of 100 per cent packing at source. This has a multitude of benefits says Hart’s business development manager, Mike Newton, particularly in terms of time efficiency and a decrease in product handling, and it is also a process that minimises costs in the supply chain.
“We believe that we were the first to pre-pack in South Africa for the UK market in commercial volumes and are the only company to pack 100 per cent of its prepack programme at source,” says Daniel Hart. “This means we handle the product once only which significantly enhances overall quality on the supermarket shelf.”
Betko was the first South African supplier to pack at source for Hart Worldwide, and carried out a number of trials to ascertain the best way this could be achieved. “When we initially began supplying Hart, we focused on ways of decreasing cost in the system,” says Betko’s managing director Japie Groenewald. “Many were sceptical about packing at source to begin with, but it has worked out exceptionally well.”
Apart from creating much needed jobs in the local economy, adding value in South Africa has also resulted in a better, lower priced product and has significantly reduced waste throughout the supply chain. “We had to change our production systems in order to achieve this but ultimately a better process has been developed,” says Groenewald. “Hart Worldwide gives us regular feedback so we always know exactly what is going on. Driving developments into the future means we might well be able to deliver directly into supermarket depots - thereby further minimising handling and becoming even more cost effective.”
Recent winner of The Sunday Times award for best company to work for (FPJ March 12), Hart Worldwide has established and continues to maintain model grower relationships.
Hart Worldwide has a team of three colleagues permanently based in South Africa. “It is this team that enables us to have such a close relationship with our grower partners based upon trust and mutual respect,” says Daniel Hart.
“The key to our success is the trust we have and the fact that we thrive on working together as a team,” says Venter. “We are fully committed in our aims and in continuing to find innovative solutions. Mike Newton’s role as Hart’s business development manager in South Africa means we have an exceptionally close relationship and understanding. Within his advisory role Newton gives us feedback on the market and quality considerations and he makes regular visits during harvesting and pre-harvesting periods.”
Dutoit is a family-run business comprising of eight estates. Of a total of 2,700 hectares, 1,900h is devoted to fruit, of which topfruit makes up 70 per cent of total production. “We have been working on a programme basis with Hart Worldwide since 1998,” says Venter, “and we feel the security of working to fixed programmes cannot be underestimated. At Dutoit we strongly believe in synergy and in mutual goals. Market growth can be achieved with a reliable supply and by consistently meeting quality requirements.”
Hart Worldwide’s system also significantly improves grower return potential, enabling producers to have the confidence to reinvest. “Hart has given us the motivation to double our output in five years and to give us strong confidence to invest,” says Ventor. “We still market 40 per cent of our produce locally but we have a world class business and our association with Hart Worldwide creates a culture where we can share the latest thinking and technology with Hart Wordwide partners throughout the globe.”
A significant amount of Betko’s investment has been due to the opportunity to export to the UK, provided by Hart and both Betko and Hart are like-minded in their ambition to move the business forward. “The stability of our position enabled us to complete new CA storage last year and we are now planning re-cooling facilities to accommodate 2000 pallets of fruit,” says Gronenewald. “We will also construct a new packhouse which will be purpose built for the pre-packing of fruit and specially designed to speed up production and to bring down costs. We are working hard on labour efficiencies in the chain and the next cost reduction will be when we are able to deliver directly to supermarket depots with mixed product to bring significant savings. We all have to be more efficient and to cut costs and diversify and so in the coming citrus season we will also be looking to store citrus for other growers,” he says.
Hart Worldwide is continually looking at ways to improve its performance and to minimise costs and wastage, says Newton. “We need to enforce every efficiency in the system. The UK is an important market for many South African producers, but then for our suppliers other markets are also vital and so we need to consider the whole.”
For many producers, the UK is considered to be the most discerning market, and in order to deliver larger volumes programmes are essential. “Working together with Hart Worldwide has brought economic benefits on the back of a philosophy to be cost effective,” says Gysbert du Toit, Dutoit’s marketing manager for fruit. “We now produce to exact specifications by limiting the time in the UK, we are able to cut costs in the chain. Complying to the standards of principles such as EurepGAP and HACCP puts us ahead of the competition and if we open ourselves to the most discerning markets then we will also do better in other markets.”
Dutoit is now focusing on increasing its presence in the UK. “We have increased our output with Hart by 50 per cent each year,” says Gysbert du Toit. “We have made a big effort in the last few years and are ultimately confident we will be able to position ourselves in the UK if we continue to be proactive and look for the right opportunities. It is also vital we react to new ways of doing business. The biggest change for us was to pre-pack at source. Three years ago we didn’t do anything like that - it was all done in the UK. We have had to adjust to the new way of supplying. To retain that market focus takes a lot of studying and training which is carried out on a consistent basis.”
Dutoit perceives all its relationships to be long-term ones, says director Pieter du Toit. “As a whole South Africa is well-positioned to supply just-in-time deliveries to the UK. We will complete our new packhouse facility in November - an investment of 40 million rand - and in terms of going forward we must ensure we have the right fruit for the right market. Quality, as we see it, is defined by the customer. The last two years has seen a focus on new plantings of Fuju, Braeburn, Pink Lady and Sundowner and we have an exciting new market in the Ivory Coast and other African countries such as Angola which are very much an extension of the local market.”
Finding fruit for different markets should be no difficulty this year as a wide range of varieties come on stream. A different spread from each supplier enables Hart to be able to take the best produce from each grower. Gala has been harvested at Dutoit, and achieved a normal crop. “The colour was good although sizes were slightly on the small size,” says Pieter du Toit. “Size and colour do tend to be big issues for us. Packouts have been fantastic though, at 60-65 per cent. We do focus on the maturity of fruit at harvest and do not sacrifice quality for colour. Golden picking has just finished and although fruit size is smaller, we have got the best skin finish seen for many years. Braeburn is being harvested now and that is a good crop and good colour.”
Generally, says Newton, South Africa is not considered to have the ideal conditions for growing Braeburn but Dutoit’s is just right.
This season will be very good especially for pears,” says Petri Fourie, managing director at Goede Hoop. “Golden and Galas are looking superb and Braeburn will be fantastic with high packouts. Pink Lady looks good and we expect the Granny crop to be fair. What is good for Golden is not necessarily good for Granny.”
“We have much more Blush Golden at Dutoit’s and Goede Hoop than last year,” Newton says. “The cold nights have enhanced the blush and sugars.”
At Betko, Groenewald says the season will be fair. “There has been slightly more russetting than expected,” he says. “However South Africa produces excellent flavoured apples and pears and generally we have seen good sugars and eating quality.”
Dutoit’s philosophy is one of large scale, cost effective production with an emphasis on social responsibility. “The new South Africa is 10-years-old now,” says Pieter Du Toit, “and we need to create a better way forward.”
In recognising its social responsibility to the Ceres community, The Dutoit Group has instigated a series of projects to enable employees to take ownership and responsibility. It has been appointed, by the Department of Labour, as the only agricultural organisation in South Africa, to take part in a pilot project by Investors in People.
The Dutoit Group has two pioneering empowerment projects. Crispy Coolers is a CA room building consisting of 22 rooms, while Crispy Farming is a farming company consisting of four farms managed as two units.
The Dutoit education trust was started in 1997 with a capital investment of 300,000 rand. Loans are awarded on a yearly basis to employees with children wanting to pursue tertiary studies with favourable rates in interest and repayment conditions.
Betko and Hart Worldwide have joined forces to provide the local school with a new mini bus. Betko has also assisted in different projects including a crèche, and has paid salaries for three teachers and supported 100 under-privileged local children. “We believe in investing in education,” says Groenewald. “We have very good relations with the school and that makes a big difference. They are always struggling for transport and to have their own bus is fantastic. Hart is doing this in recognition of what the town has done. It is not just the relationship between Hart and Betko that is important, it is also the well-being of the workers and of the entire company that counts.”
Goede Hoop was the first to supply Hart and, says Fourie, the fact they are still doing business together speaks volumes about the relationship.
“Programming with Hart has meant we must make sure we have the right product to sell over a period of time and that is why we have invested in CA storage and bulk bins. Ultimately, it is far cheaper to pack at source and that is driving down costs in the chain. We have to get into the mindset of supplying UK consumers and that means a dedicated approach and getting the processes exactly right. We have installed a lab for quality control and feel we have advanced at a rapid speed on the market.
“We have been able to develop a close relationship with Hart and from that we are reaping the benefits. Proactive information sharing with Hart Worldwide has enabled us to pack the bags at source that I didn’t think would be possible at first. Hart’s expertise has enabled us to innovate and to stay ahead and that has allowed us to invest in machinery, cold stores, new farms and planting new fruit. A new CA storage is being built which will be ready before Easter.”
Ultimately, says Fourie, the fruit industry revolves around personalities and Hart has been proactive in what it has done. There are always people who are innovative but it doesn’t necessarily mean anything is actioned. Hart makes sure change happens.”
At the end of the chain, service level is one of the most crucial performance measures for retailers and Hart Worldwide service level has improved every year for the last four years from 99.77 per cent to 99.97 per cent.
There are factors affecting the South African industry as a whole. “The value of the rand has declined in the last 10 years,” says Dunnett, “and after a reasonably good season last year South Africa is gearing itself up to be more market-led. There is definitely a pressure on the bigger packhouses and the changeover to packing at source is a big move. South Africa is well-placed for topfruit and the quality there is second to none.”
For Hart Worldwide with its aim of creating the most efficient supply chain, while still delivering the best value apples and pears to the UK, thanks to its South African topfruit suppliers, it’s already in the bag.
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