French apple exporters have plenty to look forward to in the months ahead. Although volumes may be down on 2007-08, fruit quality is, in the main, looking good, and a lack of southern-hemisphere supplies clogging up the European marketplace should create some potentially excellent sales opportunities.
According to figures released last week in Kent at the annual top-fruit conference, Prognosfruit, France is set to produce 1.52 million tonnes of apples this season, a nine per cent drop from 2007-08 production levels of 1.68mt. Of this year’s volumes, Golden Delicious will account for 541,000t - 12 per cent down on last season - Gala 263,000t, nine per cent down on last year, Granny Smith 170,000t, down two per cent on last season, and Braeburn, 112,000t - a significant 22 per cent drop from 2007-08.
The UK represents the French apple industry’s largest export market. Daniel Corbel, president of the external market commission at French interprofessional body Interfel, says shipments to the UK in 2007-08 stood at around 150,000t - a figure that has been relatively stable for the last two campaigns. “The UK isstill the most important export market for French growers, and they work equally on quality and quantity to meet the demands of UK buyers.”
Sylvain Brard, export manager director at Blue Whale, tells FPJ:“We developed our sales to the UK last year, despite a heavy overhang of southern hemisphere stocks, especially Braeburn, from September to November.
“Our exports have risen strongly since March and this season we envisage a 10 per cent increase in tonnage compared to last year, with activity starting in earnest from the end of August.”
Blue Whale has not started its season yet but, as FPJ went to press, the firm was expecting the first sendings of Royal Gala to set forth between August 14 and August 20. The company’s crop is looking good, according to Brard, with similar volumes to last year and slightly larger-sized fruit. “There are no major problems with quality because the vast majority of our orchards are protected against hail,” he says. “However, we have noted greater incidence of apple scab this year, depending on variety. Volumes of Golden Delicious are falling due to larger-sized fruit, which will put the brakes on sales of polybags in the UK.”
Bobby Barton, export sales manager for the UK and Ireland at Loire Export, says: “As another season of French apples looms, there is again some optimism and waves of renewed hope in the sector. Some are even talking of a comeback. However, UK buyers may feel the pinch from forecast Italian and French volume decreases, as these two countries make up the bulk of the high-quality lines.
“There is another healthy sign for the French supply side. As both an exporter of French apples and an active importer of South American fruit, Loire Export has noted a lack of willingness from certain key southern hemisphere countries to send fruit to the UK. Countries such as Brazil and Chile and maybe to a lesser extent New Zealand are now putting their eggs in different baskets.”
Domestic or neighbouring markets and emerging country customers such as Russia are absorbing greater volumes from these southern hemisphere suppliers, says Barton.
“Any supermarket buyer or main importer can confirm the headache it has been this season trying to secure supply from the southern hemisphere after the tail end of the French season. It is estimated that there has been up to 30 per cent less Brazilianexport to the EU, and 50 per cent less from Chile,” continues Barton.
“The different push and pull factors from the southern and northern hemispheres may mean that France, a key player in the northern hemisphere season, may want to spread out its apple supplies over a longer period. This has provoked a new way of thinking in terms of French strategy. Traditionally, French growers strove to finish up at the end of April or early May to avoid exporting to the UK during the peak of southern hemisphere imports, as this created low price returns and too much origin competition. Now, French growers, based on last year’s experience, are beginning to wonder if they could store fruit a little longer to obtain better pricing in the latter part of the campaign. In France, they have both the storage and technical expertise to do so.
“This year, in France, we saw an extraordinary situation, when French supply started drying up in the second half of May and there was a real gap to fill in the UK, as there was little southern hemisphere fruit touching UK soil. A variety like Braeburn, which was in the doldrums all year long with poor prices, saw its market value double during the month of May when supplies were scarce. Growers who held on to Royal Gala after February had little problem finding customers in a period normally dominated by southern hemisphere fresh apples,” Barton adds.
Growers in the Loire Valley are expecting a crop down by 15 per cent in 2008-09, with a drop in all the mainstream varieties - 10 per cent in Golden Delicious, says Barton - but one variety that marks itself out is Braeburn. “We are expecting a downfall of at least 30 per cent this season due to this variety’s repeatedly poor sales performance - growers are now grubbing to plant other varieties that are a safer bet, such as highly coloured clones of Gala like Brookfield or Galaxy,” he explains. “Braeburn will also have less potential in the Loire Valley because of late frosts in March that affected the two late varieties, Braeburn and Cripps Pink.
“To keep in line with the times, we are encouraging our grower base to invest in the highly coloured attractive and cosmetic clones like Brookfield in Gala and Marired and Joburn in Braeburn. Commercially, Royal Gala is always an easy apple to sell, as there is a market for every size.”
Early Loire varieties such as Royal Gala are already seeing good colouration due to early morning temperatures of 12-14°C degrees throughout June and July - sometimesdipping below 10°C. “This is in stark contrast to the Cavaillon area, which is only producing average-coloured fruit for the first few fruit picks due to a heatwave that is blocking fruit colour,” says Barton. “The fruit pressure tests recorded in our laboratory give us great confidence that the fruit will store well. There should be plenty of good fruit available for the UK from the Loire Valley.”
Peter Davis of Lincolnshire-based importer-exporter Davis (Louth) Ltd is similarly optimistic about the French season, predicting good-quality fruit accompanied by strong demand across Europe - unlike last year, when the overhang of southern hemisphere stocks impacted on the European season.
“Prices on French Royal Gala are strong due to high demand,” he says. Some fruit is only on 25-30 per cent colouration, as the variety needs cold nights, which many areas in France are not getting, with night-time temperatures at 25°C. But fruit from the Vaucluse and Cabanne is on around 50-60 per cent colouration - it is really very good quality.
“We have just started on Golden Delicious and the fruit is excellent quality. In the past there have been issues with bitter pit, which is a problem withcalcium imbalance caused by poor weather, but so far there is no sign of that. There is no russet - the skin is nice and green.”
Granny Smith supplies will kick off in a fortnight, says Davis. Early indications are for a very good-quality crop, and initial orders from processors are good. “Some areas of the country have had hail, but it is very localised,” says Davis. “I have one grower with superb Granny volumes, but one of his orchards has been completely wiped out by hail. There are pockets like this, but that won’t affect the market.”
Blue Whale will export very little Royal Gala to the UK this year due to the presence of home-grown volumes, but the firm plans to develop its presence in South Asian markets with this variety. “We have a new highly coloured Gala clone with excellent taste quality,” says Brard. “Meanwhile, we will be supplying the market with Braeburn very early due to the southern hemisphere deficit in that variety.
“The development of our Cripps Pink orchards makes Blue Whale the second-largest marketer of Pink Lady fruit in Europe, and we expect to increase volumes for the coming year. Like last year, we are again expecting excellent-quality fruit and hope to continue growing sales in the UK market.”
Production of club variety Ariane is also developing well, says Brard, and next year Blue Whale hopes to send its first volumes of the fruit to the UK market. “Ariane matches British demands well, thanks to its visual and organoleptic qualities. Also, the variety is very good for the environment, and will bring real value to retail shelves. The fruit is well established at retail level in France, and the new harvest is eagerly awaited,” he explains.
But growers face a multitude of challenges,as exchange rates and impending legislation conspire to push down returns and make life even harder for an industry already working tirelessly to meet UK market demands. Davis says: “The main concerns are of course the credit crunch and the squeeze that is being put on us by packers and supermarkets. More and more we are being asked for promotions and what we can offer.
“The pound sterling has also affected our sales greatly, bearing in mind that at the start of the season last year sterling was at £1.48 against the euro and today we are paying only £1.22 against the euro, and the forward market from Barclays is not any better - indeed, we had a forward rate for the month of October at £1.13.”
The strength of the pound against the euro is making life very difficult for French apple shippers, agrees Barton. “Coupled with these unfavourable exchange rates is the problem of rising transport costs, due mainly to diesel surcharges and general rising energy costs. At some stages during the last apple season we felt the wind was blowing against us. The contradiction was that in sterling we were marketing our fruit at relatively high prices, but in euros the price was modest. We estimate that because of these external factors, we could have lost €0.10 per kilo.”
New constraints to be imposed by the EU on all fruit growers in terms of the environment and available phytosanitary products will also become a key obstacle to overcome, says Corbel. “Responding to these demands will, without a doubt, be the challenge of the coming decade,” he says. “Managing escalating productioncosts is also a major problem, andthese constraints can only further impact on the cost of the product.”
Developing market share while implementing a policy of using up stocks, taking into account the progression of British apples in the market and the segmentation put in place by UK clients, will be the major challenge for the future, says Brard. “We have excellent apples at our disposal from growers who are GlobalGAP-certified, and which are packed in BRC conditions. Our storage capacity is excellent. We should do everything to meet the demands of our clients as closely as possible, and negotiate a concrete and pertinent sales plan with them.
“Taking into account the elevated quality demands of the British market and the steady progression of prices in euros on other markets such as Russia, or even the French market, we need to obtain better value from the UK, otherwise it will be difficult to respond to the market’s needs,” adds Brard.
In June, a delegation of French apple shippers visited the UK in conjunction with Ubifrance, the French agency for international business development. “Nothing else is as valuable as face-to-face meetings between exporters and buyers,” says Corbel. “This improves relationships and expands knowledge of the market. This kind of meeting is really beneficial for our two countries - but a simple question of time and money prevents us doing it more.”
The French apple offer presents undeniable advantages in terms of quality and varietal selection, continues Corbel. “French growers have invested enormously in renewing their orchards and developing new cultivars and brands such as Cripps Pink, marketed as Pink Lady, which has been around for some years now, and more recentlyJazz, Sundowner, Ariane, Cameo, Tentation, Honeycrunch and even organic apple Juliet.
“On top of that, French growers have been driven for a number of years to meet the quality demands of the British market, and our geographical proximity is also a very important attribute, due to new constraints regarding transport costs.”
New kids on the block such as Poland represent little threat in this regard, says Corbel. “Poland, even if it is one of the largest apple producers in Europe, has a variety choice and fruit quality much more suited to eastern European markets,” he explains. “The transport costs that Poland must face up to make access to western markets very difficult for growers - especially the English market, where the buyers are fixated with limiting costs and therefore look for supply closer to home.”
Countries such as Poland and China qualify as “sleeping giants”, says Barton. “For the moment, they can compete fiercely on discount lines and bumper packs due to significantly cheaper labour costs, but the future of French apple growing is not in these lines. The cheap apple market where the pro rata price is the focus for the buyer is no longer a level playing field. Social legislation in Europe has a long way to go before France could compete with Poland. France should draw itself away from this uneven battle and dwell on its technical expertise to build on its new varieties and the niche top-quality market sector.
“[China and Poland] may be creating a stir, but remember that they still have a varietal breakdown not much suited to our UK customers. Their climate doesn’t allow them to grow clear varieties like Golden and Granny, and their Royal Gala clones are still 10 years behind, even though they are planting new resistant clones. These countries still do not have a varietal palette suited to western Europe and are still lagging behind in technical terms.
“On the high street, it is hard to beat the quality of French. English supermarket buyers still look upon France as the crux of their sourcing campaign. They may have moved east, sourcing from areas like Poland for cheap bagging lines, Class II value packs or bumper packs due to low labour costs and cheaper farm-gate prices, but the quality display loose packs are mainly packed in France.
“I think the key to maintaining our position in the UK is service level and complete variety range, as well as permanence in the marketplace,” says Barton. “Having access to all varieties that are ready at different times in all areas of France because of climatic differences means that we can afford to say yes to all orders and then work out the logistics afterwards. Customers don’t like to be let down over difficult times like Christmas, when traditionally lots of packers close down or when packing time becomes rare. This is where our service level comes in and we have a card to play - our job is to rough out and level off the peaks and troughs,” he adds.
Despite the difficulties growers face, Corbel takes a largely positive view of the future. “As long as we have the capacity to invest in orchard renewal and new production techniques, we can afford to be optimistic. Today there is definitely a real sense of dynamism surrounding the French apple industry,” he adds.
ALL YEAR ROUND FOR LOIRE EXPORT
Loire Export is a grower-based organisation selling 35,000 tonnes of French apples and pears from its own dedicated grower base in the Loire Valley and Provence, operating all over northern Europe and eastern European countries.
“Our strong focus is on our leading market - the UK and Ireland, which accounts for 40 per cent of our total sales volume,” says Bobby Barton, export sales manager for the UK and Ireland. “Other markets for us include the Netherlands, Scandinavia, Belgium, Germany and eastern European countries.
“We deal with multiple retailers and are known for our direct daily links to the wholesale sector. Our fruit is marketed under the well-known brand Smash, which has an excellent following on all UK wholesale markets.”
Collectively, the group - which was established in 1978 - operates 400 hectares of production. “From a strategic point of view, we source from all over France,” says Barton. “We start with Provence in early August to have the first supplies on offer, and then move up to the Loire Valley in late September until the end of May. For obvious reasons of continuity, we then switch to imported produce from May to July, mainly from South America.
“You have to be in this job 52 weeks of the year. To keep track of the market and to continue turnover in the off-season, Loire Export has had to be proactive these past couple of years. For the first time in the company’s history, Loire Export has turned to importing to supply its customer base with popular varieties such as Royal Gala.
“This year, we doubled our imports from South America, and had direct contacts for the first time with Chilean growersto continue trading during June and July, when France has little volume to supply the UK with its own fruit,” adds Barton.
