Looking back over the past quarter and the anticlimax that was the British summer, sales of white grapes slowed. This was probably as much to do with higher retail price points during the period than in recent summers as it was to do with the disappointing temperatures and high rainfall levels.
Buoying the category, however, in the washout summer were red grapes. In an unexpected twist, loose sales of the fruit showed good growth and certainly helped keep traders’ spirits up, despite the continuing trend of overall growth in pre-packs.
Some of the success must also go down to the quality of the fruit itself this summer. Sendings of white seedless from Spain were better in quality terms than in a “long time”, according to one trader, and this was matched by the performance of red varieties too.
But, as is often the case, while one source may exceed expectations another frustrates, and one importer indicates this is exactly what happened with Greece. “The Greek season has really not been good at all,” he said. “We did get some fantastic quality through from Greece, but most of the producers we work with, and others too, just seemed to have a very, very short run this season: the majority of them only packed for about three or four weeks.” The outcome was, of course, felt on pricing. The importer continues: “Needless to say, we have not had too many complaints from our Greek partners as their low availability ensured that prices were kept high.” The same phenomenon is undoubtedly what also had a dampening effect on demand and therefore sales.
Now into the autumn, Greek white seedless fruit has all but disappeared from the UK scene and although some wholesalers were still working limited volumes this week on British and Irish markets, most retailers ground to a halt with fruit from Europe’s last source in the middle of last week. Turkey has sent more fruit to the UK this year, providing complementary supplies of Thompson Seedless during the Greek season.
Those that have a strong business with fruit from California are doing best, most notably Morrisons. Variable quality in seasons gone by has put some off an over-reliance on the Golden State, and so the drive into South America at this point in the season has become stronger. The result is a strong presence already this week with Thompson from Brazil, and the promise of considerably more fruit by next week. But Peru, an up-and-coming source that promised so much at the turn of new century, seems to have slowed and this season is definitely taking a back seat, especially as far as the UK is concerned.
Prospects for red grapes are a little bleaker, however, and traders are likely to be left scratching around again in this tricky autumn window. “Crimson looks like being very short indeed,” said one market analyst. “The US has problems in terms of volume on red seedless and Spain is looking like finishing very early, with stored fruit winding down fast. As far as I can see, it all points to sky-high prices on red in the run-up to Christmas.”
The difficulty is with some of the emerging sources. While Brazil does grow stronger year on year, it is still in its relative infancy as a source for Crimson and Peru does not have the volume. “There is always Flame from Peru,” concedes one trader. “But it will not be on stream until late November and it can often be disappointing in terms of quality.” The vagaries of the currency markets also mean that there is a strong pull from the US, which is attracting the South American exporters in both Brazil and Peru.
The tricky supply situation on red will therefore see most traders just keeping their heads down over the next few weeks as they try to meet orders, and it is still too early to gauge with any accuracy the likely output from either Southern Africa or Chile.
Importers are predicting a prompt finish to their supplies from Brazil and the difficulties of supply in October continuing into November when the market will be very keen for Namibia to start. But reports so far suggest that the start from the Southern African country will be on the late side, and fruit may even need to be airfreighted to bridge the market gap.
Looking at what is happening in the retail scene, sales at the discounters are going from strength to strength. One analyst says: “If you look at discounter sales figures they are very strong. Discounters seem to raising their specifications in relation to grapes whereas the leading multiples are keen to drive their cheaper offers. These are strange times.”
And further ahead, it is probably still too soon to tell what effect this recent push on value lines at the major multiples is having. By the middle of this final quarter of the year, however, analysts expect to have a clearer picture of whether these moves are actually bringing in any new customers and widening grape penetration, or just leading traditional grapes consumers to trade down.
There is no doubt though that keeping costs down at every stage from the vineyard right through to the shelf and still managing to meet both discounter and high street specs will continue to be the over-riding factor at play.
MVS BROADENS ITS OUTLOOK
Having established our grape and citrus business in the foodservice sector, we have launched grapes into the UK’s informal foodservice market under the Just Fruit marque, writes Hannes Martin of MVS Foodservices.
It is still early days, but we have started with Greek grape, marketing it through strategic customers in Birmingham, Bristol, Gateshead, Glasgow and, as of this week, New Spitalfields.
The client base still needs to be refined, but we are looking for one representative in each geographic market, so we don’t end up competing with ourselves. It is a simple, market-driven approach; moving away from the traditional “push model”. It also gives us the control we need to pack at source to order and to the precise size and pack specifications of each customer - allowing us to work on a fixed price and the customer to get exactly the fruit they want to maximise their own return.
It’s a market-driven model in an informal sector of the trade.
At the moment, fruit is coming through MVS in Sittingbourne before onward distribution, but we are actively looking for a facility in Evesham or Spalding to better facilitate logistics in the north of England and Scotland.
The fruit will be marketed in Just Fruit cartons throughout the year, and is sourced from our suppliers in Spain, Greece and Chile, which are all similarly accredited and certified compared to those companies supplying the UK retail category managers.
The informal foodservice sector will benefit from a category management model we have in place for our contract foodservice business, and will be getting the same quality fruit as we supply into our core foodservice customers.
We have also started to market citrus from Turkey under the marque for this sector.
By no means are we planning to make it the major part of our business; we see it as supplementary. It broadens MVS’s reach, which strengthens our relationships with our supply base, because we are in a better position to manipulate demand to suit their supply patterns. The strength of MVS lies in our supply base - and it is this efficiency and loyalty to MVS that ultimately our clients in the UK will benefit from.
We operate with a very lean team. My belief is that because we are small, we can afford to be slightly more flexible as well as aggressive, which in the current economic climate is not so easy for the “oil tankers” of the produce industry. I know the overheads I have to cover, I don’t need a board meeting to make a decision, and we can react far more quickly than some of our larger competitors.
We have strengthened our team through the appointments of Angela Quarrington and Jane Dumbrell. Angela brings a wealth of experience to our company in terms of account management, while Jane has more than 10 years’ experience in the quality control of foodservice and is familiar with the focus and quality that this sector demands. It is important that we surround ourselves with people that share the same vision as what we have - while ensuring that our customers benefit from the efficiencies that our supply chain offers. I am also looking for one or two senior people to work alongside me in procurement, but I am not in a great hurry, as they need to be the right fit for the company and our objectives.
We have aligned our marketing strategy and our operational strategy, so we know what we want to achieve. And when the economy turns round, we will be positioned to take advantage of the many opportunities that will spring out of the recovery.
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