This time last year, the Israeli exporting arena underwent considerable changes following the introduction of Adafresh, a venture company established by Avi Kadan, founder and former managing director of major exporter Arava Export Growers. With a new logistics centre located at Tel Aviv airport, Adafresh believes it is in a strong position to offer complete cool chain services from its country-wide grower-base to the international shop floor, and the company is hoping this, its official inaugural trading year, will emphasise the legitimacy of its stake in the market.
Adafresh marketing managing, Ayelet Lantzer, says that along with a number of their colleagues, she decided to leave Arava to follow Kadan after the company management changed hands. The majority of Arava’s herb growers evidently shared this sense of loyalty: “Two months ago, 17 out of 19 herb growers who supplied their herbs via Arava decided to move and supply their herbs via Adafresh, with annual volumes of 2,500 tonnes,” says Lantzer. As well as offering 25 herb varieties, Adafresh intends to focus on bell, pointed and chilli peppers, available from November until April, as well as 1,500t of specialty and traditional varieties of tomato.
Certain industry insiders have suggested that Arava must be reeling after a loss of such magnitude. However, according to the company’s UK marketing manager, David Crossland, all spaces in the herb sector have been swiftly refilled. “There has been a lot of change but it is settling down now after a state of flux for all the Israeli companies,” he says. “Yes, some of our growers left but we have consequently recruited more growers from Agrexco and other sources.”
Moreover, Crossland believes the upheaval has urged the company to refocus its energies in a wholly positive manner. “We are still working on the same size and scale, but geographically we are better spread,” he explains. “In the past, around 45 per cent of our product came from two growers but now it is much more evenly spread across more growers.” And Arava continues to be approached by growers seeking its representation, Crossland adds.
Agrexco may have parted company with a few growers but these fluctuations will be of little consequence overall, according to UK managing director, Amos Orr. For a company of its magnitude and with its undisputed dominance in the sector, the advent of a new competitor is of little surprise or concern, he maintains.
Orr’s philosophical approach is perhaps strengthened by the fact that, despite such adjustments, the company’s overall sales are scaling new heights on a yearly basis. Figures for 2005 measure in at £110 million, an increase of 13.4 per cent on last year, and Orr attributes this success to progress achieved across virtually all of its product lines.
Pepper exports are up by an impressive 48 per cent, to reach 7,400t and sales manager Steve Hopkins is anticipating a further 10 per cent rise. Tomato sales have also seen particular growth, with figures on loose cherry up 75 per cent on last year to 4,000t. Similarly, cherry-on-the-vine has also grown to 2,600t as a result of year-round supply - a particularly important achievement at a time when European rivals have found themselves in trouble, says Orr. In general, the weather in Israel has been favourable in recent months so expectations for the coming season are high across the board and any damages will be minimal. “One crop that has been affected is loose cherry tomatoes,” says Orr. “Extremely hot weather in August in August and at the start of September in the cherry tomato growing regions caused the fruit to drop. As a result, normal volumes will be available in the first or second week of November.”
Responsible for 75 per cent of Israel’s exports, Agrexco’s herb division is an integral part of its product portfolio with exports pitched at 7,000t this year. The UK now absorbs more than 2,000t although a strong summer season for UK producers meant curtailed imports this year, resulting in only marginal sales increases. However, despite the market showing signs of maturation, herb sales manager Mike Caddy is confident that with more UK consumers discovering the art of experimental cookery, the herb market will continue to expand. Rocket is continuing to show particular promise, driven by an interest in healthy eating and home-made salads, while a new line, sea asparagus, has started to command attention,” he says.
Arava has also broadened its herb range with the addition of bay leaves. This is just one of the advantages the company has experienced in its decision to establish a herb plant in Bangalore, India; plans for a second subsidiary unit in Ethiopia are already in place. “We have been focusing hard on pursuits outside of Israel, which is helping us to offer a more rounded supply from completely different climatic sources,” says Crossland. “So if there is a big issue in Israel all of a sudden, we have an alternative. It has taken the best part of two years but now the quality is very good. It is the same varieties, packed in the same way with the same technical system sent out with the Arava brand.” Pepper supplies have also been strengthened with the development of a production unit in Greece, due to offer its first yields this autumn.
This composite supply method is not a recent innovation but seems to have been gathering momentum particularly during the last couple of years, thanks to an ever-increasing demand on suppliers for year-round availability.
Agrexco has slowly been augmenting supplies of a whole host of products, including citrus and figs, thanks to its Alesia and Carmel brands for non-Israeli grown products. Mor International, the largest sharonfruit producer in Israel, and perhaps the world, has likewise acquired orchards in South Africa, to extend its offer. “Our Israeli product is providing the market from October to March and South Africa is providing fruit for about three months from May to July, but in the future it will be longer,” says Mor International’s managing director, Meir Ben-Artzy. “This is only the second year that we have had sharonfruit from South Africa but it is a very exciting project. We expect volumes to grow every year and then we will be able to market fruit for 10 to 12 months.”
At 8,000t, Mor’s export volumes will be slightly down on last year but product quality is looking good as the season gets underway, Ben-Arzty says. However, he highlights the importance of achieving consistency in marketable supplies and says the company is still in the process of vetting orchards in South Africa to determine their suitability in producing fruit in adequate yields, as well as of superb quality. Owing to its extreme sensitivity to temperature, water levels and sun exposure, sharonfruit is not the easiest fruit to grow. Yet, despite such challenges, as well as inevitable competition, Ben-Arzty suggests Israel is in a uniquely strong position, especially in the latter part of the season, when competitive product subsides.
“At the start of the season, we face competition from Spanish persimmon. But it is not sharonfruit, and luckily for us it is only available until the end of November,” he says. “There is one sharonfruit grower in Spain but his fruit is not as good because he hasn’t got the conditions to make it as sweet.” According to Ben-Arzty, a large number of persimmon varieties are grown world-wide but they are unlikely to be as sweet as sharonfruit. “The brix level of our fruit is 22 which is very high. Children, especially, love it. A recent study found that sharonfruit had an acceptance of 62-3 per cent compared to easy peelers, which had an uptake of 33 per cent.” Having only been in general consumption for around 20 years, sharonfruit is still a fairly new product and widely regarded as a niche item. However, consumption is rising steadily, especially in Germany, the main European market, which absorbs a little over 10 per cent of Mor’s total exports.
Exotics is a category showing distinct potential for Agrexco as well, according to Orr. The mango season has been extended by three weeks and the season for ready-to-eat has been extended by four-to-five weeks, thanks to the introduction of a new storing technique. Volumes of charentais and galia melons are being stepped up in time for the Christmas period, with attention again focused on the longer-lasting tasty Trooper variety. In addition, melon has been one of the most successful contributions to the company’s growing stronghold in organics, which together with peppers and figs, is showing signs of great success.
With the birth of new variety, Wonderful, pomegranate is another item expected to gain good ground, says Orr. “Wonderful is a dark-skinned variety, with high red-seed density and a reputation as being the best pomegranate in the world. Pomegranate is a fruit being widely planted in Israel and the fast growing orchards are providing excellent product. With marketing plans in place for both the fruit and the seeds in punnets (Rubies) we can expect to hear a lot more about Pomegranates in 2006.” Another addition to the category is Dragon Eggs, a new small hybrid pitahaya variety, bred for flavour.
Meanwhile, in citrus, Agrexco has developed a new easy peel clementine variety called Rishon, which will be available in small quantities for the first time this year. This variety is expected to make a positive addition to a burgeoning citrus category which saw sales increase by 50 per cent last season. “We benefited from the bad weather in Florida that affected their grapefruit and oranges last year, but I’m sure even without this our trade would have expanded,” Orr claims.
The company has also been making changes off the plantations. Following the recent signing of a new agreement with El Al for air freighting produce to Europe, the airline will now transport 70 per cent of all air-freighted fresh produce, with the contract coming into operation in December 2005. Orr is confident this agreement will enable the company to ensure its first-rate products are delivered in equally first-rate conditions.
Arava has also been building on its distribution capabilities with the appointment of new members of staff, both at its depot in Holland and its Israeli headquarters. At the latter, Eliana Rabinovich has been assigned to the role of herbs product manager, while Tali Sarig, will lead the auditing department, strengthening the technical team and enhancing internal procedures and protocols, says Arava’s Crossland.
Meanwhile, the ease in Israel’s political tension has enabled the company to forge stronger links with a Palestinian producer. “For two years we have had peppers and cherry tomatoes from the Palestinian-controlled area of the Gaza strip,” says Crossland. “The grower has recently taken on 60 hectares of previously Israeli-owned land and has increased his production dramatically. As a result of the political situation, he was late planting but we have given him extra technical and financial assistance and we expect harvesting to start by the end of November.” Crossland believes that having a far greater volume of product from the Palestinian area will be an excellent investment, putting the company in an increasingly strong position for the future.
The industry in Israel may have been hit by some unexpected structural shifts but it seems Orr may have some justification in saying the ordeal has been “grossly exaggerated”. There may be a new kid on the block but it is hoped a heightened sense of competition could well result in a slicker, more focused export situation all round. Whatever the long-term outcome, volumes are on target for a healthy winter season, with an array of new products to boot. Moreover, with such important developments occurring both inside and outside Israel’s horticultural plains, attentions will be turned towards grander global concerns and when all is said and done its exporters are likely to remember this year for a lot more than just a surprising shake-up among growers.
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