This spring has been busy for KG Fruits Ltd. The first glasshouse fruit was available in mid April, and the first main crop picks from under Spanish tunnels happened in the second week of May. “Strawberry crops are looking very good, with excellent flavour, size and shape, and we think that yields are good as well,” says managing director Nicholas Marston. Despite the cold and dull spring weather delaying the start of the UK glasshouse season by a week to 10 days, compared to the very early start of the 2003 season, the recent good weather has brought tunnel crops forward by half a week.
But the activity for the berry company was not only in the field. KG Fruits entered into a new agreement with Colchester-based glasshouse specialist, Plantsman this spring. “We were delighted that Plantsman - a UK berry producer group that specialises in glasshouse production, chose to merge with KG,” says Marston. The Plantsman group was a separate UK marketing desk that represents a group of growers, mainly in the Essex area. The merger is beneficial to both companies - by merging with KG Fruits, Plantsman strengthens its presence in the market and gains access to further support and technology. “This is beneficial to KG Fruits because Plantsman is predominantly a glasshouse production specialist, which is an area where KG has not been strong,” explains Marston. “The merger will give us a greater presence on the shoulders of the season. More volumes of glasshouse fruit will be on the shelves this season as a result of the merger.”
During the past 12 months, KG has continued to expand its production from organic growth of existing UK growers and the recruitment of new growers. Further expansion has arisen from its annual imported business - its long-term alliances with Alconera of Iberia and US strawberry company Driscoll continue to bring benefits to all three parties on a year-round basis. “Our turnover in 2003 reached a new high of £91 million, and we forecast further substantial growth in 2004,” says Marston.
KG’s sales last season exceeded all expectations. The 2003 season started a week later but higher yields of Class I fruit grown on a 10 per cent larger area paid great dividends. Supermarket sales were in excess of 1,000 tonnes of strawberries a week for six consecutive weeks and peaked at 1,500t in a single week. Just eight per cent of the total tonnage sold over the period had to be imported to meet shortages, which gave KG growers an opportunity for further import substitution. The success of the 2003 season was attributed to the quality of the fruit, good promotional support from their main customers and tight daily management with them.
Marston puts the success of the entire sector down to the high-eating quality of British berries as well as the positive public health messages regarding the benefits of berries - both are driving consumption demand upwards at the same rate as production is expanding - good news for producers.
With respect to varieties, KG Fruits is concentrating on the main production varieties - Elsanta for the early and main season, Florence for the late main crop season, and Everest for late season production. There are also new varieties that have been trialed; strawberry variety Jubilee is a high-quality eating strawberry whose production will be increased to more than 900t this year. The variety was developed by Driscoll and is grown by KG Fruits’ growers on an exclusive basis.
The company carried out consumer research to compare Jubilee with Elsanta and other ever bearer varieties. Results showed that more than 600 consumers who blind-tasted five varieties found the Driscoll Jubilee to be better than its rivals, both on flavour and appearance. “We are extremely excited by the prospects for this variety. It is a large step forward in eating quality as witnessed by its ‘clean sweep’ of prizes at last year’s two soft-fruit shows. Other strawberry varieties such as Elsegarde are also coming into production and have the potential to offer better eating fruit than the main current late season varieties.”
In addition to Jubilee and Elsegarde, other varieties are being nurtured. Christine for the early season, Alice for the late main crop season and Flamenco for the late season are all exhibiting potential and will enable KG to extend the range of varieties for its growers to make use of, and supply the consumer market.
“We will market 18,000t of strawberries to the multiples this year, compared with 14,000t in 2003. This is an increase of 29 per cent,” says Marston. Furthermore, 1,600t of raspberries will be supplied in comparison to 1,000t in 2003 - a 60 per cent increase.
KG Fruits has also focused on the development of its blueberry production. “Blueberry consumption is expanding rapidly - the latest TNS market figures showed a 68 per cent growth for 52 weeks year-on-year.
KG supplies blueberries year round from imported sources, and with the support of our major multiple customers, we are encouraging our growers to plant in the UK in order to take advantage of the undoubted opportunity this crop represents.”
Last year the soft-fruit specialist embarked on a new marketing initiative to promote top-quality strawberries in the Big Berry Company box, targeting caterers and wholesalers. The campaign was launched with the aim to supply the best-eating berries in a branded pack to an expanding sector. “More and more meals are eaten out of the home and we needed to address the needs of the catering market,” explains Marston. “Our launch was well received and supported, with good volumes purchased and prices for growers in line with or better than supermarket returns.” The company is increasing the supply of this pack in 2004 as it anticipates this sector to become an important part of their future sales, and another route to market for their growers.
On a macro level, KG’s managing director does not see the expansion of the European Union increasing the pressure for the UK berry industry from other berry producing countries. He believes the UK berry industry is competitive in northern Europe, and the lower cost sources such as North America need to bear airfreight costs and duty, making the fruit more costly on average than UK production. “Our main competition is from southern European stone fruit and melons, which have the same season as UK berries and compete for footage and promotional slots on the retailers shelves.”
However, the rising cost of hourly paid labour used to harvest crops has always been a problem in the labour-intensive berry industry. “We don’t expect any significant effect in terms of supply to the fresh berry industry from the EU expansion,” explains Marston. “But the availability of harvest labour for farms will improve, and probably more importantly, well-qualified and experienced horticultural supervisors and managers will come here from the accession countries, which is very hard to find in the UK in recent times as agriculture and horticulture have not been popular career choices for British nationals.”
KG Fruits short-term goals are to continue to build market share and improve the quality of its service to both growers and customers. Increased reliability in its offer coupled with the recognised health benefits of soft fruit can help the company to maintain growth. “Also, we will differentiate our offer from competitors, and present superior top-tier berry varieties to retailers that are only available from KG and its growers. Jubilee is the first and a very good example of what we will do in the future.”
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