“In the last four years, there has been a dramatic recovery in the industry in Israel,” says Mehadrin Tnuport Export (MTEX) UK export manager Ramie Hessel. “There are a number of reasons for this, including cutting down on the use of fresh water due to better recycling programmes, the introduction of good new varieties, a greater focus on reducing costs and increasing efficiency, and a favourable exchange rate, which helps us in our key export markets.
“Through these last few years, I think our customers have begun to appreciate again the quality and flavour of our products and the point of difference that we can offer them on the shelf. Sometimes, we have to struggle with the price, but the domestic market has also been strong for us, and the industrial market has given us a good outlet to optimise the usage of our volume.
“Awareness of our offer has definitely improved and if we can continue like this, our basket of varieties will get bigger and even better, while the Israeli grower can make a living out of the industry. If the returns are reasonable, the investment that growers are able to make in their business, in partnership with MTEX, will ensure that the quality of our product continues to improve - and the beneficiaries of that are our customers and their customers, the consumers.”
When product is as short as it has been in the last couple of months, says Hessel, “more sources come into play, as buyers in Europe cannot afford to look so closely at accreditation standards.” MTEX is EurepGAP, BRC and Nature’s Choice accredited, but it is not immune to the added competition and price pressures. “Market forces are dictating that prices are low, despite the supply situation,” he says. “But it is at times like these that you have to support your customers and allow them to have the tools they need to compete.
“Having said that, I hope the trend is short-term, because without a dedicated supplier base, supermarkets could face problems in the future. In order for the supply base to thrive, there is a need for two-way support.”
MTEX works alongside its growers and enters into each partnership with a commitment to invest in its partners’ orchards and provide the necessary agronomic assistance to benefit both parties. “We continuously invest in plantations, both in older and new varieties of citrus,” he says. This includes investment programmes for early oranges and different types of navels, as well as input into the development of the soft-citrus offer. Joint ventures with kibbutzes in different growing areas produced results this year with red grapefruit, and work is also ongoing with avocados.
“The industry is at a turning point after a number of years when the future seemed uncertain for growers,” says Hessel. “Nobody would invest if they didn’t believe there is a market for the fruit or a decent return at the end of the process. We have not just concentrated on varieties; there has been a lot of work to upgrade the industry’s infrastructure - bringing packhouses up to scratch, increasing coldstore capacity to cope with additional volume in the next few years, and orchard management techniques.”
As the industry recovers its composure, this Israeli citrus export season has been a rollercoaster ride. Ramie Hessel charts progress to date: “We started with early grapefruit, which arrived in a friendly market. Southern hemisphere fruit finished fairly early and we came onto a relatively empty market. We are earlier than other Mediterranean fruit anyway, so that lasted for four to six weeks and then the Florida hurricanes opened up opportunities for us that have not existed for some time. European importers who had based their whole grapefruit supply programme around Florida were left looking for a reliable source, and many of them came to us.
“Our red and white grapefruit is in no way inferior to Floridian fruit and that has been illustrated by sales - consumers have been buying grapefruit just as they would have if Florida product had been on the shelf. I think it is unlikely that Florida will recover fully by next season, but I also believe that because of our consistent performance this year, we will still be given programmes when Florida does have a bigger presence again.”
Hessel adds that there is now a greater belief in Israel that the country can open up new market niches to supplement its established export business. “This year has proved to us that we can be more open to do things we have not done in the past,” he says. The Journal reported last week that MTEX has secured a sizeable lemon business in the UK this season, due to the shortages of the troubled Spanish campaign, and satsumas provide another example. “We have sent 300 tonnes of satsumas to the UK this year and there is a lot of potential for expansion with this product. At the beginning of our season particularly, the flavour of our satsumas is very good when compared with alternative sources. The Israeli market prefers larger sizes, so developing an export market for the smaller and medium fruit is extremely good for the growers.”
While the satsuma job this year was an unexpected bonus - albeit one that MTEX expects to build on - the easy peeler campaign has “not been easy at all”, says Hessel. “There was a huge early crop throughout the Mediterranean Basin and consequently the market was flooded. It all arrived at the same time and that affected prices. We started with some very good quality Suntina and minneola, and our programmes were firm so we sold practically all the fruit, but because of the saturation, we had to follow the market prices and returns were not what we would have hoped for.
“Mor and Or, however, have arrived with the market in a completely different situation, due to problems in Spain and Morocco. These varieties should benefit even more than normal from their outstanding attributes and growers will hopefully pick up some late-season revenue.”
The volume of both varieties is growing exponentially each year, as first plantings continue to mature. There will be more than 100 per cent more Or and Mor available in 2005, as the combined volume reaches between 8,000t and 10,000t. “In four years, we expect to have 20,000t,” says Hessel. “There simply isn’t enough volume to meet demand and we are turning away customers. The fruit is popular across Europe and elsewhere, not only in the UK. We could supply half of the volume of the crop to one supermarket, but our stance is that we want as many outlets as possible to have some volume, so the value of the varieties becomes clear. Both varieties are exceptional and whatever the volume, we believe there will be a market out there. When buyers have the choice between Fortuna and Or, for instance, they will go for Or every time.”
The other great hope for the end of the season is Shamouti, which having built an impressive presence as an easy-peeling orange on the UK shelves, has endured a period in the doldrums. Like the Israeli industry, Shamouti is ready to re-emerge, stronger for the experience. New plantations are beginning to bear fruit - a result of Israeli growers showing their confidence in the variety during a difficult period. However, heavy rains and wind in late January and early February has reduced the packout prospects from 80 per cent class one to as low as 50 per cent.
The crop volume is still 25 to 30 per cent higher on the trees though and exports will nevertheless increase to all major markets year-on-year. “We are covering most of the outlets in the UK and Shamouti remains one of the best eating oranges on the market,” says Hessel. “Buyers have sometimes been put off because it is not the best orange in a cosmetic sense, but once people taste the fruit, they recognise that this is a minor problem. While aesthetics are important, we must never forget that people are buying fruit to consume it, not look at it.”
So the Shamouti campaign shows promise and the portents are similar for the Valencia season that follows. “If anything, the potential for Valencia this season is better than Shamouti,” says Hessel. “We have achieved decent returns for Shamouti in Europe, but Valencia will be in an even better position to benefit from the prevailing market situation. We have also established a healthy programme for larger fruit in Scandinavia, which again spreads the options for growers.”
Hessel concludes: “We are back to a situation where none of the major buyers in Europe can afford to ignore Israeli product, or indeed the Jaffa brand. We have had big success with Jaffa-branded products with our customers in the UK in the last two years and remain totally committed to supporting it as a vital point of difference for Israeli fruit.”
PACKED AT ASHQELON
Yehuda Ben David is MTEX’s Ashqelon packhouse manager and has seen his daily packing schedule increase from nine to 11 and a half hours a day due to the high volume citrus and avocado season. He has 40 people working full-time and another 150 temporary staff working around six months of the year. That too will increase in 2005, as the facility packs grapes for the UK market in July and August, spreading the overheads yet further across the year. MTEX packed 700 pallets for the UK last year and hopes to triple that. “We like to have full control of the packing process and two thirds of MTEX grapes are packed here in Ashqelon,” says Ben David. “We pack Thompson Seedless, Sugraone and some black, Red Globe and Crimson. MTEX has invested around £300,000 in a 600m2 extension that will be dedicated to grapes during the season, maintaining the coolchain.”
He is pictured here though with easy-peelers packed for the Italian market in boxes that won top prize at the Worldstar for Packaging awards.
SHAMOUTI SHINES ON
The MTEX packhouse in Netanya has seen its volume throughput pick up again this year and is nearly back to the levels of five years ago, says manager Beni Kritchmann. By the end of March it will be packing 500t of Shamouti in each nine-hour day. It has also seen a sizeable volume of Mandor and Suntina pass through and still has Valencia and finish of the Sunrise grapefruit crop to look forward to. “We have already passed the volume we packed last year,” says Kritchmann. “Five years ago, we packed 3m boxes of fruit, and that dropped consistently to last year, when we were down at around 2.5m boxes. This year we will definitely be approaching 3m boxes again.”
OR AND MOR OFFER GREAT POTENTIAL
Mor and Or are two easy-peel varieties that have caused excitement for growers and buyers alike. But says Hessel, they are not the easiest types to grow. “There are many examples of growers not succeeding with Mor and Or. It requires a high level of agrotechnical knowledge and experience to get it right. MTEX is learning together with its growers and as trees begin to mature we can see that they are both strong varieties and the orchards are maturing rapidly. It is up to our partnership with growers to ensure that we get the maximum out of the fruit as we develop. Growers are achieving between 30-40 tonnes a hectare for export on average - the fruit has on and off years - and that gives them the opportunity to make a living. But until the trees are 10 or 15 years old, we probably won’t know the full potential.
“Both have good skin and have exhibited no progressive defects. With young trees, decaying is more likely, but with Mor and Or, it has been minimal. And with their consistency, they are also performing well during transit and on-shelf,” he says.
The first tentative steps towards producing Or overseas have begun, with a small crop in South Africa, and the Israeli Plant Protection Board granting permission for 300ha to be grown by two Spanish growers under supervision from the PPB. AMC Muñoz has been nominated as the master licensee to police the variety in Spain, to avoid a situation arising such as the confusion of Or with the Afourer variety, which has occurred in the past. “In South Africa to date, yields are behind expectations, and we will have to see how it performs in Spain. We all know that some varieties can behave totally differently in different growing regions,” says Hessel.
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