Agrexco is the standard bearer for Israeli produce in many ways. In business for 50 years, with offices in half-a-dozen countries worldwide, it counts on the UK for an approximate 28 per cent of its export sales. But as md of Agrexco UK, Amos Orr points out, there is not much time to sit on laurels. “Just for once it would be nice,” he jokes.
Agrexco is looking at increased volumes of avocados, dates and pomegranates for export. “Pomegranates are showing phenomenal growth,” says Agrexco’s herb product manager Mike Caddy. Agrexco’s volumes this season will show a six or seven-fold increase on 2003 levels.
“Our growers have 2,000 hectares under production now,” says Orr. “I think one of the keys to its success is the health benefit, but it is still seen as an exotic. If we can get it to cross over into the mainstream successfully, then we could sell three times as much.” Agrexco works with suppliers in South Africa and Peru to secure year-round supply. The different varieties in the Israeli portfolio, including the flagship Wonderful, mean that the company can supply from Israel from August to March, with harvest ending in November.
Agrexco believes that making pomegranates easier to consume will boost sales and is working with an Israeli company that has developed technology to extract the arils from the pulp. This is already being used in fresh-cut mixes in UK supermarkets such as kiwifruit, mango and pomegranate. “Consumption is growing because we are making the product more convenient and easier for people to consume,” says Caddy. “We started working with the machine about three years ago, but it has taken quite a while for the industry to switch onto it.
“Last year Marks & Spencer included our pomegranate in one of its cut-fruit mixes,” says Caddy. “Once one includes it, the product just takes off. But that can be the problem with new products -we can find a new product but it can take time to push and promote it to the market.”
Here the dual concepts of convenience and eating on-the-go are what Caddy believes are really driving the market. “The wider the range of fruit and vegetables you can fit into this category the better,” he says. “It’s about making them simple and easy-to-use and looking for a snack side to a product, for example carrot sticks or apple slices.”
Eitan Zvi is very enthusiastic about the avocado season that is just starting for Agrexco in the UK. Green-skinned Ettinger kicked the campaign off at the beginning of the month, but it will soon be joined by Hass, which should start arriving at the end of November.
“We have new plantations coming on stream which will account for quite a lot of the growth in volume this year, but also we had a good year two years ago and an off year last season,” explains Zvi. “This year we are therefore seeing a better crop on the trees and that, with the combination of new plantings, should mean heavier yields.”
Zvi believes the UK market is growing to meet rising production as market-penetration increases. “There is a lot of potential,” he explains. “Every year more people are trying avocados for the first time.
“We have two big avocado packhouses and a few very large growers,” he says. “We receive programmes and fix prices with our customers and we can offer them stability and a mix of sizes.”
Another line in major expansion for Agrexco this winter is dates. Medjool continues to be the major variety, but this is another power food, like pomegranates, that many in the UK are catching onto. Zvi says: “Whenever we do sampling in shows and exhibitions, a lot of people try it and are surprised by the taste. It is starting to be recognised now as a good, nutritious food and is available from Israel year round. Production is increasing so there will be enough volume available to meet consumer interest for a long time.”
The next highlight on the horizon is the strawberry season and top of the list in terms of innovation this year, is labelling strawberries at source. “It is a big deal,” explains Orr. “It will mean our growers earn more and save our category managers a lot of time.”
By shaving hours off labelling time, Agrexco’s strawberries can also be with customers within 16 hours of loading in Israel. Agrexco airfreights its fruit into the Continent and then trucks it to the UK. Such slick logistics give it a significant advantage over fruit from Egypt, Orr says.
Yuval is the mainstay for Agrexco and exclusive to the firm. “Winter can sometimes be a bit tricky for us in Israel because of the weather,” says Orr, “but we are working on getting consistent supply to cover the main holiday periods -Christmas, New Year and Valentine’s Day - and we are working right across the board with retailers, wholesalers, foodservice and fresh-cut. We’ve had very good growing conditions and everything at this stage looks very promising. We have coldstores added onto the packhouses and aim to save as much time as possible by delivering into customers’ depots directly to enhance product shelf life.”
Agrexco is also enhancing its year-round supply credentials. “Now I would say about 15 per cent of what we do in the UK is international trade, sourcing from outside Israel,” says Caddy. “For example, we bring figs in from Brazil and Turkey to complement the Israeli season, sweet potatoes from the US, mangoes from Peru and Brazil and we handle UK potatoes. Our goal is to have 52-week availability. It is essential to keep our presence for when Israeli product comes into season.”
Israeli herbs are a year-round business for Agrexco and Caddy expects this season to be broadly in line with last in volume terms -some 2,000 tonnes will be sent to the UK.
In contrast to Agrexco, Adafresh has only been up and running for two seasons, but is carving out a niche for itself already. “Our first main challenge was to increase export volume,” explains the company’s marketing manager Ayelet Lantzer. “The second challenge is building and securing the company’s facilities and the improvements have been signing a six-year lease, building a cold store of 450 square metres next door to the head office, and upgrading our communications and software systems.”
Product developments include adding organic herbs to the range, which has boosted volume by 25 per cent as well as five new herb growers since last year. “We have also gone into partnership with a herb farm in the Negev in the south of Israel,” explains Avi Kadan, who founded Adafresh, “The farm will not be using Marshal to prevent thrips, which is a unique factor and will be growing year round.” In volume terms, capsicum production is up from 4,000t to 7,000t and Adafresh will also be growing 1,000t of organic tomatoes and peppers.
Like Agrexco, the UK is also Adafresh’s leading market and it is keen to expand its portfolio and supply calendar with non-Israeli product. “We started production in Ethiopia last month and are working exclusively with a chive farm,” explains Lantzer. “In November they will be EurepGAP accredited. Our technologist and production manager are working closely with the farm and are making regular visits to support them and ensure the product is grown and harvested to the same high standards as our Israeli production. In Ethiopia we plan to work year-round as the consistent climate suits supply, yield and quality.”
Renowned Israeli salads and herb specialist Arava also has innovation to shout about this winter. “Our core lines from Israel are tomatoes, herbs and capsicum,” says David Crossland of Arava Export Growers’ UK office. “But capsicum is developing now in a way tomatoes did a few years ago. Last year we really moved into green pepper for the first time and Romero pepper two years ago. This year we will have organic and conventional Romero and new variations on chilli peppers. The market for peppers is really developing, whereas tomatoes are a bit static.”
But Arava is also casting its net further afield, sourcing pomegranates from Egypt and soon from India too. “This is a brand-new business for us in India and we made the decision to do it as a spin off from Indian herbs,” says Crossland. “We also want to supply Indian okra and ginger. We give the technical and marketing input to our partner out there and gain access to a product from a different part of the world that dovetails with the Israeli supply. For example, basil grown in Israel can suffer from low light levels after January but not in India, so we are offering better availability to our clients.”
The organic side of the business is also growing rapidly for Arava. “This time last year we only had one organic herb client. Now we have three,” says Crossland. “We expect to supply roughly the same volumes of tomatoes as last year, but our predictions for peppers are to increase by 2,500t as both yields and acreage increase. Herbs are also expected to show a 20 per cent rise on last year.”
Winter would not be winter without citrus and Israeli grapefruit has come onto a strong market thanks to a prompt finish from South Africa. Agrexco’s first white and red fruit was on supermarket shelves last week and Orr hopes for a good season lasting maybe even into June. “We can keep the fruit on the trees for a long time and move around from region to region harvesting,” says Orr. “We also have the advantage that there is a strong juicing industry for the white fruit so we can save our very best fruit for export.”
Elsewhere in citrus, Or looks set for a strong season. The clementine starts its campaign in the new year and more product than ever is forecast because of new plantings and the biennial bearing effect.
The largest citrus exporter out of Israel is Mehadrin Tnuport Export (MTEX). The company grows mainly on its own orchards although it also has long-term relationships with a number of growers/producers that have been working with it for many years. MTEX has also been broadening its portfolio in recent years and this now goes beyond citrus to include subtropical fruit, potatoes, avocados, grapes and herbs.
The company is optimistic for the season ahead. “It is going to be a good season,” said a spokesman. “Satsumas started in mid-September and in October we started grapefruit. There is a big shortage in the market with South Africa finishing earlier, so Marsh and Sunrise are making a good start.”
Following on from satsumas, which will run until the end of November, MTEX will bring in Suntina, Minneola and then Or and Mor. The latter are proving extremely exciting for the marketplace. “Or and Mor are excellent soft citrus varieties, they have an exquisite taste and more sugars than all others on the market at the same time so demand is high,” said the spokesman. “We sold [Or] to most of the big retailers last season, some have actually sold it in their premium lines, and could have sold the crop five times over.” As a result, a large proportion of new plantings in Israel are Or or Mor.
Weather conditions have been good in the main for citrus production and MTEX is expecting a return to form in greater volumes on all varieties. The biennial bearing effect, as well as good conditions in the spring and summer, are leading to increased volume on the trees.
Oranges is in general a declining market in the UK, and the position for Israeli growers is further complicated by other Mediterranean Basin suppliers. “There are a lot of new countries entering the fray with large volumes,” says the MTEX spokesman. “It is a very competitive market on oranges but with the high-quality fruit we have and the Jaffa brand on our oranges, we are really strong and can overcome any competition.”
As far as varieties go, MTEX will bring in Navel, Shamouti and Valencia and is planting more Navel as the early variety enjoys a marketing window during a better period for Israeli fruit in terms of market competition.
Another variety that MTEX has high hopes for this year is the red pomelo. “It has an entirely different taste to grapefruit and we think demand will expand this season,” says the spokesman. “Our customers are taking greater volumes this year. Because it is sweeter, I think it should appeal also to a different type of consumer, not just traditional grapefruit consumers.” White pomelo will also start to arrive in the coming weeks and it is MTEX’s belief that UK consumers are beginning to be aware of the quality and taste of the pomelo.
The relationship MTEX enjoys with the Volcani Institute is one that it holds very dear. The research body has developed many new varieties over the years, including Or, and its researchers are in constant contact with MTEX technologists and marketeers developing new varieties that meet UK requirements.
Other lines that have seen great development for MTEX outside its core citrus portfolio are grapes and potatoes. The potato season will gear up in February and run until June and with grapes, which run from May until September, the two products complement the peak of the Israeli citrus season. With potato planting underway, MTEX is putting in considerable volumes of baby potatoes but also supplies organic and maincrop varieties.
MTEX subsidiary Topgro is one of Tesco’s category managers for avocados and MTEX is also looking at moving into the supply of conventional and organic carrots as well as sweet potatoes and herbs from Israel and India.
EdomUK is gearing up for its fourth export season. Established in May 2003 in the Arava region, it has years of experience behind it. Yaron Yarchi and Yinon Horesh, who each hold a 15 per cent share in the company, have several years of experience with Agrexco - including eight years based in the UK market between them. The company’s structure is unique as it is a joint venture between shareholders Yarchi (15 per cent), Horesh (15 per cent) Valley Grown Salads (20 per cent), Glinwell (20 per cent) and a group of 12 growers from the Arava region (30 per cent). Every year 10 per cent of the venture’s dividend goes into education in the Arava region, potentially training the next generation of growers.
“Our target and the most important market is the UK, which more than 50 per cent of our product is shipped to,” says Yinon Horesh. “Last winter we sold 8,500t of conventional peppers, 1,000t of tomatoes along with mini cucumbers to the NHS project, strawberries and organic products.” Through VGS and Glinwell the company supplies Waitrose, Sainsbury’s and Tesco and through Mack and EVS, M&S and Asda.
The company’s emphasis is evolving as input from its UK shareholders guides growers. “We are focusing mainly on growing organic products this season, and will triple our organic pepper output to more than 1,200t,” explains Horesh. “Also, we will focus on tomatoes of all kinds - cherry, large vine etc. - we believe that the future lies in producing as clean a product as possible. We are purely customer and demand led and this is one of the trends VGS and Glinwell see for the future.”
Producing such a “clean” product is what Horesh believes gives EdomUK an advantage over its competitors -Spain, Morocco and latterly, Egypt: “Mostly I believe we can produce a cleaner pepper, in Almeria, for example, production is nearer the sea and there are a lot more insects so they need to spray. We grow in the desert so we don’t have the same problems.”
EdomUK expects to produce 9,000t of conventional capsicum and like all Israeli senders, its tomato focus is purely on speciality lines - in the case of EdomUK this will be some 300-400t of Piccolo and Santa. Although these will all be conventionally grown, EdomUK already has an eye on organic production. “It seems as though organic is one step behind conventional in terms of segmentation, but we are trialling new organic speciality varieties at the moment,” says Horesh.
First arrivals from EdomUK will be peppers, which are expected next week. These will be followed in three weeks by tomatoes.
For all major players, one of the biggest factors in the 2006-07 campaign is the high cost of fuel. “Price pressure in the UK is downwards, while all around us, costs are going up,” says the MTEX spokesman. “On the other hand, this does mean that everyone is being forced to be more efficient. We are certainly working on that and we are expecting much higher volumes of citrus than last year as well as expanding into the newer categories for us such as herbs, carrots and sweet potatoes. But when it comes to citrus, there are not many that can compete with us on reliability and experience.”
Agrexco is investigating more cost-effective ways of heating and potentially capturing solar energy during the day to release as heat over crops at night. “We are working with the Volcani Institute and the Ministry of Agriculture’s extension service has a project looking into the use of different types of structure,” says Caddy.
Arava is also delivering pre-packed and labelled peppers direct into supermarket depots - an initiative introduced two seasons ago. Other costs savings are being made in product packing and packaging. “We have been doing a lot of work to try and reduce costs and maximise pallet utilisation,” explains Crossland. “We are re-jigging some of the boxes and changing the size so that we transport less air and more product. Now we are exporting 10 per cent more per pallet. We really do have to be quite innovative to save money. Costs are going up and returns are static so growers really are stuck in the middle.”
This season the main factors on Edom’s radar are labour and the exchange rate. The Israeli government has recently been cracking down on immigrant labour and Horesh estimates that there is only 60 per cent of the labour pool of last season. Also this season the shekel is 15 per cent stronger against the dollar and six per cent stronger against sterling.
But not all EdomUK’s eggs are in one basket and the company does export elsewhere. “The standards of the UK market are very high and this stands us in good stead on other markets,” explains Horesh. “Although more than 50 per cent of our products go to the UK we also export our larger fruit to the US and Russia is an important market as we can transport by sea from Haifa to the Black Sea much more cheaply than the Spanish sending a truck up from Almeria.”
As for the future, EdomUK believes there will be more mechanisation in Israel, keeping costs down and in response to labour issues. Growers are rationalising to use fewer, larger packhouses and eight of EdomUK’s growers have combined forces in one packhouse - the largest in the Arava region.
“I believe product will have to be cleaner -even conventional salad lines,” says Horesh. “Every year we minimise inputs as we move increasingly to full biological control. We are also trialing punnets made from starch.”
The Israeli sector is generally optimistic about the opportunities that lie ahead in the UK. “There is not only the fruit in schools programmes, but also 5 A DAY and individual product promotion groups are working in a more effective and professional manner than ever before,” says Caddy, summarising the mood of the entire sector. “We are in a business where people are turning more and more towards our products.”
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