Christmas and the New Year period is traditionally a strong one for the South African industry and the 2005/06 season is unlikely to be any different as exporters get to grips with a bumper grape crop.
South Africa’s crop could top the scales at 52m cartons according to recent reports. If this actually happens, it will only be the second time in the country’s history that volumes have hit the 50m carton mark.
The Hex Valley is expected to produce the largest volumes with 17-19m cartons, followed by 14-15.5m cartons in Northern Cape, 13-14m cartons in Berg River and 3-3.5m cartons in Northern Province.
However, as the season progresses, some insiders believe that the large crop is unlikely to be realised. “I think it’s been agreed that this is an optimistic forecast,” says Roger Manning, who is heading up the South African Table Grape Industry’s (SATI) strategy on European communications and promotional efforts.
“To me, that forecast seems a little high,” agrees Wibo van der Ende, commercial director for grape producers Safe.
His company was busy harvesting grapes in Namibia in November and he believes the quality of this season’s fruit is better than the 2004/05 crop.
“I anticipate stable shipments to the UK this season and no major changes,” says van der Ende.
While there may be some disputes over the final grape weigh in, what is clear is that South African exporters have a big job on their hands this season. Finding receptive markets for South African grapes is not too difficult a task but what is challenging is keeping supply and demand in balance.
Leon van Biljon at Dole South Africa notes the early harvesting of fruit this year. “Early areas such as Namibia, Northern Province and the Orange River are earlier, while the Berg River is in line with last season,” he says.
“Therefore, there’ll be a good spread and no bunching up of volumes. We’ll see more even supplies, rather than lots of areas competing at the same time.”
Van Biljon predicts there will be less early competition this season as Brazil, one of South Africa’s major competitors, is expected to divert a lot of its fruit to the US. “Not only will Brazilian volumes be lower, but they’ll also dry up lot quicker
than originally anticipated,” he believes. “There’s also unlikely to be a lot of US red seedless grapes around in December so this means South Africa will be in a more favourable position.”
Van Biljon says that South Africa will be supplying relatively comfortable volumes during week 47 and 48.
While South Africa may be in a better position compared to last season, when drought and lower volumes affected the deal, observers believe it is too soon to start celebrating just yet. “We’re keeping an eye on the market as there has been some talk of UK retailers offering special prices on grapes for consumers before Christmas, which will have a detrimental effect on prices,” said an observer who declined to be named.
Prime is a popular green seedless grape, and represents one of the first varieties to come out of the South African portfolio. Other varieties that will also find favour this season include Thompson Seedless and Flame. In addition, growers have invested in newer varieties in recent years and ones to watch include Ralli, a red seedless grape, and Midnight Beauty, a Sun World International proprietary variety.
“I anticipate it’s going to be a good season, so far so good,” van Biljon said in mid-November. “We have good quality grapes, they look nice and we’ve had lots of rain.”
Capespan received its first sample of airfreighted, new season South African grapes on November 7. “The quality was very good,” said Martin Dunnett, Capespan’s commercial director, adding that the first seafreighted load was due to arrive in week 47.
Similarly to van Biljon, Dunnett believes that South Africa will get off to a good start this year, as there is a dearth of good quality fruit available. “The UK will be a receptive market and it’s crucial that we build up good momentum in the run up to the Christmas and New Year period,” he says.
Capespan takes its early volumes from Namibia and Northern Province, and switches to Orange River supplies in week 48.
As with other producers, Capespan reckons it will have more grapes to market this year. “In terms of production, the 2004/05 season was an off season due to drought and we’re now back on line for a good crop,” Dunnett says.
However, he advises caution: “We’re conscious of not overshipping to a market which can’t absorb the supplies.”
Dunnett estimates that the UK can probably absorb around 4-5m cartons. This market is a natural one for South Africa and has grown in large part in response to retail demand, believes Capespan.
“Grapes have become a major area of growth for UK retailers, and South Africa’s prominence in January/February helps the retail recovery period after Christmas,” Dunnett says. “Grapes are given a lot of shelf space and they are often a strong choice as consumers detox after the Christmas excesses.”
According to Dunnett, while the UK market is still tipped towards white seedless grapes, its red counterparts are starting to find favour. Historically, red grapes have tended to be seeded grapes and have found more receptive customers in Continental Europe, the US and Far East.
However, red grapes are performing better in the UK as variety and availability have improved in recent years. Consumers are also more aware that red grapes no longer necessarily means seeded fruit.
Dunnett estimates that red grapes account for roughly 25-30 per cent of exports. The best sellers are Flame, Crimson and Sun Red - the latter variety filling the gap between Flame and Crimson.
“Flame has very good eating quality but it has a short shelf life,” Dunnett explains. “On the other hand, Crimson has a longer shelf life and offers good quality and sizes.”
According to Capespan, Crimson is still a relatively new variety for South Africa and growers began planting it in earnest about three to four years ago.
It has been nine years since deregulation, and Capespan continues to adapt to meet numerous demands and concerns.
“Capespan continues to change where it has to in order to meet customer requirements,” Dunnett says. “We’re very customer focused and with our technical expertise, are looking at new initiatives.”
The company will increase its use of Kappa QuaMa packaging this season. This packaging improves the freshness of grapes by reducing oxygen levels within the carton and increasing carbon dioxide. This ensures that grapes can be exported without the use of sulphur pads.
Furthermore, Capespan is keen to emphasise its commitment to Fairtrade and black empowerment. “We’re working with the South African government to ensure Capespan is at the forefront of innovations,” Dunnett says.
The producer has also entered into a partnership with Fyffes and an empowerment shareholder to grow grapes in the Orange River area.
Meanwhile, although fluctuating exchange rates have caused headaches, Dunnett notes that the rand is in a better position compared to recent years, which should be welcomed by the industry.
“Those growers who haven’t over-extended themselves and kept in shape financially will be the ones most able to take advantage of the good prospects available,” he believes.
Producers continue to move forward and Karsten Farms is one firm that is keen to step up its European operations. The group recently opened a new UK and European import and distribution company, Karsten UK Ltd, in Chatteris, Cambridgeshire.
While exporters are busy handling grapes for the Christmas and New Year period, they are kept busy until well into the spring months.
According to Dole, Continental Europe offers attractive returns during the post Christmas period. Furthermore, other markets that South Africa is also keen to develop include Asia - which generally prefers seeded varieties - and the US.
SATI moves forward
IT has BEEN a busy few months for the South African Table Grape Industry (SATI), which recently appointed Roger Manning to head up its European promotions.
“I’m very pleased to be joining SATI,” says Manning. “In many ways the South African fruit industry has gone through tremendous internal challenges and when that takes place, often focus can be lost.”
“However, a realistic amount of time has been invested into the infrastructure of SATI that allows it to go forward, increase awareness for the quality and origin of grapes and start to get behind promoting its grapes in export markets.”
While the UK is South Africa’s most important market, Manning believes that the industry needs to see new innovations and promotions to assist in adding increased interest for its supermarket customers.
He also notes that the South African industry needs to seek out market opportunities in a number of European markets. Eastern Europe in particular offers scope, and Manning believes that Russia, the Ukraine, Romania and Poland are markets that are worth pursuing.
“It’s also important to focus on those south European markets which appreciate the quality and characteristics of excellent grapes - markets such as Spain, Portugal and Italy,” he says.
SATI is a joint initiative involving all sectors in an attempt to centralise and co-ordinate information gathering, communication and promotions.
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