South Africa is a prominent supplier of a wide range of fruit to the UK market, enjoying investment in new varieties and improved production methods, a move into innovative marketing and the benefit of more than 100 years of trade with the UK.
The country’s fresh produce industry has come a long way since deregulation left the sector fragmented and in disarray back in 1997 and since then, forward-thinking companies have continued to improve their offer and links with the global market.
Alongside this, there is a strong emphasis on social responsibility, with building communities high on the agenda and the likes of nurseries and schools on site for the families of workers.
This year, the South African fruit industry has come together to create a £2 million campaign to boost its fruit offer in the UK, concentrating on the five main categories of apples and pears, plums, peaches and nectarines, table grapes and grapefruit. The initiative, under the South Africa: Alive with Possibility brand, will focus on promoting the country as the preferred source of fruit and as a top tourist destination ahead of the football World Cup in June, when the beautiful game is expected to pull in up to 450,000 visitors from across the world.
Anton Rabe, executive director of Hortgro Services, has watched the industry evolve over a number of years and is keen to see the promotional campaign take the sector another step forward. “As a country, we are trying to differentiate ourselves in the marketplace,” he says. “We have seen a lot of consolidation in the industry, with bigger production units and greater integration in the production chain. Growers have diversified into the marketing chain, while some of the traditional exporters such as Capespan have purchased farms and have their own production now.
“Fresh produce is a heavily capital-, labour- and management-intensive industry, but the South African sector provides work for 100,000 people.
“However, we are not making the grade on exports and that is one of the reasons we have started this development campaign, to create growth, expand the industry and create more jobs.
“As an industry, we have three core strategies,” he continues. “The government worked with the agricultural community to develop a plan around five or six years ago, but the political and business imperatives must be in balance. We have focused on equal access, competitiveness and profitability, as well as sustainability. This is our road map, and the first two strategies must not come at the expense of the other.
“There are a lot of issues that need to be put to bed. It probably won’t happen in my lifetime, but we have to work towards it.”
The UK is one of the top markets for South African fruit growers and exporters, with 55 per cent of apple exports sent to the UK and Europe, along with 84 per cent of pear sendings. At the same time, the UK alone brings in 63 per cent of nectarine exports, 37 per cent of peaches, 31 per cent of plums and 26 per cent of peaches.
The promotional venture will focus on fruit arrivals throughout the South African season, with tailored promotions at the big four retailers - Tesco, Asda, Sainsbury’s and Morrisons - as well as The Co-operative, Marks & Spencer, Waitrose, Budgens and Costco.
The campaign will be backed by Jasmine Harman, who presents Channel 4 show A Place in the Sun, together with celebrity chef Sophie Michell, from Channel 4’s Cook Yourself Thin and UKTV Food’s Market Kitchen.
Here, FPJ met growers and exporters from the most prominent fruit categories in South Africa to find out what is next for each sector and how relations are expected to shape up with the UK.
Top-fruit tales
South African apples are grown mainly in the Elgin Valley, nestled between Hottentots Holland and Groenland mountain ranges. Golden Delicious, Granny Smith, Royal Gala, Braeburn, Cripps Pink and Fuji make up some of the most popular varieties, which come on stream from February to October.
The pear offer is ready in January, with emphasis on Packham’s Triumph, Williams, Forelle and more recently, Abate Fetel.
The Dutoit Group is one of the biggest top-fruit producers in South Africa, based in the Ceres region. The firm was established more than 100 years ago and started out on its first farm, Kromfontein. The estate now stretches for 30,000 hectares, with 4,300ha of irrigated land and 8,800 staff at the peak of the season.
Apple production is based on 1,900ha, pears on 650ha, nectarines on 250ha and plums on 60ha, as well as peaches and plums on 20ha each.
Gysbert du Toit, marketing manager for fruit at the Dutoit Group, insists that the firm has remained mostly programme-orientated but with a 30 per cent margin for speculative trading, in order to make the most of trading opportunities. At the same time, he says the focus has to be on newer top-fruit varieties as well as traditional staples, in order to boost exports.
“We grow Honeycrunch, which we have sampled in the UK this season,” says du Toit. “Jazz is a good option for our growing conditions. On the other hand, Golden Delicious will always be an important part of what we do. There are a lot of exciting varieties out there, but you need to make up your mind on which one or two you want to follow because it’s important to get decent volumes as soon as possible.
“The UK is an important market for us and it will be for years to come,” he continues. “However, in the past, the UK was able to pay a good price for their demands. But in the last 12 months or so, the UK has become less attractive to most producers because the market got very near to the point where there was an imbalance between what they want and what they are willing to pay. The market is tougher than it used to be.”
The Melsetter Group is a family-owned business that grows apples and pears on 520ha, with its head office on Graymead Farm, 100km east of Cape Town. Granny Smith, Golden Delcious and Royal Gala make up the main apple mix, while Packham’s Triumph and Forelle represent the majority of pear production. A selection of stonefruit is grown only for the domestic market, while blueberry and raspberry production is partnered with Winterwood Farms in the UK.
The fruit is marketed along with volumes from other growers through the marketing arm, Fruitways, which exports six million 12.5kg cartons of fruit a year, with 40 per cent earmarked for the UK.
Stephen Rabe, general manager of production at the Melsetter Group, says the firm has enjoyed two strong production seasons, but he maintains that the strength of the rand is the main concern for growers and exporters. “We look after the UK first,” he says. “We have to be as efficient as possible and the Fruitways model has been as direct as possible. However, UK supermarkets are looking at being more direct with growers and hopefully, that will be reflected in returns to growers.”
Not too far from the Melsetter Group’s Graymead Farm, Chiltern Farm is a smaller family-run business that focuses on the production of apples and pears, with some blueberries and persimmon on a total of 200ha. Golden Delicious and Granny Smith make up the apple mainstays, along with Royal Gala, Braeburn, Pink Lady and Sundowner, with about 30 per cent exported to the UK each year.
Justin Mudge, packhouse manager at Chiltern Farm, maintains that the last 12 months have presented a tough patch for growers, but he insists that the slowdown has not stopped investment. “We have noticed the drop in prices and this was exacerbated by the strength of the rand,” he tells FPJ. “For us, a big problem is sending fruit that does not reach the shelves, which happened a few times last year in particular. If sales are slow and the fruit doesn’t move, the pressures drop and we risk losing the sale altogether.
“We planted the first apple trees that we had put in the ground for 12 years in 2008, going for tried-and-tested varieties such as Royal Gala and Granny Smith. This year, we will follow up by planting Pink Lady and Fuji.”
The Oak Valley Estate is another family business in the Elgin Valley, which is a fruit farm first, as well as a flower business and a winery. The firm exports 40 per cent of its fruit offer, with the UK as a key market.
Anthony Rawbone-Viljoen, managing director of the Oak Valley Estate, is changing the variety mix of apples in a bid to secure the long-term future of the business. “We produced more fruit than ever last year,” he says. “This is the epicentre of the business. Our apple production used to be 65 per cent Granny Smith, but we have spent a lot of time and money developing our orchards and we have changed that dramatically. We have planted Royal Gala and Braeburn on a large scale, so Granny Smith now represents about 20 per cent of what we produce. Pink Lady is a big one for us, we back Sundowner and we have Fuji in the ground.”
Stonefruit steady
Plums make up the most prominent part of the South African stonefruit offer, coming into their own in January, after peaches and nectarines come on stream in November.
The plum job kicked off the Beautiful Country, Beautiful Fruit pilot last year, which focused on a single category ahead of the introduction of the wider-scale campaign this year.
However, the plum industry is in an interesting position, as more than half of its orchards are less than 10 years old, following a period of grubbing and replanting after deregulation in 1998. Many of the sought-after varieties are in place and volumes are still on the up.
The category is focused on innovation and the South African industry is developing its own varieties in an attempt to improve their position on the world market. Culdevco (Pty) Ltd markets and commercialises varieties bred by the Agricultural Research Council, with a strong portfolio for plums.
One of the newer varieties to hit the market is African Rose, which was released last year and arrived in the UK just before Christmas. Leon Von Mollendorff, manager of Culdevco, says this has become the earliest variety that ships well. “African Rose is fully red when harvested and it has the advantage that it is self fertile, so growers don’t need another variety to pollinate it,” he says. “The fruit ripens five to seven days before Pioneer and can be stored well for six weeks.
“South Africa cannot only export fruit, we develop our own varieties and there are some unique varieties coming through.”
African Rose is just one of the stonefruit varieties on the books, with white-flesh and non-melting peaches and nectarines still being evaluated, alongside apricots for weeks one and two, which has never been achieved before in South Africa.
But back on the ground, growers and exporters are focusing on the entire stonefruit offer as an opportunity for South African trade and a way to increase their range of lines.
The Dutoit Group, for example, has moved into stonefruit in order to diversify its portfolio, but not detract from its flagship top-fruit offer. “We have been acquiring stonefruit land and we will have a whole range of white- and yellow-flesh nectarines, plums, cherries and a few peaches as well,” says du Toit. “Stonefruit is complementing our top-fruit business because it expands what we are working on. The next step is that we are looking at joint venture production in the northern hemisphere and we are considering Egypt and Hungary, among other countries.
“My perspective on the South African stonefruit industry is that up until recently, it was very fragmented and it was a stop-start situation,” he continues. “Our challenge and opportunity in the market is that I think we can compete with Chile, if we can get the right quality and quantities.”
Franschoek Fruit Packers focuses on stonefruit, with plums representing the biggest business on 500ha, ahead of peaches and nectarines on 200ha. The firm is busy wrapping up the season and sending late varieties, with around 10 per cent of the plum offer destined for the UK. Director Jan Hoon says the season went well, but he hopes the Beautiful Country, Beautiful Fruit campaign will help build sales in the long term. “Our fruit was smaller than it was last year, but our volumes have been in line with the previous season,” he says. “As an industry, volumes have been 10 per cent lower this year. Prices have been better than they were last year and returns from the UK seem to have been more or less the same.”
Grape growth
South African grape production is concentrated in the Western and Northern Capes and the Mpumalanga region, with a focus on Prime, Sugraone and Thompson Seedless for white varieties, Flame, Ralli and Crimson for the red offer and Midnight Beauty and Autumn Royal for the black seedless offer.
The season runs from October to the beginning of May and on average, 55,000 tonnes a year are sent to the UK.
South African Table Grape Industry (SATI) chairman Johan Van Niekerk tells FPJ that this season has seen higher volumes and that sales have been strong as a result of the campaign. “Prices were high pre-Christmas and have been acceptable since then,” he says. “South Africa has ideal weather conditions for grape production, with good soil, a hot, dry climate, great water supply and world-class farmers. As an industry, we are always improving our quality to outperform southern hemisphere competitors and be the preferred country of origin. We look forward to steady growth and a weakening currency.
“Hopefully, the World Cup will make South Africa better known, so that the effect can be long term and not only a one-season wonder.”
GRAPEFRUIT CATEGORY AIMS TO BUILD ON UK LOYALTY
Justin Chadwick from the Citrus Growers’ Association of South Africa on what joining the Beautiful Country, Beautiful Fruit initiative will mean for the country’s grapefruit industry.
What is the best way forward for the South African grapefruit industry?
Grapefruit is a product that has experienced a sales decline in the UK over the past five to 10 years. Every year, there is less sold and prices tend to either drift sideways or even decrease. This is not sustainable. We need to stimulate demand for grapefruit by getting consumers to recognise what an awesome product it is. Consumers who start their day with a grapefruit are very loyal to the category - we need more consumers to share this passion.
Grapefruit has changed over the years; five to 10 years ago it was a very sour, sharp-tasting fruit. The varieties grown now are sweet and incredibly juicy. I worry that too many people recall the grapefruit of old - we need them to taste the grapefruit of today and join those who are passionate about their grapefruit start to the day.
How is the South African grapefruit industry supporting the Beautiful Country, Beautiful Fruit campaign?
Growers are contributing a percentage of their returns from grapefruit exports to the campaign in the form of a levy on all grapefruit exported. Grower representatives attended the launch event and will be in London in March to attend meetings with retailers and importers.
Where is South African citrus production based?
The main citrus-growing regions are in the north of the country and the four biggest production areas are Nkwalini in Kwazulu Natal and Onderberg in Mpumalanga, as well as Hoedspruit and Letsitele in the Limpopo Province.
When does the grapefruit season begin and end and how much is exported to the UK?
Exports start in bigger volumes at the end of May and tail off in mid-September. The total grapefruit exports reached 12.4 million 15kg cartons in 2008, with Star Ruby making up the biggest share at 8.2m 15kg cartons and Marsh in second place, making up 3.3m 15kg cartons. That year, exports to the UK represented eight per cent of total sendings.
What makes South Africa suited to the production of grapefruit?
Grapefruit is a sub-tropical citrus and therefore prefers a hotter and humid environment. The northern areas have the ideal sub-tropical conditions for this product.
What are the main challenges for South African producers?
The challenges are to ensure consistent quality and volume, higher input costs, static prices in the market and very volatile returns and private retailer standards and requirements,as well as logistics and the cost of transport.
Are you expecting the World Cup to have an effect on sales of South African products in the UK?
Hopefully, there will be a greater awareness of where South Africa is, of the infrastructure in the country, of the competence of the industry to ensure food safety and consumer assurance in terms of ethical production and of the beauty of the country and its awesome climate, which allows us to produce such fantastic fruit for such a long period of the year.
CAPESPAN BACKS BEAUTIFUL COUNTRY, BEAUTIFUL FRUIT PROJECT
Capespan is one of the most prominent exporters out of South Africa and has strong links with the UK. John Banks, account manager, tells FPJ how the exporter will back promotional efforts and his predictions for the South African fruit industry as a whole.
What makes South Africa suited to the production of fruit?
The mix of a Mediterranean climate and the many mountain ranges provide some near ideal microclimates, as well as guaranteeing a good water supply. The soil quality is fertile even in relatively arid areas. There is fabulous knowledge and expertise built up over many years, which makes most of the farms, packing facilities and shipping world class.
Where is Capespan’s production based and for which lines?
Capespan’s production is based across the different production areas, ranging from apples and grapes in the Western Cape to citrus in the Northern Province. Our principal lines are apples, pears, grapes and citrus.
What are the challenges for South African producers?
Some of the main challenges are competition from South American producers and other emerging countries like India and Egypt, the redistribution of wealth and elevating poverty, the preservation of natural resources, increased energy and production costs (50 per cent increases), climate change and changes in traditional seasonal patterns and increasing inflation rate (six per cent).
How is Capespan supporting the Beautiful Country, Beautiful Fruit campaign?
Capespan, in South Africa, is administrating the statuary funds of the Capespan growers from where this campaign is funded. We also contributed towards the fund in the case of grapes and we are playing our part on the packing front by including promotional materials as required.
What is the best way forward for the South African fruit industry?
To continue their tradition of industry leadership for the very best quality, packaging and transport innovations, leading the way in research and development into new cultivars, post-harvest technology and sustainable development.
Are you expecting the World Cup to have an effect on sales of South African products in the UK?
Yes, both at the time and subsequently, as we are confident that travellers will return with fond and strong associations of what is truly a remarkable country.
