StePac has been supplying its packaging into the fresh produce industry for 11 years and every 12 months, the company undergoes the same thorough process of self-analysis. “Every year, at the end of our financial year, we bring everyone together from our offices around the world for a budget meeting - to review and evaluate customer satisfaction surveys and the past year’s performance and plan the next 12 months,” says StePac president Israel Ben-Tzur. “A number of our global team now attend Fruit Logistica, so it makes sense to continue.
“We do it because, firstly, as we do our sales projections, it is crucial to discuss the pros and cons of whatever you have done and ensure that you are staying in touch with the market - that way you are not making blue-sky decisions about the way you move forward.”
On the final day of the meeting, Ben-Tzur brings in external participants to add to the mix: “We want to make sure that the people in our offices who do not have direct access to our customers are given that opportunity,” he says. “We have a set of clear objectives for the coming year - but first we must understand the external forces with which we operate. There were only a few customers here with us (see box on opposite page), but they represented the voices of many other companies besides. But the truth over the last few years is that if they are successful we are successful and mostly, we have been successful.
“Meeting and hearing them express their views gives StePac’s team a better appreciation for what our sales staff are dealing with in the field. I also believe that, if you are going to move forward as a company, you need to pull all of your people along with you. The owners of successful businesses let everyone know their opinions, recognising that this helps the staff do their job. I also think that interaction with customers is always beneficial. The customers we have here this week have no axe to grind and everything they say is truly relevant.”
While StePac is performing well in financial terms - having registered an increase of more than 100 per cent in turnover in the last two years - Ben-Tzur says there is always room for improvement, and the clients are a good yardstick.
“We do well in Central and South America, we are strong in Turkey and we have moved on a lot in penetrating the US market. We recently agreed to open a new joint venture office in southern Russia and we have a few interesting activities happening there already. In the last 12 months, we have consolidated our melon programmes and increased our presence in the banana and cherry categories. We have also expanded our vegetable programme, which is now significant in size. We want to build on that, of course. Where we are strong, we intend to get better, bigger and stronger, and where we are mediocre, we want to improve considerably.
“It has been a good year and the signs are that we are in a period of continuous growth. We don’t get many complaints,” he says. “But we do not think what we have is perfect. We have to assume that some customers will not be as happy with us as others - otherwise why would they be using our competitors’ products? A lot of water has run through the Jordan Valley since we started the business and while we have spread our wings, there is a lot of sophisticated and intelligent competition out there. The industry is getting smarter every day.”
“The trade does not know a lot of what we are doing, but it certainly isn’t the trade’s fault. We have a big job to communicate and it is fair to say that some of the things we are doing, we might not all know ourselves - so it is both an internal and external job.” The meeting last week, he adds, is part of the process of informing the StePac team of the successes and failures of their efforts and to the impact they are having on the marketplace and their customers.
Director of the firm’s R&D effort, Dr Gary Ward and the head of the Tefen laboratory Dr Yola Saks both had their opportunity to assess the direction of their work. With a series of innovative products to come off the production line in the next few months, the team’s understanding of the market into which they will emerge is vital.
StePac is owned by British company DS Smith plc and the relationship has been a major factor in StePac’s expansion. “They are very supportive of what we are doing and our goals,” says Ben-Tzur. They understand our philosophy and really get behind it. Without their support, we could not have got to where we are today. We have monthly reviews and quarterly meetings to ensure everything is on track, but mostly they allow us to live and do what needs to be done.
“Our philosophy is to maximise the performance of our technology through the development of strategic partnerships and support technologies - this is an area where we have made a lot of progress.”
Vertical integration is the name of the game and the seminar gave credence to Ben-Tzur’s stated policy. Presentations given by the Volcani Institute, the leading Israeli agricultural research centre, Hishtil Nurseries, a growing plant propagation venture with five nurseries in Israel, Zeraim Gedera, the well-reputed and like-minded Israeli seed breeder, and Organitech, a revolutionary hydroponics system, illustrated the attention to detail being placed at these links in the supply chain.
Dr Nehemia Aharoni, of the post-harvest department of the Volcani Institute delivered a presentation that illustrated the clear shelf-life and performance benefits of using Xtend® technology with various products, with statistics and data taken from research work carried out by his team. He hailed the “unique” performance of the packaging in tests against many other packaging media.
Gad Elsar of Hishtil Nurseries said that his firm plays a “small but very important part” in the growing process, and detailed the rapid progress it is making in international markets, often in conjunction with StePac. Both Zeraim Gedera, following its vertically integrated marketing principles, and Organitech, which already has projects up and running in Russia and with Martinavarro, in Murcia, are also working with StePac to promote an integrated view of the supply chain, both domestically and abroad.
The aim being to ensure that right from the beginning of the production process - and at every stage along the line - StePac is involved in the development of products whose performance can be optimised by its Xtend® technology once packaging comes into play.
StePac is enjoying good growth, but still recognises the importance of continuing to place the building blocks for future development.
BRAZILIAN BACKING FROM BARCELO
Luiz Roberto Barcelo, co-founder of Brazilian melon exporter Agricola Famosa with Carlo Porro, says that StePac packaging has been instrumental in the rapid expansion of his company’s melon export volume: “We simply could not have achieved what we have done in the last few years without StePac’s packaging and expertise. It has transformed our business and enabled us to look at Galia and Cantaloupe melons in an entirely different light,” he says. “One of the main things the Xtend® technology has allowed us to do is include new varieties in our portfolio - we also have well over 200 varieties on trial.
Seven seasons ago, the company exported 4,000 pallets of melons and watermelons. It has enjoyed an average 40 per cent annual growth since then and this season, which is coming to an end, Barcelo will export around 70,000 pallets of melons, for a turnover of around US$35 million. Some 1,800 hectares are planted on his own Intermelon farm, while Agricola Famosa also sources from another 1,000ha of melons from 14 small and medium growers.
The company employs more than 1,500 people and makes a huge social contribution to the Rio Grande do Norte and Ceara regions of north-east Brazil.
The decision to use a packaging medium should not be based on cost alone, says Barcelo: “If you are reducing waste by 30 per cent you are repaying your investment very quickly. It is not a difficult decision,” he says. Agricola Famosa, he adds, is not afraid to innovate, having introduced thermal blankets into its melon plantation and being in the initial stages of a biological control project.
CIRULI POINTS TO FANTASTIC POTENTIAL
Ciruli Brothers’ is a third generation family-owned US importer, based in Nogales, Arizona, which built its reputation around specialisation in Mexican product, and particularly mangoes.
It has spread its wings to other Central and South American sources and, as well as mangoes, its product range also takes in a wide variety of fruits and vegetables.
Chuck Ciruli, chief executive officer, is the second generation of the family, whose two sons now handle its day-to-day running of the business. He says StePac packaging has been integral to the success of at least one of its non-Mexican ventures. “For two years, we were the only company bringing Argentinian cherries into the US market, due to the work we did with Xtend® packaging technology,” he says. “The market was not great, but we were able to hold the product back for 60 days, with no deterioration in quality at all.
“StePac’s products have fantastic potential. The one problem they face at this point is making growers believe in the capabilities of the product. Well, I can tell them, it works. We have been carrying out more trials and we’ll be back with more products.”
GOING GREAT GUNS IN GUATEMALA
Cuatro Pinos is the largest exporter of vegetables out of Guatemala. Set up 28 years ago by Tulio Garcia, executive director, the co-operative is headquartered around 30 kilometres from Guatemala City, owned by 560 small farmers, and sells product from more than 4,000 small outgrowers.
Garcia has opened up the US market with direct deliveries to retailers, and is also working successfully with several partners in the UK. Cuatro Pinos will sell around 24 million pounds of vegetables this season, around half of which will be French beans.
Like Agricola Famosa in Brazil, Garcia’s company makes a huge contribution to the social well-being of its 13,000-plus employees and also sponsors many through scholarships, some with the help of StePac.
With that background, any investment decision is a big one. Garcia believes that packaging, and in particular Xtend®, has played a significant role in the company’s rise to prominence and its ability to supply consistently high-quality vegetables to export markets.
“Packaging is a very important differentiation tool for our products,” he says. “And what it comes down to basically is a cost:benefit analysis. The initial cost may appear expensive, but if you achieve better yields and a more consistent performance, then cost ceases to be an issue.
“[Investing money in packaging] could be perceived as a risk, but everything in business investment has an element of risk attached to it. Using the right packaging can make a big difference.”
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