Lona exports to 38 markets around the world and with the exception of Japan and the rest of the Far East, Derek Sutton is responsible for all of them.
In the UK, through its relationship with MMUK, the exporter is a Tesco-focused operator, exclusively supplying its citrus category with the full range of products from South Africa. “We have concentrated on Tesco and with MMUK have been able to achieve consistent growth in our UK programmes,” says Sutton.
“We only began exporting to the UK three years ago and took a big step up last year when programmed volumes more than doubled year-on-year. I think it is a reward for our continuous efforts to drive costs out of the chain. We recognise the need to pay our growers as much as we possibly can, while supplying Tesco with the highest quality products through service providers that add value and optimise efficiency.”
Through the Mehadrin Tnuport (MTEX UK) connection, Jaffa-branded South African citrus is also channeled into Tesco. “This provides us with a very good quality control mechanism in the UK. We work very closely with MTEX and the fruit goes through the Turners PPL packhouse for Tesco in the Jaffa line, which is exclusive to Tesco for South Africa product,” says Sutton.
He adds that Lona’s network of customers around the world allow it to give growers outlets for all different sizes and quality levels, which in turn helps to create the efficiencies that drive the UK business. “What we are doing in South Africa is very quality-driven,” he says, “but we have to find ways to make it viable for a grower to provide the best quality fruit. We are working with nature here, and a tree cannot produce perfect class I fruit every time. Lona has outlets that are happy to accept class II fruit - quality is always an issue in every market, but the biggest issue is that you provide the right quality for each particular customer.”
The growth of its business in the UK has been encouraging, but Sutton says there is no intrinsic need to expand for expansion’s sake. “We are very aware that we should resist the temptation to grow too quickly, and we do not want to be all things to all people. I want to be in a position at all times where I am comfortable with my ability to deliver programmes. We exported around three million cartons last year and that might become 3.3m cartons this year. But there will probably come a point where we stabilise; growth has to come organically and it would be a mistake to force it. Our growth in citrus has been proportional across the grapefruit, lemon and hard and soft citrus products ,and with around 60 per cent of our growers wholly dedicated to supplying us, they will grow with us.”
There has been too much jumping around by South African growers in the post-deregulation era, he says, but the stability is returning and Lona’s grower base is becoming well-established. “That of course all helps to facilitate the job of MMUK, as we have production specifically for Tesco, which reduces to a minimum the chance of fruit double counting on arrival,” says Sutton.
“As the global market continues to mature, South Africa in general has more opportunities around the world. I think exporters have realised that there is a limit to the amount of fruit that can be put into each market and Europe will benefit from that. Post-deregulation, every grower picked up a cell phone and called their relatives in the UK, because it was comfortable. We are much further down the line now.”
Sutton believes that the route into the UK market taken by Lona has stood it in good stead. Its roots in the tough Asian market have provided a sound platform from which to deal with the particular issues of the UK system. “I think it has been a good way round for us to evolve,” he says. “Asia has given us a lot of experience with different financial arrangements and a good understanding of what is required to supply retail customers.”
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