Plums make up the most prominent part of the South African stonefruit offer, 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 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. Now, many of the sought-after varieties are in place and volumes are still on the up. At the same time, growers and exporters can draw on their longstanding relationship with the UK and other key markets to make the best trading decisions.
The Deciduous Fruit Producers’ Trust (DFPT) has brought together the plum industry to build on these positives and launch a new awareness initiative, with government support.
But this comes at a time when the international fresh produce market is becoming increasingly unpredictable, with mounting production costs, fluctuating exchange rates and increased competition from newer sources coming together to put pressure on the industry to make the best of what it can offer.
The new initiative, under the South Africa: Alive with Possibility brand, will build on record plum exports last year and showcase the country ahead of the 2010 World Cup, when the beautiful game will pull in up to 450,000 visitors. The aim is to promote the country as the preferred source of plums and as a top tourist destination. The £300,000 equal joint venture will focus on plum arrivals from January to March, with tailored promotions at the big four retailers - Tesco, Asda, Sainsbury’s and Morrisons - together with tourist offers. This will be backed by Jasmine Harman, who presents Channel 4 show A Place in the Sun and is the face of the campaign. The UK is not the only target market, with a €200,000 (£182,000) campaign mounted in Germany and a separate initiative launched in South Africa, to boost domestic consumption.
The project has been in the making for two years and will be reviewed at the end of March, when it is hoped that the same format can be rolled out to other popular South African lines, including top fruit, grapes and citrus.
But for now, the focus will remain firmly on the plum job. This year, the overall export volume is expected to reach 8.5 million cartons this year, not far off the record sendings of 9m cartons last season. Some 30 per cent of the export volume will be earmarked for the UK.
South Africa is home to 4,017 hectares of plum production, split between 572 growers who focus on stonefruit and 486 growers who produce both stonefruit and top fruit.
Laetitia and Songold make up the highest volumes at the peak of the season, but the majority of growers produce a wide range of varieties, including experimental lines. Pioneer and Sapphire have become increasingly popular in the early window, Fortune and Angelino have come into their own in the later period, while Sun Kiss, Southern Belle, Flavor King and Lady Red are just some of the other varieties on offer.
Nearly 70 per cent of all South African plums are grown in the Western Cape, where a spread of micro-climates mean that pockets of production come on stream at different times, to build on the shoulders of the season and maximise the export window.
The category has come a long way in the last 10 years and this is set to continue, with the major players keen to build their businesses and expand their presence in markets by adopting new approaches and fresh ways of thinking.
The Beautiful Country, Beautiful Fruit campaign was born out of a novel approach to the South African fresh produce industry as a stand-alone business, with all the factors that might affect any company taken into consideration to inform business development. Stefan Conradie, top-fruit and stonefruit manager at the DFPT, has pioneered this concept. He is the driving force behind the innovative marketing campaign and is at the helm of the Joint Marketing Forum, aimed at bringing together growers and exporters every month. “I look at South Africa as one big company,” he explains. “I look at where our strengths and weaknesses are, and how our relationship with both customers and consumers can get better. We have very good fruit, but we have been quite disorganised about it - if we can get co-ordinated, there are some very great opportunities for us. It looks as if, at last, everyone is starting to talk the same language.
“If we can get our strategy right, plums could represent a big opportunity for South Africa to penetrate more markets in a major way,” he insists. “The industry is very healthy because 55 per cent of our plantings are under 10 years old so, in a way, it is almost like a brand-new industry. The trees are in an upward phase in terms of production, so we have to start thinking about how we will absorb the higher volumes that will come onto the market in the next few years.”
The industry is now working together to try to make the most of the opportunities out there and secure the future growth of the plum category.
“I am employed by the producers to bring them closer to the marketplace,” Conradie continues. “Historically, growers and exporters have been seen as two separate entities, so the producers decided to create a job in the middle to help make the system more transparent. I want to make sure that they can understand each other better, so that producers see how marketing works and recognise that exporters act as their pipeline to the market. This used to be a bit of a grey area.”
Some 30-40 key players representing 85-90 per cent of the total export volumes attend the forum meetings every month, where they are informed of the latest market figures and compare their performance year on year.
“The days when every South African exporter had his own idea about what is going on in the market are gone,” Conradie explains. “Now, we have to bring everyone to the table and give them data that we have collected from other southern hemisphere sources, so that we can show them what is going on in the marketplace and compare it to the same time last year.”
The South African fresh produce trade has not always been the easiest game to play, especially after deregulation left the South African industry fragmented and in a difficult position, with a sudden stream of suppliers vying for export programmes. “We have had some tough years, but we have picked up our heads and everything is going well,” says Conradie. “We are now operating in a calmer environment - we have more market information and orchards that were under-performing have been grubbed. The next thing we need to do is to get producers to be more confident and invest to build the industry.
“South African growers and exporters did exceptionally well last year and we hope to have a similar outcome this year.
“There are still major challenges in terms of the messages we send out to consumers, but we need to have the volumes there to give supermarkets continuity of supply, so that it runs week on week.
“We have to get producers to understand that supermarkets are not the enemy. There will always be competition, but the multiples get consumers under one roof, which means that we are in the position to communicate with them. We cannot rely on the retailers to promote our product; they have more than 25,000 products to sell, after all. We know we have to do it ourselves and this is what we are trying to achieve with the campaign…
“We are trying to create a win-win situation. The South African government understands the value of tourism, but we want to show them that fruit can add something to South Africa as a tourist destination.”
A number of challenges are still facing growers and exporters in South Africa, very much in line with the rest of the fresh produce trade worldwide.
Gerard Cooke from Imibala Orchards is frank about the obstacles faced by producers, especially those operating on a smaller scale. “Some businesses are always sailing into the wind, and fresh produce is one of those businesses,” he says. “There are many ways in which we try to save on costs, such as monitoring electricity use and mowing the grass in the orchards fewer times a year, but we cannot save on anything that could relate to fruit quality.
“On the one hand, we have seen chemical prices rise 300 per cent in the last year, so we have had to really look at the business and see what we can save. On the other, the exchange rate is working in our favour - the rand has strengthened against sterling quite dramatically, but it is still 10 per cent weaker than it was at this time last year.”
But with UK supermarket specifications still notoriously high and other markets opening up, are there still incentives to export to the UK? Anton Rabe, chief executive officer of the DFPT, insists that the UK is still a priority market for South African growers and exporters. “Other markets are less, shall we say, finicky, and there will be some growers who have made the conscious decision to supply those markets,” he explains. “But for the industry as a whole, the UK is still a key market because of the historical connection that we have. We have a clear industry goal to make sure that our product is evenly spread across the world, but the higher hurdles seen in the UK are spreading too.”
This is backed up on the ground by Stephan Strauss, general manager for plums and citrus at The Le Roux Group, which is the single biggest producer in South Africa, exporting seven per cent of the total plum volumes from the country. He admits that this season has proved trickier than last year, especially in terms of exports to the UK. However, it has not deterred the firm from supplying the UK. The Le Roux Group produces 18 plum varieties on 150ha, as well as 400ha of table grapes, 42ha of citrus and 15ha of peaches and nectarines. “The UK supermarkets have less buying power than they had last year, but we have found that their specifications are stricter,” Strauss says. “But so far, we have exported 240 tonnes more than last year overall - up 22 per cent on the early varieties.”
Indeed, the fresh produce trade is not one to give up without a fight. The South African industry is leading the way on a number of counts, with research and development continuing to push the sector forward both in terms of new varieties and improved production methods, while both the green agenda and corporate social responsibility have been tackled head on.
A sterling example of this is the work that the industry is undertaking to become one of the first to measure the carbon footprint of its fresh produce offer across all lines, when its carbon calculator is released in the next few months. This will represent the culmination of a R3.2m (£221,456) project launched in July last year, funded by nine organisations.
DFPT Research has an annual R&D fund of R46m for the deciduous industry - 45 per cent of which is levy funded by growers, while the remainder is made up by the Agricultural Research Council (ARC) and a number of bodies and universities. Hugh Campbell, general manager of DFPT Research, co-ordinates the development programmes for the deciduous categories and acts as a link between industry players and new research. “Our aim is to find out what the blockages and challenges are, but a lot of our research is consumer-led through focus groups,” he explains. “We want to optimise the capacity of the industry and to make this work, we have to understand market requirements.”
Some 53 per cent of the stonefruit levy contributes to new cultivar development, while 50-odd projects on crop protection are ongoing across the board. A total of 68 stonefruit varieties have been launched since 1985, including 27 new plum types.
“We have had a high success rate in terms of releasing new cultivars in stonefruit, more so than in top fruit,” says Campbell. “This will remain one of our key drivers. New varieties and new plantings are what keep growers going. They are the lifeblood of the industry because they are an indication of what growers have in their back pocket and their faith in the industry. They are what get people excited.
“The elements of food safety are a given,” he continues. “What we focus on is the ability and the reliability of the fruit industry to deliver within market requirements.”
The varieties released by the ARC breeding programme are commercialised by cultivar development company Culdevco, formed in 2006 with input from five producer groups. To date, some 75 per cent of plum export earnings have been generated from Culdevco-licensed varieties.
Leon von Mollendorf, who heads up the company, singles out a red plum released in May last year as “the best plum variety that the ARC has ever bred” and as one to watch on the export market. “There are many things coming through that will excite people,” he says. “The one that I am most excited about is African Delight, a very late red variety that ripens after Angelino, stores well for up to 10 weeks and has high brix levels of up to 20 per cent. This is a slow-ripening variety that will fill a huge gap at the end of the season and could potentially stretch it to five months.”
Some 120ha of African Delight were planted last year and production has since doubled. Around 5,000 cartons were sent to the UK last season as part of initial trials, but higher volumes should come through within three to four years. The variety will also be planted in Spain, Italy and Turkey to ensure consistent supply.
“There is a lot of excitement about African Delight all over the world,” von Mollendorff says.
This is a sentiment that is very much translated to the plum campaign as a whole, as it rolls out across the UK and Germany in the next few weeks. South African growers and exporters have showed that they are ready to step up and take responsibility for boosting their business. Only the next few months will tell how this promotional effort is received but, for now, all indications are very positive.
KROMCO ON A MISSION TO SUPPORT ITS WORKERS
A prominent plum grower and exporter in South Africa has introduced an alternative business structure to motivate its team of up to 1,000 workers and make for the best working environment.
Kromco (Pty) Ltd uses a mission-directed business programme to split the company into different business units run by team leaders, to encourage workers to take responsibility for their roles. An innovation scheme runs alongside this, with suggestions made by staff rewarded on a monthly and annual basis.
Willem Coetzee, operations manager at Kromco (Pty) Ltd, says the company philosophy is to be pro-active in order to achieve the best results. “The result is that the workers take ownership,” he says. “This is a programme that has worked for us. On top of this, we measure things like morale, safety and absenteeism on an ongoing basis.”
The Grabouw-based firm has 173 hectares of plums, 533ha of pears and 1,098ha of apples. It earmarks some 20-25 per cent of its export volumes for the UK, sending plums to the big four chains, Tesco, Asda, Sainsbury’s and Morrisons, as well as upmarket retailer Waitrose.
Songold, Laetitia, Fortune, Lady Red, Angelino and African Pride make up the core of its offer.
“We have the ability to pack to the required programmes and we are very flexible, so we can adapt to market demands,” Coetzee maintains. “We are very much supermarket-driven, so we look after them very carefully.
“To keep this up, we believe that our people are one of our major strengths.”
SOUTH AFRICA FLYING HIGH
The Mediterranean fruit fly has been at the centre of a potentially far-reaching South African initiative to boost marketable yields and open up new markets.
The pest costs the industry around R20 million (£1.4m) a year in expenses associated with both control and fruit loss.
SIT Africa (Pty) Ltd, a private company on the Agricultural Research Council (ARC) Infruitec-Nietvoorbij campus in Stellenbosch, is aiming to tackle the problem by rolling out the production and distribution of sterile fruit flies in the Western Cape.
Brian Barnes, co-ordinator of the sterile insect programme at SIT Africa, insists that pushing down Med fly presence to the lowest risk levels is key to growing the export market. “Fruit flies have become a bigger and bigger problem on the international scene,” he says. “We have found that the best way to target this is through the sterile insect technique (SIT), in which millions of fruit flies are reared in controlled conditions, then sterilised with gamma radiation.”
The SIT programme was launched in 1996 and the first sterile flies were released in 1999, funded by the ARC and the Deciduous Fruit Producers’ Trust for the first seven years.
The sterile fruit flies were initially released from a plane over large areas in the Western Cape, but this cost up to R20,000 a month, so the majority of growers have switched to releasing fruit flies from the ground.
“This method drives the population right down and if you carry on doing it, you can eradicate it,” says Barnes. “The plan is to build up this system and roll it out into other parts of the country.”
The industry is hoping to lower the presence of fruit flies to what is perceived as a low-risk level.
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