“We have experienced phenomenal growth in our business in the last two years,” says Redbridge Worldfresh managing director Richard Parke-Davies. “This year, Redbridge Worldfresh turnover will be in the region of £120 million, an increase of 48 per cent over the last two years and more than 20 per cent year-on-year.
The Redbridge Group is amongst the largest fresh produce companies in the country with an annual turnover of around £280m. We are becoming far more significant as a proportion of that with each year.
Parke-Davies adds that while surmounting the challenges of managing that growth, the priority has been to maintain a focus on the areas in the supply chain that offer the biggest opportunities to add value. In fact, he says, Redbridge prefers to refer to it as the “value chain”.
“Wherever we can,” he adds, “we have invested in adding value. Our customer base is diverse and supplying the UK retailers is all about bringing value to the consumer. This is in contrast to the wholesale markets, where the emphasis has traditionally been on providing a low-cost business model. Retailers understand the need to work towards a critical mass, in order to drive down the cost dynamics in any business. But they also have a customer base that is willing to pay for added value items.
“Whilst the retailers understand a lot more now about what goes on behind the scenes [at a fresh produce supplier] they might not necessarily accept that they should be paying for that. Inevitably the expectation is for the supplier to fund the necessary investments through implementing further efficiencies, whether or not these are real or perceived. Generally the retailers are prepared to pay what they consider to be a fair price for the product or service - it is up to us as suppliers to demonstrate that what we are asking for is reasonable, considering all relevant factors including market trends, availability and the product life cycle.”
Soft fruit has been “the right horse to back” on that front, he says. “A strategic approach to the way we supply our fruit to a number of retailers - based on sustainable growth and longevity within the relationships - has allowed both us and our customers to grow. Just as importantly, it has also allowed our growers around the world to expand with us.”
Redbridge has responded to the changing environment within the fresh produce business by driving down its own costs. One significant strategic point of difference is that it does not operate its own large-scale warehousing or packing facilities in the UK, which removes a significant layer of overheads from the equation. “Overheads,” Parke-Davies maintains, “that ultimately the consumer and grower pay for. In a changing climate where cost drivers are scrutinised at every junction, food miles are on every agenda and direct deliveries optimise operational models, it is imperative that volume is not placed through UK facilities to justify the existence of that facility. We constantly challenge the way things are and look towards the way things could be.”
“In the UK, we have aligned ourselves with our grower base for our soft-fruit packing requirements and we have supported them whenever necessary in making the required investment to suit the needs of the retailers. This approach allows the grower to focus on value, not cost, and provides Redbridge with key strategic business units that can handle specific customer needs efficiently and effectively. We can now draw on a level of expertise throughout the value chain that I believe is enviable throughout the industry,” says Parke-Davies.
This “vertical approach” has enabled the company to integrate the different links in the chain that manages the product’s lifecycle.
The willingness for Redbridge to invest in the industry is no better demonstrated than in its approach to research and development. The huge investment made in the Redeva strawberry and raspberry breeding programme has already delivered the successful Suzana strawberry variety in Egypt and is very close to delivering other new varieties within the UK. “We identified very closely the growers around the world with whom we wanted to move our business forward,” says Ian Waller, sales director of the Summerfruit Company, (the specialised soft-fruit desk established by Redbridge to supply berries to UK supermarkets). “We have deployed experts to all of the countries we work with to share their experience - predominantly to improve production methods and yields. Together we have built volumes towards a critical mass that acts as a safeguard for the growers’ future and enables them to invest in their own infrastructure to the benefit of the customer.”
Although there is a berry department in Redbridge Worldfresh that supplies the wholesale and foodservice markets, the Summerfruit Company was established purely to provide fruit to the retail sector. “At the Summerfruit Company, we focus on the retail segment as here there is a need for a more structured category management approach. We have always been able to sell the growers’ fruit and we are very proud to find the correct home for their fruit. It is very rare that any of them choose to sell their fruit through the wholesale markets and we have only placed fruit onto the wholesale market three times in the last three years,” says Waller.
“Our aim is to achieve the very best return for our growers, although the caveat to that is that our customers always have to get what they want too. This leads to a continuous balance of satisfying supply and demand criteria”.
Redeva, set up in September 2002, is designed to provide growers with varieties that will sell well into the future. “It has been an enormous success,” says Waller. “Particularly in getting growers to support the concept of research and development as it applies to them.
“Redeva was a major strategic step and of course a major investment for Redbridge, but it has enabled us to bring more growers into the fold, engage them in the long-term concept and by adding value to their businesses, encourage them to plant more fruit and expand their expectations. When we eventually find the Holy Grail for consumers, then everyone will be a winner.”
“The aim of Redeva is to develop varieties that will delight the consumer and can be grown year-round, to create a truly consistent 12-month availability. There are other breeding programmes, but we think our approach is unique. Nobody is doing it quite like us,” claims Parke-Davies.
And Waller adds: “We have a number of varieties that are due to be named - four in Egypt in particular. We have generated great interest in these with our retail customers. So much so that one retailer will run a competition asking its customers to come up with a name for a new variety. It will be the first time, to my knowledge, that this has been done with a new strawberry variety.
“It’s not just about slapping a name on a strawberry or growing sales of one berry though. By bringing some theatre into stores and giving the fruit an identity that the consumers can associate with, we will be able to grow the whole category.”
Next in line for naming are two numbered English everbearers. All of the varieties on the verge of the commercial breakthrough have emanated from the initial 17,000 seedlings selected in the first year of the programme.
This year, more than 20,000 seedlings have been selected as part of the on-going breeding process. “This is a long haul project with at least a seven-year timeframe. I believe we are a year to 18 months ahead of our original schedule with the programme,” says Parke-Davies. “The key to the future of the berry category is segmentation and through Redeva and our associations around the world, we have created the ideal platform for varietal development. We will find the varieties that can replace the existing mainstays on the shelves, as well as fruit that adds an extra dimension to the berry category.”
Waller says: “It is not about segmentation for the sake of it - as a consumer I can see what has happened when over-segmentation occurs and the tomato category is an example of this.”
Parke Davies agrees: “Over-diversification quickly leads to brand dilution, which can be counter-productive for the consumer and the grower. There is no point putting a premium tag on a variety that tastes the same as everything else - there has to be a discernible point of difference.”
Redeva now has trial sites in Morocco and Spain, as well as the UK and Egypt, and has established associations in Israel, South Africa, France the US, Mexico, Argentina, Chile and Sri Lanka.
“Egypt has really cornered the winter market. Egyptian berries and Redbridge are synonymous,” claims Waller. “We have three main growers out there, who have all expanded with us as we have invested in the country, and a number of new growers are beginning to take our varieties.”
The major issue for prospective Egyptian exporters has always been the inability to produce the yields of Class I fruit to make the job viable. That has been addressed and the UK market will see the immediate benefits, says Waller. “The Redeva variety Suzana has been very successful, adding to the improvement from 400 tonnes for export two years ago, to an expectation of around 2,000t in the next Egyptian season.”
Sri Lanka is a country on the list that might surprise a few, but it produces fruit for airfreight at the same time as Israel and Egypt. “One of our strengths is to continually evolve our business model and look outside the norm,” says Parke-Davies. And Waller adds: “We have investigated potential all over the world to globalise our position and create a consistent supply base capable of a consistent offering. When weather problems affect one area and volumes are hit, we have the ability to switch supply and continue satisfying our customers.”
The potential for Redeva to provide varieties to the wider soft-fruit community is one for the future. “Redeva was established to support our growers and customers,” says Waller. “But longer term, there is no reason why we couldn’t sell the varieties outside of Redbridge. It’s a marketing problem we’d like to be faced with.”
“Our whole approach is long-term, not season to season, or week to week as the industry operated in the past,” says Parke-Davies. “The dynamics of the marketplaces in which we operate now require innovation, enterprise and integrity and Redbridge is well positioned to deal with these challenges. Within soft fruit we are working towards producing a range of products that the consumer will purchase, enjoy and come back and purchase time and time again.”
The massive growth in the berry category over the last two to three years has, to some extent, taken many people by surprise, admits Waller. “It throws up new challenges all the time,” he says. “It would be very easy to sit tight and go with the flow but you have to be extremely focused on long-term goals. The explosion in blueberry consumption for instance means that we continue to be awarded larger programmes every year from our customers and that means we need to find new sources and invest in production areas. The pace of change is amazing, but that is what makes this industry so exciting.”
AND TOMORROW, THE WORLD
Redbridge Worldfresh and the company’s largest Spanish grower/supplier, Surexport, established Frescura in December last year, to implement a pan-European sales strategy for Spanish berries. Supported by a team of sales and logistics specialists in both Spain and the UK, the company is servicing retailing clients in Scandinavia, as well as Russia, and the aim is to further develop relationships with retailers in central Europe, using the business model that has brought success in the UK. “We are trying to bring the principles of category management to the European retailers,” says Parke-Davies. “And for us as a company, it should bring some balance to the work we do in the UK.”
Waller says: “Frescura was not set up to sell UK soft fruit into Europe, but we have exported some UK fruit this year and there is no reason why that shouldn’t increase in future seasons. Logistics costs alone make it very difficult for UK fruit to compete with Eastern European producers and their low-cost models. But at certain times, it can happen and our growers are very excited about the prospect.”
“We have seen the growth potential for us around the globe and we have a vision that will enable us to go out there and take advantage,” says Parke-Davies. In Europe in particular, he believes the timing is right. “Our model in the UK focuses on long-term relationships. In Europe, the middleman is very much alive and provides a much needed service for their customer segments. Not only can we take part in this dynamic but we are well positioned to be a catalyst for change towards greater service provision and the adoption of category management principles. Change is inevitable and this will be accelerated once sourcing and logistical challenges are overcome.
“To meet our wider ambitions, Frescura was born in Spain. But this was just the beginning. We have now established a very successful business in Holland that is forging significant relationships selling fresh produce other than soft fruit. And in New Zealand we now have an export business that is surpassing our expectations, particularly in top fruit and blueberries. This Redbridge foothold provides a base to exploit our ambitions to optimise the value chain from the southern hemisphere both into the UK and Europe. Having a legal entity in any country gives you a serious presence and the opportunity to exercise greater control to the benefit of our customers. There are also clear cost and production benefits. From New Zealand, our next steps will be to look very closely at the rest of the southern hemisphere, and Asia, particularly China.”
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