There is a quiet irony in the fact that, while the national media takes a glance at the fresh produce sector and assumes a six-day halt to airfreight caused by an ash cloud will lead to bare fruit and veg aisles, major supply issues are afoot in staple shipped fruit lines.
Apples and pears have perhaps borne the brunt of this, as tough markets have added to natural challenges.
The most notable of these must be February’s earthquake in Chile, which gutted the country’s infrastructure. In terms of fruit, around 20 per cent of the Granny Smith crop is said to have been shaken off the trees and Royal Gala all but escaped, having already been packed.
The real damage was to export facilities. The closure of roads, problems at the main port of Valparaíso, the use of generator power at packhouses and problems getting labour to facilities all held up exports, while pressures in Royal Gala have been variable due to the break in the cold chain.
One importer says: “The late arrival of early fruit and the reduced crop of mid- to late-season product caused a real problem. The earthquake hit at a really bad time for the Chilean top-fruit industry.”
South Africa has also offered little in terms of respite. A heatwave a month ago hit early bi-coloured pears, while Royal Gala coloration was extremely low. There was a high cull rate on green apples too, with widespread sunburn affecting the fruit. This year’s Granny Smith crop is expected to be 15-20 per cent down, while Golden Delicious is set to fall by 25 per cent, Royal Gala by 23 per cent and Braeburn by 40 per cent. In addition to this, a strong market in Africa, the Far East and the Middle East, as well as a strong rand against sterling, have meant South African fruit has been scarce - particularly difficult as the country needs product on the shelf for its FIFA World Cup-linked Beautiful Country, Beautiful Fruit campaign.
One source says: “It is going to be a long, hard season for South Africa. The one positive point is that more fruit has been put into controlled-atmosphere storage, so there will be more available in the second half of the season.”
Those turning to New Zealand for product found little respite. Rumours of Braeburn and Royal Gala being 20 per cent down have already driven strong prices, while Cox is also making good money as apples across the range are hit by a shortfall.
Plans for price promotions this summer have been hit by the southern hemisphere shortage, but a number of sources believe supermarkets will go ahead with retail price cuts as top fruit battles against the European soft-fruit and stonefruit seasons.
In Brazil, good quality and packouts have drawn in a strong South American market, while turbulent exchange rates and an increase in freight rates have diverted product away from Europe.
Roland Brandes, managing director of RBR Trading in Brazil, says: “The UK market is not easy, especially this season... Unfortunately, our programmes to the UK were reduced as a consequence of this currency problem. There is a good demand, but prices are not enough to cover the growers’ costs. In this situation it is better to hold the fruit in Brazil and distribute in the domestic market.
“We have finished the harvest for Royal Gala and Fuji. Royal Gala faced bad weather conditions during the harvest, so there is no uniform maturity standard. Fuji was very good and we had good weather throughout the harvest. Overall volume is good - slightly bigger than last season - and quality is much better.”
Pierre Nicolas Pérès, president of the Brazilian Apple Association, adds: “We did have some difficulties during the picking of Gala. A lot of rain during the season and during picking made it difficult to pick in time; some quantities have been picked after the right time and some lots are over-mature.”
The pear market has been dominated by a bumper European season across all varieties. The crop of South African blush pears, which are becoming increasingly popular, was smaller this year. The pear market as a whole continues to grow, but a lacklustre few months may only see an upturn if South African Comice ignites the market.
The top-fruit game has proven tough for the majority in the last few months and signs of it easing up remain few.
TOP-FRUIT VENTURE PROVIDES NEW HUB FOR NORTH OF ENGLAND
Looking to the North for the southern hemisphere season, Andrew Sharp from Mack Multiples gives an insight into the company’s new top-fruit operation.
The last couple of years have highlighted a swing in the direction of how multiple retailers source a lot of their fresh produce commodity items. Growers are looking to get more transparency in the supply chain and the supermarkets are looking to source in a more direct way where they can, aligning themselves more closely with the grower base.
This business model leaves room for a programme co-ordinator, sourcer, receiver and packer on behalf of the retailer - this is how Mack now operates our new top-fruit venture.
People may not think this is the perfect time to start a top-fruit business. It’s a difficult job to source from the southern hemisphere at the moment. The South African crop has suffered from the heat and sun, with temperatures reaching sustained levels of 43-45°C. This has taken colour out of the crop and impeded growth. In some areas, the crop is up to 30 per cent down.
The problems are not restricted to South Africa, either. The Chilean earthquake has left uncertainty over the quality and long-term storage of their crop. We anticipate that a lot of the Chilean crop that would usually be destined for the UK will be heading for the US market instead. Looking to New Zealand for volume isn’t any salvation this year. The exchange rate with the NZ dollar is making their fruit expensive. All things considered, it’s a very short market out there at the moment and a big challenge for a new venture.
We have concentrated our sourcing on South Africa for the season, experiencing great interest from suppliers and a lot of support for the new model of supply. We have found that South African growers are sophisticated operators with very efficient bagging and labelling operations. This helps us streamline the later supply chain and while it’s complex when you have committed to the extent of date coding at source, a robust, well-managed supply system should support the model and bring the financial benefits of those efficiencies back to the grower.
Mack is using Liverpool Produce Terminal (LPT) for this top-fruit business, adding volume to the citrus that fellow Fresca Group company MMG Citrus already brings through the port. Many retailers’ fastest-growing regions are in the north of England, but trucking produce up from the South East adds time and cost to northern depot supply. We are supplying the northern depots only through Liverpool, offering a same-day response on urgent requests that we could not offer through our Kent base.
We are operating a receiving and handling packhouse at LPT with quality control inspection function and are handling a volume of around 10 containers a week at present, rising to 30 a week in June. This season is very much a test for us, our growers and our customers. We need to see how the system functions in the long term, but could translate across, in principle, to a northern hemisphere business using Liverpool as a transportation hub.
While it is still early in the season, this new top-fruit venture is working well. We have a defined benefit service and a scalable model, as long as we can ensure that the seafreight route logistics work in our favour. As a commodity product without the precarious shelf life issues of other fruits, apples and pears are a great product for testing the model. We would hope to use our learning on this product to make greater use of LPT long term for other products as well, as our partnership with the owners and operators strengthens. In the meantime, we are looking forward to a successful first season with our southern hemisphere grower partners in this exciting new venture.
No comments yet