Lehmann & Troost celebrates golden times

Can you sum up 50 years of L&T for FPJ readers?

L&T was created on July 28, 1958 by a merger between German firm D Lehmann und Söhne, established in 1851, and the Dutch firm A Troost & Zoon set up in 1925.

I joined my father at the company, then called D Lehmann & Söhne, as a junior sales partner in 1966, eight years after it was established. In 1968, I became a director and in the early 1970s, I was made a partner in what had by then become Lehmann & Troost BV.

For many years, the company was 100 per cent owned by me. There was a period of five years when Dole owned 50 per cent back in the 1980s, but it didn’t work out, so I resumed full ownership. Then, in 1990, I came close to selling to Fyffes, but I felt uncomfortable; somehow it just did not feel like a fruit industry deal, so I did not go ahead.

The business is now owned by my son Bram and my daughter Petra - the third generation of Troost in the fruit and vegetable trade, and my cousin Lennart van der Bos and son-in-law Maurice van der Lans are also directors. This makes it a real family company.

The celebration of L&T’s 50th anniversary on September 13 will be a real family affair, as I will also celebrating my 40th anniversary of marriage to Ineke.

How has your relationship with the UK market developed over the years?

I have spent a lot of time in the UK, having first accompanied my father by ferry from the Hook of Holland to Harwich when I was just seven years old. I still come three or four times every year, using the same route.

Ever since my first days in the business, I have been heavily focused on the English market and over the years built up a sound customer base. The UK was not yet in the EEC, and there were lots of opportunities to work and trade in the UK market.

Initially, I spoke to guys like Wally Olins, Louis Reece, the Emanuels and Harry Glass. Sadly, they have all gone from the trade. Today, it’s a new generation of people I speak to and, although I have maybe lost track a little, my enjoyment remains.

Because the UK was not in the European Economic Community, we had to be experts in all areas and, while the market has changed significantly, the fundamentals have remained the same. The producer produces and the consumer consumes, and we have to find our little place in between, as the product finds its way from field to mouth one way or another.

The UK has changed through the rise of supermarkets and, more recently, the category management effect. Category management has changed a lot of things, particularly of course the number of suppliers who can be involved in each sector for each supermarket chain.

There was a move by some companies to totally focus on the supermarket trade and sadly over the years, some of those companies have become casualties. I’m not trying to be negative, but it is important to analyse the market; in the UK you have no hinterland; and your companies have had to focus and specialise. I just make the point that there is an element of danger in over-specialising.

We have had an office in the UK since the mid-1970s and established Erms UK in 1985. We were very heavily involved in the US and brought in huge volumes of products like iceberg lettuce and broccoli, which are commonplace now, but were practically unheard of in Europe at that time. When Spanish growers began to look for export markets, we of course were involved there too, with producer Pau Raventos, who grew exclusively for us. We developed a strong iceberg and celery business, making us the first to sell these products. We brought hundreds of lorries across a year, until English growers started to grow the products themselves. We still bring in good volumes of celery.

In time, Erms UK recognised an industry need for a total one-stop service provider and this now forms a very important part of their business, so much so that last year we decided another 10-acre plot of coldstorage and packing facilities. This now gives us just over 20 acres of land, made up of four stand-alone buildings dedicated to the procurement and supply of fresh produce lines to the English retail trade

At Erms UK, the family ethos has been retained, as my partner Ian Smith also has his son working with him.

Over the years, the UK market has evolved and the introduction of cheap flights has made this generation the first that has really started to travel and explore other countries. While the older generations may be loyal to the big names on the British high street, it might prove harder to hold onto that loyalty in the future as the discounters become stronger.

I don’t think Britain will lose its tradition entirely. Although we have a common market in Europe, we should not be like the US, where the streets and buildings in one city are like those in most others. I do hope we all manage to keep hold of our own identities.

How has the core L&T business model changed to reflect the fruit and vegetable trade?

L&T has never aimed to be the biggest, but it has always aimed to be the best. By working hard and efficiently, by innovating instead of imitating and by responding more adequately than the competition, we aim to reach that goal.

We are located a stone’s throw away from Rotterdam harbour and therefore the whole of western and eastern Europe is reachable within 48 hours.

The nature of our business has obviously changed with the industry. We now import and export some 25 commodities throughout the year. We have become experts in spreading our risk. We supply the entire European market and cover the widest possible scope - finding the right balance between the various supermarkets and their specific requirements, and the wholesale markets in eastern and western Europe.

L&T works a lot in smaller countries with smaller chains and, while a lot of product goes through the supermarkets, we recognise that there are still a lot of products they don’t want to deal with, which we try to cater for.

Can you pick out some of the highlights of your time in the fresh produce trade?

I have been in some wonderful countries, met some wonderful people and brought in a number of products that were not previously known in Europe.

Although it seems like a long time in some respects, it is amazing how quickly things have changed in this industry.

When I was a child, we didn’t eat garlic because all we knew about it was that it stank. But L&T has made a very good living out of it in the last 15 years. You can add a lot of different products to that list.

I brought in the first peppers, from Ethiopa - there was no Almerian production in those days - and had a few very successful years with that product. We were bringing in 2,500 tonnes a year before civil war broke out after Haile Selassie’s death. When the war was over, Almería had 30,000 acres or so of salad production.

I was also involved at the very start with mangoes and avocados, and the first imports of different coloured peppers. By participating at a very early stage, we benefited from all of these products, and that continues to this day. You can specialise in something for a period, but you always need to be looking for the next alternative. If you are aware of the trends and you aware of changes in advance, you will always be able to participate in the deal.

Sweetcorn is another good example. When we started, most housewives thought corn was for chicken, but we built a substantial business with them over the years.

We distributed 250 lorries of French Golden Delicious apples to customers 25 years ago, but not one piece now. But we have replaced that with expanding volume of Chinese Fuji, as the tastes and planting trends change. We have that business because we anticipated it; bought a ticket and went for it.

Do you still feel there are opportunities to develop new business in the European marketplace?

Some opportunities come back, some will never reappear, but there will always be opportunities out there.

Sometimes, it can feel like the old days are coming back. Until the late 1970s, we brought in massive volumes of citrus from California. There was nowhere else to get Valencias at certain times of year and we also imported lemons in large quantities. Uruguay, Argentina and South Africa all started planting more and that business all but dried up. Because of the weak dollar though, we have tripled our volume from California in the last two years - bringing in 300,000 cartons this summer, largely because it happened to be cheap.

This year, we imported 50 containers of chestnuts from China. The same chestnuts that fall off the trees in the Netherlands, the UK, France, Italy and Spain. Because labour is cheaper in China, it is cost effective to remove the shells there and then ship them to the Netherlands, from where we are filling many lorries for Spain, Italy, France and the UK.

With so much over-programming, there are always unwanted cargoes looking for a home. For us, Russia became an enormous market. Moscow is only 2,200 km from Rotterdam, but now that more shipments are going direct into St Petersburgh, we have stepped back a little from that. But when one market closes, others are usually about to open. Egypt and Morocco will undoubtedly offer opportunity as these markets develop.

Before Spain entered the EEC, we shipped hundreds of lorries a week of Spanish citrus out of Rotterdam all over Europe, because there were no lorries coming direct from Spain and all the fruit was shipped from Valencia to Rotterdam. We re-exported oranges by boat to Scotland, Ireland and Norway by boat every week. We were experts in currency fluctuations, we paid the duty and we resold the product. Once they were in the EEC, they didn’t need the same type of service, as there was duty-free traffic of citrus throughout the community.

We may be about to see this go full circle. The oil prices at the moment could force Spanish growers down the route of shipping their oranges into northern Europe again. We are looking to find the solution, but to go back to where we were nearly 30 years ago would need a large number of growers to commit to filling boats. Larger growers delivering to the port, to ensure fast turnaround, would be crucial.

Some 30 years ago, all of the main lines came into Rotterdam, and hardly any went to the UK, which gave us the opportunity to deliver a service. Then they began to ship direct to the UK, but as boats get bigger and faster we are starting to see the UK being bypassed again.

The interesting thing is that, so far, nobody has stood up and said they want to fill the demand that creates. The problem would be guaranteeing loyalty from shippers and receivers. I don’t mean loyalty in the sense that not doing it would be disloyal, but that everyone makes their own demands and wants their own specifications. With a little bit more uniformity, and if someone is prepared to stand their ground through the good days and the bad days, it could be done.

It costs the same amount of money to bring a container from China to Rotterdam as to send one form Rotterdam to Greece. And there are so many empty Turkish, Italian and Spanish lorries around Rotterdam, looking to pick up produce to backhaul having delivered to northern Europe or the UK, that there is big potential for product coming into the port to find a home with one of the 500 million consumers with money.

As a man with a firm belief in family-oriented businesses, do you think plcs and the fruit trade are compatible?

No. When you look at the fresh produce industry over the last few decades, it is clear that almost always, public companies find it very difficult to survive in the trade. Look at most of the large category management companies and even if they are not family enterprises, they are usually set up and run that way. They are not multi-nationals, and they never will be. Companies like Hillsdown Holdings, Glass Glover and Albert Fisher are no longer around.

Family enterprises are aware that they have to put in the hours and the numbers. My family put in the 60-hour weeks with pleasure because they are committed to the company and the fresh produce business. If you can stay in that mindset, there is still a very good future for the next generation, even if the industry might have a different shape and structure.

If you were buying shares, would you invest in Microsoft, Mercedes or a fresh produce company?

What does the future hold for you?

I am 64 and on the verge of what you might term retirement, but in reality I don’t think I will ever retire. When the sun is shining, I will get up and ride my bike every day around the Hook of Holland, where I live, and I visit all my friends, who grow all sorts of products, and marvel at the developments that are taking place. When the weather is bad in the winter, I will join the boys in the office. This has been a large part of my life for a long time and there will always be something I’m involved in.

Your company has the motto “the race for quality has no finish line” - what else has your time in fresh produce taught you?

If you have no history in this business, you have no future. Our philosophy and working method has taken L&T to where it is today and serves as the guideline to what it will be in the future.

I think that is perfectly summed up by the following story.

Only six years ago, I bought a 2,000-hectare farm in partnership with a South African supplier, who asked me to show that I wanted more than simply to buy their fruit. I had been involved for a long time in South Africa and watched with interest while the fruit was exported by a monopoly. When deregulation came, I moved in there. But the farm didn’t make money for us. When I came to sell it, the first interested party was the de Nadai family that owns Unifrutti. When Alexander de Nadai got in touch to set up a meeting, we retraced our steps and it turned out that Alexander was the man who first sold me peppers in Ethiopia all those years ago.

Ethiopia was once an Italian colony and there were a lot of Italians there when I visited in 1968. He had to leave when foreigners were kicked out of the country.

When we had the meeting, I put on my Lion of Judah tie and as I walked into his office in Italy, we had lots to share. We concluded the deal in five minutes, but we spent the rest of the day reminiscing.

That for me is the essence of the fruit trade. It is something you will never have if you work for Microsoft. The industry itself is a family. We fall out sometimes, but we always forgive and forget.