Mixed fortunes for Canary Islands salads

What are your forecasts for the upcoming season?

There will not be significant salad volumes until the middle of November. But even though the Canary Islands’ tomato business is facing difficulties, we have managed as a group to sustain the same overall number of planted hectares as last season. Nevertheless, other groups of growers have dramatically lowered their plantings by as much as around 40 per cent. This is not just on tomatoes - cucumber production will also be slightly lower than last season.

Are you optimistic about demand in the UK for Canary Islands salads this season? What can exporters do to gain greater market share in the UK?

We have to be optimistic, even during these difficult times we are all facing. On the other hand, while the UK market is very important to us, the credit crunch and devaluation of sterling means the cost of importing into the UK has become more difficult and even more so than perhaps the rest of Europe.

We will try to programme as much as we can with the UK, but are always looking to at least have a small margin to keep our growers in business. Otherwise, our group will divert the rest of the volume to our office in the Netherlands to distribute to the rest of the continent.

The market there remains strong, possibly more so this coming season as Morocco, which is our main competitor, has seen an increase in its growing costs. More importantly, logistics still remain a problem for growers there and are very expensive. Like other producers, they have to pass this extra cost on and therefore they are not as competitive as in the past.

Is demand for Canary Islands salads growing in other markets, such as Germany and eastern Europe?

Apart from the UK, we as a group have a very good reputation and a good customer base within the Scandinavian markets, as well as eastern European markets, where we are developing a solid relationship with large retailers. Germany is still reasonably strong for us, particularly with the discount retailers, such as Lidl.

Have recent improvements to packhouse facilities and growing techniques paid off for growers and packers?

A lot of improvement has been made in the Canary Islands in the last five years, both in the packhouses, as well as growing techniques and structures. Unfortunately, the cost of growing and the investment made has not seen the right prices materialise at final destinations and our growers have been experiencing poor returns.

Competition from other sources and the highly competitive retailing and foodservice sectors have all had a massive influence on business.

In order to achieve higher standards and become more professional, growers have had to borrow money from the banks. With poor results, particularly in the last three years at least, we are facing very difficult times to sustain our business and maintain our growers for the future.

Obviously, the financial situation has become worse and the banks are closing their doors and not helping our industry enough to keep it going. Therefore, a lot of growers are in a very critical situation. More growers will either stop producing or won’t be able to cope financially with the current situation, and will start disappearing as a result.

How can those working in the industry offset high input costs such as fuel, fertiliser and labour?

Both growers and customers are facing a difficult year ahead. We need to at least be able to pass on these extra costs just to cover the cost of growing tomatoes. We know it is not going to get better, but we need to cover the extra cost at least.

More regulation on profit margins throughout Europe, and particularly in the retail sector, will help to provide distributors and producers with a better chance. On the other hand, if this does not happen, we will have already lost the battle before we start and there will be more casualties.

Do you feel that more Canary Islands producers will diversify into other products or consolidate this season?

There is already a big diversification towards bananas over tomatoes in the Canaries. Bananas are not necessarily achieving better selling levels, but lower growing costs and less labour are involved.

In your opinion, what are the other main trends and issues facing the salad sector this season?

More consolidation is necessary. Growers, packers and distributors for foodservice companies throughout the UK and Europe need to be working together a lot closer, creating more partnerships. Then everyone can earn a living and by doing so, overall costs will be reduced.

How do you feel the sector is evolving? Do you anticipate much change in the salad sector in the next few years?

We are facing difficult times ahead and we are concerned about our own costs against what we are achieving from our customers. As a result, service will also suffer, in view of the fact that many companies won’t be able to cover their costs.

I think more companies won’t be able to cope with the pressure and others will have to either consolidate or merge in order to keep the costs down. By doing so, they will maximise the potential service they can provide to their customers.

What else would you like to add about Fortuna Frutos and the Canary Islands salad market?

We have been present in the UK market for many years and it is our intention to carry on doing so, hopefully for many years to come. I think in all this time, we have had better seasons and worse seasons but, from my point of view, we have always shown tremendous loyalty to our customers and the UK market. I hope with everything we are doing, we can all stay in business and hopefully overcome the difficult times we are facing as soon as possible.