One of the UK’s leading fruit importers and service providers of the last few decades, Richard Hochfeld Group (RHG) has undergone a radical change of direction in the last three years; a change that its management team believes has secured not only the business’s long-term future, but also a sustainable supply of high-class product for its customer base in the UK.
Richard Hochfeld has transitioned from being a single company to a group of separate entities, which has fundamentally altered the way the business operates. The biggest change has undoubtedly been a move back down the supply chain through a new arm of the business, Richard Hochfeld Farming. Significant investment in joint venture deals in farms in Chile, Greece, India, Italy and the UK has, for the first time, seen RHG engage in a vertically integrated growth strategy that aims to bring new and improved varieties to market.
“We’ve been nudged into diversifying by the prevailing market conditions,” says RHG managing director Alan Guindi. “Since the 2008 economic downturn, we had been pretty cautious. We have a tradition of not paying dividends to directors, preferring to reinvest money back into the business. It’s that approach which has put us into a position now where we can afford to be a little bolder.
“We’re therefore taking more ownership of our own grape and apple businesses by becoming the farmer as opposed to being just the service provider.”
The joint ventures so far are on three continents:
• In Chile, RH Farming has formed a joint venture with the Chacon family and now part owns its Santa Ana farm in Ovalle. The Chacons already supplied 100 per cent of their grapes to RHG, so it was a natural next step for the two companies to come closer together in terms of a financial agreement. Within the next two years the Santa Ana farm will yield roughly 650,000 boxes of late Crimson Seedless, but for RH Farming, this represents a good platform to invest in new variety development in Chile and red, black and mid-to-late season white varieties are in the pipeline. RH Farming has also financed packing lines in return for exclusivity on the grapes of another Chilean grower, LA Fruit, which like the Chacon farms was already a long-term supplier.
• In Greece, Hochfeld Farming has made a significant investment in 25 hectares of land, in partnership with the Greek Grape Company, and planted new vines of Sweet Celebration and Sweet Globe, of which crop is already coming through this year. A late-ish white variety and a black variety Sweet Joy are also being planted this winter, as replacements for Autumn Royal. Projected figures suggest the volume produced for export from Greece will more than triple in the next two years.
• In India, RHG has reached an agreement with supplier Paresh Bhayani of IndyGlobal to utilise some as-yet unfarmed land to trial a series of black grape varieties, with a view to planting the best performers in larger commercial volumes.
• In northern Italy, a joint venture is being finalised with Monviso, also for exclusive supply of the grower’s grapes. Again, the plan is to swiftly introduce new, improved varieties, predominantly for the UK consumer.
• Closer to home, in the UK, Hochfeld Farming has bought a 23-acre apple and pear farm near Goudhurst in Kent, which is currently home to Bramley and Gala. It’s being managed by Richard Day, who already bordered that farm. The mid-term plan is to plant that farm with new varieties, which will include Sunburst, the first new apple to be introduced by Scion Fruits, the exclusively British fruit-breeding programme owned by RHG in partnership with the nursery Frank P Matthews.
Also in the RHG fold are Fruit Cover, a trade insurance company based in Guernsey that offers foreign exporters who supply RHG quick and easy insurance deals; Top Fruit, a packing operation in Kent; and Hyke Gin, a JV with Foxhole Spirits that uses RHG’s surplus grapes to distil a premium craft gin.
“All of this underpins not only our UK business, but also our growing export business into Asia and eastern Europe,” says Guindi. “A lot of that non-core UK business is being facilitated through a subsidiary company called RH International, in which the senior management team are all shareholders.
“The farms and partners have been chosen based on close personal relationships developed over 20 years and more,” says Guindi. “These are people we have total confidence in; people who understand the needs of our customers and their shoppers.
“Due to the close relationship we also have with one of the world’s major grape breeding companies, we already have licensed varieties planted in Greece, Chile and India.”
Martin O’Sullivan, who joined RHG from Tesco as business development director two and a half years ago, says there is very clear thinking behind the nature of the investment in joint ventures with growers. “There’s nothing random about this; we have a very detailed development plan. We’re searching for suitable land that is close to growers who we know and trust,” he explains. “We don’t want to be driving the tractor!”
In Greece RH Farming and the Greek Grape Company bought land that was not previously in production. “Greek grape has always been heavily traded, but we believe there is a market for top-quality Greek grape to come into the UK market, if they plant the right varieties in the right location to hit a particular late window in their season,” says O’Sullivan. “The only way for us to really have an influence on that was to invest.”
Less than 25 miles from RHG’s Borough Green headquarters, the orchard in Goudhurst has been strategically selected to suit varieties coming out of the Scion Fruits breeding programme. “As part of Scion Fruits, we want to expand and accelerate the development of our new apple varieties,” O’Sullivan says. “We feel that the way to do that is to work with growers, so that when we find the right variety, we can move quickly.”
The business has also restructured its management team internally. “We have appointed Karen Cleave as technical director across the group, we’ve moved Richard Brewer over to lead our British development work at Scion Fruits, I came in from Tesco to head up our business development and Debbie Lombard has recently also joined us from Tesco to head up our Greek business, as well as other developing foreign market projects,” says O’Sullivan.
The desire to spread the investment still burns bright and RHG is constantly on the lookout for farming land that fits its very specific criteria, all around the world. “It guarantees that our customers will secure their supply. It guarantees that they will know where it comes from with all the accreditations they need. It guarantees that it’s not traded, it’s managed, audited and controlled by us. And they will also get varieties in the future that will be the best of the best,” O’Sullivan says.
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