The consumer must become the key focus for the Israeli fruit and vegetable industry if it wishes to survive on a global stage.
This was the view of Professor Dan Levanon, chief scientist at Israel’s ministry of agriculture for 12 years and co-president of the Agro-Mashov exhibition, during his opening remarks at an international symposium held on the first day of last week’s show.
Stephane Duran, co-director of Eurofresh Distribution magazine, told delegates that the number of countries around the world exporting fruit and vegetables has increased since 2000, and that nations such as Belgium and the Netherlands, which import vast quantities of fresh produce for re-distribution, represent exciting opportunities for Israeli shippers.
“Niche markets and products are interesting for Israeli growers too,” he said. “Specialities are a way for you to enter different markets.”
While EU produce imports have been largely stable since 2005, exports from Israel have increased, especially of tomatoes. The fastest-growing tomato category in the UK is cherry tomatoes, said Durane, with a 12 per cent growth rate in 2007, and 21 per cent of the market volume. “Beef tomato sales are also on the rise in the UK,” he said. “In the pepper category, sales of orange product are rising at the expense of red.
“This shows that although the EU market is generally slowing down, with stable fruit consumption per capita, there are still opportunities for value-added, speciality products, exotic fruits and organic lines. However, there are also growing opportunities in China, the Middle East and Russia.”
There are vast differences between the retail sectors in northern and southern Europe, according to Durane, with the top few retailers tending to dominate the market in the UK, France, Germany, Ireland and the Netherlands. “Direct relationships between producers and retailers are very important in supplying northern Europe, while the use of specialised category managers, the implementation of private quality controls and issues such as Fairtrade and carbon footprint are also to be taken into consideration. Getting in contact with European producer organisations, who control much of the produce going into the supermarkets, is another opportunity for Israeli exporters,” he said.
“The fact that British supermarkets are turning green, with bids to reduce packaging, increase the amount of local produce they stock and reduce their volumes of airfreighted produce, will also impact on growers in Israel,” Durane continued. “If you compare what you send from Israel by boat, the carbon emissions in some cases can be up to 10 times lower than trucking produce from Spain; and that is an advantage you can work on with the supermarkets,” he concluded.
Russia is also a growing target for Israeli shippers, as only half of the fruit and vegetable supply needed to satisfy domestic demand is harvested locally. “A small number of Russian importers control the market,” said Natalia Bammatova, Eurofresh Distribution’s Russian delegate. “JFC, Sunway and Sorus are the biggest three, and they dominate 40 per cent of the market.”
Russian fruit imports were valued at around £1.5 billion in January 2007, four per cent higher than in 2006, and citrus purchases in particular rose, by 40 per cent. “According to the US department of agriculture, Russia is now one of the world’s leading fruit consumers and sixth in the list of largest global produce importers,” said Bammatova. “It is the 11th-largest vegetable producer in the world, but 37 per cent of vegetable demand is accounted for by imported produce. The situation in Russia is therefore very favourable for Israeli fruit and veg exporters.”
Victoria Leonova, general manager of Russian importer ARTES, told delegates that supermarket chains are the fastest-growing segment in the Russian retail market, growing at double the rate of other outlets selling fresh produce. “However, elite grocery markets, open markets established in the 1990s, and fruit and vegetable kiosks are still the most popular ways to buy fruit and vegetables in Russia,” she said.
“Fruit is not well marketed in Russia, with the only tools used display stands, radio announcements and price promotions,” Leonova added. “Herbs are becoming increasingly important in Russia, and organics too.”
Fabio Piccioli, president of NGO the International Federation of Organic Agriculture Movements (IFOAM) and AgroBio Mediterraneo Italy, picked up on the theme of organics in his presentation. “Almost seven million hectares of land in Europe are slated for organic cultivation,” he said. “In Italy, short supply chains from the organic producer to the consumer are vital, with quality, freshness and supporting local agriculture important tenets for organic consumers.”
AgroBio Mediterraneo Italy has organised open farms and educational farms for students to visit, and the development of organic school canteens in Italy has also helped boost the category. “In 2005, there were more than 500 organic school canteens in Italy, and around 1m organic meals provided every day,” said Piccioli. “Research from the National Institute of Environmental Health Sciences reveals that feeding children organic food for five days strongly reduces the organophosphorous pesticide residuals in their urine.”
Guy Rilov, international co-ordinator for the Israel Bio-Organic Agriculture Association (IBOAA), believes organics is a fast-growing opportunity for Israeli farmers. “There is a slowdown in food sales in Europe, but people are more and more aware of the health benefits of organic foods,” he said. “Even in Israel, many non-organic farmers are starting to use organic methods, such as composting.”
The biggest difference between organic and conventional farming is that the former is an ethical agriculture, he continued. “The ideology of organics is reviewed every three years by a team of seven, and two weeks ago we developed a definition, yet to be confirmed by IFOAM: ‘Organic agriculture is a food production system that sustains the health of soils, ecoystems and people. It relies on ecological processes, biodiversity and cycles adopted to local conditions, rather than the use of imports with adverse effects’.”
Rilov told delegates about the principles behind organic farming as well. “There are four main principles already in place from IFOAM,” he said. “These are health, ecology, fairness and care. Organic farming should sustain and enhance the health of the soil, plant, animal and human, and should be based on living ecological systems. It should also build on relationships that ensure fairness with regard to the environment and life opportunities, for example paying workers fairly, and should protect the health and well-being of current and future generations.
“Trying to avoid airfreight is also key to organic produce - a ship from Haifa to the UK emits less carbon than a truck driving from Spain to the UK, and that is something we should try to show our customers,” said Rilov. “IBOAA aims to lead, unite, assist and innovate, developing the Israeli organics industry from a niche into a major component. We bring together a wide variety of individual interest groups in the industry - farmers, manufacturers, distributors, retailers and exporters - and our vision for 2008 is to increase organic farming in Israel. It accounts for just 1.5 per cent of total agricultural production in the country, but 13 per cent of fresh exports. We are developing an industry policy, winning government support, and encouraging non-organic farmers to convert.”
Research and development will play a key role in the future of Israeli agriculture, according to Levanon, who presented his views on how to steer R&D towards the needs of the marketplace. “The concept of preparing product for the needs of the market has been in place for a few years now,” he said.
“There are new niches for new products opening up, when you consider that ethnic groups today are scattered across many different countries. Some products are not easily accepted by the public, but it takes time to educate the consumer - Israel only started to export avocados a few years ago, but now, along with mangoes, kiwifruit and lychees, they are well known. We are just starting to do the same thing with pitahayas.”
New varieties, better shelf life and health-enriched products are all vital elements for the consumer, said Levanon, and finding earlier and later market windows to accommodate the shoulders of the season are other elements researchers should be working on. “For example, good Turkish figs are available in Europe from July to September, but if we can get in before or after that period, as long as the product is of a high quality, then we have a chance,” he said.
Dr Eli Putievsky from the Newe-Ya’ar Research Center of the Agricultural Research Organisation, and the ministry of agriculture and rural development, talked about developments in Israel’s fresh herb industry. “Fresh herb production started in Israel in the mid-1980s, with Europe and North America the target markets,” he said. “Originally we grew varieties for the dry herb market, but then we had to find ones for the fresh market as well.
“There are now 42 species of herbs grown in Israel, and exports are year-round. We have made great strides with the packaging, which has enabled us to increase shelf life dramatically, and our main aim today is to export herbs by sea. Agrexco owns two temperature-controlled ships, and we are conducting pre- and post-harvest experiments. We want to increase herb exports by sea by 80-90 per cent, otherwise the sector will be unable to survive rising fuel prices.”
The herb industry is also trying to mechanise as much of the work as possible, according to Putievsky, to reduce manpower. “We are very proud of the direct connection in Israel between the research centres, the herb growers and the exporters - it is very unique,” he added. “We always need to be one step ahead, not behind. We can increase production with new varieties, but we need to build up markets slowly, so that we can rely on them over a longer period of time.”
BEN-DOR BENDS OVER BACKWARDS FOR UK MARKET
Ben-Dor Fruits attended Agro-Mashov to showcase its wide range of summer fruits, currently supplied into Marks & Spencer, Tesco, Sainsbury’s, Morrisons, Asda, Waitrose and Somerfield.
“In the UK we work with Agrexco as our distributor, because they have excellent facilities, and we are very satisfied with that arrangement,” manager Seffi Ben-Dor, pictured, tells FPJ. “The UK is our biggest market and demands the best quality. We work closely with the UK retailers on our 23-year-old breeding programme, to assess their requirements.”
Established varieties in the Ben-Dor portfolio include the Aromacot apricot family, around 70 tonnes of which are sent to the UK annually, the colour apricot family, which includes the Vaiolet and the Tiger cultivars, and watermelon plums, which Volcani professors have proven contain four times as many antioxidants as pomegranates, according to Ben-Dor.
“Our relatively new Plumagranate line will, I predict, be our most successful supply into the UK, because of its red flesh,” he continues. “Our yellow Lamoon plum family is already popular in the UK.”
The company also breeds and grows Shark Teeth plums, which have a pointy end, Pita nectarines and peaches, known in the UK as UFO or doughnut peaches, and red blush and yellow pears, which have been successfully trialled in the UK. “We now have the green light from UK supermarkets to grow and export our pears to the market,” says Ben-Dor.
Ben-Dor Fruits operates 450 hectares of production, and recently awarded a licence to several growers in the Arava Desert, totalling 50ha of production, to supply the company with new cultivars. “Our breeding programme trials 250,000 varieties, and every year we pull out 50,000 and replace them. Around 1,000 cultivars are grown commercially on my farm,” says Ben-Dor.
“Health, flavour and appearance are our main concerns. I would like more share of the UK market, but we supply Russia, Singapore, Cyprus and South Africa as well. We also sell our varieties to growers in other countries, and get royalties for that,” he adds.
AVIV VENTURES INTO FRUIT
Fruit and vegetable exports are relatively new ground for Aviv Export and Marketing, which started life as a flower specialist.
General manager Azemon Melzer, pictured, runs the firm, which has clients in the UK and Europe, and operates a logistics centre near Amsterdam.
“All our produce is sent to the Netherlands ,then re-distributed across Europe,” says sales and marketing specialist Viki Elovits. “We were originally part of Agrexco, but then in 1978 became independent. We only branched into fruit and vegetables two years ago, but now they account for 40 per cent of our business, and flowers account for the remaining 60 per cent.”
The company markets peppers, tomatoes, strawberries, kumquats and 25-30 varieties of herbs, and operates from offices and a packhouse near Netanya. Its flowers are sourced from 200 growers all over Israel, and its fruit and vegetables from 80 farmers. The UK is Aviv’s second-largest export market, after the Netherlands.
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