Tomatoes, blueberries, apples, mushrooms and onions may sound like an eclectic mix, but these fresh produce items from Poland have enjoyed considerable success in the UK. And this list could grow further as producers eye the UK soft-fruit market with growing interest.
Onix has invested £5.5 million in Poland since 2002 in modern raw material storage, process mechanisation, grading, pre-packing plants and machinery and purpose-built processing facilities. The company’s most recent investment was in field irrigation for its onion crop to reduce the impact of future droughts.
According to UK-based group director Simon West, the main benefits of Poland include a relatively low-cost base, covering raw material, labour and utilities. However, West says labour in the food/agricultural sector is in increasingly short supply, and the cost is rising.
“This is due to greater employment opportunity and choice, particularly in western central Poland, where business is booming with many new Polish and international organisations having been recently established,” he explains.
Significant numbers of low-skilled staff have moved to western Europe since Poland gained EU entry in 2004, and Onix has invested heavily in automation to offset this effect.
Fresh World managing director Colin Galbraith believes there is significant potential in the UK for Poland. Climate changes and warmer summers in particular should bring stronger demand.
Fresh World is diversifying its fresh produce portfolio in Poland and has taken on eight to nine “fairly large scale” growers in the last year. It has entered the cucumber and mini-cucumber sector and also intends to handle other salads.
Poland as it stands today differs markedly to how the country was a decade ago. “Many farms now accept EurepGAP as standard, traceability is good and Poland’s natural resources - clean and plentiful water and land - gives it an edge,” Galbraith tells FPJ.
Importers have a large role to play in Poland’s opportunities, insists Polepack’s John Fraser. “Poland is the same as any other producing country - it has very good-, mediocre- and poor- qualityproducts,” he says. “The main problem I see with the UK market is that everybody wants the “very good products” for poor prices, unlike eastern markets where a fair price is paid for each quality range.”
However, Fraser is confident opportunities for Polish produce will be as strong this year as in 2006, given that the country can produce a wide range of high-quality products.
“As the number of EurepGAP farms increases in Poland, this will bring with it a natural growth in export potential,” he says. “Since EU membership, Poland has gained access to other member states but at the same time has maintained its links with eastern markets.
“Also, the Polish population has spread significantly into the UK and other member states and there is an opportunity for all serious importers to capitalise on the current situation.”
Mushroom producer Greyfriars began importing from Poland five years ago. “We were the first UK company to import mushrooms from Poland in significant volumes and we spent a lot of time trying to find the best mushroom farm in Poland,” says managing director John Smith. “We believe we’ve got it in Okechamp SA.”
Greyfriars started modestly in Poland and gradually built up its volumes. “Our farm produces excellent-quality mushrooms and we’ve maintained that quality with consistent size of product, grading and great shelf life,” Smith tells FPJ.
“I’m not knocking UK production at all but the best Polish farms are as good as those in the UK. There is the overall attention to detail, and the fact labour costs are considerably less means there is no skimping on costs.”
Smith adds that the best Polish farms have been mentored by high-quality Dutch farmers.
Since Greyfriars entered Poland, other mushroom farms have developed, evolved and prospered. “There’s a number of good farms sending product to the UK and this is going to be the trend,” predicts Smith. “We knew Poland was going to come to the UK so we wanted to be part of it rather than be threatened by it.”
As overall sales to the UK and Europe have already been fixed for this season, Greyfriars will not be increasing its volumes from Poland. However, Smith says there could be a shortfall in volumes this year as more growers exit the deal.
“The price of mushrooms has been too low for too long,” he says. “Also, the Irish industry is contracting further due to economic pressure and Poland won’t be able to make up for the shortfall, as it takes time to produce mushrooms - it’s not an overnight thing.”
Poland produces the whole range of mushrooms but Greyfriars concentrates on button mushrooms due to the lower labour costs involved. “When you pick a pound of buttons, it’s more costly than picking flats, cap, etc,” Smith explains.
While sources are impressed with the quality of mushrooms, there are challenges ahead.
“Some of the Polish growers need to invest more in equipment and to manage weather conditions,” Smith says. “It can get very hot in the summer and very cold in winter - growers need to deal with the extreme temperatures. This will happen, but it will take time.”
Many growers are still producing mushrooms on phase 2 compost. In order to raise productivity, Smith says growers need to move to the next level and replace phase 2 with phase 3 compost, which could increase productivity by 20 per cent.
But Smith adds Poland also has other markets in its sight. “Obviously the UK is a sophisticated market that can take large volumes, but France and Germany also offer attractive options,” he says. “Polish entrepreneurs will look at western Europe as a whole.”
West is confident demand for Polish fresh produce will continue increasing so long as stable competitive prices and sustainable supply can be maintained. “The UK is showing increasing interest in innovative Polish suppliers that are prepared to invest and meet high technical expectations,” West says.
“In our case, the UK market represents a good return on investment in terms of money and effort. Our investment is also proving to have serendipitous benefits, as we are able to serve a rapidly developing Polish domestic market and other EU countries.”
However, importers have raised concerns about the Polish currency, zloty, and how it performs. Should the value increase, this will affect the profitability of Polish mushrooms, Smith says.
West agrees: “The strength of the Polish zloty against sterling has taken some of the shine off exports to the UK.”
Onix is well known for its onions and last autumn it launched fresh-cut diced and sliced onions for the food service and manufacturing sectors for sale in Poland, Germany and the UK. The company operates in Wielkopolska in central western Poland and exported 19,000 tonnes of onions to the UK in 2006.
UK demand for Polish onions (mainly fresh and frozen processed), has been particularly strong this season, as last year’s drought significantly reduced the European tonnage.
UK processors require 60mm+ bulbs to machine peel, and these large onions are not only in short supply but are also expensive.
However, West says many Polish onion peelers and export-import agents have jumped on the bandwagon this season, attracted by the high UK prices on offer.
“Unfortunately, much of the cheap Polish product being imported into the UK during March was of poor quality and very small bulb size, with incomplete traceability,” he adds.
“These processors often have very basic, unhygienic production facilities, use illegally employed casual labour and use Dutch, German and/or UK industrial grade raw material that is not otherwise saleable. Export to Poland is the cheapest form of disposal.”
A two-tier market for onions exists this season, West says, as the larger-sized onions are in short supply and smaller onions are more readily available but becoming shorter as the season progresses.
Fresh World confirms this view. The company has imported good-quality onions from Poland this season, although individual crop sizes are small. “Some customers are finding it difficult if they want onion slices for pizza toppings or similar, but for dicing, there’s no problem,” says Galbraith.
The company is also investigating value-added lines and is experimenting with sliced and diced onions manufactured in Poland, although maintaining an adequate shelf life is a challenge. Once this is overcome, however, Galbraith feels that these added-value onions will be a strong addition.
Fresh World will begin importing Polish tomatoes in April and anticipates a good crop, although this is dependent on light levels. Galbraith tells FPJ that there has been a significant increase in glasshouse acreage in Poland. “We’ll see 50 per cent more availability in terms of hectarage,” he adds. “There’s the perception that Poland is a low-tech producer, but that’s completely wrong. Some really good-quality glasshouses have been built in the last few years.”
Agro Alians is optimistic about prospects in the UK and will begin shipping tomatoes at the end of May. “We’ve already signed some contracts for the season and anticipate exports to the UK will rise,” says the company’s Marcin Winiarczyk. “British retail companies see that Polish product is of really good quality and greenhouses have gained accreditations such as BRC and HACCP. Our next step is to show consumers that our tomatoes are as good as Dutch product.”
While Polish tomatoes are unlikely to garner premium prices, Galbraith says that having the right product at the right price will create interest.
One UK importer hopes Poland will not be persuaded to grow Dutch varieties. “Poland produces good quality, tasty varieties and I hope they won’t start growing higher yielding but less flavoursome tomatoes,” he says. “It would be a mistake to sacrifice taste for yield.”
POLEPACK ASKS FOR FAIR PRICES
Polepack is looking to expand its apple range in the UK in terms of volume and varieties, but this will depend on market conditions. Last season, higher prices on the eastern markets inevitably dictated sendings, according to Polepack’s John Fraser.
“Several UK companies approached us for supplies but the main problem with the UK market is that Polish apples are Class I specification butare labelled as Class II, with a Class II price,” he adds.
This problem was exacerbated during 2006-07, as some poor-quality Polish apples were dumped on the UK wholesale market, driving down prices.
Polepack says it has been approached by several UK companies to export other products. Although its focus remains on apples, Fraser tells FPJ: “Who knows what will happen in the future? We are always open to work with any serious partners.”
Polepack was founded last year as a service provider to suppliers of Tesco Poland. “We feel we are now in a position to take on future challenges to both increase our market share of the service provision market in Poland and also help UK companies to establish a direct link to Polish produce,” Fraser claims.
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