The beginning of winter is mercifully still a few weeks away, but growers in Israel have long been preparing their winter lines. This season could prove to be more challenging than most, given the current economic climate, but exporters are hoping that UK consumers will continue favouring their crops.
The winter months are an important time for Israeli exporter Agrexco, when the firm produces a wide range of crops including avocados, melons, strawberries, citrus, figs, dates, sweet potatoes, peppers and fresh herbs.
Weather conditions and light levels have been favourable in recent weeks. “The crops are looking good,” says Oded Yacovson, Agrexco UK’s general manager. “We are just hoping that we will not get a return visit from the severe frosts that we experienced earlier on in the year.”
David Crossland of Mill Associates, the new representative for Arava Export Growers of Israel, agrees that everything looks fine at the moment. “Weather conditions have been quite normal, slightly hotter in October but not excessively so,” he says.
Arava’s core business consists of peppers and herbs, but the company has recently diversified into strawberries, tomatoes, radishes, potatoes and celery. The supplier hopes to increase its winter line exports to the UK by 20 per cent this season, due to its diversification into radishes and other vegetables, rather than because of a large rise in production.
“We will also increase strawberry tonnage by 50 per cent this season, albeit from a low base,” Crossland tells FPJ.
Herbs and peppers are Arava’s biggest sellers in the winter months and the group has recently expanded its trials of ‘ever ready’ green peppers. Crossland says the market for pointy red and yellow peppers is also moving forward.
Meanwhile, new-season grapefruit and satsumas have arrived in the UK market, as the warm weather has led to an early start for some citrus exports.
“The growing conditions have been fair during the season,” says Marius du Plessis, general manager of MTEX UK. “Volumes are expected to be on a par with 2007, with an increase in pigmented grapefruit and late clementine varieties due to new plantations coming into yield this season.”
MTEX markets Jaffa-branded fruit in the UK and on October 3, the new Jaffa logo was unveiled to the global trade in Rotterdam. The redesign aims to freshen up Jaffa with a contemporary look and is the first alteration to the brand in 15 years. It is hoped shoppers will be seduced with the strapline, ‘Love Life. Love Jaffa’.
“We felt that the brand was in need of a new look as our research showed us that we were in danger of losing our longstanding brand heritage in the UK, as we have not been communicating strongly enough with our consumers at store level,” du Plessis explains. “This new look really brings the brand up to date and our marketing campaign will help us to raise awareness among our core target audiences.”
The Jaffa brand name is enjoying a milestone in the UK as it celebrates its 50th year in the market this year.
As Israeli exporters continue looking to the season ahead, it is fair to say they are in a cautious mood and are keeping a close eye on the current marketing conditions.
“We had seen a growth in demand for figs, dates and avocados but, with the recession, it has become a fragile market and consumers are making cutbacks in the more exotic and luxury purchases,” says Yacovson. “Obviously, we would love to increase our winter line exports to the UK, but I think it will be a normal season for us and we will be working to the programmes already set.”
As a result of the economic situation, Agrexco is seeing a greater volume of fresh produce being distributed on the continent.
Crossland says demand is also rising in Russia and the former Eastern Bloc. “There is a large population of people in the area and a percentage are wealthy,” he says. “These markets are willing to pay extra for good-quality produce.”
Stronger demand from the central European markets, in addition to a strong domestic market, has increased pressure on exports. Nonetheless, exporters are keen to stress that the UK remains key to their plans. “The UK is, and will always be, a focus for MTEX and other Israeli exporters and we support the UK clients,” says du Plessis.
“We appreciate that the UK is looking for good internal and external quality and this market is very important to us,” agrees Yinon Osem, from Edom. “Edom is always hoping to increase exports to the UK, but the current situation does not help.”
Edom supplies avocadoes and pomegranates to the UK and says that, as a high-quality supplier, the UK’s stringent requirements actually work in its favour.
Agrexco is also keen to stress the significance of the UK market. “The UK remains the most important market to us and we are making every effort to work with our customers,” says Yacovson. “But we also have a great commitment to our growers and need to get the correct balance with prices and returns.”
Indeed, concerns about how growers are faring during these challenging times are a major concern for the sector, with few expecting a swift resolution. “Growers’ costs are rising but the returns are not taking this into account,” Yacovson says. “Again, this is an ongoing problem that needs to be considered by all parties.”
This view is shared across the sector. “At a time when growers need higher prices to accommodate the growing costs they have absorbed, UK retailers are not putting up their prices,” says one insider. “I don’t anticipate much innovation in the winter crops this season. With the increase in costs, growers are being much more cautious with production and expansion.”
Crossland acknowledges a gloomy outcome for some producers. “I predict that some smaller companies with small financial reserves will amalgamate or go out of business,” he says.
Certainly, exporters are under no illusions about the mounting obstacles they face. “The main challenges have not changed and now, with the current economic situation, all are highlighted,” says Yacovson. “The strong shekel against the sterling, escalating fuel costs, shortage of labour, competition from other countries, the water shortage - and so it goes on.”
Transport has also been on the agenda this year. In late August, shipments of summer fruit, including mangoes and grapes, were disrupted when port workers went on strike. Workers were protesting against the government’s decision to allow private contractors to be employed at the ports. The situation has not been resolved completely, but exporters are confident that winter lines will not be affected significantly by the recent troubles.
“Things have settled down,” agrees Osem. “There have been some delays, but I believe the situation will only get better.”
Meanwhile, ongoing water shortages are posing obstacles for Israeli growers. According to recent reports, farmers use approximately 40 per cent of Israel’s fresh water, and falling water levels in the Sea of Galilee are raising concerns about the sustainability of the country’s fresh water supplies.
“Water is a big issue in Israel, but I believe we will need to learn how to live with it and find the best solutions,” Osem says.
Yacovson moved to allay water shortage fears back in late May and he says Agrexco’s growers are using a desalination system that helps to overcome water limitations.
As for future developments, there are a number of new ventures in the pipeline. Agrexco has established new growing areas for dates in the Arava, to the south of Israel. The company is also focusing on pepper shipments and a new transit station was built in the Arava region last January. This facility provides optimum conditions for handling and temperature control, while also acting as a packing station for some pepper production.
Agrexco began exporting its organic Ramiro peppers to the UK, Europe, Canada and the US in late September. The sweet pointed organic pepper, which has an intense red colour and a long shelf life, is grown in different areas of Israel, enabling better use of climate zones and greater prevention of pests and diseases.
Meanwhile, StePac is trialling retail bags that hold peppers for long-haul export routes, which will enable customers to opt for seafreight over air transportation. “On the one hand, our packaging needs to reduce condensation, while at the same time prevent dehydration,” says Amnon Sandman, StePac’s region manager for Europe, Africa and the Middle East. “This is why Xtend technology includes solutions for modified humidity, and not only modified atmosphere.
“We are constantly developing new polymers in order to fine-tune the balance, so that our packaging really does keep produce fresher longer than competing products.”
In terms of other products, Israel has high hopes for its pomegranate industry and the growing areas devoted to the fruit have increased. “Approximately 250 hectares of new crop will yield this season and this will rise to 350ha in 2009 and another 300ha in 2010,” says Yacovson.
Osem is optimistic about opportunities for pomegranate sales in the UK and he predicts the development of better varieties will enhance the deal further. However, he argues that the sector needs to focus on getting more customers familiar with the fruit’s eating quality and appearance, so that they concentrate less on price.
Exporters are confident that the investments they have made will pay off. “We have good products, good customers, good growers and a good logistical infrastructure in place,” says Yacovson. “We all possibly just need to recognise and reach a better understanding of the others’ needs, to keep it all running smoothly during these more difficult times.”
STEPAC XTENDS NEW PACKAGING
StePac has high hopes for its new packaging for pomegranates, cucumbers, asparagus and peppers and is manufacturing Xtend modified atmosphere/modified humidity (MA/MH) 5kg export bags.
Amnon Sandman, StePac’s region manager for Europe, Africa and the Middle East, says: “We are also offering this bag as Xtend Easy-Tear MA/MH 5kg for pomegranates, which makes it easy for fresh produce vendors to tear away the top of the bags so that fruit can be displayed in cartons without excess packaging getting in the way.”
The specialist is also developing even larger bin bags for pomegranates, with trials beginning this season.
Sandman predicts the future of packaging in the UK and Europe will be in biodegradable products. “We are diligently working on our first oxobiodegradable bags and look forward to announcing their commercial availability soon,” he tells FPJ.
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