Hortifrut-VitalBerry merger to cut supply ‘lull’, says Naturipe
The merger agreed upon by the heads of Chilean blueberry companies Hortifrut and VitalBerry will help fill traditional low void windows in the North American market, according to Naturipe executive vice president of marketing Robert Verloop.
The executive emphasized the deal was still being worked out and finalized, but once in place it would consolidate the companies’ volumes under Naturipe’s brand, as Hortifrut is a key part owner of the U.S. business.
“There often isn’t enough fruit on the marketplace as there needs to be, and the fruit that’s there, if it’s being sold through a lot of fragmented distribution chains, it doesn’t have the ability to really service the blueberry industry’s best customers,” he told www.freshfruitportal.com.
“We think this combination will give us additional volume so that lull is non-existent and really the transition becomes much smoother.
“It’s really important for retail, it’s crucial for food service, so for us to be able to go to the market with that much more fruit, providing what we believe are some of the best customers in the industry with more fruit consistently, is just so much stronger.”
He added the move would create efficiencies at the supply and customer level.
“The potential is there to eliminate duplication. Any time you have more people doing things more consistently on a standardized basis it becomes much more efficient, and it also makes the selling and marketing much more efficient because you’re not handling different products – our customers don’t have to handle different SKUs (stock-keeping unit),” Verloop said.
“There are efficiencies at the farm, transport and logistics, but I would look at the efficiencies in the marketplace. For those customers that have been looking for more product, this means that they have to go to less people.”
Thinking long term
Verloop highlighted the business model for Naturipe and blueberries in general was very different to when he joined the company almost five years ago.
“We rely less and less on the spot market, the day-to-day trading, and what we really want to base our long term success on is pre-programmed selling programs for the season, for the year, and that’s important for us both on the growing side and the selling side.
“If we have a yearlong commitment, price becomes part of the equation, but it really becomes more about service, innovation, different packaging and building long term responsibilities towards each other.
“It’s about the psychology in the market. People want to participate with the berry category, consumers are looking for it, so the more we take out non-value producing activities – negotiations are non-value producing – it’s about how do you get more people eating our product, more often, keeping that velocity going.”
Verloop was upbeat about the next generation of varieties coming onstream, saying there was good potential for growers of those berries to reap higher premiums.
“The next generation that’s now starting to come out, which had been developed five years ago, something like the Rocio which shows a lot of promise, that may become a different segment of the total blueberry industry.
“There are some buyers and some consumers that may not value that flavor profile, fruit size, and they’re satisfied with the other ones, so there are different value levels. We want to be able to offer a wide variety to different customers.
“We want to do everything we can to eliminate the poor tasting fruit. When the fruit is weak you have to be careful not to ship anything to the marketplace because you destroy yourself, but there is nothing wrong with selling a premium set of varieties; we do that under Naturipe Selections, branded separately.”
He added the company would likely be opening up with new foodservice customers in the next two to three months.