From the pages of Produce Business UK
Reflecting on some of the greatest challenges for the international fresh produce business, nine of the world’s senior industry thought leaders made a plea for cooperation, communication and education up and down the supply chain at the sixth annual edition of The London Produce Show and Conference held this week.
Taking part in Jim Prevor, The Perishable Pundit’s highly regarded Thought-Leader Breakfast Panel on Thursday, the nine panelists hailing from four continents discussed topics ranging from Brexit and trade tariffs, to raising consumption and consumer engagement.
The panel represented the powerful retail and foodservice sectors, NGO leadership and the influential world of celebrity chefs, comprising:
- Amanda Freitag, Chef, TV Personality & Cookbook Author, as well as The London Produce Show 2019 Ambassador (US);
- Clare Linstead, Senior Buying Manager for Tropical, Exotic and Stonefruit at Morrisons in the U.K.;
- George Liu, CEO of Frutacloud in China;
- Philip Macy, Category Buyer for Grapes and Stonefruit at Sam’s Club in the U.S.;
- Tom Stenzel, President and CEO of the United Fresh Produce Association in the U.S.;
- Raj Tugnait, CEO of Fresh Direct Group in the U.K.;
- Tania van der Merwe, Senior Buyer for Freshmark in South Africa;
- Stephan Weist, Director Category Management for REWE Group in Germany; and
- Maria Wieloch, Senior Category Manager for fruit, vegetables and flowers at ICA Gruppen in Sweden.
With more than two-thirds of fresh produce imported into the U.K., Raj Tugnait, Chief Executive of Fresh Direct Group, addressed the potential operational impact of Brexit on U.K. businesses and their suppliers.
“Communication and pro-activeness is absolutely essential,” he said, explaining that Fresh Direct Group has established a dedicated task force to work on contingency supply plans with customers, and to prepare for the worst-case scenario.
“Our aim is to mitigate the impact,” Tugnait continued. “We are working with the government as well, to make sure that they understand the nuances of fresh produce so they don’t take a general food approach because fresh produce is very specific.”
Similarly, the U.S. is experiencing major political and trade challenges given the so-called ‘trade war’ with China, and, most recently, the threat of tariffs for Mexican exporters to the U.S.
Tom Stenzel, President and Chef Executive of the United Fresh Produce Association, described the panorama as one of the biggest challenges for global produce industry.
“It’s not just the U.S.; I see it globally,” he commented. “It’s a nationalistic approach, and in the next few years I see the threat of more barriers rather than opening trade.
“Today, most U.S. growers also have partnerships with Mexican growers where they own production there. National borders don’t really govern produce at this point in time, and I think our political institutions are behind in terms of trying to still look at the produce trade across national borders.
“We need to educate government officials. We disagree with a number of the trade policies, the tariffs and the threat of tariffs on goods coming from Mexico in order to deal with migration. They don’t go together. So, the agricultural industry, the business community and even a number of political leaders are pushing back very strongly because the tariffs are simply not a good strategy.”
Moving onto the challenge of increasing produce consumption, Maria Wieloch, Senior Category Manager for fruit, vegetables and flowers at ICA Gruppen in Sweden, suggested that while the produce sector cannot compete with the big marketing budgets of other industries, it could learn from them.
“Everyone knows fruits and vegetables are important for a healthy lifestyle ... but still consumers find the solution in a pill, a bar or smoothie,” she lamented.
“The big challenge for us as an industry is to make this commodity hip, and to learn from the marketing of other products.”
To that end, ICA is focusing on educating its customers about the different varieties of fruits and vegetables and their specific, individual characteristics, such as flavor. The retailer is also emphasizing seasonality, and promoting produce around traditional holiday periods.
“Consumers want their own preferences, and to be able to show that to people by saying ‘I prefer this type, while you prefer that’,” Wieloch proposed.
Philip Macy, Category Buyer for Grapes and Stonefruit at Sam’s Club in the U.S., agreed product differentiation is important in driving repeat purchasing for his customers.
“We look for more unique varieties with better flavor,” Macy said. “Customers expect to have something better. Really, it’s not me that decides, it’s the customer when they come back for more. Pluots [the plum-apricot hybrid], for example, we get a lot of feedback on how much consumers like them. They have 30-40% higher brix (sugar) level than a normal plum.”
Equally, Tania van der Merwe, Senior Buyer for Freshmark in South Africa (the fresh produce procurement arm of Shoprite), said her organization is working on educating shoppers about different varieties.
“We have three different retail store levels, and Checkers is the highest,” she commented. “There, we have aspirational lines that we monitor to see if they work, and we educate and do marketing around those. For example, within grapes we decided on a couple of cultivars and marketed them separately from the standard line to see how shoppers interact.”
Nonetheless, affordability remains crucial to ensure all shoppers have access to fresh fruits and vegetables.
Clare Linstead, Senior Buying Manager for Tropical, Exotic and Stonefruit at Morrisons, pointed out that when it comes to deciding which lines to carry at the U.K.’s fourth-largest supermarket operator, consumer demand and affordability come first.
“As retailers, we need to work responsibly with the international supply chain to ensure that we are getting produce from A to B in the most efficient way possible without creating waste, or it will cause the produce to become unaffordable,” she stated.
She added that Morrisons also offers several different branding tiers; from the standard to a higher tier range to give consumers access to more interesting varieties with higher brix levels that are more expensive.
At the other end of the scale, meanwhile, Linstead said U.K. consumers still need educating about seasonality, as well as what is edible when it comes to buying and eating cosmetically imperfect fruits and vegetables.
Speaking of ranges, George Liu, CEO of Frutacloud, brought attention to the opportunity to offer all Chinese shoppers, not just the affluent, more choice via a wider range of produce tiers.
“People always have the idea that Chinese people like really premium fruit but it’s because after going through three to four layers of logistics [within China], premium fruit has become the standard on the shelf,” he explained.
“My question is how do we revolutionise the cold chain? How do we shorten the distance from the grower to the consumer? That is where you would have the opportunity to give more choice and levels of standards.”
Going deeper into the topic of how to engage consumers, Stephan Weist, Director Category Management for REWE Group in Germany, and the current president of Freshfel Europe, said operators need to respond to the different demands across all age groups.
“People of my age start to get nervous about how long they’ll be around for, so we eat healthier than maybe we did 10-20 years ago,” he explained. “But teenagers and kids aren’t really interested in eating healthily; that’s not their biggest issue right now. It’s all about having fun.”
At the same time, Weist said younger consumers are extremely concerned about the planet, which retailers and other businesses must take seriously.
“We need to listen to their concerns,” he urged, singling out plastics in particular. “We have a responsibility as an industry to think about that… otherwise we’ll be punished by the end consumer.”
On the question of pricing, Weist indicated to the audience that consumers, in Germany at least, will pay more for better tasting fruit, provided the supply is consistent.
“We can sell better and more expensive fruit on one condition – as long as consumers are not disappointed or they will not come back,” he warned.
“Some varieties are so different in taste that people will honour that with price. But if it’s mediocre it won’t fly. The consistency promise is extremely important. We need to find a way to keep our promises together with our partners.”
New York-based celebrity chef Amanda Freitag emphasised the extremely important and positive role that chefs can play in making produce more appealing, as well as educating and inspiring consumers to try lesser-well-known fruits and vegetables.
“We are more influential than we can imagine,” she noted. “From the bigger platform of television where people look at what we cook, to social media where thousands of people can see what I’m doing.”
Children are the key to driving consumption too, according to Freitag. “Kids love to cook, they love watching the shows, and learning about food,” she explained. “Through osmosis they are learning how to eat better, and we see a lot of kids educating their parents.”
Freitag added that the time is ripe to push produce. “From my world in New York, there’s a wellness push around chefs, and a creativity push to do more with produce. Chefs are super competitive too, so we always want the next new thing.”
Indeed, Tugnait from Fresh Direct Group, reminded attendees that food trends often start in the foodservice market, meaning the sector can help to introduce new or innovative products to consumers faster than the retailers.
“The fundamental difference between retail and foodservice is push and pull,” he affirmed. “In retail you have to push; you think something might go well, so you put it on the shelf and hope consumers will pick it up.
“In foodservice, we are fortunate. We have a team of chefs, sector expertise and product expertise. We work very closely with caterers and brands to develop their menus. Come to us with ideas, but come to us with well-thought-out ideas, not a shotgun approach.
“No one had heard of jackfruit a few years ago, now you can’t get away from it! It all kick offs in foodservice.”
Once the nine panelists had shared their experience and expertise, attendees left the Ballroom at the Grosvenor House to walk the busy aisles of the LPS19 trade show in the Great Room, which was packed with exhibitors representing a myriad of industry sectors from across the world.