“Germany is an important market for us”

Marc Peyres, Export Sales Manager, Blue Whale: “Germany is an important market for us”

Founded in 1950, Blue Whale is a group of fruit growers with nearly 300 producers in the South, East, and West, the Loire Valley, and the Alps. A major player in the national and international apple market, with exports to 70 countries, Blue Whale also sells plums, pears, grapes, and kiwis.

After the frosts of 2021, Blue Whale was concerned about a possible drop in production. In the end, the season was rather satisfactory, with limited incidents offset by a large crop. “Our biggest productions are located in the South-West and are protected, so for most of our producers, 2021 has been a big season in terms of harvest,” explains Marc Peyres, export sales manager at Blue Whale. Nevertheless, the cold spring affected the quality of the fruits. “Volumes were therefore pretty satisfactory, but it was mainly the quality of the harvest that was impacted. We started the season with a significant number of small sizes and skin defects.”

As far as consumption is concerned, the campaign has also been uneven: “We must not forget that we were coming out of two years of COVID-19, which had a very beneficial impact on apple consumption. People at home consumed more fresh fruit and vegetables overall. Now we’re having trouble getting them to eat fresh fruit outside the home. This is probably something we will have to work on in the future. This decrease in demand, amplified by smaller apple sizes, is not without consequences for the end of the campaign: “Since the beginning of the season, we have been carrying European stocks, and we found ourselves with large stocks of French niche varieties on March 1st.”

Although producers would happily forget the 2021 campaign to focus on the coming season, the cold weather announced this week makes them worry about reliving the same situation as last year.

EXPORTING: A TRADITION AT BLUE WHALE

“We have always exported a lot. The fact that we have been able to do so in the first part of the season allows us to reach a balance before tackling the final leg of the season. We still have some varieties with larger stocks for which we will have to extend the season, but overall we are ending the season in a way that is nothing like last year.” The season promises to be more difficult, but should end in a rather “decent” way.

“During the last season, we still lacked export markets, especially in Northern Europe, which had a large harvest, Germany in particular, and in Southern Europe such as Spain and Portugal, which are important export markets for us.” Difficulties in exporting can be explained by a higher inflation rate than in France, a decrease in consumption, an increase in local production, and smaller sizes.

GERMANY: A COMPETITIVE MARKET

Although for a long time Germany was not a priority export market for Blue

Whale, today it represents nearly 10% of its exports. “We have practically doubled our volumes in Germany in 5 years, with varieties that are adapted to the market, because to be successful in a European market outside your own country, you need to have a distinctive product. This is what we have today with four main varieties: early Gala at the beginning of the season, followed by the Pink Lady throughout the season, and the Granny and Joya at the end of the year. Varieties that allow Blue Whale to stand out from the local apple and maintain a consistent supply with several German distributors. Each market plays an important role in the balance of our annual sales for a given product and period. Germany is an important country for us today as it is our 4th largest export country.”

This is certainly an important market, but one that nevertheless requires some adjustments. “Today the German market has a very organized and centralized distribution system. In order to reach the distribution system, we need to have volumes to offer. In addition, the presence of a large local production requires a diversity of both varieties and products. A requirement also justified by the presence of other countries on the German market. It is a very competitive market, especially with northern Italy, which is a major apple producing region. But just because a market is competitive doesn’t mean that there aren’t areas worth exploiting. That’s what we are trying to do today, mainly with adapted varieties, but also with the development of organic products in a market where the demand is high. Although Germany has its own local organic production, Blue Whale continues to stand out with varieties that offer a high taste value, such as the Pixie and the Candine. These are varieties that I think will be very successful, just like they were in Scandinavia.”

ABSORBING RISING PRODUCTION COSTS

After the Agec law and the generalized increase of inputs that has been raging for several months, the sector is trying to adapt as much as possible. “The obligation to switch fully to cardboard had already generated additional costs. The economic recovery just after the pandemic and with it, the lack of materials, has again led to a surge. Given the current geopolitical context, costs are likely to rise again, and if we want to absorb these production costs, we would have to increase our prices by 10 to 15%. A situation that affects all professionals, across all sectors. Everyone will end up raising their prices, we won’t really have a choice. Concerns about consumer purchasing power could lead to a price war among European distributors.”

For Marc Peyres, the Ukrainian conflict may also redistribute the cards. “The southern hemisphere is about to start its season and several countries in this area used to ship large volumes to the East. The risk today is that this blocked merchandise will be shipped back to our European markets and sold at very low prices.”

PROMOTING THE VALUE OF PRODUCTION TO THE CONSUMER

Orchard evolution, varietal innovation, but above all introduction of new varieties to consumers... These are the challenges that Blue Whale will have to face in 2022. “There has been a lot of innovation in recent years, so a lot of new varieties are coming to market, both here and abroad. One of the biggest challenges for 2022 and beyond will be getting those new varieties to consumers through our distributors.” Another challenge is the development of the organic market. “It is something demanded by society after all, when we look at the evolution of regulations and consumer expectations. We must therefore succeed in developing consumption to absorb the products that we have developed in organic.”

Blue Whale is also aiming to reduce its impact through its new orchard practices, such as the HVE approach, initiated in 2019. “We are now 100% HVE in our orchards. We are working on organic and on Zero Pesticide Residue, so we will continue on that path.” But to successfully promote its approach and its products, the company will continue to invest in communication campaigns for the next five years. “We need to push our organic offer and new varieties. To impose them we need to review our variety launch.”

In the longer term, Blue Whale will continue to develop new scab-resistant varieties with high flavour potential, not to mention the efforts made in new, more sustainable growing practices that will have to be valued by the market. “This obviously requires investments and risk-taking that we will have to deal with in the coming years.”

www.blue-whale.com/fr

CEO Steven Martina: “I don’t see why The Greenery wouldn’t still be around in 25 years“

In 2016, The Greenery chose a CEO from its own ranks: Steven Martina. Last year, this Dutch marketing cooperative celebrated its 25th anniversary. Martina has been with the company for 18 of those. This year he and CFO Arthur Swijter also formed the board of Coöperatie The Greenery U.A., using the so-called RVC+ model. We spoke to Steve about focus, digitalization, and diversity, among other things. “That people can mournfully explain why we cannot systematically reduce VAT on fruit and vegetables to 0% is beyond me,” he exclaims.

How did the Greenery celebrate its 25th?

It would’ve, of course, been wonderful to be able to celebrate our 25th anniversary together, but due to the pandemic restrictions, it wasn’t the party we’d wanted. Nevertheless, we did ‘corona-proof’ it, focusing on interaction with and between our growers and employees. For example, we gifted all our staff a surprise box, and they personally delivered cakes to all our growers. We also organized smaller, more light-hearted initiatives. From the management side, we held things like cooking workshops, a 25 Years of The Greenery quiz, and fitness training sessions. We also hosted a cycling clinic along with the Jumbo-Visma Team, which had stops at various grower locations.

How long have you been part of The Greenery?

I’ve been with the company since 2004 but worked part-time at a soft fruit business since I was 11. At 16, I began buying at auctions and also did commission trading for a few years. I went to the FruitMasters and Veiling Zaltbommel auctions [in the Netherlands] but also to Hoogstraten and Borgloon in Belgium. But, I didn’t only work in fruit; when I was a student, I did stock trading for almost five years, something I’d always dreamt of doing. However, a trader only makes money if there’s movement. In the end, it wasn’t all that exciting. Then The Greenery approached me; they were looking for someone who knew about soft fruit and trading, and I made the switch.

Cycling clinic at grower locations with the Jumbo-Visma team

At The Greenery, I returned to working with physical products and growers. I started in strawberries and held all kinds of positions, from buyer to salesperson to business unit manager. Until 2013, when I was asked to take care of the organization’s commercial side. In 2014, I was appointed as commercial director for all trading activities, and a month later for all commercial activities. Then, in 2015, the Supervisory Board wanted to know if I, as the first from the company’s own ranks, wanted to lead the organization as CEO. I’ve now been in that role for six years and, since this year, am also Coforta’s successor, Coöperatie The Greenery U.A.’s Chairman of the Board.

Why the RvC+ model?

With all the market changes at our growers and customers, decisive business is key. You must be able to do business with each other and switch quickly and immediately. The previous model had some duplicate roles. The Coforta cooperative owns The Greenery. That cooperative has an executive board that reports to the AGMs. Those board members and two non-member executive board members formed The Greenery’s Supervisory Board (RvC). The CFO and I were accountable to that supervisory board.

But we had to deal with the executive board, too, which consisted of growers with management and supervisory roles who also represented the shareholders. We advised them that things were becoming very complicated in various areas. To simplify things and directly interact with one another, we chose the RvC+ (Supervisory Board Plus) model. The trading company and the cooperative’s management are interwoven, and the supervisory board oversees things at the cooperative level.

Do the growers still feel represented?

That was a point of attention and is why the process took a while. It may seem that growers have less influence, but, in fact, they’re closer to the company. In the past, I’d go to AGMs, tell the members how The Greenery B.V. was doing, and leave. Then the cooperative’s chairman would give an account of his activities. Now I tell the general meeting how both the cooperative and business are doing. I’m directly accountable and am in direct contact with our members. But it’s beneficial from a cost and efficiency point of view too, which is more appropriate in this day and age.

Two years ago, you split the members and trade branches. Why?

Two years ago, we initiated the move to create a definite split in our activities. The Greenery B.V. consists of several components: The Greenery Growers, The Greenery Logistics, and The Greenery International. Each with its own focus. The Greenery Growers distributes our members’ products, and The Greenery Logistics offers logistics solutions for fresh produce. The Greenery International provides value-added services with a wide range of Dutch and imported products to retail and online customers in Europe. Our subsidiaries serve specific markets and customers.

With The Greenery Growers, we take care of our affiliated members’ sales. Growers believe it’s essential that we get maximum prices at the lowest possible cost to achieve as much return as possible. This component, therefore, has no profit motive. Then, we have a logistics and a trading division whose intention is to make a profit. That sometimes led to the question, are we collecting cover for the logistics unit, making a profit as a trading company, or going for the best payout price for growers? Now no one asks that. Combined with customers indicating that they want to do business directly with the source and some growers needing more interaction with end clients, we’ve continued tweaking our organization over the past year. We now serve several buyers directly with products from The Greenery Growers. That’s let us create shorter growers/customer communication lines. We consider transparency crucial, and we believe, overall, this leads to greater grower and client satisfaction. That contributes positively to the mutual understanding between these groups.

Last year, you managed to distribute 2020’s profits among your members. Did that give you a taste for more?

When I was asked to be CEO in 2016, I said, ‘I’d like to take the job, but we must become a regular business.’ What I meant by that is that as soon as you become profitable, your shareholders should be able to share in that experience. It must be something tangible. You can own a company, but if you never make a profit, you’re not going to make rational decisions. Certainly not if you have another interest as a supplier to the same company. That’s why we wanted to reward our shareholders.

But to do that, you have to make a profit. So, the priority was to get the company in order and ensure a positive result. Last year, our members received dividends for the first time because our solvency was in good order, and we were virtually debtfree. We’re now entirely debt-free and have a good net balance sheet. We’re happy with that, and it also loads our growers’ ownership. We can be proud of the results we’ve achieved in recent years, which we can also substantiate. That ensures that we, as a cooperative, remain in demand too.

Is that necessary?

I think it’s always necessary to be an attractive market player. Ultimately, in the future, you want to be working with the best growers. And for that, you need a certain amount of growth, which requires focus. We’ve chosen to focus on several product groups - top and soft fruit, fruit-vegetables, and open field vegetables. We no longer do other products like mushrooms. We’ll continue to organize these for our trade customers who take the total assortment, and we have the necessary suppliers. But we don’t facilitate this as a cooperative anymore.

For years the trend has been towards fewer growers, with more acreage each. Scaling up continues unabated and will continue, given the rising costs and labor pressure. Automation must continue, and you need a specific scale for that. The current energy prices make it even tougher to start up certain crops. It’s in times like these that growers must consider their options. That’s why we’ve organized the company per product group. Within each product group, we work with the top growers to see what their goals are and what steps are needed to remain relevant in the market.

Then, the open field growers leaving to join [distribution and packaging center] Tolpoort was a hard blow, no?

No, because growers are free to do as they please. Those growers had wanted to do so for a long time and decided to take that step. We’ve lost a considerable acreage, but on the positive side, it creates space. Buyers won’t disappear. We’ve filled the gap, partly with our own cultivation and partly with new members. Several open field growers expanded this year for that reason. And a number of broccoli growers have joined us, good for 75-hectare acreage more. We’ve also concluded contracts with some chicory suppliers, with talks now underway about closer cooperation. These are steps we can now fully take.

You haven’t been using GMOs for a few years. Will that remain the case?

I don’t know. Firstly, GMOs don’t equal money for free. If you ask someone if they want to receive GMO funding, they will undoubtedly say yes. But there are strings attached. We deliberately chose not to use GMOs for several years now, for two reasons. We couldn’t meet the requirements placed on our organization without very disproportionate measures. Our size and the responsibility we want to take meant we opted not to use GMOs, mainly because the rules lack clarity. The Netherlands interprets things differently from, say, Belgium and Germany. Also, it’s under great scrutiny because of past incidents.

You have to handle it with care. That’s why we think it’s vital that Europe has a level playing field. We also believe it’s important for a company to be able to operate without subsidies. We’ve, thus, created that possibility. The Netherlands has become a net contributor in Europe, so the government is under slight pressure. That’s because we, and other parties, have decided not to use GMOs. As a result, the conditions have been adjusted in recent years, and various cooperatives have reapplied for GMOs. We, too, are reconsidering it based on a solid per product group plan. We’re evaluating whether it fits in with our goal and investment ambitions.

Could you give us a little insight into which business units aided the good financial result, mid-pandemic?

Last year, the hospitality channel closed due to COVID-19, so the retail sector dominated. Overall, that worked in our favor. However, we did have to deal with specific product markets being lost. Restaurants use things like redcurrants a lot. So, if no one visits a restaurant, there’s far less demand at certain times of the year. The pandemic affected individual products, but we generally had good sales, thanks to our focus on retail. Also, we focus on online players, upcoming and those who’ve been on that market for longer. That’s taken off quite well for our existing and new customers. We brainstorm with our clients about packaging, size, and distribution, too, as well as how ripe fruit should be for online shoppers.

Can you tell us about your company’s sales development at Jumbo and the possibilities the PLUS/Coop merger brings?

We cooperate with some larger retailers, so we have a reasonably sizeable local share in fruit and vegetable concepts. Obviously, Jumbo is and will remain an important client. And PLUS, with whom we have a close partnership, including store distribution, has been with us for years. They’re now merging with COOP, and if needed, we’ll support and brainstorm with them.

How important is digitization to The Greenery?

Very. It’s a prominent pillar within the company. It’s important for our employees, but there’s also a new emerging generation of growers who want to have all information at their fingertips in real-time. We’re primarily considering how it contributes to our proposition to our buyers and mem-

bers. All companies will eventually be digital, if they aren’t already. That’s a continuous development, and the entire chain is increasingly becoming data-driven.

Our growers’ and clients’ expectations in this regard will only grow, and we must facilitate that. If you want to be a good employer, it’s more attractive if you use modern tools and digital processes to ensure slightly improved processes every day. Our trade customers use our webshop well too, and last year we increased the number of products. Our buyers used to like speaking to a salesperson on the phone. Now, the new generation finds it particularly convenient to see availability

and prices online, any time of the day. er organic is really more sustainable. I don’t think organic is, by definition. You have more input and less output. Is that sustainable? There’s the same discussion around packaging at the moment.

Cardboard must replace plastic en masse. But where does that cardboard originate? Trees have to be cut down all over the world for it and shipped to Europe. Then it might be more sustainable to consider a specific type of plastic, making sure we have a good recycling system. What do our retail customers think about this? At the end of the day, they take consumer demand and public opinion into account

What aspect have you, personally, worked hard at within the company?

I became a father after I became CEO. Then, of course, you contemplate your life’s purpose. What will I leave behind? I never used to think about that, but once you have children, it becomes important. I never thought I’d say that, but there you have it. And especially when you’re a CEO, you start thinking more about what your impact is and should be. I thus began considering several social issues more.

We want to ensure fruit and vegetables are accessible to everyone. It’s crucial that we contribute to society in this respect. Obviously, we have to make money. But by bringing these products to market as quickly and efficiently as possible, we can ensure they’re available but also affordable for everyone. Fruits and vegetables are often considered expensive, but there’s enough supply from which to choose. buy pre-packaged hamburger buns for €3, but they think a €0.99 bell pepper is expensive. And yet, thanks to our efficiency, our fruit and vegetable prices are some of the lowest in Europe. That’s also why it’s important that VAT on fruit and vegetables should be 0%. The government is now telling our sector that’s impossible to do systematically. In 2019, it was possible to increase from six to nine percent, but not from nine to zero percent in 2022.

With all due respect, I cannot believe some people dare to mournfully explain that. We’re so afraid something will, unjustly, be priced at zero percent that we don’t do it. I think we need much more of a ‘can

do’ mentality. The government quickly pumped billions of previously unavailable money into pandemic support. Suddenly the money press was turned on, and it flowed like water. But that’s apparently impossible for prevention issues. If that’s so, governments also shouldn’t be singing their own praises and should just admit health isn’t a priority. Because if you prioritize something, you direct your actions accordingly. We’re keeping up the fight for this via our interest group, GroentenFruitHuis.

In a Social and Economic Council interview, you named diversity and inclusivity as a strategic theme. How do you give form to that?

Admittedly, I was never as consciously engaged in this. I was fortunate to grow up in a safe environment. A few years ago, the Global People Awards approached me. Every year, they award the best businessperson and manager of color. I declined it; I didn’t want to receive an award because of my ethnicity. But they approached me again the following year, that time to participate in the jury. They said, ‘This isn’t about you; it is about what you can do for others.’ You get to meet many people and hear their stories and the struggles

The government quickly pumped billions of previously unavailable money into pandemic support. Suddenly the money press was turned on, and it flowed like water

What does the future hold for your various subsidiaries?

Our group includes several companies. That resulted from all the auctions merging, and trading houses, and distribution and transport companies being bought. We’ve now reached a stage where we’re questioning whether we want to remain on this course. What do these companies contribute? How does that relate to the risks it entails? Are we prepared to continue investing in this? These are the choices we’ll be making soon.

But then you’ll get smaller, not bigger. Naturelle, for instance, is already part of The Greenery.

That I can’t answer yet; I can say we’ll become more focused. We’ve indeed already integrated Naturelle into The Greenery, mainly because we no longer consider organic a separate branch.

Why not?

Organic is part of the game, relevant to the niche. However, you cannot feed the world organically. Naturally, I’m in favor of organic, but we don’t have enough land and water. You also have to ask whethEvery week, there’s something on sale. It’s difficult to want to eat cauliflower every week because there are times when it costs €3, but at other times, it’s €0.99. It’s also about education. People in lower-income brackets certainly often make unhealthy choices, not even based on money. They

they’ve endured, and that did cause a switch in me.

Of course, I’m not going to bring in random women or people from different backgrounds. As an international company in the Rotterdam area, we already have a motley crew of employees of all nationalities, although we’ve never actively promoted that. But this is mainly about awareness. Some of our buyers are people with an ethnic background. Your company has to be diverse enough to serve them well. It’s vital to have a good mix; that benefits creativity. A society that’s divided unequally, ethnically, eventually leads to

friction. That, at the expense of economic stability and a sense of security. Responsibility is being taken all over to take these steps together. There’s already some governmental legislation in place.

But we have international customers who want annual reports about, say, how many women we employ and how many hold managerial positions. That has to be at least 30% by 2025. And let’s face it, in our industry, this is often waved off by saying, ‘there aren’t any women active in our branch’. But have you made a genuine effort? Conversely, if you’re too active in this area, women will say they want to be hired purely based on their qualities, not their gender. That makes it quite challenging, but it’s about mutual awareness and ensuring equal opportunities. For example, we’re now holding sessions at The Greenery. We discuss how to organize this with women in the company.

We mustn’t make the mistake of thinking men can arrange things like that. I’ve been in networking clubs of 50 people that include four women, where I’m the only person of color. Then they sagely discuss themes such as diversity and women at the top. I’ve stopped doing that and no longer participate in sessions of mostly men talking about women in leadership. And when it comes to diversity, I don’t want to be the only one at the table that fits that bill. You have to talk not about, but with people. I’m convinced you can then also take more targeted steps.

Is it difficult to attract and keep employees?

Everyone in the market struggles with that. People were more reticent during the pandemic, but are now looking around more. Everyone’s looking for good workers, as are we. We can still find personnel in our field reasonably easily, but in cer-

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tain disciplines, it’s becoming more complex. Think of team leaders in the warehouse. That also has to do with regional competition. When you have to work in a 12°C D.C. or could earn €0.50 more per hour, it makes a difference. Then you sometimes have to compete with companies that have marginally better collective agreements in that regard. For people with lower incomes, who’re sometimes literally just surviving, that plays a role. That’s challenging, but up until now, we’ve managed to meet that challenge reasonably well.

Who or what inspires you?

Various sources inspire me. I try to read at least two books a week, ranging from management gurus to more general sources. If I have to name a person, it’s Nelson Mandela, with no reflection on myself. It astounds me that someone can be subjected to so much suffering, get past it, and still do the right thing.

Are you easily approachable to staff?

It depends. I’ve been with the company for a long time and have worked side by side with some of our employees. Some are easy to approach, chat with, or email. But there are also those, say, in the warehouse, that are farther away. Some know you from before and like discussing all sorts of things with you; others look up to you. We try to organize things as flatly as possible and be easily approachable because many people can have a certain natural threshold. That’s why we hold monthly breakfast sessions, unfortunately mostly digitally, in the last two years.

There, people can ask all kinds of questions. I consider myself easily approachable, yet people you’ve worked with for years suddenly see you as the CEO. That’s true for customers and growers too. But, just as easily, a client can call me to say

he’s been at the dock for half an hour and no one’s come to load his strawberries. That’s because I’m still the first person listed under ‘strawberries’ on his phone. That’s just as nice.

We started the interview discussing your company’s anniversary. Do you think The Greenery will still be around in another 25 years?

Definitely! I don’t see why not. Though, I don’t know what the company will look like then. Two-thirds of the company no longer sells its members’ products but is active in the trade and logistics fields. I’m optimistic about the near future. We’ve put our affairs in order in recent years and are in good financial shape in a sector that still offers plenty of growth opportunities. We’ve now structured the company in a new way. We’re also working at involving the shareholders even more in the cooperative. We want to get some of the equity registered in their names. These are the things we’ll soon be working on with our members, along with facilitating their dreams and ambitions as best we can. We can now put some genuine effort into this. Full speed ahead!”