Graaff Fruit / Enterprise Africa

GRAAFF FRUIT

GRAAFF FRUIT Ever-Growing Ceres Fruit Farm

Planning for Long Term PRODUCTION: Joe Forshaw

Farming fruit in the Ceres Valley for more than 50 years, Graaff Fruit is a long-term business.

Today, this innovator is planning for the next decade and beyond as it plans for new crops, on new land, for new markets. CEO Robert Graaff tells Enterprise Africa more… www.enterprise-africa.net / 3

INDUSTRY FOCUS: AGRICULTURE

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A short drive from Cape Town, northeast through Paarl, across the agricultural heartland of South Africa, you enter the Ceres Valley. A beautiful, lush, rich landscape - boasting mountain ranges for shelter and deep healthy soil – you will not find a better location for growing fruit. Endless sunsets and picture-perfect landscapes make this place a heaven on earth – named after the Roman goddess of agriculture and fertility, for good reason.

Averaging 300 days of sunshine throughout the year, with hot summers and cold winters, apples grow extremely well here. In fact, deciduous fruit from this region is prized the world over, with major local and international retailers desperate to fill their shelves with tasty, healthy South African fruit.

For Graaff Fruit, one of the area’s key companies – providing employment for many and driving economic development for the country – the Ceres Valley has been home since 1968 when the family purchased a small piece of land, the

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Lushof Farm at Prince Alfred Hamlet.

CEO Robert Graaff is a thirdgeneration farmer, with a love for the Ceres Valley, and a modern approach to agriculture that encapsulates people, planet, and profit. This triple bottom line approach has seen the business expand successfully, introducing new varietals to the portfolio over the years, and Graaff has plans for further growth.

ALWAYS GROWING Importantly, any development comes with a promise of supporting the environment, minimising waste, and preserving nature.

“Our plan is to build a one million3 dam and reservoir on one of our farms,” Graaff tells Enterprise Africa.

“Starting in August, that would allow us to develop another 140 hectares

GRAAFF FRUIT

// BEING IN THE FARMING BUSINESS, THERE IS NO NORMAL – WE DON’T HAVE NORMAL HERE // on that farm. As the oil price goes up, this becomes more expensive, but right now we are sticking to our plan. It’s a nine-month construction period and it will 10 years before the extra land becomes fully productive – our business is a long term one.”

Currently, the company farms at various sites either directly or indirectly through partnership agreements. Top fruit and stone fruit come from Lushof, Romansrivier, and Rietfontein – where onions were also farmed. Each product is carefully chosen for its climate suitability and compatibility with local conditions. In total, Graaff Fruit delivers more than 25,000 tonnes of fruit each year. Apples, pears, nectarines, plums, peaches, and more are sent out across the world to customers in the

UK, Europe, USA, Canada, the Middle East, Far East, and across Africa.

“Our carbon footprint is well off-set by the number of trees we maintain and plant every year and we’re continuously working towards reducing it even further,” says Graaff.

He adds that renewable energy is increasing in importance for the company, and further projects will be rolled out in the coming months to take advantage of the bountiful natural resource that already feeds into Graaff Fruit production.

“We are looking to make the most of the sun – that is a no brainer for us.

“We have solar power already, but we are looking at increasing our solar capacity. The price of electricity has gone crazy. In the last year, we have certainly achieved significant savings with the price increases that have been

realised – the payback on solar used to be six years but it is now five years.”

As these developments are rolled out over the next decade, Graaff Fruit will look to put a challenging period behind it as the Covid pandemic and Russian war in Ukraine have wreaked havoc on the logistics industry that moves the company’s produce around the world.

INTERESTING TIME Since 2019, global container shipping rates have more than quadrupled on average. Demand has increased but supply has not kept up thanks to employee absences as a result of the pandemic. Equipment has also been an issue with containers unavailable or sitting in the wrong parts of the world. And some ports around the world lack technology and efficiency,

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INDUSTRY FOCUS: AGRICULTURE

resulting in bottlenecks. Add in the rising cost of fuel and the demand for cleaner transportation and you have a recipe for supply chain disaster.

“It’s an interesting time,” says Graaff. “We have had a very good harvest of great quality. Unfortunately, logistics challenges remain, and the conflict in Ukraine has turned logistics into an absolute nightmare.”

The company is now forced to add an extra 12 days on average to its time in transit – introducing new risk.

Robert Graaff is not happy. “In fresh produce, everyday counts – fruits perish every day. 12 days on certain fruit types – table grapes and stone fruits in particular – causes a lot of quality issues. Fruits arrive delayed and with quality issues, and the result is that we get less money for our produce.”

He explains that his Quality Claims (QC) rate would normally sit at around 5% or less during regular trading conditions. As the pressure on logistics has ramped up, this figure has increased.

Again, Graaff is not impressed.

“These new challenges results in

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// IT’S A NINE-MONTH CONSTRUCTION PERIOD AND IT WILL 10 YEARS BEFORE THE EXTRA LAND BECOMES FULLY PRODUCTIVE – OUR BUSINESS IS A LONG TERM ONE //

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GRAAFF FRUIT

// WE ARE CONTINUOUSLY TESTING NEW GENETICS. WE ARE ALWAYS LOOKING FOR IMPROVEMENTS ON ANYTHING WE HAVE // closer to 30%. That takes away slightly from what was a very good season.

Also, with inflationary cost increases – logistics, transport, fertiliser (which has doubled), chemicals, wood, cardboard, paper – it is so bad that there are people that will go out of business.”

This stark warning comes at a time when inflation sits at almost 6% with further increases expected. With other challenges obvious, further looming uncertainty in a market that has been dealt multiple setbacks over the past few years creates a difficult environment for companies like Graaff Fruit.

“Russia was 10% of our market and that no longer exists. The domestic

market has been flat. We haven’t seen an impact of inflation on income - it is not growing very fast. Covid-19 still lingers in the sense that if Shanghai closes its port then it impacts our exports. We have to keep monitoring the situation around the world,” says Graaff.

PROMISING SHOOTS Despite the difficulties faced as a result of forces out of the control of the business, Graaff Fruit is enjoying positivity with several initiatives underway to ensure continued growth. The quality of the fruit being administered right now is unrivalled and Robert Graaff looks skyward

when describing the reasoning.

“The yield is excellent and the quality has been good. We had a very good winter with great rainfall and we had more than enough water, with favourable weather – no hailstorms or frost.

“We are servants of the weather, and that is the most unpredictable element in the business. We are quite used to dealing with things quickly,” he smiles, speaking of the company’s nimble approach.

Another boon came in the form of demand uptick while the world worked and played at home – with health on the mind – during the harsh pandemic months.

“Fortunately, consumption of fruit went up during the Covid period as people were eating more from home and they were choosing to eat healthier,

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INDUSTRY FOCUS: AGRICULTURE

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and we are in the health business. There will always be strong demand for fruit and that is good for us,” says Graaff.

These healthy products are not just across one or two ranges – Graaff Fruit has a strong selection.

“We are very diversified,” confirms Graaff. “We don’t just have apples; we have pears, grapes, stone fruits, plums, nectarines, peaches – our portfolio is very diversified. We are not reliant on one product which allows us to weather storms much better. We have very good retail programmes in the UK and Europe and we are on the shelf for 12 months of the year. If we don’t have nectarines in Tesco, we will have apples. If we don’t have stone fruits in Marks & Spencer, we will have pears.”

And the strength in the product portfolio continues to be nurtured with the innovators at Graaff Fruit

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2022/06/02 13:01

consistently churning out new ideas and testing new varietals.

“We are continuously testing new genetics. We are always looking for improvements on anything we have – that is a continuous process, you can’t just start up, we are always evaluating. We test at least 200 new varieties every year. We are strict in what we select because it is so expensive to plant one hectare, you can’t afford to make mistakes,” says Graaff.

He is enthusiastic about the production of cherries, where a first commercial harvest was picked in December 2021. Planted in 2018 at Rietfontein, the 6.5-hectare plantation produced extremely well.

“We are very excited and we see great potential. Once again, it is a highly perishable product and you need an efficient logistics chain to

farm correctly. We are selling locally in Woolworths and Checkers, and we will export for overseas retailers.”

CLOSE TO THE LAND Planning for the long-term future, Graaff is clear that there must be an appetite shift in the consumption of fresh produce if the local market is to grow, and that clearly understanding export markets remains vital when looking to maintain reach into these promising geographies.

“Generally, there are enough apples in the market but we need people to eat more. That is the only way we will grow the local market,” he says. “We have an oversupply of fresh produce and that is why South Africa exports – you’ll never not find fruit in our domestic market.

Interestingly, so many different types of fresh products are now available. Years ago, you would only have nectarines on shelves in December but now you have blueberries, raspberries, watermelons – the selection for the consumer has grown significantly. We have to find particular weeks where there are opportunities and that is why so much goes into our planning.”

Country’s including Malaysia and South Korea are now high on the list of exciting prospects for South Africa’s exporters, with the country enjoying a favourable reputation which has been nurtured globally for a century. But Africa also has significant opportunity with a growing consumer population and a quickly developing retail industry.

“We export to East and West Africa – mainly apples as they are a hardy product. It is very difficult to export grapes or nectarines into Africa because they are so much more perishable and rely on a strict cold chain, and that is a challenge in Africa.

East Africa likes more balanced Apple varieties like a Pink Lady or a Granny Smith, but West Africa prefers a sweeter palate like a Golden Delicious or Red Delicious,” says Graaff, adding that the African market is important but requires on-the-ground knowledge

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to navigate the different nuances.

Internally, the business is wellpositioned for further growth, with a large amount of land producing quality fruits and a strong link into retail programmes around the world. With expert people and an unmatched location, Graaff Fruit will grow through its solid structure.

“In agriculture, you are so close to the land and the people that work with you, the familycorporate model is probably the most successful and sustainable.

We run like a corporate but we are a family-owned business,” says Graaff.

With the next generation too young to get involved in the business yet, Robert Graaff – a father and uncle – is not predicting the future, but he is hopeful of continued family involvement, as long as it aligns with the company’s long-term strategy. The hurdle in front of him right now is the ongoing logistics issue driven by wider macro factors. Careful management and an agile approach remain essential.

“All farmers are praying for a normalisation as quick as possible.

We go through weeks where things seem like they are getting back to normal, but then the next day things fall apart again,” says Graaff. “When the Russian-Ukraine situation and the Chinese Covid problem is put to bed, things will begin to stabilise, but being in the farming business, there is no normal – we don’t have normal here.”

Thankfully, the company’s strategy around sustainability and longevity mean that this is one looking beyond immediate challenges and towards a prosperous future for the Ceres Valley, and for South Africa.

“We can’t complain. The future looks bright. People always want to eat healthy food,” Graaff concludes.

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June 2022

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