World Blueberry Update: With a Focus on The Latin American Blueberry Industry

Transcription

1 World Blueberry Update: With a Focus on The Latin American Blueberry Industry Update, Analysis, Current Role in Global Industry & a View to the Future

2 Thank you for the Invitation FALL CREEK FAMILY OF COMPANIES MR BERRY Argentina & Uruguay

3 Who is Fall Creek? Family-owned US corporation, founded in 1978 The Blueberry Solutions Company International Nursery, Farming and Berry Business Solutions Breeding and R&D IP Management Company Owners: Brazelton Family Headquarters: Lowell, OR, USA Partnerships in Chile, Argentina, Uruguay, South Africa and Greater Europe

4 WHO IS PLANASA? Research of new varieties of strawberries, raspberries, stone fruit, garlic and asparagus Nursery producer of strawberry and raspberry plants, stone fruit trees, garlic seeds, asparagus plants Fresh produce production: endives and salads for the markets As breeders, Planasa launched the strawberry variety SABROSA, which is the most planted in the south of Europe Planasa has nurseries in Spain, Poland, and France

5 PLANASA STRAWBERRIES

6 The FALL CREEK by PLANASA European Partnership Fall Creek quality blueberry plants and service to the market of Greater Europe Replicating R&D operations Full portfolio of leading Northern Highbush, Southern Highbush and Rabbiteye varieties Delivering Fall Creek Solutions to Europe and larger neighborhood to support the development of the blueberry industry Bring the best in blueberries from around the world to your farm

7 FALL CREEK by PLANASA NURSERY

8 FALL CREEK by PLANASA RESEARCH SEGOVIA & CARTAYA (HUELVA)

9 WHERE ARE THE PRIMARY PRODUCTION REGIONS IN LATIN AMERICA? 9

10 AGENDA: STATE OF THE LATIN AMERICAN BLUEBERRY INDUSTRY What are the facts? How does the Latin American Blueberry Industry fit into the greater global industry? What s going on in the fields? Themes - Winners and Losers What are the trends looking to the future?

11 THE GROWTH: South America has been the fastest growing region in the last decade and a half in the global blueberry industry.

12 SOUTH AMERICAN EXPORTS (M kilos) r A0U uu t 2. u2g. 2U r e 2a. 2. gu2a o 2U 2u 80% 18% 1%

13 NORTHERN HEMISPHERE VS. SOUTHERN HEMISPHERE (M Kilos) South American blueberry production represents a fraction of the volume produced and sold during the Northern Hemisphere season. r A0U r A U2r. A UU2r ga g72a Uy mu h t ut r o r A r 7 uy2g A. r a2a u. 9 2 U2g UU 9 2 u72y. ya u2. r. t r t Aut t o

14 GROWTH TRENDS - NORTH AMERICAN CONSUMPTION 437 Lbs. in Millions Major growth in fresh consumption New product development New Markets

15 MAJOR NEW CONSUMING MARKETS Take Home: The whole world is beginning to eat blueberries Most of the world s major new and existing consuming markets are in the northern hemisphere where will their counter seasonal fruit come from? Why? USHBC Consumer Research: Blueberries are healthy, fun, easy, unique

16 THE PRACTICAL ADVANTAGE South America Has a Clear Geographic Advantage in Counter Seasonal Supply From October Through March/ April.

17 THE PRESSING QUESTION With such advantages and opportunities, why are South American blueberries showing up many weeks of the year, often uncommitted, at lower prices and often with quality problems? Is South America over planted and producing beyond the market s capacity to consume, or is something else amiss?

18 There is no industry free of problems what are the trends and challenges? Unstable and unpredictable production and supply systems. Growing and producing challenges, impediments to quality Logistical and infrastructural limitations. Discord on the go to market side. Consolidation among buyers. Consolidation likely to be preceded by further fragmentation in many geographies. Beginning of inevitable consolidation in production, logistics, sales and marketing. Reorganization of supply strategies of the large growing companies.

19 Common challenges for growers throughout the Americas Labor, Labor, Labor Increasing input costs Varieties Many of the varieties planted today do not have the productivity, efficiency, quality, flavor and arrivals needed to compete in the future. Trends toward preferred and non-preferred varieties in the processed and fresh markets Many lack economies of scale Small and medium sized growers cannot absorb the costs of much of the machinery, packing facilities, cooling, etc that increases efficiency, lowers cost and increases quality Instability in the Frozen Price Floor Buyer backlash against years of excessive high prices Unpredictable supply has made product development more difficult for buyers and end users Inventories are now down Pricing stabilizing and the processed industry is (hopefully) able to develop more markets and uses for blueberries High commissions for South American growers

20 GENERAL SUPPLY SIDE CHALLENGES for LATIN AMERICA Structural Issues in Production and Supply Systems: Significant problems with product quality Weak varieties for export needs Antiquated growing systems Distances from farms to packing and shipping Fumigation in Argentina Impact of shift to maritime shipments Culture: High prices during boom years attracted non-horticultural and agricultural participants.

21 CHILE

22 CHILE

23 CHILE

24 CHILE

25 CHILE

26 CHILE

27 CHILE

28 CHILE

29 CHILE

30 MEXICO

31 MEXICO

32 MEXICO

33 MEXICO

34 MEXICO

35 MEXICO

36 ARGENTINA

37 ARGENTINA

38 ARGENTINA

39 ARGENTINA

40 ARGENTINA

41 ARGENTINA

42 ARGENTINA

43 ARGENTINA

44 LOGISTICS AND INFRASTRUCTURE Argentina and Uruguay Most production areas are far from the airport (now direct flights from Tucuman, but not enough for entire crop) For many years, growth in planting significantly outstripped building of infrastructure (packing, cooling, fumigation, inspection, and freight forwarding) Limited cargo space for an increasingly large crop Limited infrastructure for maritime shipments

45 LOGISTICS AND INFRASTRUCTURE Chile: National infrastructure is excellent (airports, ports, ASOEX, cooperation with importing countries Agriculture Departments Production still spread across the country Challenge: Getting the fruit safely from the fields to good packhouses and closing containers in a timely manner Infrastructure quality and logistics vary significantly from grower to grower and shipper to shipper (New) Impact of the earthquake

46 GO TO MARKET CHALLENGES Number of exporters and importers increasing while the number of retailers is decreasing. Chile : 77 exporters shipped more than 10 tons 30 exporters shipped more than 10 tons to Europe Of the 39,916 tons exported to the US, 10 companies account for 5,000 of those tons Of the 7,109 tons exported to Europe, the top 10 companies account for 5,000 of those tons The #1 exporter to Europe sent 2,000 tons to Europe and the #2 and #3 shipped 1,000 each Much of Chile s export volume is consolidated among a handful of shippers, but a very large number of smaller companies with weaker market positions are shipping to the same markets

47 GO TO MARKET CHALLENGES (Continued) Argentina and Uruguay: Over 80 exporters in the last 3 years Many receivers in the northern hemisphere are not active year round berry companies US retail industry is increasingly consolidated and Europe is experiencing similar consolidation UK market is already largely consolidated Mainland Europe consolidating and also dominated by a complex chain of wholesalers, brokers and middlemen. Consolidation among retailers puts small and less professional companies selling berries at a disadvantage and can create disruptions in the market.

48 MACRO TRENDS AND SIDE EFFECTS Hangover from a growth binge New growing pains Supply strategy reorganization of big companies creates further fragmentation in the market in the short term Still plenty of light at the end of the tunnel, strong berry companies continue to thrive

49 What s likely ahead for the Latin American Blueberry Industry? Winners and losers Consolidation Modernization of farms, infrastructure, Shipping and Selling System Systems, varieties, professionalism

50 CONCLUSIONS None of these barriers are insurmountable When quality is good, it is very good South America still has a strong potential to be the low cost, high quality producer of the future for counter seasonal blueberry supply Investment and an increase in efficiencies all along the chain will be necessary for long term viability Consolidation is inevitable Trends to bigger farms, new and better varieties, improved infrastructure, economies of scale, professional companies, fewer growers, fewer shippers trend for all the Americas Huge opportunities remain for growth in new and existing markets who will seize these opportunities and reap the benefits?

51 THERE WILL BE WINNERS AND LOSERS Most companies go bankrupt when they fail to aggressively pursue the difficult changes they know they must make to survive - - Kevin Adams Einstein s definition of insanity: Doing the same thing over and over again and expecting different results

52 Contact Information Fall Creek Farm & Nursery, Inc Jasper-Lowell Road Lowell, Oregon USA Antonio A. Álamo Bermudo Fall Creek Europe Representative Cell: Cort Brazelton VP of International Development Ivan Leache Planasa VP of Sales