Traditional invests in relationships and expertise
In the Traditional segment, the markets where potatoes occur in their freshest form, HZPC is world market leader. Our ambition is to maintain this position over the coming years and expand where possible. Both the breeding licences for protected varieties and trade continue to rise in volume, in line with the forecasts in the long-term strategy. In the most important markets sales were good, with a favourable combination of sales prices and quantities.
Our strong position in the Traditional market is due to HZPC’s reliability and high product quality of deliveries to the grower on the one hand, and the efficient use of distribution channels on the other. So, for example, we have made a conscious decision to carry out cooling container transportation by water. This is more economical and not only means fewer transportation journeys but also makes a direct positive contribution to the reduction of CO2 emissions. A great side effect of which HZPC is proud!
Trading in challenging situations
The market for Traditional, where potatoes are offered raw and straight from the fields, is found in rural areas around the world. More than other HZPC sectors, this sector has to deal with a lack of organised sector structures and with political instability. This means local growers can’t invest in, for instance, mechanisation. It is also about seed potato trading in conflict areas and regions with an unstable political situation. To date, HZPC has managed to continue trading even in difficult situations. For example, in Libya trade has continued during the past year, despite the unstable situation.
We achieve our largest growth in areas with a moderate-to-well-organised agricultural sector that operates professionally. This degree of development goes hand-in-hand with the need for fresh food that is rich in nutrients, while the area of fertile agricultural land is often limited there. The grower has a decisive say in the seed potatoes to be used and in these areas wants productive, robust varieties with high nutritional value. We now have a few good new varieties for this sector that are performing well and which we can introduce more widely. In this we work closely with our colleagues from R&D and Production & Logistics.
Investing in knowledge of agronomy and breeding techniques
We maintain good relations with local, entrepreneurial distributors in Egypt, Saudi Arabia and Libya. Relationships in which we invest both time and knowledge of agronomy and breeding techniques. This is an added value we offer the value chain as a company, an approach that also benefits for example the Retail Fresh sector. In countries with a traditional market and a rising middle class, the Traditional sector works closely with the specialists of Retail Fresh. The transition whereby ‘traditional’ potato varieties are available in small packages in supermarkets is also evident in Romania, Russia, Hungary and Poland.
In countries like China and India, we focus on long-term investment in time and expertise to build up our sustainable position. By investing in new varieties, local sales and intensive product management, HZPC is extending the reach of its protected varieties. The aim here is to maintain the balance of operating costs throughout the supply chain.
Our large radius of activity in many regions, such as East Africa but also Israel, is due to a good network of distributors, and in strategically important countries supported by local product managers. This enables us to make HZPC’s total Traditional-focused portfolio directly visible to growers and support growers efficiently in the introduction of new varieties.
The market changes in the Balkans
Hero: “30 years ago, together with our agent Ivan Buturac, I began exports to Yugoslavia through central state importers. We sold seed potatoes class E, which were propagated several times, so that the quality for the end-user wasn’t that good. After the Balkan War and the splitting-up into independent countries such as Serbia, Bosnia, Croatia and Kosovo, we focused on small farmers and ‘market gardeners’ with direct sales via privatised distributors. These are very traditionally-minded buyers who for a long time would buy only Jaerla and Desiree. Through intensive variety testing and guidance, we’ve introduced many varieties of which the most important are Adora, Monalisa and Liseta.”
Steven: “Following accession to the EU you can clearly see up-scaling amongst the small professional growers. They need multipurpose breeds so they can meet the needs of the emerging supermarkets. While the quality in some supermarkets still leaves something to be desired, it is clear that certain characteristics are becoming increasingly important: a beautiful bright skin colour, very washable, easy to store, and above all a good and consistent taste! For our work area, multipurpose varieties are therefore very important: varieties that are relatively easy to grow and that also meet the above requirements. Colomba, for example, has in a very short period of time seen significant growth in the Balkan region. Large and small growers alike are very pleased with this variety. It’s therefore vital that we also focus on the introduction of other multipurpose HZPC varieties, such as Fortus and Memphis.”
Hero: “That’s a good strategy for maintaining our high market share while serving both the traditional market segment as well as the emerging supermarket channel. My advice: use the expertise of our Retail Fresh colleagues to optimise the success of the introduction.”
Steven: “I’m going to do just that. I’ll also be watching the new trends and developments closely, so hopefully we’ll continue to be succesfull.”