"The horticultural sector here is different than in the Netherlands. We have small greenhouses here, but a large cars and a large houses," a German grower joked this week in front of Dutch participants in a fact-finding mission to Bavaria, Southern Germany. This week, Jochem Wolthuis of the Germany Desk, Fresh Produce Center, led the group that visited several companies from the fresh produce sector, so they could see with their own eyes the opportunities the region has to offer.
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The delegation comprises 17 entrepreneurs from the horticultural sector: Lodewijk Wardenburg of the Bom Group, Paul Jochems of Brabant Plant, Onno Zwaan of DLV glas & energie, Otto Klop of Greefa, Arie Middelburg of GreenMatch, Aad van Dijk of The Greenery, Gerrit Land of GrowPower, Johan Hensen of Haluco, Michiel Bontenbal and Jos Looije of Looije Tomaten, Theo de Groot of MPS, Peter Colbers of Syngenta, Ton Janssen of Tasty Tom, Ferry Aarse of Valstar Holland, Jan van den Bos of Van der Windt Verpakking, Robert Roodenburg of VGB and Tim Huijben of Viscon.
Lessons from the wine sector
Anyone buying a bottle of wine in 1999 in Southern Germany, didn't even think of buying wine from this region. The stuff had a bad reputation, and customers ignored it en masse. Since then, the wine sector has evolved significantly. By uniting, they have vastly improved the image and position of the Southern German wines. It's not just about quality, but in large, also about experience. By telling customers the story of the product, and linking the wine to the experience of the visited area, the image, revenue and viability of the sector have improved enormously. This story kept coming back in the fact-finding mission to Southern Germany. What's become apparent is that Dutch produce hasn't achieved a very good position in Southern Germany either.
Regional and organic
"For regional produce, customers pay up to a Euro more per package," Pascal Kneuer, manager of supermarket REWE in Boxdorf said. And Kai Fuchs of the Gartenbauzentrale Main-Donau cooperative also called the regional, Bavarian quality label the most important quality label he has. In addition to regionality, organic is also hugely important. In fact, if Kneuer had to choose between the regional sign and the organic sign, the organic sign would be placed next to the leek in the supermarket. The caption Frankengemüse would then be placed a little lower. Organic cress grower Elmar Gimperlein also said that his cress is such a niche product, that the additions "Aus der Heimat" and "Bio-Product" are sufficient from other German regions as well.
Dutch mentality
But even apart from the competition from regional and organic produce, Dutch entrepreneurs have quite a bit to improve on. Karl-Heinz Baunach of trading company Schraud & Baunach has hardly any Dutch tomatoes lying in his warehouse, while Belgian produce is certainly present. He prefers the Belgian mentality, he says. This subject was also broached by the German growers with whom the delegation spent a pleasant evening. In Germany, it's not wise to overconfidently show how business should be done in the sector, and how things should be handled from now on. It's about relations and trust, otherwise suppliers don't stand a chance to begin with.
What stands out most in the production companies visited, is that they focus on the market. For instance, greenhouse company Scherzer Gemuse may have an acreage of 17 hectares, but that can't be compared to Dutch companies of that size. The company produces bell peppers, tomatoes and eggplants, and also has various other segments. André Busigel, cucumber grower, also says he thinks twice before expanding his acreage. If the market becomes saturated, that would be useless.
Minimum wage
Are there no chances in the German market then, and would the Dutch be better off staying away? It's not quite like that. At the companies visited, it's striking how much labour is used. Starting January 1, the German minimum wage of 8.50 Euro per hour will apply. It can lead to chances in automation. But more important is the idea that as long as the Netherlands doesn't focus strongly on quality and the story, the German entrepreneurs don't really fear the Dutch competition. Their supply looks like the choices were made in the Southern German wine sector: the producers choose quality (flavour varieties like Lyterno) and bring their product to the market with a story. There is no mindless expansion either. Also striking: sales cooperatives Frankengemüse, together with the Gemüseerzeugerring Knoblauchsland firmly reject GMO subsidy. "If you need subsidies to keep your company going, it's not a sustainable company," they feel. And even without that subsidy, the German greenhouse vegetable growers in the area are well able to earn back their 30% higher cost price.
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The fact-finding horticultural mission is an initiative of the Agricultural Attaché Network at the Dutch Embassy in Berlin, and was organized by Germany Desk, Fresh Produce Center. The Ministry of Economic Affairs has given support to the mission to this new, neighbouring market. This fits into the additional efforts by the Ministry of Economic Affairs regarding economic services for businesses hit by the Russian boycott.