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"Ten hectare not enough to remain competitive in retail"Jack Groenewegen can rightly be called one of the prominent figures of contemporary horticulture. In recent years, the Westland tomato grower has shaped not only his own company, but also producer organization Prominent. At the moment Groenewegen is actively involved in the realization of 'Prominent 2.0': the organization is being transformed into a company where members can bring their own company under its umbrella. "If you keep on doing what you always did, you will not make it in the long run. Thinking about your own future is a necessity to survive."
Prominent chairman Jack Groenewegen
If there is a consistent theme through the conversation with Jack Groenewegen (49), it is his love for the horticultural sector. "As a child, it was already clear to me that I would take over the parental company, another option was simply not there," says Groenewegen. "I think that was mainly because my father always ran the company with pleasure and enthusiasm, which he has transferred to me."
Groenewegen joined the parental company at the end of the eighties, which had 1.5 hectares of tomatoes. Because the location in Naaldwijk did not offer any opportunities for expansion, the Groenewegens quite soon started looking for a new location for their company. "We ended up in De Lier. Here we started with two hectares, a few years later we increased to three hectares. With the move I took over the company. This was a logical step, and my father gave me a lot of freedom. In this way the new generation becomes more involved and your enthusiasm grows. I think this is the best way to ensure a business takeover to be successful."
Renew, renew, renew
In the early years, Groenewegen was particularly busy with the building up of his company - Kwekerij Greenway - and the organization of the cultivation. In 1993, the course was changed and the grower, together with several colleagues, was at the base of producer organization Prominent. "With a number of growers, we started cultivating the Cameo tomato, a new and distinctive variety, particularly in terms of luster and shelf life. It was also unique that this variety could also be harvested as a TOV. Production however was lower which meant that this tomato had to be sold for a higher price. But at the same time there was growing awareness that the auction system as it existed, and in which quality was not rewarded, was ending. For this reason we went in discussion with Groenteveiling Westland. We wanted our own auction block, something that was revolutionary at that time and marked the beginning of Prominent. But it was not until 1995 that we became an official producer organization."
Groenewegen was a member of the board at Prominent from the beginning. He made this choice mainly for strategic reasons. "I saw that the chosen road - producing a lot, with too little attention for taste and quality - would eventually fail. Especially after the Wasserbombe affair. The Dutch horticulture industry had to focus on quality and ensure that a premium was paid. Prominent was able to do that quickly, sometimes we were earning 40 to 60 cents more than average for a kilo of tomatoes. Especially in America the Cameo tomato was a hit. This confirmed that we were on the right track."
In the first instance the Prominent vine tomatoes were sold via the clock, later the product was sold on contract via eight traders. "That did not work, as these traders were trying to steal each other's customers. So in 1999 we decided to focus on one buyer. At first, that was Van Dijk Delft, but that company was rather soon taken over by The Greenery."
The Prominent growers stayed with The Greenery until 2012. After that the DDOR cooperative was established: a cooperative of fruit vegetable growers that sells tomatoes, peppers, eggplants, snack vegetables and cucumbers. "We set up this cooperative for the sale and marketing of our own product and other fruit vegetables. We deliberately opted for collaboration with other fruit vegetable growers: the broader your assortment of products, the more appealing you are for market parties, that's our conviction. This is indeed the case, the DOOR formula is catching on."
Freedom and responsibility
At the moment, 29 TOV growers are affiliated with Prominent, together they account for an acreage of 380 hectares. This includes the 25 hectares of their three own cultivation locations from Prominent. The product assortment today consists of TOV, cocktail, (mini) plum and cherry tomatoes of different varieties. "We employ more than 100 people in total, who are, among others, responsible for product sales, for the running of our three cultivation companies and for the packaging company that we also have now." Groenewegen indicates that the Prominent cultivation companies, the packaging company and the DOOR cooperative are doing exceptionally well, even though this is done without an entrepreneur. "This proves that not only a company that is run by an entrepreneur can be successful. But involvement of your people is essential; this we stimulate by giving our employees freedom and responsibilities. This makes it really feel like it is their own company."
Impact on their own company
Is membership with Prominent not a limitation of entrepreneurial freedom, to which Groenewegen attaches so much value? "Absolutely not," he says firmly. "In most areas you surely can follow your own course, only in terms of sales everything runs through DOOR. There are enough choices left to shape your own entrepreneurship." Groenewegen admits though that his board work has had the necessary impact on the development of his own company. Because he was away from home a lot, for example, he was forced to set up an organization that could run independently of himself. "That was not expected at the end of the nineties, especially since our company was relatively small at the time. By now our company has two locations, with a total area of 16.5 hectares. Probably my company would have been bigger if I had spent less time at Prominent. But I always have gained a lot of energy from the board work, I see Prominent as an extension of my own company. In addition I strongly believe in the added value of collaboration: together you achieve more. That we have proven in recent years, for example in the field of innovation."
For this reason, it was only logical for Groenewegen to say 'yes' when he was asked to become chairman of Prominent over three years ago. He had not been on the board anymore for several years, because he had completed the maximum number of terms. "I knew right away: this I have to do! I have been involved in the club from the very beginning and I have experienced the whole development: Prominent feels like my life's work."
Prominent as one company
A next step in the Prominent story is the development of 'Prominent 2.0'. A first impetus was given to this last year. "We also came – also because our advisory board held up a mirror to us - to the conclusion that we need to ensure that the companies of the Prominent growers are ‘future proof’. The average company size is now around ten hectares. In view of the increase in scale that is taking place within the sector, it will be no longer sufficient in 2028 to be able to work competitively within the retail segment in which we are active."
The board and the advisory board of Prominent then suggested the idea of merging all the companies of Prominent members into one large company. "That gave a shock effect and logically led to a lot of discussion. But it made everyone realize that something had to be done. Eventually we came up with three options: either a grower grows by himself or he joins with one or more colleagues or he is bringing his business to Prominent. Growers have to make their own choice on a voluntary basis."
Last year a working group 'Prominent 2.0' was created. This among others listed the financial position of all members. "If you compare these reports, you will see major differences in the financial possibilities of the various members. A report has been drawn up for each grower to give insight into where he stands with his company. This in order to stimulate members to learn from each other; an important function of the collaboration. The next step is that the members will draw up a vision for their own company in the first quarter of 2018; how do they see the development in the next ten years?"
From association to company
During the outlined process, according to Groenewegen, the realization grew that – in order to enable growers to make a choice about the future and possibly bring their company into Prominent - the producer organization would first have to be transformed into a company. "There were arrangements about the distribution of the value of Prominent - these were based on the number of hectares of the members - but there was still a great deal of uncertainty about this. We realized that in order to give growers the opportunity to bring in their company, we first had to bring more clarity in this area. When members know exactly how much of their money is in Prominent, it increases their engagement; it makes them feel more like Prominent belongs to them. A number of issues is being worked out and a share structure is being developed. The idea is that growers who bring in their business will get shares in return."
Once the share structure is organized, 'Prominent 2.0' will continue to take shape according to Groenewegen. In concrete terms, this means that the board is going to discuss with the members about how they see the future of their own company. In particular the question whether they want to bring in their company in Prominent is crucial here. "If a grower decides to do this, he will become the manager of his own company. That does not have to be a problem: as stated, we have demonstrated with our other Prominent companies that people can just feel responsible as well and can achieve excellent results. Besides, we do not obligate members to make a choice. But if they do nothing, chances are that in ten years' time their company will no longer be viable. Moreover, many members see the possibility to transfer their company to Prominent as an opportunity; for example because they have no successor."
The biggest obstacle for entrepreneurs to bring their company in Prominent is, according to Groenewegen, the 'family feeling', the fact that a company is usually built up by previous generations. "It's hard for entrepreneurs to just ignore this, which makes sense. I myself also notice this feeling, something I never had expected. However I think the route to Prominent is the best option for my company. But probably you also have to get used to the idea; it takes time."
The realization of 'Prominent 2.0' must gradually take shape. "To be able to manage and control the process optimally, it is important to do this step by step. In any case 'Prominent 2.0' must have a clear structure in 2020." How does Groenewegen see his own role in about ten years? "My own company is then brought in and I have a different role within the Prominent organization," he says. "Maybe by that time I am director of production or something like that. Prominent is and remains my child. And my work within Prominent is more than just a management position, in that role I am an entrepreneur too. And right there is also an important factor; we run Prominent from the entrepreneur’s perspective."
Groenewegen wants to encourage fellow entrepreneurs also to get started with their own future. "In any case, think about it. It will not automatically become right when you continue to do what you always did. Be active with your own future and take steps in this area. Also joining Prominent is an option: towards 2020 we want to grow to 500 hectares. Growth is not a goal in itself, but a way to optimally serve the market and to remain competitive, so that Prominent is still leading in 2030 and even in 2050."
Prominent at present focuses on more areas than just marketing and selling a wide assortment of tomatoes; Over the years, the palette of activities has been expanded considerably. This trend was started in 1999 when Prominent set up its own packaging company with the aim of better serving customers. "Because you remove a link from the chain, you gain more flexibility," says Jack Groenewegen.
At the same time Prominent also developed its own horticultural area which includes a packaging company, on the Laan van Boekesteijn in De Lier. "We have put this up all together. If you do this with just a few growers, you’ll ruin the club. Everyone is the same and participates, that was and is the most important creed within Prominent." In addition, Prominent now has three of their own cultivation locations. "These companies also act as a kind of testing ground for our members," says Groenewegen. "In 2003, for example, we started experimenting with assimilation lighting at our first cultivation location, which was revolutionary. And we also saw that there was still more to be earned from the sale of electricity." The following year, all Prominent members purchased a CHP; with this we were a step ahead of the market. Together gathering and sharing of knowledge is the most important state of collaboration. That brings improvement for all of us."
In addition to their own cultivation companies, a packaging station and sales, the producer organization is now also active in the field of breeding and temporary employment. "We look critically at all processes at the companies and ask ourselves the question: can we do that better ourselves? If the answer is yes, then we will get started with it. It’s as easy as that.”
Publication date: 1/31/2018
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