Cooperation within the greenhouse horticulture is essential, but does not necessarily have to happen in the form of mergers. Various forms of cooperation are possible that can strengthen the sector for the future. Entrepreneurs will have to take the initiative themselves. That was one of the conclusions during the convention ‘'Toekomstbestendigheid voor de glasgroentesector' on Monday September 3.
The interactive meeting in the World Horti Center in Naaldwijk was an initiative of Rabobank and Federatie Vruchtgroente Organisaties (FVO) and was visited by more than 130 entrepreneurs and representatives of producer organisations (POs). The goal of the convention was to start a discussion about the urgency of cooperation. When asked whether cooperation is a hype or a necessity, it became apparent that most of the entrepreneurs are well aware of that. More than 86 percent voted for necessity. The following discussions showed the wish to be real. But what stops them from cooperating is the next question. According to the entrepreneurs present that is mostly caused by lack of trust and equality, by confusion and disappointment from the past, and because of fear of losing freedom.
Inspire and challenge
The arguments may be understandable, but according to FVO-chairman Michiel van Ginkel, should not be an obstacle for cooperation. “Our buyers are also subject to far reaching scale enlargement. They are growing and becoming stronger and stronger. To claim our place in the chain, we have to take steps together.” Van Ginkel pointed at the enormous fragmentation of the greenhouse horticulture sector in the last twenty years and because GMO is no longer a certainty, the willingness to cooperate will only decrease. “That is why entrepreneurs, but also producer organisations, will have to inspire and challenge each other more. Do we want to cooperate more in the future, we have to make it happen ourselves,”
Ruud van der Vliet, director companies at Rabobank Westland, put the discussion on edge by speaking of a ‘bath tub model.’ At the front side you can find companies such as Bayer and Monsanto, and on the back side the retail. All the way at the bottom near the drain is the producer. “if you see that retail takes 40 to 60 percent of the margin in greenhouse vegetables, leaving a modest reward for the grower, it is partly due to the fragmented situation. Companies have to compete with a retail of enormous proportions. By joining together you will not entirely solve the problem, the chain just works that way. We are being played against each other, and have let that happen for a long time. Research shows that again and again, and the situation is not changing. It is worrisome.”
Into battle together
Van der Vliet is calling on growers to cooperate within the legal frameworks, which have been extended. “The possibilities are there, particularly in sales. Working even more efficiently, with robots for example, is also necessary. But in the long run we have to organize the sales side much better through use of big data, that is where we have to go. Not in the form of a merger, but by cooperating with larger companies or forming cooperations the battle can be fought.”
Fact is that the gap between the front runners in the greenhouse vegetable sector, and the pack has only become bigger since 2014, and it is the front runners who are cooperating. Many are active in the cooperation DOOR and Harvest House. General Director Jan Opschoor (DOOR), and General Director Jelte van Kammen (Harvest House) are of the opinion that trust is an important condition for cooperations, but also that all parties involved can greatly benefit from cooperating. “Think about the future, determine what makes you happy, and what you are good at and what not. Then go look for partners in the sector that complement each other and want to share their knowledge.”
Prof. Dr. Annemieke Roobeek, Nyenrode University
Grower is the connection
According to Prof. Dr. Annemieke Roobeek, Nyenrode University, the current situation in the chain is not tenable. “Growers are in a troublesome spot in the chain. They supply the best product, but get less and less paid. The bottom has been reached in lowering the cost price. That is why a mind shift is necessary. Growers should get rid of their minority complex. We are the second largest food exporter in the world, and have the most knowledge by far. We will have to do business in a different way to be successful again. I see good opportunities in the urban horticulture, and in vertical farming, but everybody is just dabbing, there is no cohesion. Together, grower and breeder can achieve optimal results in this field. It is time for the growers to rise. They are the connection!”
Steven Pont
Beware of hype
In the concluding panel discussion it turned out once more that few had doubts about the necessity of cooperation, but we should beware that the subject itself does not become a hype, also according to tomato grower Richard Hartensveld. "The initiative must come from the entrepreneurs themselves. If organisations put to much stress on cooperation, the effect could be averse. And to be clear: not everybody has to be in vanguard. Cooperation comes in many forms, and everybody has to determine what is of value to them. Growers do have to venture out more, according to Cindy van Rijswick, Fresh Produce analyst at Rabobank Nederland. "Practicality is a good quality, but sometimes it is good to look at something in a more carefree way and from new perspectives. Rabobank expects the family company to keep on playing an important role in the future in the greenhouse horticulture. But stakeholders from outside will also join. It could be investors, or employees with certain ambitions. A company has to keep an eye out for that in the coming years."
The panel discussion was concluded with the question which theme the entrepreneurs choose as the next step in cooperation. 56 percent chose 'access to markets', 34.5 percent chose 'access to knowledge, and 9.5 percent chose 'efficiency'. How much will become actual remains to be seen. But FVO-chairman Michiel van Ginkel said he was positive about the future. "The Federatie Vruchtgroente Organisaties has not come as far as we had hoped up front, but it is clear we are communicating within our platform, and that we are prepared to talk about further cooperation."
Hold up a mirror
It was remarkable that many entrepreneurs who considered themselves front runners at the beginning of the convention, came to a different conclusion after. At the start, 44.6% percent of the entrepreneurs considered themselves a front runner, the percentage had decreased to 32.9 percent at the end. The percentage 'followers' had grown from 26.5 to 38.8. It made clear that the speakers and the discussions during the afternoon were of added value, and that many entrepreneurs had reflected on their situation. The appreciation of the convention showed this clearly. On a scale of 0 to 9 those present gave the convention a 7.
Source: Rabobank