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How could climate and economic changes affect the organization of European markets?

Although imported fruit and vegetables currently occupy an important place on the French market, the recent economic and climate changes could transform the market in the years to come. Alexandre Picault, sales director of Kultive (producer of greenhouse vegetables and leading producer of cucumbers in France), believes in this strategy of local development, which he has been pursuing since 1985.

“Kultive's motto has always been to be as close as possible to the means of production and to the consumer, in order to best meet the national demand. Global warming has been increasingly showing us that we were right in our approach, as the availability of imported products may gradually decrease.”

Climate change could affect the availability of Mediterranean products
Although all countries are currently affected by the increasing weather hazards, some are suffering more than others, with yields that may be harder to maintain from year to year. “Taking this year's cucumber campaign for example, Spain is currently experiencing heat waves of up to 45 degrees. Such temperatures make it very difficult to grow cucumbers. Producing plants in such conditions is complicated, and so is replanting. There could therefore be a delay in planting in Spain, resulting in lower availability at some point of the year, along with higher, less competitive prices. In this case, the situation could actually benefit the French production, which would face less competition from Spain.”

The economic context affects the competitiveness of Benelux products
Spain is a significant competitor for French cucumbers, but the supply from Belgium and the Netherlands remains the main player on the French market's production schedule. “The Benelux countries do not have the same business model as in France. With a different market organization, they benefit from major investments from financial groups. France focuses more on the domestic market, while they specialize in exports. Before the energy crisis, Benelux countries were very competitive in terms of price. Their climate and cheap energy allowed them to light their greenhouses and thus achieve much higher yields than in France. They were also able to source and produce their own inputs relatively cheaply. And finally, they could benefit from cheap labor from Eastern Europe, which is less available today.”

“In this changing economic context, they will now be confronted with the same issues as French producers in terms of labor and energy. Additionally, being export-oriented, they are dependent on foreign markets, some of which have recently closed. They sometimes supply countries with production shortages, but when domestic supply is sufficient, they can find themselves with a lot of merchandise on their hands. So today, it is not so much the climate constraints that impact their production, but the economic constraints, which again make them less competitive with the French product. France has the advantage of producing French cucumbers for the French market so, unlike Benelux countries, France is not dependent on the markets of other European countries.”

Distributors’ role in strengthening French supply
In this changing context where uncertainty reigns, making major investments may prove difficult for some producers. Distribution has a role to play in enabling producers to invest with greater peace of mind. “Generally speaking, our sales director is very surprised that distributors do not try harder to get closer to production or work with contracts. Prices can fluctuate throughout a season but in recent years, the trend has clearly been upwards. So why not contract more, since producers are keen to do so? Today, the level of investment is such that producers do not dare to take the plunge without a guarantee. Many distributors ask them to produce first, but it is no longer possible to operate like that today. Producer profiles have changed, and the younger generations are more involved in the economic dimension, wanting to know what the medium- to long-term prospects are before developing their business.”

According to Alexandre Picault, a new awareness from the distribution sector is needed to change the production model and consolidate the French supply. “Growers are faced with more and more constraints when it comes to production: climate, economic and social constraints, in addition to the reduction in the number of authorized fertilizers. Growers must produce better and healthier products, but they would be more willing to accept constraints if they were offered some guarantees.”

Developing production through regionalization to better meet French market demand?
At the same time, French production must continue to organize itself and adapt to the national demand from the beginning to the end of the season. “We are helped by some distributors who play the game by opening French lines from the spring, which is the most pivotal period of the season. But we must also ensure that we have sufficient volumes in the middle of the season (from mid-June to mid-July, when there is often a deficit), so that lines remain open and distributors do not have to resort to imports to meet the demand. Because once the switch has been made, especially during the summer vacation, it can be difficult for French cucumbers to regain their place on the domestic market. One solution could be to regionalize production, by expanding in the south of France, for example, in order to compensate for the production shortfalls of the north, adapting to climate constraints and better meeting the needs of the French market. Playing on the production calendar could also be an option. Additionally, we need to manage the end of the season well, with a quality product that is competitive with the early cucumbers from Spain. Early in the season, consumers tend to support the French production, but at the end of the season, what matters is the quality.”

Future developments that could support French production
Today, labor remains one of the main constraints on French production. “Growers are finding it extremely difficult to find people willing to work in their greenhouses. Some producers have the capacity to reinvest in greenhouse development but struggle to find labor. With the development of technology, could harvest robots help in this respect in the future?”

“On the other hand, we are now being asked to produce more and more using green energy. Some companies would be interested in the concept of decarbonization, which aims to buy carbon credits from companies that produce in a greener way. Could this also be a new direction for our business, helping us to invest more?”

Finally, although Kultive's primary aim is to meet the needs of the French market, this changing economic and climate context could lead the company to export to Europe in the years to come. “Kultive has exported in the past, in order to absorb the ups and downs of French production in relation to the domestic market. But in the next 10 years, Mediterranean countries may demand French products if they can no longer supply their own markets. It could also be a question of market adaptability. If it makes economic sense for us to export, we might then consider the possibility.”

Photo : Simon Boisgard / © Philippe Montigny

For more information:
Alexandre Picault
Kultive S.A.S.
190 allée du bois vert
45640 Sandillon, France
Phone: 02 38 49 33 49
Fax: 02 38 49 33 48
[email protected]