An outgoing executive at India’s largest retailer discusses broad trends in the imported fresh produce market, including the impacts of a ban on Chinese apple imports, phenomenal growth in kiwifruit and the possibilities ahead for avocados.
Sumit Saran is about to make a big career change, albeit within the same industry. As he prepares to leave Future Group where he has been head of international foods for nearly four years, he has recently set up a consulting firm for marketing fruits and vegetables in the fast-growing Indian market.
“The new company is called SS Associates, and we started representing Washington Apples and USA Pears in India,” Saran told PBUK, highlighting the development only happened recently on Nov. 1.
The move sees the expert changing his focus from direct selling to a role centred more around marketing, and his insights into the workings of the Indian fresh produce sector will undoubtedly garner interest when he participates in a breakfast panel of thought leaders at The Amsterdam Produce Show and Conference this week (Nov 15-17).
He said while India presented many hurdles for potential exporters such as high tariffs, a fragmented supply chain and the country’s long distance from many major fruit-growing regions, with the right attitude and a long-term vision many were able to make their mark.
“We have a saying at Future Group that there are thousands of ways to move ahead but only one way to stand still! So if you stay at your desk only researching about India, you’ll never be able to move ahead, because the challenges often appear bigger than the solutions,” he said.
“Just look at the success story of imported apples,” he said.
To illustrate this story, he emphasised Washington State shipped about 4.5 million boxes of apples to India last year, compared to just 4,000 boxes when the market opened in 2001.
“For a retailer, certain mainstream products like apple imports are an extremely important category, and the main reason is that Indian consumers have broken the seasonality barrier,” he said.
“When Indian apples are in season from July to October, you get them, but when they’re not you have apple imports coming from across the world, Washington being the largest of that.”
He said broadly India used to have around 45% of its imported apples coming from Washington, 45% coming from China, and the balance coming from elsewhere such as Chile or New Zealand. But the dynamics leading into this coming winter look set to be very different.
“From this year onwards from June 1, India banned the import of Chinese apples and pears. So that is a big hole in everybody’s sourcing basket,” he said.
“So people are still trying to figure out what origins they need to tap into to cover that volume they would handle from China. That’s a big change that’s happened this year.”
He said the main varieties imported from China was Fuji.
“Now with Fuji out of the equation [from China], it’s going to be Red Delicious and Royal Gala, then small quantities of Granny and other varieties,” he said.
He said it was still “anybody’s guess” as to when the government would lift the ban on Chinese pome fruit, but even with the Chinese competition there would be room for new suppliers.
“You should not look to build a programme because China is not there. You should build the programme on the strength of what you’re willing to supply and create a demand for that,” Saran said.
“Last year when everything was open with apples coming in from China, the US and everybody else, India imported about 10 million boxes of apples – it’s an incredibly large market.
“So there’s enough room for everyone if they can get their act together in terms of grades supplied, packing and promotions.”
He added that in response to the current situation, Washington State’s apple exports were up considerably in the early part of the current season.
“At this time of year it would normally be imports trickling in because the real season for imported apples starts in December-January, but I’m seeing Washington apple supplies being nearly 40% up from the same period last year.”
Other major growth categories
Saran pointed to two other categories that had made waves in the imported fruit arena – citrus and kiwifruit.
“Egypt has been the biggest player on citrus and we do see some South African fruit. It’s only in Navels and Valencias,” he said.
“Zespri [from New Zealand] is the one that’s driving the kiwifruit category. The Bloom Foods and Beverages subsidiary of Future Group represents Zespri in India as one of its four distributors.”
He described kiwifruit as a classic example of what good promotions and marketing can create for a new import deal.
“Nobody in India even knew what a kiwifruit was five or seven years ago. Zespri came in and started a programme; it’s created a market that’s absolutely buzzing.
“Now we’re seeing supplies from Italy and even from as far as Chile. That would have been unthinkable five or six years ago.”
He said kiwifruit was previously used mainly for decorations, for example as a garnish on a cake.
“It’s only recently after this campaign of health and nutrition that I see people in middle-class India starting to buy kiwifruit as a fruit snack. And that has certainly pushed sales many-fold,” he said.
“We’ve been seeing growth of 40% year-on-year for kiwifruit, especially for Zespri. Three or four years ago the sales were extremely minuscule.”
In light of India having opened its doors for Peruvian and Chilean avocados, and with an already strong role played by New Zealand with the crop in the market, Saran is very upbeat about the fruit’s potential.
“In our gourmet store which is called Food Hall avocado is the highest selling item. In upper-class modern India, avocados are becoming very popular,” he said.
“But on avocados we have not seen specific promotions or marketing, so it is currently at the initiative of the retailer that the growth is coming.
“If tomorrow there were to be an association of these countries to create an avocado market here, I have a feeling demand will be very good.
“Indians are very predisposed to eating chutneys and accompaniments, so if somebody works out a way to bring guacamole to middle-class India, they can really push, and the retailers will also get the support to go that extra mile.”