It’s Fresh!, which labels itself a high-tech innovations company, has spent the last five years working feverishly to turn a $15 million investment into a long-term commercial proposition. At the forefront of the initiative has been one of the firm’s founders, Simon Lee, who promises the It’s Fresh! filters, pads and sheets that have made an impact in the produce marketplace will be the first of many technologies that his team brings to market in the next few years.
These current products absorb ethylene and create a protective atmosphere around the fruit that Lee likes to refer to as the ‘Freshasphere’. The technology has shown itself to be safe, clean and consumer-friendly, it slows the ripening process and can add up to four days to shelf life. It also scores extremely well in blind taste trials, with It’s Fresh! ‘treated’ fruit consistently picked out by consumers as having superior flavour.
There has been significant progress, particularly in the last 18 months. It’s Fresh! has been adopted to varying degrees by a number of supermarket chains around the world, including Morrisons, M&S, Waitrose and the Co-op in the UK, Carrefour in France and Walmart, and Albertson Safeway in the US.
But even though sales doubled last year Lee and his fellow founders have enlisted industry veteran’s to help them further. Tim Mason Ex-Tesco deputy CEO, Peter Durose ex-Tesco head of produce and Julie Criddle, who joined the company from Univeg in February. Produce Business UK talks to two of them. At the end of the article, are extracts from an interview with Professor Leon Terry about his groundbreaking work with strawberries
Peter Durose – Stepping up the dialogue
It’s 10 years since Durose left Tesco and embarked on a career outside the supermarket sector. He has operated as a consultant for much of that time, and for the last year he has been working for It’s Fresh! on a close to permanent basis. He is cautiously pleased with progress.
“We always want to be further ahead of where we are, but where we are is still a very good place –he says at the company’s headquarters near Milton Keynes. “One of the barriers for a small, new business is to gain traction in what is a very, very large sector for the retail industry. Produce is worth 10-12% of retail food sales and that makes it a big chunk of the overall picture, and it is dealt with by a relatively small number of companies.
“That doesn’t make it the easiest challenge, but I guess from when I started getting more involved with It’s Fresh! to where we are now, it’s been good. The growth of the business is running at 300-400% over the last few years, so if you ask for a line in the sand, well, it’s not a bad line in the sand to have. As a result of that, the positive in terms of removing barriers is that as more people see more people doing it, there is more likelihood that they will look at it and realise they should be considering doing it [too].
“I think the founders of It’s Fresh! have done a brilliant job. They’ve identified an issue and then gone out and created a product. I have huge respect for people who can go out and start a business – it’s the same in the produce industry, you go out and see companies and the way they do things and it’s just fantastic and amazing that they’ve come up with something new.
“That’s what these guys have done and the more we get involved in the produce industry, the more important it is to have people who understand the retail and produce industry really well, so we can make sure we’re having the right dialogue in the right way with people.
We had a breakthrough last year though and we’re now building up from that. So bringing in Tim [as a non-executive director] Julie, and others like Alex McNair has done that and it’s a good team. Tim has had over 30 years of retail experience with Tesco, and is renowned for launching Tesco’s Clubcard scheme, Tesco Express and Tesco.com. Julie’s got fabulous experience working with some of the best retailers for one of the largest UK suppliers and has very strong product knowledge across a number of products that we didn’t have that knowledge on in internally. And Alex comes with a good breadth of technical expertise, specifically retail-facing in terms of technical management, which means he has a slightly different focus in terms of how it works, how he wants it to work and how we want to communicate that to technical teams.
“Of course, one of the challenges is the sheer number of people we have to talk to, to take this forward. It’s not like it’s a sell to a buyer, then you get technical approval and that’s that. We keep switching between the two and whilst the It’s Fresh! approach with the filters is very, very simple and very flexible, there are always nuances that are really important for different products.
So with pears, for instance, where we have got a lot of traction across the UK market and in other countries too, [is when] somebody put filters right through the supply chain process and when they put them into the ripening process, we weren’t sure that was right because traditionally we’ve thought that we want ethylene in the ripening process. But what we actually saw was that It’s Fresh! substantially reduced the level of scald, so there was an additional benefit there.
Retail is simple
“Retail is relatively simple in the grand scheme of things, and I say that as someone who would consider themselves a retailer. You buy something, you sell it and you make a margin that needs to cover your costs of operations and give you some profit. Now, it’s probably got a lot more complex in the last 10 years and it had definitely got a lot more complex in the decade before that. So I think you have to tailor the dialogue with retailers and with produce suppliers too. I have huge respect for a number of produce businesses, what they do and how they do it and the excellence with which they achieve what they do. But there is also sometimes a reticence to look at new things [because the job is tough]. I don’t know if that’s a cycle. These last 12 months have shown me that there’s a lot more going on in the supply chain than I had appreciated before, but I’m not sure how much of that gets escalated to retail level.
“What we’ve had to be clear on is that we need to listen to our customer and understand what’s really important to them and that can be something different for the buyer, something different for the technical manager and yet another thing for the category director. Making sure that we are covering off all of those points rather than the minutiae we look at in our process.
“Now though, we have dialogue with more retailers in the UK than we had last year, we’ll have more lines rolling out and being piloted across the UK this year. There will be some new product areas beginning to creep into that as well, so I think the business is in pretty good shape.
“We have commercialised with some of the largest retail groups in the world namely Wal-Mart and Carrefour. And in the UK [we are] working with Tesco, COOP, M&S, Waitrose and Sainsburys as well as a full roll-out with Morrisons across a number of categories – avocados, pears, berries and stonefruit – and this year, similar to last year, Morrisons is communicating the It’s Fresh! message in-store with shelf barkers telling consumers that the filters were being used to improve the quality and freshness of their products.
Morrisons communicates the It’s Fresh! message clearly to its customers
In France, Carrefour rolled out one product last year and communicated through its website that the filters were enhancing their experience of ready-to-eat pears. “Carrefour is talking to us about the next phase and it’s interesting talking in France because you obviously have a legislation change, which means retailers have to do something about waste on an on-going basis and they are looking at ways to do that.
“There are different things they can do; as a retail industry in France they have started to introduce more refrigeration … but they need more and we are beginning to have a dialogue. [Carrefour] will roll out two more products this summer. We’re getting some great traction with Wal-Mart in the US too and this year will be a huge step forward.
“Talking to consumers a little bit more and making them aware of it has a number of benefits. The auto-insertions and the pad will be a little more discreet, but it is still good to try and build a little more understanding about the reasons why their product is eating better and lasting longer, and that reason is It’s Fresh! I’m not saying it’s going to build 99% awareness in a short space of time, but it is good to have a level of understanding because that can become a positive determination of purchase for customers too. If they know about the technology and it makes them buy product because they know it will keep, that’s a positive thing for them, for our customers and for us.
“The negative reason for doing it is to be very clear with consumers what it is, so if they see one of our standard filters loose in a punnet, at least they will understand what it is. Out of the millions and millions of filters that were sold in the UK market last year, we saw six or seven comments that people thought it was a plaster, and half of those were posted on twitter, then answered by another customer explaining that it was a filter that helps to keep the product fresh.
“We have pretty much gone past the need for that negative reason now, so letting customers know why it’s there and building a positive perception of it can only be a good thing for the retailer and their growers. We did some qualitative and quantitative research and the reality is if you tell customers that you are going to put a product in their punnet that will help their peaches stay fresher for longer, then ask them if that’s a good thing, they will almost always say yes. “
PBUK spoke to Durose on a cool Monday following a Sunday of 27°C temperatures in the UK and he admits that it’s hard to know whether it would be better for It’s Fresh! to have a summer with perfect weather conditions or for the weather to fluctuate. There are benefits to the fluctuating scenario though. “It’s much harder for retailers to manage the fluctuations – having to pump all that stock in when it’s 27°C on a Saturday or Sunday and then finding out it’s going to be 12°C by Wednesday,” he says. ”It’s a nightmare to try and manage that, because even really good retail systems will take 4-5 days to recover sales patterns. If the weather is up, down, up, down, something like It’s Fresh! which gives them another two days shelf life, gives them a massive opportunity to mitigate the nasty periods when they would ordinarily see waste increase. If we are working with people on certain products [when fluctuations occur] they will see the benefit in terms of their figures.
“Demand can spike, but production doesn’t necessarily match that, so how you manage quality going into a retailer can be helped hugely by It’s Fresh!
“I think maybe we haven’t been all that good at getting that message across. Where we started as a business, there was a very high degree of focus on the retail side of things, where the numbers are very large and you can make a big difference to somebody’s business. But actually, you have to go back to the supply side in terms of managing quality and stock and ensuring that the product you put into the retailer is going to be of sufficient quality and good enough to delight customers. That’s very hard to do with produce, you can’t just switch the production line on and off, it’s an on-going process.”
Moving the discussion on
One of the barriers to It’s Fresh! being used more widely is moving the conversation past talking about waste and talking about quality and delivering that to the customer, says Durose. “Of course, if you buy a product and take it home and it keeps well in your fridge or fruit bowl, then that is a good thing. If you are constantly putting stuff in the bin, eventually you will just stop buying it,” he adds.
“It does seem to be that the longer we keep the product with It’s Fresh!, the better the taste becomes, whereas without It’s Fresh! it seems to tail away. We did do some tastings on berries bought from retailers recently, and to be fair, we were well past the best before date, so some of the product that hadn’t been treated with It’s Fresh! was fairly ropey. But Julie and I decided we could still try them and the untreated fruit tasted terrible and had gone completely. But the product with It’s Fresh! had actually improved in taste from the previous taste test a few days before.
“I think the retailers are still the key drivers. There are a couple of suppliers there who have been clearly more progressive in terms of taking it and saying ‘yes, we absolutely believe in the benefits of this for our business and for our customers’. For most, the obvious barrier is putting an increase into the cost [of supply] when, what was it Mike Coupe said recently? – there is 4% deflation. If the retail category is deflating at that rate then the produce category has been doing something similar hasn’t it, if not higher figures in certain categories? And you’ve got that downward pressure on price – there is always downward pressure on price in those environments and it’s very hard then to be in a discussion that tells suppliers we are going to be putting 1% on their costs.
“Certain retailers are good at compartmentalising things very effectively. If the buyer’s not responsible for the waste or can’t combine the waste and margin figures, then it’s no good [to the buyer] hitting your waste budget if you’re not actually hitting your margin budget.
“The more progressive suppliers and retailers have said they have got a net margin arrangement, which basically says that’s the net figure they’re aiming for, so then using It’s Fresh! is not an cost issue because they know that it’s going to deliver for them on the bottom line. Then, they can focus on the fact they are getting positives in terms of fewer complaints, better quality and better sales.
“We had a very interesting conversation with one customer earlier this year, who said that they’d finally gone through all of the information we’d given them last year (it was a couple of reams thick!), that the science is really good and that they completely believe now that It’s Fresh! works. Now what they have to do is go back to the proof that it works for the business and what the cost benefits are.”
“Overall, we see largely the same results [with each client] but of course it depends what price they are trying to sell something at how that relates back to the costs. You could say that there’s no point trying to save the waste on a product that costs 50p and has a waste bill of 3%. Our product would have to cost considerably less than 0.75 of a penny to make it worthwhile. The alternative argument is that it doesn’t matter so much about margin if it substantially enhances the product and taking that forward, it’s even harder to demonstrate. We’d like to be talking about sensory and quality a lot more, but actually we talk about waste and return for obvious reasons.
“Ultimately, it comes back to ‘what’s the return on investment if I put It’s Fresh! in my punnets?’”
“The industry has progressed massively. When I started in the business in the 1990s, grapes was a big category, but getting the right variety and the right quality was the key – the price bit was kind of irrelevant because the sales were there and if quality was good, the volumes just kept going up. I think that’s why grapes grew so quickly in that period,” Durose says.
“Berries are going through that same evolutionary process now, he adds, and a balance needs to be struck between breeding for volume and shelf life and breeding for flavour.
“There are clearly fluctuations between [berry] varieties and also within the quality of specific varieties at certain times of the year. I think there is perhaps too much focus on variety rather than flavour. Any variety can be good at times and bad at times, but what you should really focus on is what you want to deliver in terms of flavour profile, regardless of the variety.”
“Do strawberries necessarily perform in a glasshouse as opposed to open field production? I think if you put the two together, which is quite difficult, you’d probably say no, not at all. Season extension is great in terms of building sales, but it does create quite a bit of fluctuation in the product. It’s the same then if you’re bringing product from Spain or Morocco – you’ve putting pressure on a fresh product coming from an on-going harvest. A UK strawberry will probably be on-shelf in 24-48 hours, whereas that product from Spain or Morocco might take 3-4 days to get into the hands of a UK supplier. By its very nature, you will tend to get a different product, but hopefully that’s where It’s Fresh! will start to make quite a bit of ground. We’re spending a lot of time talking to people in Spain and Morocco, running trials and letting them see for themselves. For the growers as well, getting better product to the UK will drive their sales too.
“There are various products where the yield on arrival at a supplier’s packhouse can drop quite considerably and that can be for a variety of reasons. If we can help push that yield up, it has a substantial return and payback for the grower, and for the supplier, as it starts to make the whole process in terms of quality control, supply and availability considerably easier. All of a sudden they find they are not running short and having to go out to the market – there are real benefits there. “
Durose and the It’s Fresh! team are looking at a number of pieces of work that challenge the status quo. “Reduced atmosphere and controlled atmosphere have become the norms for the transportation of most product and that still isn’t necessarily without its issues, although it has become quite refined. When there is a fluctuating temperature element in there, the reality is that it can cause difficulties – what we are seeing with It’s Fresh! is that it can contribute significantly to those processes,” he says.
“We’re also looking at using It’s Fresh! with certain products where it can replace controlled atmosphere. That’s really interesting, it takes the potential for our product to a whole different level in how we use it and where we use it. But of course there are obvious challenges in getting to that stage. A container of [produce] coming out of South Africa, for example, could have a value of $20,000 or $50,000, so you have to get a high degree of confidence to even agree to do the trial. Whilst we might say we believe the product will perform better with It’s Fresh! in it, full stop, it is another to say that you could also remove CA and take a considerable chunk of cost off the container, which would make It’s Fresh! relatively inexpensive as a replacement. We are at the point of looking at that over the next set of seasons.
“There are two parts to it for us. One, we’re not just looking at the retail pack. And two, it’s really good to be talking to the growers about the benefits of It’s Fresh! because ultimately, they have as much to gain and at the moment they are not necessarily getting the benefit of It’s Fresh! Yes, as we start to grow the market, they are seeing some of that drive back down to them in demand for their product, assuming they have more to sell, but what we’re talking about is to add value to their business by providing them with a better return on what they produce and what they sell.
“Now we’re adding value at every point of the supply chain, to all the people who are using It’s Fresh!, and that’s a really important development.
“I think we all think science should be black and white, but it’s a little bit like the law – it never is black and white,” he says. “One of the things Professor Leon Terry is showing now is that most products are responsive to ethylene, and items that produce very little ethylene are often very sensitive to ethylene – which is contrary to what most people have traditionally thought. So the climacteric discussion on ethylene has kind of gone out of the window.
That’s a big jump and you need academia to lead the way on that.”
Durose looks back on his days at Tesco and recognises that some of the attitude that prevailed at the time are perhaps now out-dated. “I always used to look at it this way: If you had a negative view on waste, you almost limited sales because you were more worried about wasting product than selling. If you try to limit waste, one of the first things to slide traditionally would be your availability, so you have to be careful. I always said waste isn’t a bad thing, but where we are now ‘hundreds’ of years later, is that is not quite the case because you can use technology like It’s Fresh! to extend the life of the product and improve its quality. So you can reduce waste in a very positive way, because you are giving the customer a better product and you are making it easier and better to supply the product.
“It’s still a challenge to make any changes in the supply chain. We went with our standard filter to begin with and that’s great because it’s extremely simple and flexible to use. However, if the minimum wage means the cost of labour in produce is going to rise by 20-25% and the retailers are still sitting there at meetings saying that it won’t have much impact, then the cost of inserting our filter does become another barrier.
“We are ahead of that curve because we have always recognised that it would be preferable if the growers and suppliers did not have an insertion cost on top of using It’s Fresh!, so we have our pad for using in berry punnets, and will hopefully introduce a filter that can automatically be inserted on a packing line, removing the insertion costs completely. We will have full production samples of the auto-insertion filters in the next couple of months, so it should be available by the end of the summer.”
The It’s Fresh! pad for use in berry punnets
Scratching the surface
There is plenty of room for expansion of the It’s Fresh! profile, says Durose. “We are only really scratching the surface – what I’d like to do is to get the core products that we are in at the moment rolled out with more retailers, so we can create some scale and hopefully use that to accelerate more. There are other products that we are looking at; Tenderstem broccoli, asparagus, figs, passionfruit, kiwifruit, for example where we know that the product works, but it’s case of building knowledge of the nuances of where in the supply chain and how it works and what’s the best way of using it,” he says.
“There are lots more areas where we can push on, and there are others where we are really looking to gain an entry into the market. Mangoes are a great example, from a prepared perspective. One of the things we find with It’s Fresh! is that you get a far greater degree of consistency, not so many high pressures and low pressures mixed within a batch. That’s great for the processors because they can get a far better yield and it’s great for us to work with them because their yield data and the data they generate by effectively destructively testing every single product they receive gets us great figures back in terms of how we are adding value to their businesses and their growers’ businesses.
“There is new product technology coming that will add functionality. The product has been entirely focused on managing ethylene and its removal. But in terms of managing product quality, it’s not just about ethylene, you have to have the right harvesting and chill processes in place all the way through. Get the right packaging and incorporate It’s Fresh! of course, but there are still so many other factors there that have an impact on shelf life. If we can deal with some of those factors, we can take it further. Our chief technical officer is working on some new developments now and one or two of them are very close to us being able to trial them with the supply chain, in lab conditions or in a chill chamber.
“If we start to add functionality to what we already have, then that’s really quite exciting. We can already move the life forward, if we can do that and really provide the customer with robust, good tasting product, we keep moving forward. One of the prerequisites of my training in the past 20 years has been that you have to keep moving forward, or eventually somebody comes past you. Constant evolution and constant improvement is what we still strive for and that will take us outside of core fresh produce and certainly into the prepared sectors to help them on life and quality, and eventually outside of produce I expect, to start looking at proteins.”
Julie Criddle – Speaking the trade’s language
Julie Criddle joined the business as UK sales manager in February having previously spent five years with Univeg and before that, a decade at Empire World Trade.
Her appointment marked another step forward in the desire to talk to the trade in its own vernacular, in order to establish a progressive dialogue that didn’t get mired in the science behind It’s Fresh!
“When you look back, you see that It’s Fresh! has had great success in presenting the technology to the retailers which has started the process of evaluation” says Criddle.
“There has been a certain amount of kickback from the supply chain from that process which has made it slow going. I think growers have to find out for themselves and go on that journey to discover for themselves what works. Coming from the supply side of the business, I feel that the supply base has got to understand, and believe, in the technology and know why it is good for their businesses and for the retailer’s business. They need to see the benefits.
“There’s definitely some [shelf-life extension] fatigue and people are so stretched that they can’t see a way out of the day-to-day job. It becomes so absorbing. M&S has taken on board their sustainability programme, from grower to end consumer and as more retailers start to look at the entire supply chain, there will be a place for It’s Fresh! and for other technologies. But people have still got to do their day job and to ask for trials and trials to be undertaken, whilst they are attempting to get fruit smoothly in and out of the door can be seen and just another job that suppliers and retailers just haven’t got time for.
“People are looking at every single penny, but sometimes you do have to invest [to move forward]. We can turn up and show results [of trials] and prove that it had a profound effect on quality, but if they didn’t see the trials, it’s not that they don’t believe us, more that they just don’t absorb it in the same way as we do when they run and see the trial for themselves.
“We are putting a huge amount of focus on the supplier base and also continuing to talk to the retailers. I think the supply chain feels that they will inevitably pay for it, but that the benefits are all for the consumer and the retailer. To ask them to pay for stuff when they don’t see a direct benefit is difficult. It’s a tough market and when you are just trying to get through the season, it can be hard to take a longer-term view.
“But a lot of transit trials are taking place; for instance blueberry trials where the growers have already delivered the benefit before it even gets to the retailer. So rather than asking the retailers and the supply base to pay for the technology, if the grower can see a benefit as it travels through the supply chain, everyone gains. And that cost and benefit can be split across more parties.
“If growers can see a benefit and are able to reduce waste in a way that they can measure, it will really work for them. The retailers and the suppliers have been good at measuring waste, but for a grower overseas, they send their fruit to importers and they have to work to the packouts achieved and quality on arrival, so they are really quite excited to work with us to understand things better. We’ve done some good work with cherries and blueberries and we’re also doing some work with mango and avocado, to see whether we can get better product in the back door. Inevitably the grower will pay for that, but they will gain from it, as the product performs more consistently through the supply chain and there will be fewer rejections. Growers are trying to find every which way and they are probably much more focused on new technologies.
“I think coming from my background, you’re bound to be more in tune with the calendar and suppliers and how the industry physically works. You can sit with a buyer and you’ve sold produce to them before so you have a feeling for what makes them tick and what they want out of it. I think you just speak their language and that enables you to put a different nuance on it. You can then start to talk about seasons – where are your spikes, are they predictable, where should we focus, do we look at the shoulders of the season? And you’re then having a more in-depth discussion about their challenges, which are the challenges they then put back onto their supply base.
“I think the perspective on It’s Fresh! is really mixed. There are a lot of people out there who say ‘we know it really works’ and that includes some of the best customers we work with, but there is this constant need for validation and proof that it works every single time and you will get your return every single time. People who work with it and understand fruit think that when fruit is exceptional, it’s just exceptional, so they are looking for where the biggest bang for their buck is with It’s Fresh! They need to see and feel that it works to get the benefit of that investment and also that they will be rewarded by retailers for delivering fruit that delights customers.”
Criddle returns to her previous point of answering where that pay-off for suppliers and growers is. She admits it’s an evolving solution, but feels that all will become clear. “That’s where we need to be. It’s not just about getting it onto the shelf, scraping through the Best Before dates and breathing a sigh of relief. It’s much more than that for It’s Fresh! and other technologies that promise to deliver a different proposition onto the shelves.”
South African avocado breakthrough
“We’re carrying out commercial trials with several full containers of avocado coming out of South Africa, but not using CA. We’re putting filter sheets in loose avocado and shipping it to Europe and losing the cost of the CA, which will be a massive cost saving over time. The grower should benefit from that because it will be cheaper to get product here. We also believe the product will be more consistent, as one thing that It’s Fresh! does with product that produces high levels of ethylene, is it narrows the mix of maturity.
“It could be seen as a risk, as it’s not cheap to ship a full container, as Peter pointed out, but in the 1990s, nothing was shipped with CA – so effectively we’re going a little bit back in time but with the balance of new technology.
“We’ve already trialed containers out of Chile with avocados and cherries, so we know it works and can deliver better fruit into the UK and Europe, which will benefit growers, importers, retailers and consumers, and will drive long-term sales.”
Leon Terry – Changing strawberry fields forever
Watch the video here
The first fruit that Cranfield University worked on with the technology It’s Fresh!, were typical climacteric fruits, for which the control was perceived to be vital. These included avocados, plums and pears and the results were extremely positive.
While it is an accepted part of the maturation cycle of many fruits, ethylene is often overlooked as a factor with other fruit and vegetables – strawberries amongst them.
However, scientists are thankfully an inquisitive bunch and Professor Leon Terry, director of Agrifood at Cranfield University, Bedfordshire has one of the best post-harvest labs in the world and one of the largest in Europe to call on for his revolutionary work with It’s Fresh! Using highly sensitive forms of equipment like photoacoustic laser spectroscopy enables scientists to measure down to parts per billion – giving them the capacity to look at non-climacteric fruit, where the role of ethylene has not been perceived as so important. This enables measurements to very low levels and tests for It’s Fresh! on products that many people would not have thought it was suited to.
The results have been extremely interesting across a number of fruit, but Professor Leon Terry, who did his PhD on strawberries many years ago, has now overseen what he considers to be ground-breaking research on strawberries with It’s Fresh! technology. “Research as long ago as the 1980s threw up evidence that ethylene could have a role [in strawberry maturity],” he says. But a lot of people still thought that it didn’t. Working with It’s Fresh! allowed us to test the role of ethylene and we’ve shown that if you really control ethylene, you can extend shelf life.
“It’s not a question of thinking that you can improve the shelf-life and freshness of strawberries, we have proved it,” he adds. “Controlling ethylene allows you to control the natural disease resistance of the fruit and we have showed that you can extend the shelf-life for up to two days. That really is quite ground-breaking when you think most people thought it had no effect.
“There is a view that there is often a trade off between post-harvest life and flavour. The consumer really wants flavour and technology is one tool to align with breeding [to change] that,” he says.