Taking trade to the next level: where does Peru go from here?
Peru plans to triple its fresh fruit and veg production by 2020

Taking trade to the next level: where does Peru go from here?

Gill McShane
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JOHN GILES Promar International
John Giles

LPS_Spotlight_Speaker

To spotlight the exciting new product ranges Peru has to offer the UK market, the Peru Trade and Investment Office in the UK will host a special 90-minute seminar at the London Produce Show and Conference 2016 next month. John Giles, fresh produce market researcher and divisional director at Promar International, will present the facts; followed by a panel discussion with industry experts in sourcing from Peru. Below, PBUK speaks with Giles to find out more about the opportunities for both buyers in the UK and Ireland as well as Peruvian exporters

Your presentation at LPS16 will focus on an analysis of Peru as a supplier. Why Peru?

John Giles (JG): Over the last 10 years the Peruvian fruit industry has been one of the great success stories of the fresh produce sector. They’ve not exactly come from nowhere but they have made tremendous progress in any product they have turned their hand to; avocados and table grapes are just two examples.

A decade ago if you asked people what they knew about Peru, they’d say “asparagus”. Peru was and still is good at and famous for its fresh and processed asparagus. But in the produce business we tend to put people into boxes. Then, suddenly, during the course of the past 10 years Peruvian exports of mangoes, avocados, table grapes, citrus, and now blueberries and pomegranates have all been growing incredibly strongly. And it doesn’t look like exports will stop expanding any time soon.

Peru has been very active and is doing well in many markets around the world, although in the US there have been some phytosanitary problems, which the produce industry is getting over. At the same time, Peru has developed Free Trade Agreements (FTAs) with emergent consumer markets South East Asia and China, among others.

My view is that Peru has developed a very successful and well-established fresh fruit and vegetable industry. So, there must be something you can learn from them!

Why has Peru done so well?

JG: Peru has developed a very strong reputation on the market. Not just in the UK but around the world. A decade ago Peru wasn’t without its problems, in terms of its recognition of trade union rights, water usage and corporate social responsibility (CSR). And, there have always been some questions about political and economic stability in Latin America, and the way produce destined for the continent is handled.

It’s not all been plain sailing but Peru has come through with flying colours. Some 10-15 years ago buyers might have had a nagging doubt about whether Peru could really do it. The industry wasn’t sure about what products Peru could do and do well. But they have shown they really can and more so.

Indeed, Peru has made a name for itself in counter-seasonal grapes, citrus, avocados and year-round asparagus. So, where does Peru go from here? What’s left?

JG: If you look at rate of growth in exports to the UK in general, we’ve not reached the stage yet where Peru won’t send more fresh produce. They’ll export more to the UK and to Europe for sure. I think Peru will look more closely at other markets around the world too. For instance, there have been some significant plantings of grapes in Peru – all aimed at the Chinese market. There is a lot more to come from Peru.

You don’t think the UK market is saturated for Peruvian fruit and veg then? But, equally, UK buyers should be aware of the competition?

JG: No. There are still growth opportunities, but challenges too. The UK has been a particularly good market for Peru. It’s no surprise that the US is Peru’s main market, followed historically by Holland, then the UK. Obviously, Holland is more of an re-export market, so after the US, the UK is a very important destination. Some of the products that Peru has been supplying for some time might start approaching maturity. But the industry says it will triple its exports over the next few years, and the UK will have to be part of that.

And, yes, a little bit of what Peru achieves in the UK will depend on the exporters and how attractive they find other markets around the world. Clearly, they’re interested in Asia, and China in particular. UK importers and even the British retailers know that. They know Peru has other options. If the UK does not develop strong trade relationships and pay reasonable prices then someone else will.

Why should Peru still pique UK buyers’ interest? Are there any specific products or categories Peru has to offer that would suit the UK?

JG: Peru has already experienced significant growth across the board. It would appear to me that whatever they turn their hand to, they do very well. Whatever it is – tropicals, exotics, pomegranates, blueberries – the UK seems to like what Peru offers. The exporters seem to have understood what UK customers want. So, it’s up to them now to show what else they’ve got, and to tell us about it.

For instance, Peru has a growing range of fresh fruits, niche products, superfoods and dried exotics. Do you think there’s potential to develop UK sales in those categories?

JG: You have to remember that superfoods come and go out of fashion. If you go back 20 years kiwifruit was recognised as being a superfood. All these types of trends have their own natural lifecycle.

But Peru does have an advantage when it comes to superfoods. Blueberries are a superfood, as are pomegranates. So, Peruvian exporters have a wonderful opportunity to ride that wave of interest among consumers in superfoods.

That said, everything has a lifecycle. In five years’ time there’ll be something else. Demand for berries will continue increasing, of course, and maybe pomegranates are a bit further advanced down the product lifecycle too. But superfoods is quite a large niche.

How else can Peru’s position be strengthened in the UK? Do UK consumers know enough about Peru, for example?

JG: I wonder how many British consumers could look at a map and confidently put their finger on where Peru is. So, yes, people need to find out more about Peru per se. There is a lot Peru needs to tell us about itself – as a country, a source of supply and its unique growing conditions.

Everyone is interested in suppliers and supply countries. It doesn’t matter whether it’s Pershore or Peru, consumers in increasing numbers want to know where their food has come from.

Peru is a major supplier for a number of products into the UK. So, naturally, people will want to know more about Peru. It’s still an unknown for most consumers – they probably have a fairly undeveloped view of what Peru is like. It’s a great place, of course! Peruvian produce exporters should come and tell us about it.

What should Peru and its UK receivers do in that respect, to raise awareness?

JG: Peru is still a relatively emergent supplier to western Europe when you compare it to South Africa, which has been trading produce for 100 years, or Chile, which has been doing it for 30-odd years. Peru is still, to my mind, the ‘new kid on the block’.

One thing that South Africa and Chile and others have done over the years is to organise successful generic produce promotions that tell consumers lots about the fruit and the country from which they come. So, there is an opportunity to look and learn from others. But Peruvian exporters must realise that the dynamic of the UK market has changed significantly in last 10 years – they can’t just do what others have done; they have to look at the market now.

That being said, the ability to communicate powerful messages to UK consumers has never been stronger. There are opportunities to tap into many mediums, especially social media.

Is there anything that UK buyers can also still learn about Peru? What can they expect to see from Peru in the future?

JG: Most UK buyers are pretty savvy; they travel the world. As I said, 10 years ago there were question marks over whether Peru could do it [develop a wide range of quality produce for export]. Now, most of the leading UK importers and supermarkets are dealing directly with Peru for some products.

Peru is much better known now. It’s not an unknown quantity for any produce company in the UK. There are not too many surprises to be had from Peru – the only surprise is how much more can they do!  

One thing to note is Peru has a unique climate that gives growers the advantage of double cropping, which means they can extend the peaks of their seasons. It’s not that there are any real gaps to fill in the market, but there will always be times when the peak in supply tails off and quality can dwindle, so this is where Peru can step in, provided it maintains a quality offer.

Peru has given the fresh produce world a bit of a shake-up in the last decade. It’s evolved from a country we didn’t know much about to a country that’s recognised for having got something fundamentally right.

What should Peruvian exporters focus on in the near future to ensure they continue evolving for the UK market’s needs?

JG: Peru needs to keep its eye on the UK market’s trends and CSR-type issues. They have done incredibly well, but they are not immune to any of the issues that impact on produce supply. Unless they keep an eye on the market and understand where the discounters, online shopping and convenience is going, they might get caught out.

Their exports have grown rapidly, and, to some extent, that’s the easy part. Peru has been riding a wave of tremendous success. But they won’t be the ‘new kid on the block’ forever. They need to look as an industry at how they can go to the next level – and that may not happen spontaneously. Part of the challenge is having the ability to develop that strategy, They’ve got to keep up with what’s going on the in market, whether that’s in the UK, Europe, Asia or anywhere else.

Of course, Peru is not unaware of the challenge. The industry has grown up a lot from just being good at asparagus; it has diversified its exports and its geographical reach too. Peru has also invested in its own certification schemes for good agricultural practices, companies have made progress with CSR, and the government has been very successful at developing FTAs and opening up markets in North America, Europe and Asia. Often, the Peruvian exporters and export associations are seen out in force at international trade shows.

But water usage and CSR will always be on the radar, and water might be the biggest challenge of all. These are issues that never go away, so Peru will always need to be on its guard and looking for solutions. By not keeping up, the danger is you could get a mixed reputation, which can be difficult to change. For all the wonderful things Peru has done, that’s something they do need to be mindful of.

Country fact file: Peru

Capital: Lima
Language: Spanish (84.1%), Quechua (13%), Aymara (1.7%) & other native languages
Population: 30.4 million
Area: 1,285,216 km2
GDP: US$385.4 billion

Source: CIA World Factbook

Peruvian fresh produce organisations

Agap (Peruvian Guild of Fresh Produce Exporters)
Apem (mangoes)
Ipeh (asparagus & vegetables)
ProCitrus (citrus)
ProHass (avocados)
ProVid (table grapes)
ProArándanos (blueberries)
ProGranadas (pomegranates)

Next month the
London Produce Show and Conference 2016 convenes for the third year at the Grosvenor House Hotel in Mayfair on June 8-10.

To attend the Peru seminar, register your attendance here.

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