Already one of the biggest names in the fresh produce sector, Univeg’s recent merger with Greenyard Foods and Peatinvest has created one of the largest groups of its kind. Chairman Hein Deprez explains exclusively to Produce Business UK why the company is not stopping there with its expansion plans (including in the UK), and what benefits the deal will bring to produce consumers at large
The merger was significant enough given that it has created the largest company of its kind in the global fresh produce sector, with expected annual sales reaching close to €4 billion (£2.8bn). But what makes the agreement even more important is the fact that Univeg, with Greenyard Foods as its new parent company, now has a reach that crosses all produce sectors – from fresh to frozen and canned through to production materials.
Hein Deprez, executive chairman of Greenyard Foods and Univeg’s founder, believes the two additions to the group’s portfolio will not only complement its existing business, but could help boost fresh produce consumption, while all three companies will benefit from complementary synergies.
Speaking from the organisation’s head office in Sint-Katelijne-Waver in northern Belgium, Deprez says the changes will enable Univeg to deliver a clearer message to consumers about the health benefits of eating fruits and vegetables – in all their forms.
“Fruits and vegetables are not only sold as fresh, but also as frozen and canned – it’s still the same production that is going to the market,” says Deprez. “They fulfil different needs for consumers. They aren’t always looking for fresh – sometimes they are looking for convenience or products you can keep longer or that are at a different price level.
“Consumers’ understanding of fruits and vegetables is that they equal health, but the messages they are receiving from suppliers are very confusing. If the message is confusing, you don’t have trust and if you don’t have trust, the consumer doesn’t buy the product.”
These same consumers, Deprez continues, may well then buy from a processed food brand that makes the same health claims as fruits and vegetables, but with considerably less evidence to substantiate them. As evidence, he cites ‘funghi’ pizzas, which typically use a single mushroom across a pizza that is sold as a meal for four people.
Deprez says the fresh produce health message is also often misappropriated by yoghurt manufacturers who frequently use fruit imagery on their packs. “Almost all yoghurts have an image of fruit on the outside, but is there any fruit inside? Very little,” he claims. “Manufacturers promote the yoghurts as fruit-based and people think this counts as one of their five-a-day.”
Deprez says the focus of Univeg’s expansion will be on how it can boost consumption of fruits and vegetables, particularly in Europe where he believes there remains considerable potential for category growth. “Consumers in Europe eat around 300g of fruits and vegetables a day when most governments say they should be eating 560g, so the potential is enormous if you can communicate in a more effective manner and take a more intelligent approach to the market,” Deprez argues.
Bringing fresh, frozen and canned together under the umbrella of the new business will, argues Deprez, enable the company to communicate the benefits of eating fruits and vegetables in a more open, transparent way. “The most important thing is that people consume fruits and vegetables – fresh, frozen or canned,” he says.
“We saw that bringing the three companies together was complementary because if you don’t buy fresh, you have frozen or canned on your plate.”
Quite a different proposition is Peatinvest, a company that is very much focused on the production side of the fresh produce business, specialising in potting soils and substrates for modern, intensive cultivation of fruits and vegetables.
With some 30 years’ experience in the sector, Deprez says Peatinvest has already recorded some notable successes, with one particular highlight being its role in the revitalisation of strawberry production to the Benelux countries. This was achieved, he says, through the use of an innovative, organic-based soil substrate that was utilised for strawberry production instead of soil. As a result, Deprez says that it not only became profitable once again for Benelux growers to produce strawberries, but also created sustainable jobs in local communities.
Expansion focus and UK plans
Although the majority of Univeg’s business is currently focused on three countries – Belgium, the Netherlands and Germany – Deprez says expansion throughout Europe is very much on the agenda. The company is actively looking to grow its presence in the UK, France and the US and in the longer term in the Scandinavian countries.
Operating as an importer and producer in 27 countries, Deprez says Univeg is increasingly aiming to sell fresh produce to local markets where it has its own operations, such as South Africa and South America, as well as in India through its joint venture with Mahindra.
Univeg’s involvement and interest in the UK market in particular has increased over recent years. The company entered the market in 2007 with its purchase of Spalding-based Malet Azoulay (now Univeg UK), a business that until that time had been focused on exotics imports.
Since the UK company’s integration, Deprez says Univeg has worked to diversify its portfolio, adding stonefruit, salads, vegetables and table grapes, among other products.
Univeg further expanded its UK operation with the acquisition of top-fruit specialist Empire World Trade in January 2014.
That company is currently being integrated into Univeg UK with a view to running the whole operation as a single business. Previous gaps in top-fruit supply from British sources will now be supplemented by fruit from Univeg sources on the continent.
“The UK is an interesting market, but a market where there is a lot of pressure – the retailers are not having an easy time and the European discounters are coming in,” says Deprez. “It’s a challenging market, but we like that and are not afraid of that.”
In production terms, however, Deprez believes the UK still has some work to do before exports outside the country can be considered. “There’s still a long way to go to improve production, cost prices and quality in the English market,” he says. “At the moment, production of deciduous fruit will only be for domestic sale.”
Looking ahead globally, Univeg’s founder believes that the focus of fruit and vegetable production going forward will very much be on identifying viable production zones in areas with dry climates and a sustainable water supply.
“I’m very interested in detecting all over the world areas with a dry climate and a sustainable source of water – these are very scarce, but they exist,” he explains. “ We need water to grow and it needs to be sustainable or it doesn’t have a future and in a dry climate you have a lot less pressure from diseases – it acts as a natural greenhouse.”
Examples of such production zones in the Univeg portfolio include Turkey (cherries and figs), South Africa (avocados, tropicals, top fruit, grapes and stonefruit) and Argentina (top fruit from the Río Negro Valley and grapes from San Juan at the foot of the Andes).
Other Latin American production includes grapes grown near Brazil’s São Francisco River, citrus and blueberries from Uruguay and pineapples from Costa Rica.
The latest to be added to this list is Suriname, where Univeg last year finalised a deal with the country’s government to purchase a 90% stake in the previously publicly-owned banana exporter Stichting Behoud Bananensector Suriname (SBBS). The Suriname government has retained 10% of the operation, which was renamed FAI following the deal.
Deprez believes that although work is required to improve the knowledge base at FAI, the company has the potential to become a major exporter to European markets. “We’re working on the fundamentals of the company by bringing more knowledgeable people on board,” he says. “We’re focusing on achieving higher yields and better quality, and we’re confident we will start to see results coming out of Suriname in one to two years.”
Deprez’s faith in Suriname’s potential is based on the fact that it has a “very interesting” climate for banana production, but also benefits from being a South American country that, as well as being an ACP (African, Caribbean, and Pacific Group of States) member, it’s geographically close to Europe.
“The missing element to make it work was knowledge and step by step we’re implementing that,” he explains. “I’m convinced that once the knowhow is there, Suriname can have the same levels of production, yield and quality as other banana-producing countries.”
Under the terms of the merger deal, finalised on June 19, Univeg has been partially demerged from its previous owner, De Weide Blik, and Greenyard Foods has become the new parent company for the group that includes Univeg, Greenyard Foods and Peatinvest. Deprez says he has been closely involved in the development of both Greenyard Foods and Peatinvest, having invested in the former company since 2006, during which time Greenyard’s sales have risen from €150 million a year to €605m. In fact, as chairman of both companies, Deprez has effectively steered Peatinvest and Greenyard Foods for several years.