Flandria in 2005 and 2006: review, outlook and some key figures

The LAVA auctions saw quite a substantial increase in sales for key types of Flandria produce (+25% for loose tomatoes, +26% for glasshouse lettuce, +25% for leeks, +29% for cucumber, etc.). How do you explain these figures?

Maarten De Moor: �You have to put the figures into perspective. It�s true that 2005 was a better year than 2004, but you have to remember that 2004 was a particularly poor year for most produce. In 2004 there were a whole string of reasons for the low pricing. As far as produce grown under glass is concerned, production in other countries more or less mirrored the situation in Belgium, resulting in overproduction peaks and very low prices. Outdoor produce had a mild autumn that year. Belgian production reached an all-time high, but more northern countries also had a longer season. In 2005 all these factors were less evident. Increases in sales in 2005 were, however, countered by higher production costs, especially energy costs. The sharp rise in energy prices in the international market had a serious effect on the competitiveness of our producers. In short, better yields and sales in 2005 were offset by markedly higher production costs.�

Flandria sweet peppers are an exception: volume increased, but overall sales fell by nearly 25%. Is the golden age over for Flandria peppers?

Maarten De Moor: �Over the past ten years the total planted area in Belgium and the Netherlands devoted to sweet peppers has steadily grown because of the better prices.  Consequently, there has been enormous growth in production and we are now facing a functional production surplus and an imbalance between supply and demand. Peppers are also still regarded as a relatively �new� vegetable and consumers don�t yet see them as something you eat every day.

New produce to be introduced

Witloof chicory (Belgian endive) seems due for a boost. Now that the three-year generic promotional campaign for witloof chicory conducted jointly by the Netherlands, France and Belgium has come to an end, Belgium alone has submitted an application for a European grant in order to continue the campaign. Why?

Maarten De Moor: �Despite the relatively small production area (80% of all witloof chicory is grown in Belgium, the Netherlands and Northern France), it has proved difficult for these three production areas to come to a concrete agreement. They are all organised differently, so things tend to happen at a different pace. In Belgium and the Netherlands some crises can be managed thanks to extensive cooperation between the producers. In France, however, cooperation is still very limited and rudimentary. Measures to cope with a crisis can only succeed if coordinated centrally and adopted by everyone involved. In the past three years we�ve jointly organised many promotional campaigns aimed at increasing chicory consumption in the two target markets, Italy and Germany. After three years we suggested continuing the campaign, but both the Dutch and the French producers have pulled out. That�s why Belgium applied for a European grant to pursue this project.�

After two fairly quiet years, 2006 will see a wave of new produce introduced under the Flandria quality label: mini-peppers, pointed peppers, self-blanching celery, green celery, pointed cabbage, radicchio (red chicory), etc.

Maarten De Moor: �One of the key objectives in launching Flandria was to create a fruit and vegetable brand that stood out from the competition because of the importance attached to environmentally sound cultivation methods and the desire to put superior-quality produce on the market. The aim is eventually to bring all our auctions� produce under the Flandria label to enable us to offer buyers an unprecedented range of produce. So 2006 doesn�t actually represent a new wave, but rather a further expansion of our range.�

Can buyers expect anything new from the auctions in 2006 or in terms of LAVA�s commercial policy?

Maarten De Moor: �In 2006 LAVA and the auctions want to be even more proactive in working with buyers to explore potential opportunities. This includes seeking out new sales markets, investigating new marketing methods and looking at new types of packaging. I feel it�s really important to get buyers involved in all this and to try to work in tandem with them. If you think of the image of a tandem bicycle, it�s vital that both riders, in this case the producers and the buyers, pedal together in order to achieve their goal: better pricing, better sales of produce and a decent income for all concerned.�

Convincing consumers that fresh produce is always better

The latest research shows that there has been a considerable increase in consumer awareness of Flandria in Belgium, but that this quality mark is still not recognised often enough in stores. What plans does LAVA have in 2006 to boost recognition?

Maarten De Moor: �The surveys conducted by Dimarso have shown that we have already partially achieved our aim, which is to increase general consumer awareness, but that our presence in stores is still too limited. By that I don�t really mean the physic al presence of produce in stores, but the ability of consumers to recognise it for what it is. To achieve that aim, we�ve developed an ambitious programme and made more resources available. Here�s just one example: we�re increasing the number of wok demonstrations in F1 supermarkets from 90 to 130 stores.�

In the first nine months of 2005 there was substantial growth in exports of Flandria produce. What sort of yearly figures are you expecting?

Maarten De Moor: �In the spring of 2005 southern production countries suffered some extremely cold weather, forcing growers to end the production season early. This meant that there was no overlap period with the northern production area, which immediately created a demand market for Flandria produce. We therefore see improved export figures mainly in the first half of the year. The final figures for 2005 will probably show less substantial growth overall, however. The premature end to the season in southern production countries actually prompted growers here to get the new production season (autumn) off to an early start and that undoubtedly interfered with our exports in the second half of the year. What�s more, Belgium itself had a mild autumn, which meant that our production of glasshouse vegetables was higher.�

In 2006 there are plans to organise information and networking days for representatives in the potato, fruit and vegetable trade in the Czech Republic and Poland. Will the new EU member states continue to be a priority target?

Maarten De Moor: �We want to meet buyers in these countries face-to-face to tell them about Flandria produce, and particularly to point out the potential for their own turnover. Their entry to the EU has lifted trade barriers, making trading easier. Certainly in the Czech Republic we�re seeing a sharp rise in demand for quality.�

Recently Belgian consumers have been bombarded with TV commercials for new ready-to-eat vegetable soups and other vegetable preparations, which claim to be just as healthy as fresh vegetables but much more convenient. How is LAVA planning to respond to this trend?

Maarten De Moor: �In 2006 we�ll be launching a new consumer campaign that will include TV commercials, participation in consumer fairs, product sponsorship in TV cookery programmes, in-store wok demonstrations, etc.  In each case our aim is to get the same message across to consumers: cooking with fresh produce is fun! Cooking with fresh produce is actually a good way of really pampering yourself and your family!�

The key figures for 2005

Supply of the main types of Flandria produce to the LAVA auctions