"It's very competitive to win fruit from the growers. You have to be on your game all the time," says Wayne Mudge, right, CEO of Cape Five Exports, a company that tends to focus on medium-sized growers, many of whom with retail programmes that they run by themselves and very few exclusively delivering to Cape Five.
"In fact, we encourage that. I'd rather have competition. I would encourage any guy with ambition to do it himself," Mudge says. "We stay away from a business where we can't add anything. There are enough opportunities out there for everyone."
Fifteen years ago the company had to re-assess: they were shackled by the traditional tight focus on the UK and Europe. "As soon as we diversified towards the East our business took off," he says. They spread the risk in terms of their offering, adding stonefruit, blueberries, and citrus (there's no end to the demand for mandarins, he notes) to keep busy all through the year, as well as in terms of trade destinations.
In Europe, there is still a space for South African Pink Lady apples, and Braeburns in the UK and for South African pears, but the rest of the apple basket has had to be presented elsewhere. The way the European market developed, Africa has been a godsend to them, especially for (grass green) Golden Delicious sales. Grannies are sold in smaller proportions,10 to 15% of their apple portfolio, and Goldens will go the same way he believes, probably supplanted by Gala types which, he says, you can sell everywhere. "There is still good demand for Golden Delicious in Bangladesh and in West Africa, and I think in those places it will stay in high demand."
The big difference for South Africa, he observes, is the high light intensity and a very dry summer in the Western Cape, where most fruit (outside citrus) is grown. "It does actually lead to better taste, and I think people know that about our fruit."
Bevin Williams of A & B Williams, a key supplier of apples and pears to Cape Five, with Wayne Mudge
Business is solid in China
China, a relatively new market, takes mainly Fuji apples, with space for Gala too. "We're trying a few new things in China. Our clients there have seen we give them exactly what they want," he says. "We have a good position in China. It's interesting to see the relationships that have developed. I can see it's giving us a chance to sell other products like pears for which we gained access three seasons ago. We haven't made much headway but now we're getting more inquiries, they want to try new things."
They focus on Chinese retail. "It's better business: the wholesale markets can be very good but they can be a disaster as well. Retail is quite committed to its agreements, you're definitely going to get your price. They're quite adaptable but when it comes to taste, it must be a sweet apple, that's very important. Acidic apples don't work."
China takes middle-sized apples from South Africa, with a preference for bi-coloureds. "I think the dilemma for a South African apple grower is if you want to sell in the East, Pink Lady is not going to work there. We keep trying but you never get momentum."
India likes red apples, he says, and the market will grow. South Africa feels the competition from Eastern European apple producers like Ukraine and Moldovia in the Middle East and in India.
Lack of shipping options from Cape Town
"One of the hidden lost opportunities in Cape Town is that because of berthing delays [at the Cape Town Container Terminal] a lot of the shipping lines decided they will stop in Durban, not Cape Town anymore because it costs them too much time on the South African coast. So our options to ship out of Cape Town in terms of destinations and regularity just aren't there anymore, and we need that back."
When starting the season for the Middle East and the Far East it has become a regular occurrence to drive containers to Durban, across the breadth of South Africa, for loading out at the Indian Ocean port because of a lack of shipping options from Cape Town.
Mudge recounts a consignment of early-season plums destined for Dubai a few years ago: delays at Cape Town led to the decision to split it into two portions. One half went to Cape Town, as initially planned, while the other was rerouted by road to Durban. By the time the latter arrived in Jebel Ali, the other half was still waiting in Cape Town.
The intent at Transnet has improved, he believes, under the leadership of the new CEO Michelle Philips. But "we went right to the bottom. We've still got to climb up. If we could solve those problems, business would grow faster. Although," he points out, "it hasn't stopped growing."
Agriculture is a force for good
From an organizational point of view, a different challenge is growing the business while not bloating the wage bill, all while fulfilling their social responsibilities. Mudge, who grew up on a Cape apple farm, is a strong proponent of the belief that agriculture in South Africa is a force for good.
Thanks to the graduate placement programme of the Fresh Produce Exporters' Forum (of which Mudge was chair some years ago), which gives graduates of colour a foot in the door at fruit exporting companies, Cape Five Exports has attained the services of five new staff members over the past eighteen months.
"It's a very good programme because it's a challenge for black South Africans, not to get an education, but it's the network, the background knowledge that they lack. We expose them to everything in the chain. I think agriculture has a big role to play in uplifting this country, and it does play a big role."
For more information:
Wayne Mudge
Cape Five Exports
Tel: +27 21 850 4640
Email: info@capefive.com
https://capefive.com/