It's uncommon for fresh produce directors to sell their business, take a few years off, and then return as employees. Yet after three years, Fred Kloen is back at his old stomping ground—OTC Organics. "I missed the dynamism and action. Maybe it seemed like an illogical move from the outside, but for me, it made perfect sense."
After selling his remaining shares to the former Total Produce at the end of 2021, Fred consciously chose to step away after 20 years at OTC Organics. "I could have stayed on, and I did for a while, but I felt the need to take a break and experience what it's like to have no commitments. If you stay involved in the company with one foot still in, you never really disconnect, which is why I decided to take a proper sabbatical."
The time off was well spent—he built a house and went on some great trips—but Fred soon realized he was still too young to do nothing. "By September, I started feeling the itch again. I briefly considered returning to the fresh produce business but decided to try something new instead—business brokerage. I thought it would be a great way to help entrepreneurs using my knowledge and experience, but those processes often turned out to be long and drawn out, and I'm not exactly the most patient person. When you're in the fresh produce sector, you sometimes think it's all a bit too fast-paced, but once you step away, you quickly miss that energy."
Beer brewing
Fred did carry something over from his brokerage adventure—Stadsbrouwerij Staverden, a local brewery where he's now involved in brewing natural, authentic, and artisanal beers, although not daily. "Still, I noticed that my heart beats faster for (organic) fruit and vegetables—nothing else really comes close. Because I left OTC on good terms, returning felt immediately familiar. Quite a bit has changed internally, and this past winter OTC was in need of knowledge, experience, and seniority—something I could offer. There was a real need for experience, and if you can bring that together, you've got a great little ABC."
Returning as an employee doesn't bother Fred. "You just have to be careful not to slip back into your old role—but that's on you. Honestly, I love not having to deal with the entire operation anymore. I can now fully focus on commerce, which suits me best. There's a great spirit within the commercial team, and I hope to contribute to OTC's commercial success with my knowledge and skills. I must say, the trade fairs in Berlin and Nuremberg felt like a real treat. In your farewell year, you still meet a lot of people from your network, but after that, the contact fades quickly. You meet so many people at these fairs—some you've worked with for twenty years—that's something I really enjoy."
Fred has also noticed changes in the organic fruit and vegetable market after three years. "You see that large players are getting even larger, and some smaller ones are being swallowed up. The organic market has been under significant pressure in recent years. The effects of COVID-19, geopolitical tensions, energy costs, and changes in consumer behavior due to inflation and other uncertainties have been clearly felt. A lot is being written about the organic sector, and there's movement, but translating that into success is not so simple. Let's also not forget that in the past three years, costs within the EU have risen enormously, but this is barely reflected in consumer prices—the chain has absorbed the difference, which is an undesirable and risky development."
Fred Kloen at Fruit Logistica with colleagues Cornelis Ernst and Andre Setz of Freeland
Fair pricing
"The discussion around fair pricing remains extremely relevant, but market instability has only increased. Ocean freight can cost $5,000 to a destination today and $8,000 tomorrow. Retailers are caught up in a race to the bottom. Everyone's looking for faster and cheaper ways to operate, which makes it very difficult to successfully roll out products. But if we can't achieve fair pricing for producers, even the best sales team in Europe won't help—you'll hit a wall, because without supply, there's nothing to sell."
"On one hand, Europe presents ambitious targets for expanding the organic market share, but that alone won't get us there. Producers are facing daily challenges like inflation, rising wages and board prices, energy costs, and phytosanitary issues. When production costs rise steeply but cannot be passed on to the market, returns drop so low that producers start questioning how economically sustainable organic farming still is. You can have the world's finest ambitions, but at the end of the day, you need the producers. Now we're seeing producers, both in the Netherlands and beyond Europe, pulling out because they can't achieve the necessary returns, and the growing risks outweigh the benefits. We all want organic growth, but it must come with a healthy economic balance throughout the supply chain."
In any case, within the Dole Group, OTC has plenty of opportunities to showcase and grow. "Dole is the largest fruit and vegetable company in the world. Sustainability and organic development are therefore firmly on the agenda. The backing and support from the parent organization not only provide financial strength but also open many commercial doors—on both the procurement and marketing sides," Fred observes.
Connection with the customer
"For us, the main challenge is to maintain that 'old-school' connection with the customer. The personal aspect remains crucial. That's what helped OTC grow, and it's still where you get the furthest. This is made harder by constant staff turnover at retail—especially in the German market, where there are frequent personnel changes. We, too, have had to make efficiency improvements, doing more work with fewer people."
When asked if he plans to retire at OTC, Fred laughs and says, "I'm not looking that far ahead yet—it depends on too many factors, starting with whether they're happy with me. But the idea isn't to do this for just a few months, of course. I'm really looking forward to hitting the gas and putting OTC back on the map. I'm certainly not backing away from the challenges ahead. The bottom line is: that if we know what our customers want, they know what to expect from us, and we deliver on those expectations—every single day. If you manage that, the rest will follow naturally!"
For more information:
Fred Kloen
OTC Organics
Tel: +31 (0) 885 880 440
Mob: +31 (0) 629 728 490
fredkloen@otcorganics.com