“The discounters were the real winners”

Mr. Koch, what were the biggest worries facing the European fresh produce sector last year?

Aside from policy frameworks, which have to be complied with, the extent to which weather conditions affect the fruit and vegetable markets became clear once again. Incidentally, this concerns both outdoor and indoor crops, as a lack of sunshine slows greenhouse vegetable growth as well. 2023 gave us a taste of everything – high temperatures and extremely dry summer weather, storms, downpours and constant rain. There was hardly a country in Europe that did not somehow suffer.

And apart from the weather?

Certainly the price increases which affected the entire value chain. In 2023, seed, plant, pesticide and machine prices rose once again. Rising fuel prices have made transport more expensive, and the supermarkets have to take energy for lighting and refrigeration into account. Then there is the labour shortage, which in terms of production above all impacts the labour-intensive harvest, certainly in countries like Germany and Benelux. Throughout Europe there is a shortage of truck drivers. Shipping companies no longer make every delivery round and are dependent on drivers being available. Plus, in recent years the minimum wage has risen several times both in Germany and other countries. All this has had a huge impact on the sector.

How did weather conditions affect the harvest?

The fruit harvest around Europe fell slightly short of 2022, due mainly to a lower apple yield. The low temperatures in spring meant there were fewer insect pollinators, with less fruit as a result. By our reckoning the vegetable harvest marginally exceeded that of 2022, due mainly to global water supplies in 2023 being slightly better than the previous year. In mid-September countries including Germany, France and Benelux saw continuous rainfall. Vegetables that go into storage such as headed cabbage, celery and carrots increased in weight, so the actual amount harvested was quite large. However, it is only when these products come out of storage and are marketed that one will see whether the wet weather caused extra storage and sorting losses.

Besides these product groups, can you identify any other winners and losers?

In 2021 and 2022, the weather in Southern Europe resulted in substantially lower stone fruit yields. In 2023 conditions improved, so that peaches, nectarines and apricots could be categorised as winners. By contrast, small citrus fruit (easy peelers) experienced lower yields, as did Spanish melons and Italian table grapes. Cabbage varieties such as cauliflower, kohlrabi and broccoli also suffered from weather extremes, with the effects continuing into 2024. In France, which is the biggest supplier of cauliflower, some fields were already waterlogged during production, which severely dampened the market volume at the start of the year.

Have these harvest fluctuations also impacted international trade?

Basically yes, onions being one example. In 2022, the European harvest was so small that there was soon demand for overseas produce. Imports increased noticeably, particularly from New Zealand. However, not all events had such a direct impact. Take tropical fruits such as bananas and pineapples for instance. In some countries, rising costs resulted in less fertiliser and pesticides being used. The consequence was lower yields and less produce available for export. It would be logical to conclude that fewer bananas and pineapples were imported into the EU. In the case of pineapples that actually happened, whereas bananas have not been affected yet. But perhaps 2023 marks a return to normal levels because imports in 2022 were so low.

The cost of living in the 27 countries of the EU rose year-on-year again. Is that reflected in fruit and vegetable consumption?

In some countries, consumer fruit and vegetable purchases have declined slightly. However, there are various factors at play here. The organic produce sector definitely suffered. Whenever consumers tighten their belts they choose conventionally grown apples or tomatoes. In Germany, we also noted consumers switching preferred retailers. The discounters were the real winners, while stores with higher-priced goods – weekend markets, farm shops and specialist retailers had fewer customers.

Will this trend continue?

I think the discounters will be even more in demand in future. The overall economic situation will not change any time soon, and it is fairly unlikely that prices in this sector will return to the low levels seen before the pandemic.

Looking back at market events in 2023, what is your most vivid memory?

The panic when the shelves suddenly ran out of fresh produce in the UK. Every channel began debating whether this could happen in the rest of Europe. The change in the flow of goods after the UK’s departure from the EU was the explanation given at the time. But that was only part of the reason. After all, Brexit had been a while back. The key factor was that food retailers wanted to keep shop prices stable for consumers and had decided not to buy more expensive products. The suppliers then approached buyers who were willing to pay their prices. So to a certain extent it was a problem of one’s own making.

Where do you see the biggest challenges for the sector in future?

Managing weather extremes will continue to be key. We need to breed more resilient varieties adapted to dry summer weather. We have to expand the use of protective measures such as hail netting or rain covers in order to ensure the quality of sensitive plants such as cherries and strawberries. Water supplies generally remain a key issue. For example, how can we store winter rainfall and make use of it for crop production in summer? Another constant challenge is the availability of labour during the entire production cycle – fruit pickers, transport workers and retail staff. That also includes deciding which operations can be mechanised or automated.

So the weather and work processes remain key topics …

Yes. At the same time the sector must also improve its consumer communications. Customers are frequently unaware of how production and retail processes actually work. This is why they have no sympathy for price increases, a burden they must sometimes share. People are also often unaware of the potential fruit and vegetables have to satisfy new dietary habits. Take for instance meat substitute products which are often ultra-processed. Why not batter celery or mushrooms instead in order to replace meat? Fruit and vegetables are the ideal substitute here.

Despite all the problems, were there any positives for the sector in 2023?

Certainly the fact that producers have finally obtained a share of rising food prices. Whether it is enough to fully absorb the increases is a different matter. Whatever the case, things are moving in the right direction.