The opportunities for learning at global produce events are often serendipitous. Last year at the launch of The Amsterdam Produce Show and Conference, we had the good fortune to offer a tour that included the Robinson Fresh European headquarters in Amsterdam.
The tour was terrific. Gary York, Vice President Sales and Marketing, gave an excellent presentation, and the building itself — so very international, so progressive, so global — taught many lessons, but when the conversation evolved into an incredible discourse between Jim Lemke, President at Robinson Fresh, Bruce Peterson of Peterson Insights —who built Wal-Mart’s produce program in no small part with Jim Lemke and Robinson Fresh — and yours truly, it was a discourse that had never happened before, would never quite happen again, and, according to one important attendee of the tour, was like gaining an MBA in produce in a half hour.
That conversation ranged from a discussion on Wonky Vegetables to the integration of logistics and product, to the role of branding in produce. The value to attendees who were on that tour was immeasurable.
We detailed the tour last year in this piece:
We are returning this year with some new twists, including Robinson Fresh flying in Gina Garvin, their Director of Consumer Insights, to help elevate the tour further. It is a real industry service that Robinson Fresh provides the industry, and we respect and appreciate the seriousness with which Robinson Fresh takes on this challenge.
We asked Pundit Investigator and Special Projects Editor Mira Slott to find out what lies ahead for the lucky attendees this year:
Vice President of Sales and Marketing
Eden Prairie, Minnesota
Q: As part of our pre-Show coverage for Amsterdam, we want to highlight the exceptional opportunity attendees will have to take part in a Robinson Fresh tour, following its great success at the inaugural Show last year.
As we launched the Amsterdam Produce Show, Robinson Fresh was on the cusp of expanding its European headquarters to accommodate its strategic international growth amid a rapidly changing retail environment. The company graciously opened its doors to attendees on the final day of the show for a tour of your facilities and to provide insights into the scope of your operations in the context of The Netherlands, which is so important to the global produce industry. Let’s inspire attendees with elements surrounding this year’s tour…
Could you start by giving some background about Robinson Fresh, its international scope and its value proposition? And why did you choose Amsterdam for your European headquarters?
A: I can talk about Robinson Fresh’s global expansion and why we’re proceeding in this direction and some of the headlines around this area. And then Robert Walsleben, director of European business, can get into Europe a little bit more and to why Amsterdam is important.
The reason we are expanding globally… over 112-plus years as a company entity, CH Robinson over time started to work with growers in multiple locations, first in North America, supplying fresh fruits and vegetables to our clients in the northern, midwestern U.S.
As consumers began to travel more and more, and our customer base started to expand through the U.S. and Canada, we had to develop growing relationships and growing operations, first in Mexico, later in Central and South America, primarily supplying fresh fruits and vegetables, high quality products, branded items, and consumer-differentiated products to our clients in the U.S.
As we did that, we needed to bring increasingly added value to those growers, whether it was food safety, financing, innovation through seed varieties, cold chain logistics, etc.… As those growing operations grew and prospered with the CH Robinson alliance, we realized we needed to expand our consumer base.
Q: In what ways?
A: European consumers preferred different products, different varieties, oftentimes different sizes, at different times of the year. This was the case with Asian consumers and South American consumers as well. We needed to evaluate our global retail relationships and bring some of these products to them. In doing so, we could bring value to our growers by being able to sell the entire crop and also market it to different parts of the world using smart cold-chain logistics, benefiting people in many countries, while maximizing financial return to the farms.
At the same time, as global retail relationships continued to expand and consolidate in different parts of the world, we were able to meet that demand of the retailer in multiple areas. If you look at large retailers, such as in Holland, the area we’re talking about now, we’re able to meet the needs of an Ahold, for instance, not only in Holland, but, of course, on the U.S. East Coast, where they have operations. But we’ll also form alliances in places like Indonesia, where we work with a retail chain there as well. That’s the five-minute version of our global expansion.
Q: Could you elaborate on how retail operations and the international landscape are changing? Is it important or necessary for a company to be as global as you are? Is there value in becoming a niche player as well?
A: It’s a great question. We’ve seen over the past decade or more as retailers continue to increase their footprints in multiple areas of the world in order to grab additional market share. We’ve also seen consolidation on the other side, where retailers are teaming up to create their own efficiencies and their own improved supply chain that would enhance the value to the grower.
Then think of things like most recently Amazon and Whole Foods, and why that was an important acquisition for two retailers in quite different spaces in the retail sector. But you can also look at the merger of Ahold and Delhaize closer to home in Amsterdam, where that was an important merger to enhance the position of those two retailers, not only in Europe, but in the United States and also places like Indonesia and other parts of Asia.
Then you look at global expansion. You can take U.S. retailers like Costco, and see their growth in Europe, first in the United Kingdom, and now most recently in Spain, France and Denmark. Also, you have Aldi’s and Lidl’s expansion into the U.S. The same thing goes for Tesco, first, of course, in Europe, and then also in China, Thailand and other locations.
So, these large global retailers continue to expand and look to take market share. They want to create and deliver great products to the consumers and do so in a very cost efficient and effective manner. One way you do that is to limit the number of touchpoints, the number of vendors you have to work with in order to increase your efficiencies by working with companies like Robinson Fresh, which has a global scale.
We’ve got the products and services. We can deliver value through logistics and through products, so partnering with us, you can have an advantage working with us across multiple continents, bringing consistency and high quality to your consumers, at the same time looking to lower your overall landed costs both to the store as well as your own operations because you have fewer vendors to manage.
Q: Often, retailers closely guard proprietary information and are reticent to share internal operations and strategic direction, especially in a cut-throat environment, keeping suppliers at arms’ length. Do you find retailers more open to sharing secrets with suppliers to help better manage and innovate supply chain logistics and product portfolios?
Does an increasingly more complex retail landscape demand it? At the same time, there’s always been a tug-of-war between costs and benefits of retailers dealing direct to avoid middlemen, and retailer/supplier collaboration.
A: We have definitely seen an evolution in the retail sector, where retailers are more collaborative than ever before, whether it’s replenishment or consolidation services, or being open to branding ideas and new innovative products.
Oftentimes, we’ll deliver a new product to market like our Imperial papaya or our Orangetti squash, or our own proprietary systems. For example, we have a technology that can track and trace orders around the world in a very efficient manner, whether those orders are on ocean containers on large vessels, or in the cargo hold of an airplane. And the speed at which we can track that information down to the PO level, giving these retailers virtual inventory around the world, allows them to operate in that more cost-effective manner.
However, in order to do that, they have to share information, and then that information is tied into our proprietary technology that works on behalf of the retailer. That technology is Navisphere Vision, and today we’re talking to multiple large global retailers about the applications that technology can deliver to increase their performance and develop a better overall experience to their consumer.
Q: What trends do you see on the product side, and where are the opportunities to market them?
A: One thing we know for certain, and it’s one of our strategies, is that supply chains are constantly shifting. When looking at trends, the first thing I think about is how the consumer dynamic is changing all the time. We’ve talked for a few years now about the emerging middle class in China and what that group has done to influence trends in that part of the world. For instance, in China now, there is high consumer demand for avocados.
We are meeting that demand with our Green Giant fresh avocado brand. It’s an exciting trend that has allowed us to grow in China with a high-quality product and a great brand that resonates well with that consumer.
In pursuing trends, I think about what that geography might entail. A good example is the increased consumption of sweet potatoes in Europe, first with the influx of sweet potatoes, over the last decade or so in the United Kingdom, and now most recently into Western Europe. There is interest in the healthy attributes and the great varieties that are produced in the United States, which we ship to Europe through our growing partners.
Trends definitely can be global at times, I think of health and wellness, and certainly geographically-focused specific varieties and items, or even brands. Our own Tropicana brand citrus, for instance. We’ve just expanded that brand into South America, so now for the first time, not only will consumers be able to enjoy Tropicana fresh citrus in the United States, where we’ve been partnering with PepsiCo for more than a dozen years to deliver product, we’ll now be delivering Tropicana fresh citrus to retailers in South America.
We’re excited about the emergence of that brand there and what it will do to benefit the consumer. We hope to continue and look forward to expanding our brands to other parts of the world. There’s another trend of consumers looking for high quality products as economies have improved, and consumers have more money in their pockets. They are looking for products that can benefit their lives, and we want to mirror those product offerings at Robinson Fresh.
Q: What is there to gain in the context of your business at the Amsterdam Produce Show?
A: We see it as almost a responsibility of ours, being a company of our size and with the resources we have, to communicate our value proposition to the industry and to help bring value to the entire supply chain. CH Robinson is a large global company and, depending on what circles you’re in, we’re a large global cold chain company, a large global logistics company, an expert and innovator of fresh fruits and vegetables… We’re a European company, we’re an Asian company, we’re a U.S.-centric company.
What we love about your Shows, whether it’s in New York City, London or Amsterdam, is that they give us the opportunity to speak to other attendees, to the industry leaders and to tell our story that not only follows consumer trends but helps to create consumer trends through innovative products and solutions.
The forum for these shows is exactly what we’re looking for, and it doesn’t hurt that the Amsterdam Show is only two kilometers away from our European headquarters. We were very, very pleased with last year’s show. You had a great audience and great speakers.
We look forward to sharing our story, and hearing others’ stories; to talk about the various industry issues and how together we’re going to change this industry for the better.
After speaking with Gary York in the U.S., Mira visited Robert Walsleben in the Netherlands to learn more…
Director European Business
C.H. Robinson European Headquarters
Amsterdam, The Netherlands
Q: Gary York provided an excellent overview of CH Robinson Worldwide and Robinson Fresh’s global expansion strategy. Robert, now focusing in on the Netherlands, could you share more insights on why you chose Amsterdam for your European headquarters? You were on a major growth trajectory during the launch of our Amsterdam Produce Show last year.
What are the latest developments?
A: We have a lot of new things to talk about since, primarily around the extension of our products and services, and exclusive marketing agreements with large entities. But all the reasons we’re headquartered here in Amsterdam haven’t changed and are still valid; the search for talent, proximity to the import hub in the Netherlands, ease of customer access to our corporate headquarters here in Amsterdam, proximity to our transportation solutions. For the future, what we’d like to talk about is the extension of our products to the market for 2018 and beyond as well as other exciting things that are significant.
The story for Robinson Fresh and C.H. Robinson, as Gary talked about, is global expansion. Consistent with this same story line, we’re extending a lot of products and services that we haven’t had before in the region, around logistics solutions for temperature control, new commodities, new import commodities, and a significant and rapidly growing local presence in the market, so we offer Spanish supply, Italian supply, etc.
Q: How complicated is it to expand like this? You’ve pointed to company strengths in leveraging both produce and logistics expertise, and you have this whole integrated supply chain. Could you provide some perspective on how the operation works?
A: It’s all part of what’s been our growth plan for Europe, since Robinson Fresh became an entity in Europe, just 36 months back. We’re in a plan where we’re integrating all these things Gary York has talked about, whether it is cold chain management or products that come from exported regions to Europe, like the U.S.A. and our sweet potato program, which we do in collaboration with our exclusive marketing representation from Wada Farms. And also from Central and South America, whether from our pineapple plantation in Costa Rica, melons from Panama or melons from Brazil, we’re managing the entire supply chain. We’re bringing all our capabilities to bear — service freshness, quality, and productivity in the supply chain.
Q: What would you say are some of the biggest challenges and opportunities for your company, and for the industry as a whole?
A: Following consumer trends without a doubt. Consumer trends are changing, as Gary talked about, and we have to stay ahead of them. As part of our tour at the Amsterdam Produce Show, we’re going to highlight consumer insights. We’re going to bring our director of consumer insights over to do this event and give the tour a whole new flavor.
Q: What kind of feedback did you receive from attendees who had the opportunity to join your tour last year? Could you share your overall impressions of the inaugural Amsterdam Produce Show?
A: The Amsterdam Produce Show is very exciting for us because it’s in our backyard. Our headquarters is only two kilometers away. Having all these buyers and suppliers in Amsterdam really gives us the opportunity to showcase our operation and capabilities and how our business model works. More importantly, we can build relationships. This is our headquarters, and it’s in the hub of Europe, so for us, The Amsterdam Produce Show has created positive momentum. It’s been great to have people come on the tour and walk away saying, hey, now I understand what Robinson Fresh has to offer and its value proposition.
Q: And what is the biggest takeaway?
A: What we’ve found is that being in Amsterdam goes beyond just ease of access for our customers; it also provides for some differentiation in that we’re more than just a Dutch company and wholesale trader. Our goal is to bring unique value propositions to the retail environment.
Q: How does the company structure work exactly?
A: As Robinson Fresh, we sell our products and services into four different verticals. Our Number One priority is the retail vertical. We sell into the foodservice and processing vertical as well — for instance, value-added manufacturers of French fries — but we are not in the value-added space of processing fruit and vegetables ourselves.
We also sell into the wholesale channel, and the fourth vertical is the agricultural grower/shipper. So, for us, back to the question of why Amsterdam, being integrated in our European headquarters, has allowed us to leverage many resources, where as being in a remote region doesn’t allow you that luxury. We have all of our internal analytics and shared services in this location in Amsterdam, which allows us to gain a lot of synergies.
Q: Analytics in what capacity?
A: Analytics are around two different areas. One is around the customer and category insights, and the other is around supply-chain network analytics, the ocean, air and surface transportation space, and other supply chain services. We have teams of people who can take a complex problem, cold chain logistics in this case for Robinson Fresh, and develop network solutions that bring value through improved velocity, service levels and product freshness.
Beyond just being differentiated in Amsterdam and providing easier access, the resources that we have in this location have allowed us to bring more value to our customer base.
Q: Let’s talk more about your European product expansion strategy going forward. Our sister publication, Produce Business UK, detailed your 2017 program extensions into Spanish sweet potatoes, Italian mini watermelons and Mexican avocados.
A: From a product side, the growth is strategic in both categories and volumes. We’ve got more products than these, which we’ve focused on in 2017 and grown in a significant way in Europe. Our strategy is a continuation and expansion in targeted categories where we have a value-added proposition for our customers in the retail vertical, supplying retailers in a direct way.
Q: What retailers and regions are you targeting? Are you looking to penetrate new markets?
A: These span from global multi-national retailers to European regional retailers. We’re increasing our business in the Central European region in 2017, and it’s one of our focus areas in 2018: Poland, Czech Republic, Slovakia and Hungary. We’re doing new business in all those countries this year, in addition to the UK and Western Europe, where we started our core business.
Q: What are the challenges going into those countries?
A: Our value-added proposition in product is one aspect. The other aspect is the complexities of the network and the cold-chain solutions required to deliver into those markets. Typically there is more consolidation of loads, so to achieve the best economies when you import product into Rotterdam, for example, you have to have a network established where you can consolidate and distribute product to retailers in ways that allow them a lower cost structure due to the fact you’re not paying what’s called in Europe “groupage” shipping rates, which are less than a truckload, and still meet their service requirements. This is something that differentiates us in that market.
We’re currently doing business with three major retailers in the central European region, which we’ve started in 2017. But for proprietary reasons, I can’t share their names.
Q: Are there particular products that are of interest, trends you’re seeing?
A: What we’ve focused on are tropicals or exotics from the U.S., Mexico and Central and South America, primarily the more complex import items because that’s where we bring the most value. Local production supply chains are fairly built out.
Q When you’re expanding your retail business, are you seeing differences in terms of demands?
A: For the retailers that are multinational, yes, because they generally have supply chains with more complexity and further reach. For the ones more regional in geography, generally speaking they have more of a static supply chain.
From a product side, I’d say not necessarily, because where we focus our value props is in these tropicals and exotics, and that demand exists in all retail.
Q: And the commodities where you can get the most bang for the buck…
A: …more differentiated products and also products that have major growth rates. If you look at avocados and sweet potatoes, we’re talking about growth rates significantly above the traditional produce space.
Q: Gary York pointed to avocados and sweet potatoes as examples of products that are becoming increasingly popular with new consumers in untapped markets around the world.
He can speak to growth in other specific markets, but In Europe, in general, both of these items are growing extremely rapidly; I can say it’s in the double digits for sure. You think of produce growth rates in general… if you look at Euro 28 — soon to be Euro 27 due to Brexit — produce growth is at 1.5 to 2 percent, and these products we focus on are at much higher growth rates, ten times the growth rate or more!
And in these developing economies, like Central Europe, they’re growing at even faster rates. What we’ve seen is that the trends tend to move from West to East in Europe from a consumption standpoint. When you look at per capita consumption of sweet potatoes and avocados, the numbers are much lower in the more developing countries than in the more mature markets.
Q: That’ s an important impetus for getting into new markets because of that saturation…
A: Yes. For us, it’s about opportunity to add value for our customers, and it’s a major growth vehicle for our business in Europe. It’s an important part of our strategy.
Q: How has the disruption in the retail environment impacted competition with pricing and margin pressure, etc.
A: I would say the competitive pressures given the retail disruption you alluded to — the need to be innovative and creative for these retail customers — is higher than ever. It’s certainly not business-as-usual anymore. It’s about bringing those value-added solutions to customers, beyond just product, which differentiate you as a supplier and bring value to them that they can deliver to the consumer because that’s what the end game is.
Q: In the spectrum of retailers wanting to go direct versus through middlemen, where do you see your company fitting in?
A: We see ourselves as bringing value through strategic products we are invested in. And that runs the gamut from contract growing with our grower base all the way to having ownership stake in a pineapple plantation in Costa Rica. We don’t view ourselves as middlemen. What we say our philosophy is: We want to invest in categories where we can add value and keep the multigenerational farms intact, so we serve both constituent bases, the customer as well as the supply base.
Q: In that realm, could you talk about partnerships and relationships.
A: Long-term relationships are very important. When you talk about our sweet potato program, we’re the exclusive marketer and distributor of Wada Farms, which is one of the largest growers of sweet potatoes in North America. And the vast majority of sweet potatoes we import from Wada come from North Carolina. We have expanded that relationship now into Europe now and are offering 12-month supply-chain solutions to our customers, but we also are developing local sweet potatoes from Spain.
We have been able to bring three things with the sweet potato program, making a difference in Europe. Number One, we brought infrastructure technology to allow quality improvement — we’ve built curing rooms to allow both improved product quality and a more robust shelf life for the retailer. Number Two, we brought agronomic expertise from Wada Farms, and Number Three, we brought new seed varieties, not necessarily proprietary, but varieties not traditionally grown in Europe. So, that’s an example of our investment in the farm. It’s a great model. Now we can offer our customers year-round solutions in these commodities where we have a differentiation.
Q: What are the latest developments? Can you tell us about deals in the pipeline?
A: We also have something new for 2018, which will be very big, so this is hot off the press. We haven’t officially announced yet. We’re going to now represent Verfrut is the largest owned fruit grower and exporter in Chile… I say largest owned meaning that 100% of their export is product from farms, orchards and vineyards that they actually own and control. There are other exporters that may be bigger but they are exporting fruit from other growers.
They supply in a big way grapes, apples, kiwis, and stone fruits from Peru and Chile. This is going to be a very large new program. In the U.S, with sweet potatoes, it’s been our relationship with Wada Farms that has enabled our growth, and in South America, now it is Verfrut and our relationship with Verfrut that will enable our growth into those categories.
We don’t just want to be about avocados and sweet potatoes; we need to be more diversified in our value proposition, and that’s what these types of relationships with our logistics do to provide differentiation for our customers. We’re really excited about it.
Q: Would you say this arrangement with Verfrut is exclusive?
A: We are going to manage all of their growth in Europe.
Q: That’s quite an undertaking…
A: When you look at this industry, to be able to bring the end-to-end solutions in both products and services that our company can bring on a global scale really does differentiate us from many of our competitors.
Q: It’s quite an advantage when you’re dealing with these large multi-national retailers, as Gary pointed out. You have Ahold and Delhaize joining forces, and more recently the Amazon/Whole Foods merger…
A: Global expansion of these multi-national retailers continues to proliferate. One of our company sayings is to meet the customer where they want to buy and have that capability to do so.
The Amazon/Whole Foods merger is interesting. Being over here, we don’t spend a lot of time internally thinking about what those implications are. It’s a bigger retail question. Anytime we see retail consolidation, we think of what our opportunities are, as a big logistics company and global supplier of products and services. So, as Amazon continues to build out its infrastructure and offerings to the broader consumer, we don’t see it as disruptive as the retailers do.
Q: That’s a nice segue to how you will be integrating consumer insights into this year’s tour…
A: For the retail tour, we’re bringing Gina Garven, our director of consumer insights. Last year on the tour, we gave a good overview of why we’re here, and now were’ going to build on that and take things to a new level.
Q: What will Gina present to attendees? Is this consumer research that Robinson Fresh conducts? What’s involved in the program and how important is it? How are the findings applied to the business? And does the analysis impact strategies and the bottom line?
A: Gina and the rest of her category insights team help to drive results and influence the performance of our commodities and customers through consumer-focused analysis, industry benchmarking, trends and collaborative plan development.
Q: This sounds like it weaves through a lot of areas?
A: A few specific offerings provided by this team include consumer insights, commodity supply chain mapping, assortment and merchandising analysis to include POG design, pricing and promotional analysis, and demand planning and inventory management.
The team is able to support our customers through custom reporting and analysis, dependent upon needs. At the end of the day, the category insight team goal is to be a collaborative partner by finding opportunities to drive sales in the produce department and address any pain points in the business through impactful analysis and actionable insights.
Q: That should intrigue attendees. Is there anything else you’d like to bring out in this preview piece?
A: I always like to brag about our people. In our fourth year of operation here, having talented people in our organization has been one of the key enablers of our growth.
Q: When you say talented, do you mean there are all these experts in different areas.
A: Yes, and this would include our ability to service our customers in logistics, product and account management.
Q: I remember when we did the preview for last year’s tour, and you introduced me to the team. It is somewhat like a United Nations here.
A: Just from our team in Europe, we have people representing six different nationalities, and speaking over a dozen languages. One guy speaks six languages fluently. This surely helps to break down cultural barriers and cultivate strong multi-faceted relationships, which has been paramount to our success.
We received a lot of questions when we launched The Amsterdam Produce Show and Conference and located the show in the Netherlands, but not in one of the production or port cities. Geographically, the Netherlands is small, so it is not much of an issue, but our focus was on Amsterdam as a font of innovation, a global city gathering thought- and practice-leaders from all corners of the globe. This all was in line with what we were trying to accomplish, and it turns out that many of these same issues drove Robinson Fresh to establish its European Headquarters there as well.
Not all companies would open their home and their heart to the industry in the way that Robinson Fresh has – so we are exceedingly appreciative for the industry leadership they have expressed through their support of the Amsterdam event and offering this tour to the global attendee base.
Come take advantage of an unapparelled opportunity to learn.
You can check out the website right here.
Register for the event here.
Book a hotel room — where the action is — at the Headquarters Hilton Amsterdam right here.
And if you would like to exhibit or sponsor, please let us know here.
And, of course, we are happy to answer questions right here.
We look forward to seeing you in Amsterdam!