The word "synergy" may be used excessively in the corporate world, but the tie-up between T&G and Oppy goes to show what it actually means in practice.

Oppy's David Nelley with Kazumi Ito of Delica North America.

In March this year, T&G Global increased its stake in Oppy's U.S. subsidiary David Oppenheimer and Company from 15% to 40%, while Oppy itself acquired a 50% stake in T&G subsidiary Delica North America.

This overlapping arrangement has brought new opportunities, and to better understand them Fresh Fruit Portal caught up with representatives from Oppy and Delica North America during the Produce Marketing Association's (PMA) Fresh Summit convention in New Orleans last month.

"It’s really first steps in the first few months since this happened, but we’re already seeing synergies in supply and a little bit on the sales side," said David Nelly, Oppy's VP of apples, pears, cherries and global exports

"On the supply front we’re able to have discussions with growers about sales programs for Canada, the USA and now in Asia hand in hand with T&G to their various importers plus their new offices in Shanghai and Bangkok.

"We’ve always dealt with growers talking primarily about domestic programs, and Kazumi’s (Delica North America CEO Kazumi Ito) team have gone to see growers talking primarily and only about export programs. Now we can put them both together.

"We have buyers in Chile and Peru who wanted us to export to them, but we’ve never really had the bandwidth and expertise. Now we can draw on our colleagues at T&G International that are active in the same items we are."

He said the three main synergistic items were apples, table grapes and berries, but a range of commodities stood to benefit from the partnership.

"Let's make no mistake – it helps when we’re selling competitive items like grapes and stonefruit to be able to go to the same importer T&G have a 12-month presence with for something that’s really in demand like Envy apples, for example in a market like Vietnam," Nelley said.

"In terms of Envy and Jazz, they are 12-month supply products for us, so along with our T&G New Zealand office we can look to maximize potential in key countries, whether it be in China, Thailand, Japan, Vietnam, Singapore or elsewhere," added Ito.

"T&G is a New Zealand company so we do have that big presence in New Zealand and Australia as well. Oppy being connected with the suppliers is going to help us in reaching out to those markets as well, not just Asia," she said.

With a wide range of possible markets the companies are now better able to utilize apple crops out of the U.S. Pacific Northwest.

"Now we have the confidence of being able to look at the whole crop, being able to sell into Asia, the Middle East and North America, rather than saying ‘we’re only interested in North American sizes’," Nelley said.

"It’s an opportunity to sell the whole crop – that’s really important. It's no secret that both companies have pretty strong partners; T&G with BayWa out of Munich, and Oppy with Total Produce out of Dublin, so if the right opportunity is there there’s the ability to jump on it."

He added Ito participated in weekly sales calls and could stay up-to-date with production, while Ito contributed to monthly reports on export markets, giving both sides "greater visibility and awareness".

"We're getting excellent market intel on a weekly basis whether to ship or not ship, and sometimes the information on whether not to ship is as valuable as do we pull the trigger and go."

North American apple crop expectations

Nelley said the Pacific Northwest Jazz apple season got underway in early October, and was to be followed by the first Pacific Rose and Envy crops shortly after the conference.

"It is smaller sizing, 10 days late and smaller sizes but we’ve got really good bagging programs now with Jazz on the concept of snacking apples so a small size crop is really not as fearful," he said.

"The bigger sizes are a bit short on supply so those FOBs (Freight on board prices) are increasing."

He said growers normally produced jumbo sizes like 48s and 36s in Pacific Rose and Envy, so if that sizing were to come down a notch it'd be "perfect" for North America.

"We want 72s and 80s. The export demand is high for Envy as usual but we’re seeing real uptake on the domestic side which is what we want because we’re on the start of a really big wave of Envy out till 2025. 

"Pacific Rose comes along with great sizing, really great demand in Asia for exportability. That completes the varieties that we sell – we don’t deal with commodity apples on the domestic market.

"And the big feature we have this year is a bigger organic volume out of Washington, which Oppy has the exclusive on, and the organic Jazz are flying out the door at the moment. So although it’s a really big crop, we’re seeing some good movement."

Ito said the Chinese market had been "screaming" for more Envy and Pacific Rose volumes because they couldn't get enough volume out of New Zealand.

"So they're just waiting for the volume to come. They do prefer big sizes in these markets, so we’ll just see how these actual sizes come along and the volumes to be shipped to Vietnam and China."

Berries surge up the priority ranks

Ito highlighted berries had become a key category at T&G recently, with the appointment of a new general manager for berries based in Australia and exclusive rights in Australia for 16 blueberry varieties from Fall Creek Farm & Nursery as well as Plant & Food Research. 

"We're going to be focused on identifying which growers will be planting these varieties and our office of T&G in Australia will be marketing these," she said.

On Oppy's side, Nelley said the company had seen good vertical integration with strawberries, and a relatively new blueberry deal in British Columbia.

"It ran last August through September. It's really interesting because the blueberries are farmed in Washington State and packed in Canada.

"We're looking hard at export opportunities. Where Oppy was selling on the domestic side, how can T&G come in on the export side?"

Ito said this idea tied in very well to the group's revamped approach to soft fruit.

"Obviously these Fall Creek varieties are found all over the States, but because we have the exclusive rights in Australia you can piggyback on that," she said.

"You do the right job in Australia and make sure that we can have the 12-month supply, utilizing growers like Oppy's Washington-BC supplier to make sure we bring the right quality fruit in to whatever packaging we put it in.

"That’s probably going to be our biggest strength at T&G."

Greenhouse exchange

T&G may not be as strong in greenhouse crops as Oppy, which has a significant presence in North America with the help of Divemex (Mexico) and SunSelect (Canada), but the group is a pretty significant player in New Zealand.

"For the first part, BC has just opened up with pepper access to Japan for instance, so we’re looking at what’s the opportunity there," said Nelley.

"Kazumi has already got some business going with California tomatoes into various Asian markets, but what's more exciting is that the general manager of T&G’s covered crops (Anthony Stone) has started talking with our grower Divemex in Mexico and SunSelect about the possibility of cultural exchanges, agronomist exchanges," he said.

"For example a guy who is doing really well with Divemex in Mexico can go and do a sabbatical in New Zealand for six months to a year, or up in BC. 

"We can look at enriching our business that way which isn’t insignificant because technical expertise in greenhouses is harder to find these days, and it gives us a really good Asia-Pacific focus."

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