Renewable energy and agriculture company BayWa AG has decided it cannot wait any longer to export German-grown apples to China after years of diplomatic stagnation to negotiate an access deal. But the group still has much to be positive about for the category as Jazz and Envy apple plantings get closer to maturity in the old continent.

As the second installment of a two-part feature with the group, BayWa's global produce general manager Christiane Bell discusses a changing landscape for German apple growers, as well the group's broader plans in subtropical fruit production. We then speak with Darren Drury of subsidiary T&G Global to discuss the outlook ahead for proprietary varieties. 

In a similar vein to its greenhouse initiative, BayWa is taking a "local-for-local" approach to the European apple deal amidst what Bell sees as a "global me-first attitude" from governments that puts all traders at risk. 

We ask her to elaborate on the point.

"I'm talking about America First, or China First, wherever it may be. What's happening in China right now? They’re not importing many apples from Europe but they are importing trees," she says.

"By the time our politicians wake up and get permission to export anything, these trees will be grown up and will be producing the varieties that the Chinese market demands...I don't believe in it anymore. That’s why we’re looking in other directions and for other opportunities."

This includes plantings of Jazz apples in the Palatinate area, in addition to production of this variety and Envy elsewhere such as Italy, France, Spain, Portugal and the U.K. In total there are 3,000 hectares of these T&G varieties planted in Europe.

"The aim is to facilitate and service local-for-local production. There’s going to be less logistics worldwide, because we feel like supplying fruit generally is going to be subject to political changes," she says.

"Just remember the Russian embargo - from one day to the other products produced for the Russian market could no longer be exported to the Russian market."

In addition, she claims BayWa weather effects from 2017 have meant the company's apple stocks are down 85% on this time last year.

"Fortunately BayWa is solid like a rock and we’re stable with a wide portfolio but for the growers who don't have this opportunity and depend on local conditions, another year like this would threaten their existence and change  business dramatically," she says.

"You certainly have to be a believer if you want to be a grower. There is no protection for the growers whatsoever – it’s the retailers increasing the standards year-on-year, decade on decade, and the political background with the Green party making it more and more difficult to cultivate any trees whatsoever."

Bell clarifies this last point in reference to restrictions around where orchards and hail nets can be erected and the required distance from waterways.

As a side note, Bell also discusses development of BayWa's tropical fruit business since the acquisition of TFC Holland B.V. in 2016.

"We're super happy with it. It's a value-creating benefit to the global produce division itself," she says.

"There too we are looking at the value chain and increasing our access to the direct projection, which is a requisite for many retailers. 

"We’re looking at avocado production which we want to be involved in to be an avocado grower ourselves in South Africa."

She emphasizes the company would like to better facilitate the current "super trend" in avocados, while in other subtropical crops the group already has mango production in Brazil and ginger in China.

T&G: Scale and scope key for proprietary apple marketing

While BayWa may not be optimistic about getting European apples into China, the world's second-largest economy has a free trade agreement with New Zealand where subsidiary T&G Global is based. 

T&G Global executive manager for pipfruit, Darren Drury.

T&G's executive manager for pipfruit Darren Drury says there has been a real strengthening of New Zealand's position in global markets over the past five to seven years and he expects a good campaign in 2018.

"A similar crop volume to 2015 is predicted and that's good news going into a market that is positive and ready for New Zealand fruit," he says.

"The quality of the fruit New Zealand produces has been recognized and we’ve got a strong following, particularly in some of the premium markets around the world.

"Obviously we’ve had a weather event hit the Northern Hemisphere so that’s come into play as well. There’s no doubt the market will be hungry for some new fresh offerings. We’ve had strong signals from our customers and they’re wanting to start as soon as we are able to ship the fruit."

He says the New Zealand apple season has started a little bit earlier than a typical season and a lot earlier than in the last two or three years.

"We’ve had a warm spring and a hot summer, plus sufficient rainfall so it's been a good growing season for us," he says.

"We are experiencing a few weather events currently as we enter the harvest window for New Zealand apples but have clearly had a more stable growing season that is better than what we have experienced over the last four or five years."

The executive describes two main pieces around marketing the apple brands Jazz and Envy. The first is executing tactics by supporting retail customers and doing promotions, while the second is more longer term and is about connecting directly with consumers through brands.

"I don’t think we’ve quite had the scale and scope to do it historically, and certainly with growth coming in some of our PVRs (plant variety rights) we will have that ability," he says.

"It’s taking it from being beyond a variety to having people recognize it as a brand in itself – Envy particularly is well placed to achieve that.

"We’ve had pretty good success with interesting initiatives in Thailand. Jazz did benefit from some creative campaigns we did with our partners at Vachamon."

He mentions the T&G Thai-based office has been very good at engaging social media and harnessing celebrity endorsements, along with specialized campaigns in the country such as the 2017 and 2018 Elle Fashion Weeks and a partnership with a Porsche dealer in Bangkok.

"The key thing is trying to find a new way of connecting. What worked for us in Thailand may not work in other markets," he clarifies.

"If you look at Asia the real star performer for us has been Vietnam - we have done marketing work but we’ve been very fortunate having a variety like Envy. It's just been a runaway success in that market."

Having a "runaway success" is no easy feat for an apple given the wealth of cultivars out there, but Drury and his colleagues are grateful for their association with New Zealand Crown institute Plant & Food Research (P&F) which gave them Jazz and Envy.

"We believe both those apples are just outstanding examples of varieties that absolutely nail it in their space," he says.

"If you want a semi-sweet, tart apple, Jazz absolutely nails it. And Envy in terms of being a large red sweet apple is very good. The biggest challenge a lot of these other apples have is they’re all good apples, but are they great apples?

"That’s a big question. The second challenge is scale, so how do you actually achieve market penetration without scale? Unless you have that volume behind you, you’re never going to break it. The advantage we have in that is we have a global program where we can achieve scale."

He says production of PVRs in Europe has increased more than what was expected five years ago, while 2,500 hectares are now planted in North America and 2,500 hectares are planted in the Southern Hemisphere. The bulk of the latter is in New Zealand, but there is also incipient production in Chile, South Africa and Australia.

"We’ve got really strong partners in San Clemente in Chile and we have a great relationship with that team," he says.

"Our program is at a point where it’s slowly growing – we’ve had a few challenges around the more technical growing issues that we’ve made a lot of progress within the last three or four years. We don’t have a massive growth story but it is growing.

"It’s taken us a while to evolve our techniques in Chile with the different climate and growing conditions. Over the evolution of our program with Chile we’ve slowly moved our program south and we’ve found it’s had a lot more success for our varieties in particular," he says, adding moves have also been made into areas with higher altitude to obtain cooler climates.

In South Africa, Drury says the program is still in its infancy through partnerships with DuToit and Tru-Cape.

"Obviously South Africa’s got issues with their water supply at the moment but we are well placed to grow our program there in the future.

Headline photo: Envy Apple Facebook page

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