Hannes Tauber, marketing manager at VOG, discussed the company's unique approach from farm to shelf during the past Fruit Logistica fair in Berlin.

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What is the company's vertically integrated system about?

The model upon which we were founded embodies a vertically integrated approach that distinguishes VOG as the home of apples. We house experts adept in various facets such as production, storage, sorting, packing, and sales. Our comprehensive approach places us in direct control of the entire process, from cultivation in the fields—where farmers, our esteemed partners, play a pivotal role as the primary food producers—to the cooperative, which is collectively owned by these farmers and serves as the central entity for storage, sorting, and shipment of products.

We ensure that every step of the journey, from farm to market, is meticulously managed, culminating in our partnership with retailers to deliver apples directly to consumers. This vertically integrated system, established in 1945 and continuously evolving, has recently seen the finalization of centralized sales operations, streamlining processes for both domestic and international markets. Now, clients benefit from a singular point of contact for all product inquiries and category management support, enabling optimization of turnover, assortment, and consumer satisfaction throughout the year.

Our ongoing focus is on strengthening partnerships across the entire value chain, fostering collaboration between growers, cooperatives, sales teams, retailers, and consumers alike.

Can you also tell me a little about the history of VOG?

VOG was established in 1945, immediately following World War II, marking the inception of its journey. It all began when a group of cooperatives recognized the power of unity, realizing that collective effort surpasses individual capabilities. This collaborative spirit laid the foundation for the creation and growth of VOG.

Today, VOG stands as the premier fresh apple commercialization organization in Europe, a testament to the vision and determination of its founding members. What began as a union of 4,000 small farmers has evolved into a powerhouse, leading the market in the sale and distribution of apples.

What sets VOG apart from other apple producers? 

This type of organization, when compared on a global scale, is rather unique. We have thousands of farmers, predominantly small family-owned growers, who have worked the land for generations. The geographical diversity of our land is vast, ranging from 200 meters to 1,000 meters in elevation. This diversity allows us to offer a wide variety of apples, ranging from traditional favorites like Granny Smith and Gala to premium selections such as Pink Lady, envy, as well as newer varieties like Cosmic Crisp and Giga.

What distinguishes us is our commitment to innovation over the past decades, both in agricultural practices and product development. For instance, all the managed varieties mentioned earlier, like Pink Lady and Cosmic Crisp, are already under hail net protection, ensuring consistent product availability to the market while promoting sustainability by minimizing crop damage due to adverse weather conditions.

Additionally, our business model has enabled us to expand into international markets extensively. While we serve local markets like Italy, our main export destinations include prominent European countries such as Germany, the UK, Scandinavia, Spain, and the Benelux region, alongside markets in the Middle East, North Africa, India, and Central and South America.

Regarding our relationship with farmers, our vertically integrated system ensures that farmers deliver 100% of their fruit to cooperatives. This collaboration allows us to handle the entire production process, ensuring that all fruit is sold through cooperatives. Consequently, all profits generated are reinvested into the farming community to support innovation, technology adoption, and market development. This symbiotic relationship allows us to respond to market demands effectively, driving continuous improvement and future growth.

How do you seek feedback from farmers and how do you engage with them?

Every cooperative comprises a board of directors or council elected by the farmers, representing their interests. From each cooperative, one member is appointed to serve on our company's board, facilitating ongoing communication and information sharing. Continuous meetings foster dialogue and collaboration, aimed at shaping the future direction. This exchange occurs regularly at various levels, including board meetings, newsletters, and through technological platforms such as apps, ensuring consistent communication channels. Our comprehensive system not only supports farmers but also facilitates market understanding, allowing us to relay valuable feedback and insights to them.

How does data contribute to the entire chain's operations? 

Data is indispensable. Without proper interpretation, navigating the complexities would be difficult. How do you leverage this data? We have a centralized system for data collection, sourcing information from both the fields and cooperatives, as well as sales channels. By consolidating this data, we gain insights into market trends, product availability, and field status. This data is pivotal to our company's success and underscores our commitment to professionalism.

While natural products inherently carry uncertainties, such as variations in fruit size and environmental factors impacting harvest timing, we strive to minimize risks. Despite the inherent unpredictability, our goal is to mitigate risks to ensure the most accurate understanding of the market landscape possible.

Do you encounter any challenges throughout the entire production chain? Are there areas where you're currently focusing on improvements or solutions? Are there any specific challenges that you are addressing?

Certainly, we face several challenges. Firstly, there's a need to enhance fruit and vegetable consumption, particularly apples. Our aim is to foster a positive consumption trend by making these products more appealing to consumers. This entails providing structured guidance to retailers and consumers, ensuring consistent availability of high-quality products year-round, and aligning product offerings with consumer preferences. Effective marketing, professionalism, and quality assurance are key components in this endeavor.

Climate change poses another significant challenge, impacting production processes. While risks such as hail and frost have always existed, we've implemented measures to mitigate these risks. For instance, all managed varieties in our assortment are equipped with 100% hail net protection to ensure consistent supply and quality. Additionally, we employ frost protection techniques and ensure natural water sources or rainfall supply our orchards, supplementing with drip irrigation where necessary. Over 75% of our irrigation utilizes drip irrigation, a substantial investment that we continue to expand upon.

Moreover, we're investing in new apple varieties resistant to diseases such as scab, exemplified by varieties like Giga and RedPop. Giga, characterized by its large size, bi-coloring, and aromatic sweetness, targets consumers seeking larger-sized apples. Conversely, RedPop offers a smaller, intensely red, and sweet snack-sized option. These new varieties not only cater to evolving consumer preferences but also demonstrate our commitment to innovation and adaptation.

Furthermore, we're actively researching and developing heat-resistant varieties to address future climate challenges. As a family business, we operate with a multi-generational perspective, necessitating long-term planning and sustainability measures. Our focus extends beyond immediate challenges to ensure future generations can continue to thrive in the industry.

Which initiatives are you working on to achieve sustainability?

Indeed, sustainability is ingrained in our organizational DNA, reflecting our commitment to long-term thinking and the well-being of future generations. We recognize the importance of considering the legacy we leave for our children and their descendants. Our sustainability efforts are anchored in the UN Sustainability goals, serving as a guiding framework for our initiatives.

Then we have a model on the South Tyrolean level, not just at a company level, but really on the entire region, which is called Sustainapple, which extends beyond our company to encompass the entire community. This model is built upon principles such as working in harmony with nature, promoting healthy food production, and achieving international success. Drawing from the UN goals and the Sustainapple concept, we have developed our own strategies and projects, focusing on social, ecological, and economic sustainability.

In terms of social sustainability, our cooperative model exemplifies a balanced approach, producing nutritious fruit while fostering community well-being. We strive to minimize waste through innovation, enhance storage capabilities to prolong product lifespan, and deliver appealing products that resonate with consumers. 55% of our entire energy that we are using comes from solar panels on our cooperatives. Integrated production also means you work together with nature and you only intervene and there is really a risk to lose the crop or if the cost of the intervention is higher than the loss that you can incur

So really also balance, find the right balance between what you do, what effect it has, and to think long term also in this way

Economically, we prioritize efficiency to ensure our farmers reap the benefits of their labor, enabling them to invest in long-term success. The cooperative structure exemplifies economic sustainability, empowering farmers to thrive while contributing to the broader economy.

From an ecological standpoint, we prioritize responsible water management, employing techniques such as drip irrigation and hail net protection. Additionally, our cooperatives utilize renewable energy sources, with over half of our energy needs met through solar panels. We adopt integrated production methods, which harmonize with nature while maintaining a balance between intervention and natural processes.

Furthermore, we invest in communication and innovation to drive consumer engagement and consumption. Initiatives like introducing new apple varieties such as Cosmic Crisp and implementing targeted marketing campaigns are examples of our innovative approach to boosting consumption and sustainability.

In essence, our sustainability efforts at VOG encompass a holistic approach, integrating social, ecological, and economic considerations to ensure a resilient and prosperous future for all stakeholders.