Sunday, December 10, 2023

How will climate and economic changes affect the organization of European markets?

Although imported fruits and vegetables currently occupy an important place on the shelves of the French market, the evolution of the economic and climatic context may cause changes in the coming years. Alexandre Picault (commercial director of Kultive, a company specializing in the production of greenhouse vegetables and the first producer of cucumbers in France) believes in this local development strategy, which started in 1985. the production method and the consumer to respond as much as possible to national needs. More and more, global warming shows us that we are right to think about it because imported products may not be available in the future.

Climate change will alter the availability of Mediterranean products
Although all countries are currently affected by increasingly recurring climate risks, some suffer more than others, with returns that become more difficult to sustain each year. “If we take the example of this cucumber season, Spain suffers from heat waves of up to 45 degrees during the summer months. Because of the heat wave, it is easy to imagine that growing cucumbers is more difficult. The production of the plant at these temperatures must be complicated, such as replanting. Thus, there may be a delay in sowing in Spain, which translates into a lower availability of a calendar season and higher and less competitive prices. In this case, the situation may benefit the French cucumbers, which are less competitive in their market than the Spanish.

The economic context affects product competitiveness in the Benelux
Although Spain is an important competitor of French cucumbers, the cucumber with the largest presence in the French market production calendar is of Belgian and Dutch origin. “The Benelux countries do not have the same business model as us, with a different market organization. They benefit from significant investments from financial groups. While we focus our cucumbers on the local market, they specialize in exporting. Before the energy crisis, they were very competitive in price. Their climate and cheap energy allowed them to light their greenhouses and, therefore, get higher yields than ours. In addition, they can obtain and produce inputs cheaper than us. They can also take advantage of cheap products. Eastern European labor, which is now scarce,

“In this changing economic context, they have to face the same problems as us in terms of labor and energy. In addition, while they focus on exports, they rely on foreign markets, some of which are new or just shut down. Sometimes they supply countries with a lack of production, but if the local supply is sufficient, they may find themselves with too many things on their hands. So now it is not the climatic limitations that affect their production but the economic ones, which also make them less competitive compared to the French product. Our great advantage in France is that we produce French cucumbers for the market in France. Therefore, unlike the Benelux countries, we are not dependent on the markets of other European countries.”

Strengthening the French offer: the role of distribution
In this changing environment, where uncertainty reigns, it will be difficult for some producers to commit to large investments. Distribution helps producers invest more calmly. “In general, I am very surprised that distributors do not make more efforts to bring production closer and sign more contracts. contract. Because, while it is true that prices can fluctuate over time, throughout the campaign, in recent years the trend has clearly been upward. So why not hire more? Especially if the producers are willing to do it. Currently, the level of investment is such that they do not dare to take the step without a guarantee, which is normal. Many distributors ask them to produce first before talking about sales, but now it is no longer possible to operate like that. The profiles of producers have changed; the new generations are more involved in the economic dimension, and they want to know what the medium- and long-term goals are well before their activity develops.

According to Alexandre Picault, the distribution sector must be aware of the need to change the production model to consolidate the French supply. “Producers have more limitations when it comes to production: climatic, economic, and social limits, not to mention the reduction of active materials, which adds to other difficulties. They clearly understand what we ask of them today: to produce better and healthier products.But producers are more willing to accept limitations if there are guarantees behind them.

Developing production through regionalization to better respond to the needs of the French market
At the same time, the French production must continue to organize and adapt to the national demand from the beginning to the end of the campaign: “We have the help of some distributors starting from the spring, the most important during the campaign, opening in French. But we also need to make sure that we have enough in the middle of the season (from approximately June 15 to July 14, where there is usually a deficit) so that the lines remain open and distributors do not have to turn to imports to satisfy the demand. demand. Because once the change is made, and especially during this time of summer holidays, it will be difficult for French cucumbers to regain their place on the shelves. A solution could be the regionalization of production, with the expansion of the south, for example, to compensate for the deficiencies of production in the north, adapting to the climatic limitations, and responding as much as possible to the needs of the French market. Playing around with the production schedule can also be an option. On the other hand, the end of the campaign must also be managed well, with a quality product that can compete with early cucumbers in Spain. “We must remember that at the beginning of the campaign, what matters is the French flag, and at the end of the campaign, the quality.”

Future developments to support French production
Today, labor remains one of the main limitations of French production: “Producers have great difficulty finding personnel to work in greenhouses. We have examples of producers who can invest and also develop greenhouses. “But they can’t find anyone to manage their tools. With the advancement of technology, maybe harvesting robots will help in the future.”

“We are also asked to produce more with green energy. Some companies may be interested in the concept of decarbonization, which aims to buy carbon credits from companies that produce more environmentally friendly products. Maybe it can also be done in a new direction for our business that will help us invest more.

Finally, although Kultive’s main objective is to satisfy the needs of the French market, the evolution of the economic and climate context may lead the company to export to Europe in the coming years. “Na, we already export, but to absorb the increases and decreases in French production about our local market. But maybe in the next 10 years, other countries in the Mediterranean arc will request French products; if not, they can supply their markets. It can also be a question of market adaptation. If for us “it makes economic sense to export, why not consider the possibility?”

World Nation News Desk
World Nation News Desk
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