|The supply chain structure of “Arava Export Growers”, and entry into niche markets in Europe|
|An interview with Itamar – CEO of Arava Export Growers Company|
|January 15, 2019|
|The supply chain structure of “Arava Export Growers“, and entry into niche markets in Europe enables Arava Export Growers to supply their customers with fresh produce that meets European quality standards and high redemption prices for Israeli growers.|
Arava Export Growers began in the early ’90’s as a company specializing in marketing melons and peppers, and was the first company to receive an export license aside from the mythological Agrexco Company. It is a corporation held in equal parts by the Livnat family and a growers’ consortium from the Arava region. This partnership has already functioned successfully for 30 years in Israel and abroad, opening and developing markets and exploiting the relative advantages it has developed during the years of its existence.
Over the years, the company’s product mix has changed, and it currently markets about 50,000 tons of its produce to international markets. For certain crops such as peppers, root vegetables and herb greens, the company holds significant sectors of activity. In addition, they also market fruit – citrus, mango, pomegranate and dates.
Aside from the company’s export activity that constitutes its core enterprise, Itamar says that “the company sees a steady increase in local market demand, and therefore chooses to develop this as well. The local market is not subject to currency exchange rates, and we detect an increase in consumption by the local market.”
The main international markets in which the company is active include: Russia, the former SSR countries, Europe, the U.S. and Far East markets. The company markets a broad list of products to Russia, including all of its produce – fruit, vegetables, citrus and herb greens. In the European market they focus on England and Eastern Europe, with the latter being more relevant to Israel for logistical reasons. The company’s activity in the Polish, Czech and Hungarian market grows stronger from year to year, which also holds in the Baltic and Scandinavian countries.
After the collapse of Agrexco, which specialized in opening up markets for Israeli exports and maintained representatives in various countries, it became clear that local export companies could not manage to invest in opening markets and lacked decision makers. “Arava Export Growers Company”, Itamer states, “is trying to open up markets organically and to focus on markets in which it has a relative advantage.”
“Arava Export Growers” understood the importance of the logistical aspect in terms of creating an advantage in the fresh produce market, and therefore, Itamar states, “in order for us to have the logistical capacity to supply customers with produce on an appropriate schedule and to enjoy the advantage, we decided to erect warehouses in several European countries such as Holland and Slovenia, as well as in the United States. In this way the customer’s dependence on sea, air or trailer transport is avoided. Another advantage deriving from this is its ability to carry out quality control near the destination. In other words, Itamar summarizes, the level of end-customer service increases as does the growers’ redemption.”
Itamar also relates that a company wishing to market its produce in Europe, must meet high, demanding standards that include various parameters such as transaction terms, use of insecticides, etc., and Arava Export Growers meets these high standards.
“Our ‘added value’ is supplying from stock,” says Itamar. “We succeed in maintaining stock with long shelf life and marketing it within a few days.
Thus, we have the strength to create pre-planned marketing, to produce according to demand, and to reduce the uncertainty that threatens growers. Arava Export Growers provides farmers with service from beginning to end: marketing and selling the product, the customer’s order, control over the supply chain from the packing house to the customer – off loading, sea and air transport, providing answers for quality issues and of course – collecting payment and bearing customers’ credit risk without rolling it back onto the growers. At Arava Export Growers, we provide all the growers with an inclusive security net,” Itamar says with satisfaction, “and combined with our financial strength, we increase the trust growers place in us.”
In addition to the logistical advantage that enables quality control and meets stringent quality standards, Arava Export Growers matches produce supply with the rising demand for organic produce, and accordingly the area of organic farming continues to develop, with nearly 5,000 tons of produce being marketed, primarily to Europe and the U.S.
Arava Export Growers Company will participate in the Fruit Logistica Fair to be held in Berlin between 6-8 February 2019, at the Export Institute pavilion- Hall B, CityCube