Fresh Produce Quality Management

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SENA-UK 3er Simposio Internacional, Armenia,
Colombia
Quality Assurance - the key to UK Market Access
Dr A P Legge
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Contents
The areas to be covered include

• The size of the U.K. market for tropical products
• Retail concentration in the U.K. market
• Social changes in U.K. market / consumer demands
• The Impact of Changes in Legislation
• The New standards ISO 9000, ISO14000, SA 8000,
  EUREP
• Organic Production - requirements and future
  market
• Stategies for accessing for the U.K. market
• Conclusions

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The Size of the Market for Exotic Products
Mainstream Exotics - TNS Superpanel figures
(year ending April 2000 change year on year.)
Product Sales Value Change Yr on
Yr Kiwi 37.20 -3Mango 18.53
33Papya 3.95 48Other
exotic 1.53 5
As an example, Sainsbury list 32 different lines
of exotic fruit and 42 different lines of exotic
vegetables.
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Examples of exotic lines
These lines are usually seen as airfreighted to
the U.K.
MaracuyaMangoPapyaPassion FruitPitahayaPomegr
anatePhysalisRambutanStrawberriesSugar Snap
PeaTamarillo
AsparagusBaby PineappleBaby PitahayaBaby
SweetcornCarambolaHarricot BeansGraadillaGinge
rLimesLycheeMangosteen
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Ripe and Ready Retail Display
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Crops exported to the E.U. from this Region
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Trends
The UK Fresh Fruit and Vegetable Market is valued
at 8.61 billion
Trends

• Towards Fresh Fruits
• Speciality produce is a fast growing sector
• Market driven by convenience and health, e.g.
  increased sales of pre-packed salads. Seedless
  grapes, and easy-peeler citrus, whilst bananas
  became the UKs best selling fruit in 1996
• Organic produce is making an impact

The market will experience growth of 12.3 from
the end of 1998 to reach 10.04 billion by the
end of 2001. (sourcekeynotes 04.07.2000)
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Supermarket Display
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The concentration of trade in the UK
The major retailers - the supermarkets -
Asda Safeway Sainsbury Somerfield Tesco Waitrose
account for more than 80 of all fresh produce
sold in the UK. As a policy, they prefer to sell
their produce as own-label.
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Tropical Fruits - Sales by Outlet - year ending
08-00
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Consumer Desires
For the UK consumer. The four most important
attributes in product choice are-
1- Brand Name / Reputation 2- Product
Quality 3- Price 4- Guarantee
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Social Change
Social Change in the UK will influence the future
market place, with a trend towards convenience
foods, take-away meals and consumption of food
outside the home. Since households are
shrinking, both partners are often working and
need to save effort wherever possible - they are
time-poor / resource-rich.
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Consumer Interests
Apart from price, consumers are interested
in- Food Safety and related issues GMO-free O
rganic Pesticide free Fair
Trade Information Other Issues Health Pre-
prepared Convenience Value for money Home
delivery By implication the consumer desires us
to use bio-methods of control
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Biological Control
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Biological Control
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Legislation
UK and European consumers attitudes have been
affected by food scares over the past ten years
including such diverse causes as listeria,
salmonella, E.coli 0.157, pesticide residues,
G.M.O.s, B.S.E. and in parallel, reports of
exploitation of child labour and environmental
damage.
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Use of MeBr being outlawed
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Pesticides
The E.U. has been harmonising MRLs to meet the
needs of safety of consumers. This work has been
in 2 areas- harmonising E.U. MRLSreviewing
member country Approvals to achieve an
E.U.-wide list. As with all products grown in the
E.U. all imports from non-member countries must
comply with this regulatory development.
This work has the implication of severe
disruption to the flow of imports from the
tropics, with its first serious impacts in 1999,
with the post-harvest fungicides used on many
tropical products being set at the limit of
determination (LOD).
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COLEACP
COLEACP, in response to this regulatory change
has developed an ACP Pesticides Initiative
action plan. It has two components 1 Seeking
the setting of MRLs above LOD as import
tolerances for the active-ingredient / crop
combinations considered priorities in tropical
and sub-tropical regions - provided that the
pesticides concerned are not highly
toxic. 2 The formulation of agricultural
practices by the ACP horticultural industries
to comply with the new EU commercial and
regulatory requirements.
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Codes of Practice
The COLEACP is actively seeking the regional
harmonisation of codes of practice Seeking safe
and responsible production in the tropical
horticulture sector, in a manner that addresses
the requirements of producers, consumers and
intermediate stakeholders.
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1990 Food Safety Act
British Importers, under the UK 1990 Food Safety
Act have a legal responsibility to take all
reasonable precautions and exercise all due
diligence in avoidance of failure, whether in
development, manufacture, distribution or sale of
food to the consumer - the law requires the
adoption of HACCP and documented quality
management systems.
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The need to be hygenic but safe
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Code Compliance
Four codes will have high importance for
exporters in the future, They are ISO 9000 -
Quality Assurance ISO 14000 - Environmental
Protection SA 8000 - Social Auditing The EUREP
standards
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EUREP - Principal Objectives
To ensure suppliers are using GAP - based on a
robust legal framework where compliance with
regulations in the country of origin is an
absolute minimum requirement. To encourage viable
ICMS minimising inputs whilst achieving viable
yields for producers To recognise existing Best
Practice - and develop it further to meet
consumer needs through partnership with growers
and suppliers EUREP participating retailers
(26) Include Safeway, J Sainsbury, Tesco,
Waitrose, UK others in Europe include Albert
Heijn, Coop Italia, Rewe, Promodes, Spar Austrai,
Tengleman, Migros, GB, Delhaize
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EUREP Principle Objectives
Clear training, instruction, review mechanisms QA
systems require effective staff management and
their development through formal training Quality
training achieves the desired result only if the
growers are integrated into the supply
chain Training programmes must include relevant
hygiene instructions Trainers themselves need
training - a role for co-ordination from export
associations QA system must involve full written
checks, with feedback to the farm and regular
formal reviews of the results of checks at source
and destination. With a clear commitment between
the exporter and UK distributor, the latter can
have the confidence to jointly invest in training
programmes, thus increasing the supermarkets
confidence in the relationships.
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ICMS Integrated Crop Management Systems

• To work under these systems is essential in order
  to supply the UK market, but ICMS offers risk as
  well as rewards.
• e.g.
• increased risk of economically damaging pest
  attacks
• damage to the cosmetic appearance of the crop
• risk of insects present in the crop plantation
  and at harvest making their way into the export
  product.

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Display of Organic Produce in a UK Supermarket
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Organic Production of Fresh Produce
This may offer an alternative method to combat
the EU MRL harmonisation The EU market for
organic products is forecast, by Tesco, to grow
by 400 over the next four years. Organic
production must be certified by an authorised
auditor, under EU regulation No.2092-91. Organic
Production in compliance with EU regulation
No.2092-91 dated 24 June 1991, which lists the
only crop production and protection products
which may be used. A transition period of 2-3
years will be required if land is to be used for
organic production unless it can be proved that
no agrochemicals have been used. Importation into
the UK requires the importer to be registered
with U.K.R.O.F.S.
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Retail Sales of Organic Foods in Western Europe
1996-2000
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Organic Farmland
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The Organic Market
UK retail organic market growth - actual and
projected in m
Source - Soil Association
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Organic Facts
In the UK, organic sales are made
by Supermarkets 69 Independent
Retailers 16 Farmgates / Market
Stalls 15 More than 80 of all organic fruit
and vegetables sold in the UK are
imported Consumers are willing to ay a 20-30
price premium for certified organic fruit and
vegetables and are less concerned with the
cosmetic details of organic produce.
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UK Supermarket Strategies

• Fresh produce is now a destination category (for
  which shoppers will switch stores)
• Fresh produce is now the first department
  shoppers encounter
• Fresh Produce is primarily own-label
• The Food Safety Act 1990 has had a deep impact -
  it has required retailers to take even more steps
  to ensure control of all activities upstream,
  especially ensuring traceability
• Rationalisation of the supply base - the race is
  on to find the best partners
• Innovation, especially in the areas of
  added-value product
• Category Management has been fully introduced in
  2000

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What do Supermarkets Seek in Suppliers
Technical Excellence Financial Stability High
Quality Supply Chain Management, TQM Product
Range Management Innovation in every field -
varieties, logisitics, packaging, promotion and
cost-reduction
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TQM - What are the Key Features?
Everyone in the team, from farmworker /
smallholder to the M Dmust feel involvement in
every aspect of quality. This team must be
given leadership and trained to create a
universal understanding that the exporters
success depends upon the contribution and
participation of every member of that team. It
follows therefore, that every team member must
feel free to participate which can be a culture
change. Every team player is provided with the
opportunity to perform their tasks correctly as
specified with commitment.
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T.Q.M. Key Feature Team Culture
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The principal requirements of T.Q.M.

• Involvement
• Leadership
• Culture change
• Commitment
• Can only be developed around an effective quality
  assurance scheme, which is seamless between the
  smallholding / farm, and the supermarket shelf
  which is what the UK supermarkets expect of their
  suppliers.
• What do these supermarkets expect of their supply
  chain?

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What UK supermarkets expect and require of the
supply chain
Policy

• A thorough knowledge and comprehension of their
  needs
• Operating and supplying to meet them
• Certified performance and safety complying with
  UK/EU law
• Clear training / instruction / review mechanisms
• Suitable / specified packaging and logistics
• Reliable product / two way flow of information /
  innovation
• Clear value for money

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What UK supermarkets expect and require of the
supply chain
A thorough knowledge and comprehension of their
needs, which must imply a very professional
export chain

• The expectations reflect those of their customers
• First the negatives
• No dangerous residues
• No G.M.O.s
• No exploitation of people
• No degradation of the environment

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What UK supermarkets expect and require of the
supply chain

• The required varieties grown under ICMS
• Working to a defined crop management
  specification
• High levels of confidence generated
• From the consumer
• From the supermarket
• From the distributor
• Being aware of the changes in the market-place
• Understanding Category Management

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No degradation of the environment
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No degradation of the environment
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Certified Performance and Safety

• Ensure full understanding of UK 1990 Food Safety
  Act and European Hygiene Directive 94/43/EEC
• Meet requirements of Due Diligence a
  requirement of the UK Act on all food suppliers
• Use of ICMS and Crop Management Specifications /
  EUREP
• Monitor all critical safety aspects (residues,
  water quality) use HACCP to identify and
  eliminate risks
• Run harvest and packhouse hygiene to highest
  possible standards
• Record all production inputs by field and farm
• Ensure full audit trail on every package

Remember - the consumer awareness of Food Safety
Issues is higher than ever before UK supermarkets
are monitoring quality on shelves intensively
e.g. ASDAs Tell Tim hotline to share
information about produce and the J.S. Customer
Cares weekly summary.
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Reliable Product / 2 way flow of information
Reliable product needs T.Q.M. at every stage
for reliability of Eating quality Inherent
safety The UK importer needs reliable suppliers
for reliable product Two-way flow of information
of accurate information and intelligence will
benefit all partners Use it in developing
flexibility to respond both to changes in the
market place, and to problems arising
Additionally the information should be used to
stimulate supplier generated innovation (the only
long term source of competitive
advantage) Reliable suppliers will benefit in
the climate of slower growth in the fresh produce
market Synergise their strengths More stable
returns Potential for economies of scale with
fewer suppliers in play
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TQM is a fundamental requirement for Colombian
Exporters
Do Check and record everything Spot-check those
who check Shelf-life tests Carry out spot checks
at every stage Plan the production
Dont Assume all is OK Ever try to save money at
the expense of quality Stock-pile fresh produce
in anticipation of price increases Short-change
the cooling or the packaging quality Say yes
just to please your importer
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Which means going to the airport
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Areas where confidence must be 100
Confidence in the product in the grading and
packing in the logisitics (cooling, transport,
timeliness) in the supply programme in the
communications (in both directions!) (This is
COLEACPs 5 Cs list)
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TQM
TQM has to be a part of every Colombian exporters
marketing policy with regard to varietal
selection production harvesting post-harvesting
handling (grading, packing, cooling) logisitics
(on-time delivery, absolutely correct
paper-work) marketing (partnership with
importer)
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e.g. Sweet, yellow flesh pineapple
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The Colombian exporter has to be
Reliable Responsible Financially sound To be able
to organise working infrastructure (transport,
cooling) Quality Assurance Well trained,
efficient, experienced personnel Accurate and
timely information in crop progress
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What the Retailer Expects
From the preceeding items we can see that the
retailer can expect modern hygenic facilities at
every stage sound, audited, environmental
policies new product development regular team
meeting a two-way, continuous flow of
information written procurement
programmes consistent quality and all at the
lowest possible cost
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An unacceptable packhouse standard
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A good example of modern, hygenic facilities
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Conclusions
The UK market for tropical and sub-tropical
produce is dynamic, challenging and can be
rewarding. There is substantial concentration in
buying power in the UK with supermarkets
controlling three quarters of fresh produce
sales. A good product is no longer the sole
requirement of importers and supermarkets audited
compliance with environmental, ICMS and social
protocols is becoming a requirement. The future
for certified organic production is excellent,
and offers great potential for forward looking
cooperatives of mixed family farms. To access the
UK market necessitates meeting many requirements,
but will indicate a modern, sound operation.
With the introduction of category management,
access to supermarket sales is via a small number
of importers. Above all, successful exporting /
importing requires financially sound, trustworthy
partnerships.
Dr A LeggeTechnical DirectorMack Multiples
Division
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Dr Alan LeggeTechnical DirectorSena Oct 2000