In the fiscal year 2022-2023, Greenyard further developed and strengthened its Integrated Customer Relationships with major European retailers. We spoke to Charles-Henri Deprez, Managing Director of Greenyard Fresh, and Philip Ditchfield, Supply Chain Expert at Greenyard Fresh. “In times of inflation and product shortages, our unique business model has once again proven its value.”
With its Integrated Customer Relationship (ICR) model, Greenyard has been pioneering a truly unique business model in the world of fruit and vegetables. The basic idea behind ICR is to fully unburden retailers in the fruit and vegetables category by creating a transparent end-to-end chain that increases quality and ensures availability. This holistic approach also allows parties to take significant costs out of the chain. Greenyard offers a complete range of products, all year round, and fully in line with each retailer’s brand positioning. Depending on the retailers’ specific needs, we can draw up an entire menu of added-value services, including logistics, packaging, ripening services and direct-to-store deliveries.
The advantages for retailers are clear. “We remove the retailers’ insecurity and volatility of supply and we provide them with a direct connection to our global network of growers,” says Charles-Henri Deprez. “But most of all, through our product knowledge and our expertise, we enable them to really stand out from their competitors in one of the most important categories for today’s consumers.”
Unique in the world of fruit and vegetables
Philip Ditchfield, who has worked in the field of supply chain management for many years before he joined Greenyard, sees several parallels with what is happening in other sectors. “There is a clear and established trend in many industries to move away from merely negotiating prices to building integrated partnerships, where suppliers and customers join forces to optimise their value chain. But our ICR model is still truly unique in the context of fruit and vegetables.”
“In our industry, there are many very good and savvy negotiators, on both sides of the chain,” he continues. “But if we’re honest, there really is not that much margin to play with when it comes to fresh fruit and vegetables. Working together to reduce non-adding value costs in the chain is a no-brainer, as it allows everyone to benefit.”
Greenyard has been advocating a demand-driven model to improve efficiency and reduce waste in the supply chains for fruit and vegetables for many years. “It requires transparency and an openness to share information that negotiating parties in a transactional model would never share,” says Charles-Henri Deprez. “The planning of promotions is a good example of this. It’s no use doing a promo for cauliflower when supply is low and prices are high. That may sound like common sense, but retailers very often look at fruit and vegetables like they were industrial products which they are clearly not.”
This demand-driven approach also has a beneficial effect on the quality of the products that end up in the shelves. “We are working with fresh products that have a limited shelf-life – as soon as they are harvested, time is of the essence,” explains Philip Ditchfield. “You cannot stock fresh tomatoes for weeks in a warehouse as you can with toilet paper. Close collaboration is essential to create an accurate forecasting which in turn allows the retailer to put the products in the shelves when they are at their freshest, which is essential to provide the best consumer experience. I think this is also one of the reasons why we see that many of our customers who engage in our ICR-model outperform the market.”
Charles-Henri Deprez points to another factor that is increasing awareness from the retail side. “In the first months of 2023, we have seen severe shortages in the market for cauliflower, peppers and several other vegetables because of bad weather conditions in southern Europe,” he explains. “As many retailers were struggling to fill their shelves, it made them realise – maybe for the first time in decades – that there might be a possibility that the product will not be there.”
Greenyard was able to counter these shortages thanks to the unique position we have created over the past 40 years. “Firstly, there’s our global scale. We closely work with growers around the globe, which enables us to be agile and swiftly shift regions to secure produce. We are not dependant on one or two regions. This, combined with our commitment to invest in long-term relationships with our growers, allowed us to secure produce for our customers, even when times got tough.”
The market is waking up
Meanwhile, Greenyard’s ICR model is clearly gaining traction in the market, leading to a growth in inquiries and interest from retailers, including discounters and other industry players. Early 2023, the German retailer Dohle Trading Group – the group behind the German HIT supermarkets – chose to enter an ICR-model with Greenyard Fresh Germany. “We are now the single supply chain partner in the fruit and vegetables category for over 100 of the retailer’s stores in Germany. The new partnership will not only remove the complexity in their supply chains but will also further reinforce their strong brand in the German market,” says Charles-Henri Deprez.
Looking from a historical perspective, many retailers have grown out of purchasing organisations that combine the spending power of different stores to get better conditions from suppliers. Today, the world is changing. “Forward-looking retailers realise that they are not just competing with other brick-and-mortar retailers but also with the Amazons of this world – companies that are extremely customer-focused. The future is with retailers who focus all their assets on the consumer and leave the supply side of things in the hands of trusted full assortment experts, who can unburden them in every aspect,” concludes Charles-Henri Deprez.