STORY: STUDIO TC HAIL DAMAGE CAMPAIGN
STORY OVERVIEW
Despite the worst hailstorm in 50 years causing extensive damage to most of its
shareholders’ crops this year, Africa’s leading distributer of apples and pears, TruCape Fruit Marketing, didn’t loose any of its international customers. The company
also didn’t incur a loss. This is quite remarkable in the fresh produce industry.
Suffering extensive damage to a whole harvest and then also not able to supply
overseas customers are some of worse fears of exporting farmers. This not only
results in immediate loss of income, but could also lead to loosing a customer,
resulting in future losses. In the end a lot of the fruit was sold in South Africa via the
large South African retailer, Shoprite / Checkers. In marketing the fruit to South
African consumers, Tru-Cape launched a campaign, “Ugly but pretty” informing and
educating them that the damage was only cosmetic. Managing director, Roelf
Pienaar, beliefs the strong relationships which the company has built with retailers
globally over the past 13 years will help Tru-Cape regain shelf space next year. TruCape’s experience and strategy for managing the crisis could offer lessons to other
exporting producers.
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INTERVIEW TRANSCRIPTION
Angelo Coppola: Despite the worst hailstorm in 50 years which caused extensive
damage to most of its shareholders’ crops this year, Africa’s leading distributer of
apples and pears, Tru-Cape Fruit Marketing, didn’t loose a single customer. And
what’s more – they didn’t incur a loss. For more on how Tru-Cape weathered the
storm, here is their Managing Director, Roelf Pienaar. Roelf, can you quantify the
losses suffered and what did it mean to your farmers and your bottom line?
Roelf Pienaar: Managing Director: Tru-Cape: It was massive, Angelo. It think
there’s farmers in the Ceres area that had a hundred percent damage. That
effectively means no crop for them to market in 2014. If I had to quantify… If I take
our bottom line, if I take our turnover it was about 200 million of our turnover. That’s
conservatively speaking. It’s very difficult to quantify for the whole Ceres area, but for
the farmers it was devastating.
Angelo Coppola: Now, why is supplying into the international market so important
for your farmers?
Roelf Pienaar: Managing Director: Tru-Cape: We’re an export business. From our
total volume about 70% is exported to the rest of the world. We’re in 64 countries.
We’ve got 120 customers worldwide. So we’re in a very good position to leverage,
call it a weakening rand, but also to put a quality product in the international market.
So obviously you want to export a picture perfect product. That was the problem this
year. We weren’t able to export as what we wanted to.
Angelo Coppola: Now, you talk about picture perfect fruit. How did you supply or
didn’t you supply to that market?
Roelf Pienaar: Managing Director: Tru-Cape: Our strategy with the hail damage
was to really go through the local retailers. If have to really take my hat off to
Shoprite and Checkers, they have been very supportive to us in marketing the fruit.
We’ve launched a campaign – “Ugly but pretty”. We basically took our weatherblemished fruit or hail damaged fruit – we had a different brand and we basically put
it into the retailers. And the support has been tremendous. Internationally we tried to
…. There were a couple of markets that we did try to get the fruit into, but ultimately
we wanted to protect the brand name, Tru-Cape. So it was more on the local market
that the strategy worked very well for us.
Angelo Coppola: Now, how did you convince those international customers of yours
to actually stay with you and not go to the competitor?
Roelf Pienaar: Managing Director: Tru-Cape: Agriculture, especially on the export
side, is about relationships. I think, over the last, call it thirteen years, Tru-Cape build
up such a strong brand name. So we’ve got a relationship with the big retailers
worldwide in order for us to get that, call it, shelf space back next year. Obviously
we’ve let in certain of our Chilean competitors maybe from South America as well,
but I am positive that next year through relationships and through basically
explaining the situation to our customers, we will be able to get their buy in for next
year. And they’ve been very supportive over the last call it couple of months.
Angelo Coppola: Now, let’s come back to the local environment. Why did you
decide to communicate with local consumers?
Roelf Pienaar: Managing Director: Tru-Cape: We had to. I think the consumers
understood. Everybody knew what happened in November last year in Ceres. The
message we had to get out there that, you know, even though the fruit is damaged,
it’s still good, it’s still nutritious and it’s still healthy to eat. It was perfectly good
product. I mean certain of the product the colour was actually so good it could be
exported but it had a hail mark on it. And it’s not just about the product, but it’s also
about supporting South African agriculture. So it was trying to maximize value for our
farmers and ultimately our farmers are not just providing jobs. They’re an investment.
There’s a whole secondary call it value chain that will flow from their invest in the
Ceres area or in the Western Cape area. So for us it’s not just a way to give back,
but it’s a way to almost ensure their, call it, sustainability.
Angelo Coppola: Now you probably touched on this already, but how did those
consumers react?
Roelf Pienaar: Managing Director: Tru-Cape: Very positively. I think on a local
market side, I’ve been contacted personally by consumers telling us they’ve
experienced it positively. In KZN sales were actually up compared to last year. We’re
actually considering keeping the brand or keeping the special weather-blemished
fruit for next year. So for us it has been a learning experience. And I think for the
South African retail customers also. I think the support has been tremendous.
Angelo Coppola: Now, you think the strategy worked – short term and long term?
Roelf Pienaar: Managing Director: Tru-Cape: Definitely. On the short term
ultimately it’s about return. So I think the alternative was that you had to send it to
the juice factory for example where the price would be anything between a thousand
rand (US$ 100) and a thousand three hundred rand (US$ 130) a ton. What we did
here was to premium on that and also to basically keep our shelf space on the
domestic market. So from a financial perspective, definitely it worked.
Angelo Coppola: Again, we’ve done the rosy thing, but ultimately if you keeping that
brand for next year, are you anticipating that you might get more hail or is it weather
playing and doing what it normally does?
Roelf Pienaar: Managing Director: Tru-Cape: I think for me the learning was that
as a farmer and as somebody in agriculture you’re so depended on nature. I think we
can plan and we can build Excel spreadsheets and strategies, but ultimately it’s
about ensuring that you get the product from the tree onto the shelf as quickly as
possible. And what I’ve learnt anything can happen in agriculture. You basically put
in the inputs and not just hope for the best, but you’re so dependent. I think what
we’ve learnt is that you have to be prepared. For us it’s a nice backdoor if something
happens we’ve got a strategy in place.
Angelo Coppola: It’s awesome. Roelf, thanks for joining us.
Roelf Pienaar: Managing Director: Tru-Cape: Thank you, Angelo