Vegetables sourcing in Africa: the experience of Freshmark

Abstract

Freshmark is a leading South African company organizing the sourcing of fresh produce in 11 countries throughout the African continent. The company was established 15 years ago and increased its turnover from 20 million Euro in 1989 to more than 125 million Euro in 2004. Key to its success are direct eye-to-eye relations with suppliers, a fleet of refrigerated trucks and highly qualified technical and commercial staff. The main customers are the Shoprite stores that serve a market of around 30 million customers. Freshmark operations are based on the establishment of real chain partnerships, where suppliers share common goals and loyalty. Open communication as well as knowledge and understanding of each other’s business reinforce truth and trust. Growers and retailers thus maintain a joint interest in promoting better product specifications through Eurepgap and HACCP norms. The core message is that information must flow from the market back to the suppliers. Local markets are highly segmented, but at the lower end of the market where people earn up to 120 Euro a month a large turnover can be made. Market access also requires joint planning towards a fine-tuned system that delivers small quantities on a daily base, with the guarantee that the produce will be collected. This guarantee enables farmers to intensify production and permits Freshmark to satisfy variety-seeking customers.