Rewe takes a minority share in Spanish organic company

Sustainability is under discussion more than ever before in the food business, and not just in the wholefood trade. All the big food concerns are in the process of implementing their concepts and promises. By acquiring a minority share in the Spanish organic vegetable company Campina Verde, the Rewe Group has secured even closer collaboration than before. With this move, and in other respects too, Rewe is taking its green promises seriously. Are the organic pioneers falling behind?  (Picture: The founders of Campina Verde Frederico Huber and Alwin Gfrörer)
“With this minority share of 25 %, we have simply formalised the collaboration with Rewe that has been going on for many years,” explained Frederico Huber and Alwin Gfrörer during a conversation with Organic-Market.Info at BioFach 2009 in Nuremberg. The fruit and vegetable marketing company Campina Verde has its headquarters in Cordoba in Andalusia. What was important for the two founders was to take advantage of the vertical integration that was occurring in the industry. Like no other agricultural area in southern Europe, Andalusia has developed in the last ten years to become the producer of organic fruit and vegetables for the major importing countries Germany, France and Great Britain. In winter and spring in particular, the region supplies citrus fruit, tomatoes, cucumbers, paprika, strawberries, avocados (picture), zucchini and lots more besides to specialist stores and supermarkets all over Europe.

With its staff of 18, Campina Verde takes over functions that range from coordination, quality assurance and quality control in the packaging plant to trained agricultural specialists giving growers advice on cropping. “Quality assurance in a very wide sense was, and still remains, one or our major tasks,” explained Frederico Huber. Agricultural technicians are stationed in Malaga and Almeria, and they visit the producers’ fields and greenhouses on a regular basis to give advice, to check that all processes are running smoothly and to advise on quality assurance. Quality assurance, transparency and continuous supplies are the most important issues for German clients who buy organic goods from Spain,” says Mr Huber. Campina Verde cooperates with 40 packing plants and markets a total of 20,000 t of organic fruit and vegetables each year. “We work direct with individual growers, producer groups and family farms, but also with cooperatives covering the organic production of up to 600 farmers,” adds Alwin Gfrörer. A long-term cropping plan enables producers to plan with confidence at largely stable prices. (Picture: Packing plant for organic strawberries in the ecologically sensitive Doñana delta)

Goods are marketed in Germany and other European countries via the specialist wholesale trade, which means principally by Rewe. Mr Huber explains that Rewe has set itself the target of becoming the most sustainable food company in Europe. To fulfil this ambition, it has developed its own criteria, that take into account the social context in which producers operate and the environmental situation at the front line.
In practice, the issues in Andalusia are:
- water use that conserves resources (pilot project with WWF in Huelva for strawberry cropping)
- disposing of the vast quantities of plastic sheeting for greenhouses, and
- improving the living and working conditions of illegal African immigrants in the production region round Almeria.
(Picture: Packing plant for tomatoes and other produce)

Mr Gfrörer says that Rewe’s aim in taking a minority share in Campina Verde was to keep our sourcing know-how exclusively within the German retail food trade. This is a tribute to the expertise Campina Verde has built up over many years. Rewe acquired its share in Campina Verde Ecosol in July 2008 via the firm Jump Central GmbH (Rewe Zentral AG) that has its headquarters in Cologne. It is not clear whether its level of participation will be increased in the course of time. The Rewe Group is not the first concern to buy an organic producer. (Picture on right: Tomatoes grown under plastic)

The climate change prognoses in recent years have finally got through to the top managers in the food companies. In the context of the general sustainability debate, in January 2008 Rewe boss Alain Caparros talked about Rewe’s appreciation of the issue: “Sustainability must not be a marketing gimmick – it has to be a part of our everyday lives, and a part of our company procedure too.” Examples can be found on Rewe’s website: an eco-greenhouse that has photovoltaic panels to produce electricity and a lower than normal water consumption. As Ludger Breloh pointed out, however, they are still in the testing phase, so these initiatives represent the company’s vision. But this does not apply to some other measures. A good year ago, Caparros announced that Rewe was using 100 % of its electricity from renewable sources, and more than 6,000 stores nationwide now use electricity from solar, hydro, wind and biomass. The Rewe Group claims to be the biggest consumer of green electricity in Germany.

The retail food trade, personified by Caparros for example, has also noticed that consumers are becoming more demanding regarding quality: “The food trade is undergoing a step change. Whereas in recent years customers were only concerned about price, now quality is increasingly taking precedence.” In Rewe’s view, the bar was gradually being raised higher and higher. Their levels of responsibility, commitment and social engagement went much farther than demanded by law. The specialist trade knows this only too well, aware as it has been of the need to meet customer demands for quality. But you have to be careful – it is one thing to talk about values but quite another to give substance to values day in day out in terms of quality in production, processing and marketing across the whole value added chain. The important factor is that the consumer is always experiencing how values are implemented in practice.

Back to Rewe, that we can take as an example of the strategy in the retail food trade: the organic arm of Rewe (previously Füllhorn, now Rewe Bio) has existed for 20 years. There was no massive expansion of the product range, but it was regularly extended. Now moves are taking place to make the new green approach, the sustainability strategy, a reality: a current example is collaboration with the Hamburg coffee roaster Darboven to put their coffee “Intention” bio+fair on sale in Rewe stores. Also, Rewe supported the WWF campaign “Save the Polar Bear” with a donation of 150,000 euros that came from the sale of one million low energy bulbs.

Rewe’s green image is promoted by a film on the company’s homepage dealing with social responsibility and by the criteria applied by Rewe to food, non-food, tourism, society, the environment and green electricity. On numerous occasions, it was emphasised at the sustainability conference held before BioFach in Nuremberg that sustainability does not always have to equate with higher expenditure but in fact can often save costs, while of course creating a better image at the same time. The fact that Rewe’s activities are readily accepted by customers is shown by last year’s financial results. As the food industry publication – Lebensmittel Zeitung – reported at the beginning of March, the Rewe Group increased its turnover in 2008 by 11 % to approximately 50 billion euros. It also stated that the company wanted to continue raising its profile with about 350 projects relating to sustainability and quality assurance.

Comment: sustainability more than a marketing gimmick?

It is interesting that the conventional retail food trade is threatening to overtake the wholefood trade in the first two categories of sustainability (ecology, social commitment, economy). It is obvious that the conventional trade is not just making a token gesture, as it did in the 1990s, but is taking the subject seriously and acting accordingly.

Whereas a section of the wholefood wholesale and retail trade in Germany is happy with their suppliers’ assurance that goods are of organic quality (either EU or trade association certification), some conventional competitors are going farther with their quality and sustainability criteria. Not exactly willingly – think back to the Greenpeace campaign “Here you get the most poison for your money” and the string of reports on pesticide residues found in fruit and vegetables.

On the one hand, there are of course a large number of German wholefood manufacturers who for years, or from the very beginning, have concerned themselves with the issues of sustainability and fairness and have made a huge effort to turn these principles into reality. Where they have fallen down is frequently not telling the world about it. Admittedly, the opportunities to do so are really limited compared with a concern of the size of Rewe. Small to medium wholefood manufacturers are not in a position to set up a dedicated department for sustainability. On the other hand, the organic industry must not risk its capital in terms of trust and has to stay focused on the issues, especially as far as communication is concerned. Slogan: we are doing good and we talk about it. Only a handful of companies have been doing this with the right degree of enthusiasm – Eosta, Rapunzel and Gepa. The sustainability debate will stay with us - certainly longer than the credit crunch. And the issue is tailor-made for the organic industry. That means involving oneself in the debate, communicating ideas and successes and not being sidelined by the big players. Otherwise it would not be the first time that pioneers in the market economy have been overtaken by financially powerful companies. (Picture above: Cutting asparagus in Andalusia)