Is it time to take on the Continent?

With pound-euro parity getting nearer, growers are looking for opportunities overseas. Jack Sidders reports.

After a summer of gains, the pound is once again slipping back to the low points seen last year. It currently sits only a few pence from parity with the euro and, with the Bank of England continuing to talk down sterling, it seems that the "staycation" may be here to stay.

Though there are predictions of a strong rally in the medium-term, as the British recovery outpaces that of countries in the Eurozone, the state of the public finances and a long-term trend of decline have some City pundits resigned to a rate some 25 per cent lower than that of two years ago.

The implications of this for horticulture should not be underestimated. A straw poll taken at Plantarium of growers who thrive thanks to Britain-bound exports found many of them despairing.

One grower, Dick Blom, said it had completely altered its offering for 2010 after seeing UK sales crash from 150,000 plants to just 50,000.

While this creates a vacuum in the domestic market, which has led to a resurgence of British-grown produce, some companies are now saying the time is right to make incursions on the Continent.

West End Nurseries owner Peter van Delft said he would be increasing production next year to do just that.

"Our export side is increasing rapidly," he said. "Export has gone from virtually zero as a percentage of the business in recent years, to this year when we are looking at four to five per cent. We still have a significant part of the export season to go, so it is hard to judge how high it will be but it is looking promising. We are upping production by 10 per cent to meet the Eurozone demand."

Roughly half of the extra production will be going to Europe, while the other half will tap into domestic opportunities left by declining imports.

Like West End, which also had a history of exporting during the 1990s, Johnsons of Whixley has this year looked to reignite its Continental relationships. Director Andrew Richardson said: "We are already getting commitments for next spring in time for next year. On the Continent they are used to making commitments. With the euro rate being where it is, it is a no-brainer for them to use our product."

But opinions differ on how best to break into these new markets and, once there, how to hold on to them.

Seiont Nurseries is looking to up production by 10 per cent to cope with increasing demand both at home and abroad. But nursery manager Neil Alcock said that this year had actually seen a slight decline in its exports and that his optimism for next year is based on the quality of Seiont's products.

"It is not always about price and exchange rates," he said. "Everyone in every country has buying habits and to get new customers you have to break their habits. So you have to talk about quality before you talk about price.

"We found in Holland, to break their buying habits, they wanted reliability - that's why you don't see sudden shifts in buying habits."

Thus, Alcock explained, transport is the key, and finding a reliable and viable haulier to guarantee delivery at the right price is the biggest barrier to success on the Continent.

This is echoed by those companies that have yet to take a gamble on European sales, saying that even though their product might be 25 per cent cheaper now, the cost of getting it to Europe makes the difference negligible.

But this can be overcome, some have argued, with the right approach to building relationships.

Success on the Continent will not be achieved overnight, Richardson said: "People have got to realise that you can't just flick a switch and make it happen. You can't just go to Essen and pick up business; it takes time.

"When the exchange rate goes the other way, we need to make sure they know our product and our service - and hopefully, when it does, they will stick with us."

Wyevale Nurseries sales director Doug Reade agreed, saying that while there are still opportunities to cash in on European markets, the key to maintaining them is building relationships.

He added: "There will always be opportunistic buyers who buy because of the weak pound, and if we have surpluses we will try to use that, but really it is all about relationships."

But it is not just a good service or even a good-quality plant that will cement those relationships, said van Delft. Buyers, he said, expect good service as a minimum and are more likely to be swayed by something different.

"New products and good new plants - that's what they want," he said. "The export market for us is new products. And not just new for new's sake, it has got to be good."

This, he said, is exactly where the company's new range of award-winning Caryopteris comes in - to impress Continental buyers with something they have not seen before.

This approach is also championed by Seiont, whose Continental ambitions for 2010 are largely centred around its Four Oaks award winner Cordyline 'Pink Passion'. The company has already confirmed orders for 80,000 of them, just under half of which are going abroad.

This, said Alcock, will bring Seiont's exports back up to 15 per cent of its overall business and put it in a healthy position for further foreign expansion in the years to come.

Provided, that is, that the British economy continues to be the "sick man" of Europe.


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