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Alexander Hornig, managing director of Ernst & Schlößer, on cooperation with vertical farming providers

Higher demand for herbs from southern Europe, Israel, and Kenya

Bulk herbs such as parsley, basil, mint, and coriander are usually part of the standard assortment for herb traders, continually enjoying great popularity. Despite this, even this segment is not immune to the high prices and costs, as Alexander Hornig, managing director of Ernst & Schlößer Ltd, tells us. "Demand was very restrained and dropped sharply at the start of the pandemic. No one really knew where the situation was going, especially when you look at the development of prices for energy, packaging, and other business-related costs."

Alexander Hornig

Down season set early in Bavaria and Austria
"In the wake of the energy crisis, many growers in regions such as Bavaria and Austria have reduced or prematurely discontinued herb production for the off-season, as production has no longer covered the costs. Heating the greenhouses was simply too costly. Almost all buyers switched to other growing areas in southern Europe, Israel, or African countries such as Morocco, Kenya, Uganda, etc."

In light of this, he says it was advantageous that his company was able to source goods from Israel and Kenya year-round. "We want to offer high-quality products that remain fresh even after a few days of storage, allowing for sales or further processing without having quality losses. This has certainly given us a competitive edge or two over our competitors, so we have always been able to deliver."

Entire product range from Israel and Kenya
"We can source our entire product range from Israel and Kenya. These include oregano, lovage, sorrel, and Thai basil. Climatic conditions are relatively constant throughout the year, especially in African countries, which facilitates cultivation and downstream production. The change in global climatic change raises the question of how growers will respond in the coming years, as not only are climatic conditions changing, but the availability of water as an important production resource is becoming increasingly critical. The big challenges in the medium and long term will be the quality of the product, as well as availability," Hornig says.

"The quality of the herbs dropped a bit at times. That's because farmers want to meet the high demand, but the plants need time to grow." Through a broker in Amsterdam, the herbs are delivered to the airport there. "First, the produce is cut in the place of origin in a relatively warm environment, then packed and airlifted to Amsterdam. Then the goods come to us by truck for the last mile. Along this supply chain, there are some 'critical points' where the product can be compromised, affecting quality."

Varied sales units
The herbs are sold exclusively in the Berlin area. "We work with a customer who supplies the herbs in 15-gr trays to major department stores nationwide. Percentage-wise, those are small margins, but all the products that are also found at our wholesale market are marketed in that range."

These 15-gr trays are the norm for food retailers, he said. "For parsley and dill, they usually go for 25-gr trays because one needs more volume for most dishes. We also sell bundles of up to 100-gr, which again goes to delivery customers, who then don't have to portion the goods further. To larger customers, we again sell cilantro and mint in 1 to 2-kg boxes. Parsley is sold in both summer and winter in 5-kg boxes."

Price trends
"In the course of the seasonal changeover, it has been noticed that due to the fact that demand in the individual regions has become stronger, prices have also changed quite a bit. In the last half of 2022, we have had to adjust prices twice. This is because there have been fewer flights not only in passenger traffic but also in the cargo sector, which is why there are also fewer parking spaces available. Accordingly, the price per pitch became more expensive. We try to keep the price in a good balance as best we can. For which a certain tact and good intuition are important."

Cooperation with vertical farming providers
With new approaches, such as vertical farming, new paths are now becoming available. "Particularly with fruits and vegetables, these farming styles should break up the seasonality element. This topic is highly interesting, both in terms of volume and regionality. After all, the latter is also increasingly in demand by the consumer, having been in the spotlight more and more for several years. As a wholesaler, we have to account for this and for the higher nutritional awareness of customers."

For more information:
Alexander Hornig
Ernst & Schlößer GmbH
Beusselstraße 44 N-Q
10553 Berlin
Tel.: 030 - 395 17 52
E-Mail: [email protected] 

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