Due to the exceptional weather conditions, eating outdoors has seen a significantly lower frequency compared to previous summers. This, in turn, leads to an even greater business slowdown, which already declined during the holiday season, says Alexander Hornig, managing director at Ernst & Schlößer Ltd.
"Our range extends to imported goods throughout the year, although we currently also carry a considerable selection of nationally or regionally grown herbs. Cooperation in the region is particularly important to us in order to keep the distances as short as possible. This gives us more flexibility, and we all benefit from daily freshness. However, the fluctuating weather has had a significant impact on the quality of the products, as, due to intense rainfall or heat, softer herb varieties, in particular, tend to see a quality drop or in some cases fail completely."
Alexander Hornig. Photo: Ernst & Schlößer GmbH
Stable quality standard through imported goods
"In general, we strive to offer a significant proportion of regional products during the seasonal period, taking into account the respective availabilities. With regard to the continuous demand, however, we see ourselves obliged to use alternative procurement channels. As a result, we also source goods from countries such as Italy, Spain, Morocco, Israel, and Kenya. We promise our customers to ensure a stable availability of goods."
Organic herbs continue to represent a niche market, which is still associated with limited yields, as the volumes harvested are smaller compared to conventional cultivation. "This is proving insufficient to ensure adequate commodity availability for wholesalers, especially in the context of stable demand."
Furthermore, Hornig notes that there is an increased demand for fresh herbs at Berlin's weekly markets. "People's awareness has changed. Fresh herbs are now an important ingredient in people's kitchens, similar to regional potatoes or tomatoes. Customers want to buy the tastiest products to give themselves and their guests a culinary treat."
Plastic packaging still the norm
The use of plastic packaging remains the norm in the herb sector. "This results from the fact that no adequate alternatives to plastic packaging exist as yet. The need to protect the goods is of high importance here, as product spoilage can occur within just a few hours. At the same time, we as a company are subject to legal requirements, which we must follow to the letter. These legal regulations include special hygiene regulations, which are intended to protect both the product and the consumer. However, we already use materials that can be efficiently reintegrated into the recycling loop. Packaging not only acts as a means of protection but is also a carrier of important information and is equally popular for branding."
Within the marketing strategy, the standard unit size of 15 gr for food retailers will remain, he said. "For wholesalers, there is also demand for packaging for quantities of 50 gr, 80 gr up to 100 gr. Common herbs such as parsley, mint, or coriander are also offered in much larger packages, of between 2 to 5 kg."
Price at a high level in the long term
The price structure for herbs within Europe has largely converged, he says. He emphasizes that local products generally do not have a long transport route. Nevertheless, higher production expenses were incurred at the same time. "The equivalent of this is found in imported products. There, production tends to be cheaper, but additional expenses for logistics put the price difference between domestic and foreign products into perspective."
Regarding the prices of the previous season, Hornig makes it clear that these are no longer relevant. "Due to special effects, a fundamental adjustment has taken place in many sectors, which will be sustainable. We have currently reached a price level that will stabilize itself. In view of numerous producers who have ceased production, supply will concentrate accordingly. Increased minimum wages and the cost of production inputs have increased considerably. The latter is essential for conventional agriculture to achieve an economically viable crop yield."
"All these aspects are reflected in the sales prices. We continuously strive to review the use of vertical farming at regular intervals and explore it in close cooperation with selected strategic partners. This allows us to deal with seasonal fluctuations in the long term while minimizing long transport distances."