Later this year, in October, Andre van Kruijssen’s ‘promised years’ in Brazil will end. But the director of Veiling Holambra is going to stay on. His work isn’t done yet. There are still plenty of challenges. “We’ve been doing some great work here.”
When, halfway through the interview, Andre van Kruijssen is asked about the things that were accomplished under his leadership, he lists a great number of achievements. The build of a wholesale centre, implementation of tracking and tracing in all processes, installation of RFID tags in trolleys, trays and containers, implementation of the Linnaeus project (international codes), extension of the auction building, doubling of cold stores, development of new flower containers, increase of marketing activities, successful use of social media, installation of LED screens in the auction hall, the development of a digital marketplace, they will begin with auction presales next month… And he could go on.
If you ask Van Kruijssen, the list could be even longer. He says there’s plenty of work left in Brazil, so he’s going to stay on for a few more years. “I’m not happy unless I have a challenge to work on.”
Do you think there are enough challenges left at Holambra?
“Yes, I feel we’ve been doing some great work here and I can see opportunities to further develop that in a good way. The board and the management have a shared vision and are very future-oriented. This shared vision is the starting point for some important projects that we’re going to implement over the next two, three years. No heavy investments in physical aspects, but more in software, improvements in the chain and in customer relations. Those are the challenges. The cooperative can be made completely future-proof through innovation. Innovations and improvements lead to a better market position.”
Is the digital marketplace one of those challenges?
“We’re developing a digital platform. At the moment, we’ve got a web shop, similar to Plantion’s web shop. The web shop isn’t just a challenge for the cooperative, but for customers and members too. We play an important, central role in it though. The integration of members’ web shops in the digital marketplace means that the physical market function will continue to exist next to the digital one. I really believe in the combination of digital and physical. Digitalisation alone isn’t everything and neither is physical sales alone. Besides, we don’t have any choice; we’ve got to innovate because the entire world is digitising and innovating. It’s a fascinating time, because on the other hand, we don’t want to lose or erode the physical marketplace.”
What do you mean by improvements in the chain?
“That’s the second challenge. Improving the chain, especially with regards to cut flowers. From harvest to post harvest to transport and from delivery at the distribution channel to delivery at the shop. Through certification and advice. We’d like to help the various partners in the chain deliver a fresher product to the consumer, we’d like to certify growers’ transports and introduce regulations with regards to post-harvest handling. And we’d like to develop display furniture and packaging. This is in line with the Decorum approach. We’re not going to get involved in the actual shelf management. But it’s an interesting area, which we’re exploring together with our customers.”
What’s the position of retail in Brazilian plant and flower sales?
“That’s the third challenge. We can see how the large retailers are strengthening their position. The biggest retail chain in Brazil is Pão de Açucar, a subsidiary of the French Casino. The second biggest retailer, Carrefour, is French too. That just shows how big these retail organisations are, they operate at a global level. These large retail chains come with all sorts of requirements that growers have to fulfil. And they like to think of the auction as a wholesaler which they can impose their supplier contract on. As a cooperative, we’ve got to be prepared for the future. We’ve got to maintain our market position, based on our own strengths and we shouldn’t get totally dependent on a few parties that are telling us what to do. We must ensure a good customer distribution. We don’t want to be too dependent on a few big players.”
Do you see any opportunities left in the retail channel in Brazil?
“Yes, there are many opportunities. Especially in supermarkets. That’s why we’re going to focus heavily on cut-flower sales to supermarkets. They don’t use the auction clock, you’ve got to offer them a deal that includes packaging and a display. Some retailers buy directly from growers through us. We have regular meetings with supermarkets. Our aim is to get them to increase their sales, so that they’ll purchase more from us. Cut flowers are mostly used for decorations at parties, weddings and other celebrations. We’d like to encourage people to buy plants and flowers for personal use. If flowers are sold in the supermarket, they become more accessible to the consumer.”
Brazil was struggling with political corruption and a financial crisis, while Holambra increased its turnover. Well done?
“Last year, our turnover increased by 5.5%. However, the inflation rate was 7%. So you could say that our sales value went down by 1.5%. In my opinion, your growth should be larger than the inflation, but considering that we’re in the middle of a financial crisis, I’m quite pleased with our result. By the way, growers were also dealing with climate problems last year. Our estimate for the coming year is an 8% growth. But a lot depends on the political and economic situation. Considering everything that’s going on around us, the cooperative is a very solid organisation.”
How self-evident is the existence of Veiling Holambra for the Brazilian floricultural industry?
“Completely self-evident. I don’t like the word self-evident, though. As soon as you say it, it’s no longer true. The auction plays a central role and we’re firmly embedded in the floricultural industry.”
Do you feel your revenue model is under pressure?
“No, I don’t. But I do think we should try to increase our efficiency. That would gradually reduce the costs for growers. Our largest investments are behind us now. Especially with regards to buildings. We’re working on a good plan for 2020. All together. The most important part of having a vision is that everybody shares that particular view of the future. My role is to promote the vision and get people engaged.”
Intermediary services are an important part of your business – any complaints about fees?
“With regards to clock and intermediary services, we’ve got a clear vision. 35% of our turnover is realised through the clock and the other 65% through intermediary services. Our strategy is to maintain the same fees for all our services; clock, intermediary services and web shop. If you reduced the fee for one service, that would make another more expensive. If, for instance, we made the web shop cheaper, the clock would become more expensive and that would lead to the clock losing its position and function as a physical spot market and price mechanism, which it still has today. We aren’t going to get rid of a service as long as it hasn’t been overtaken by another one.”
But the costs for clock sales are higher than those for intermediary services, aren’t they?
“If you look at all the numbers, it isn’t that expensive to keep the clock going. As long as the logistics are well managed. And why would we tear something down? I’d rather let it run its course. We don’t treat large and small customers differently either. Why would large customers pay lower fees? We need small growers, if we want to keep a broad assortment. There is demand for the speciality products that small growers supply. We have to be careful not to look at costs alone and not to take away the strength of the organisation in its entirety. Small and large growers need each other. We do follow the cost-causer, cost-payer principle, but we look at it across the board. And we don’t need to make huge profits. If we increase our efficiency, we can lower the rates.”
But the rates must be a point of discussion?
“Yes, of course they are. And if the large growers don’t agree, I can keep explaining that we need to think of the cooperative as a whole, but that won’t work unless they support it. Actually, the director’s opinion isn’t that interesting. What really matters is the opinion of the board of management. A few of our larger growers are on the board of management and they support the one-fee policy.”
You don’t have a folder that says ‘exceptions’ somewhere?
“Our ‘exceptions’ folder is completely empty.”
Sounds very genuine?
“We stick to our principles. With regards to direct sales outside the auction for example. If a customer wants to sell directly, without intervention of the auction, that’s fine, but the board of management will then ask that member to leave. We had a case like that last year. It concerned a large customer. His membership was cancelled. Let’s say it was a mutual agreement. We’d like to avoid having to expel a member. But there are many discussion points. Including our heavy investment in cash and carry. Or about the use of members’ software in the digital marketplace. And the need for efficiency – you have to discuss this with your members. It’s important to get everyone on board. We’ve got a few projects planned that will lead to more efficiency or a decrease in costs. They’ll make us future-proof.”
How much longer are you going to stay in Brazil?
“I’ve got a permanent contract. We evaluate the situation every year. Looking at the challenges ahead, they’ll keep me busy for a few more years. Anyway, you should never go around saying that you’re leaving, you’ll immediately lose your authority. Jan Straver (former director of VBA) once said: “change the position of the lamps and the flies will fly a different route.”
Andre van Kruijssen (53) studied horticulture at Wageningen University from 1983 until 1988. He worked with Bloemenveiling Aalsmeer from 1991 until March 2000. His positions there included Head Plant Auctions, Head Quality Control and Product Manager. After that, he became Sales Manager for FloraHolland’s Bleiswijk branch.
In 2002, he became the director of Veiling Vleuten. His specific task was selling all the land and property and facilitating the move of the company and all the tenants in the complex to a suitable new location. This eventually led to the merger between Veiling Vleuten and Veiling VON in Bemmel. Van Kruijssen moved on to become the director of Plantion, where he was involved in the development of a new building in Ede.
Van Kruijssen has been CEO of Veiling Holambra in Brazil since October 2012. The auction has 300 members and 500 customers. Last year’s turnover was nearly €175 million.