‘Large supermarkets across Europe are pushing towards commercialisation as a business model’

Interview #1 with Antonio Domene, CEO of CASI

The intensive agriculture sector, particularly in Almeria, has traditionally been very innovative and has an international focus. However, there are still many areas where technology will become increasingly important, especially with regard to product distribution and marketing. Today we had the opportunity to talk with Antonio Domene, CEO of CASI, about how this 75-year-old traditional cooperative has modernised in order to become one of the largest tomato-producers in Europe.

What are CASI’s main sales channels?

Our business model has two channels: the auctioning and the marketing. To begin with, we have become a benchmark for tomato prices at the European level thanks to the amount of produce that we auction. However, a few years ago, our customers asked for more added value, and we had to respond to customer demand by developing the marketing front, and internationalising the business.

Nowadays, both channels carry more or less equal weight. In the first channel, we consider the initial price, where the added value is provided by the farmer or partner; in the second, we consider the landed price, where the added value is provided by the cooperative.

How important is the foreign market?

We export about 70 per cent of what we sell, and 50 per cent of what we auction. Fortunately, because of the volume we offer, our tradition, our years in the business, and our brand recognition, almost everyone who is looking for tomatoes knows us. We now have a presence in 23 countries, mainly Europe — although we are also trying to expand in the Middle East. In this sense, we have a lot of organic demand, but we want to become more proactive when looking for new clients.

It is often said that the sector needs to modernise. Do you agree with this? Doesn’t CASI exemplify how the industry is improving its processes through technology?

To answer this question I have to highlight an important distinction. On one hand, it’s true that the horticultural sector has embraced innovation and technology in relation to production and handling for many years. For us, it is fundamental that our farmers optimise their production and become more efficient without losing their know-how or professionalism, and we have a technical department that uses different technologies (robotics, IoT, Big Data, etc.) to that end. Remember that a greenhouse is a controlled environment where it is easier to innovate. It’s like a small data centre, where you can install various devices to measure parameters.

However, it is also true that many of these technological innovations have not yet been introduced to the marketing side of the business.

In what sense is it necessary to innovate your marketing?

The internet has changed the relationship between customers and suppliers. To give an example, this is a sector in which salespeople sell by WhatsApp — which causes unimaginable problems when it comes to dealing with this information and working out how the negotiation took place.

Or think about our auctions, a platform that, even though it is enormously important in Europe, still basically take place face-to-face. We might consider an online auction where anyone in the world can buy our products. Why not?

To give another example, we are in the midst of a project for developing and marketing a new product in partnership with several other companies. We now have a new variety of tomato which was developed with a seed company, and which will have both a national and, obviously, an international focus. We would like to share this business opportunity in order to enhance marketing campaigns, but there are no technological tools to help us that are oriented to this sector.

What will be the decisive factors for these changes to take place?

Basically, large supermarkets across Europe are gaining more of the market share, and they are pushing towards commercialisation as a business model. They require an increasing degree of customisation in terms of packaging and, in particular, of service. It is understandable that, because of their processes, large supermarkets do not favour auctions — although our farmers prepare the produce directly to get it on the shelves, which cuts waiting times at our centres, and ensures a better quality product. You have to find the perfect balance.

Also, you have to keep in mind that demand is increasingly unpredictable. The sales window for Almeria in Europe was longer before climate change, and before there were greenhouses everywhere. Before, if you wanted fresh horticultural products in Europe between December and April, you had to come to Almeria. But, reduced technology costs for greenhouse infrastructures mean that countries like Holland, Turkey and Morocco are now also competing with us.

These two trends demonstrate that the innovation in the industry has go beyond simply that of production.

What other changes do you think need to be made in the industry?

Much of the technology we buy in Almeria comes from Israel and the Netherlands. Unfortunately, although there is a very large ancillary industry in Spain, it can’t yet compete with these countries in terms of recognising innovation in the fields of industry, machinery, processes, and engineering.

Also, with regard to Spain specifically, I think it is essential that, even though we have the best agronomists, we train more technologists. We have the best engineers in the world. Now we need to incorporate people with skills that are more focused on technology and innovation in production and business processes.

Originally published at www.kantox.com on May 31, 2018.