Help new investors find their way in horticulture

  • 17 May, 2019
  • By Jacco Strating for GreenTech
  • Crops People

The horticultural sector is currently on the move. New methods and techniques make professional growing possible all over the world. But also new players appear, expressing their interest in horticulture. These investors see great opportunities in the production of healthy food products, but often enter the market without any experience. Established horticultural players should help them, according to vegetable breeder Rijk Zwaan.

Horticulture is hot. Health and sustainability are currently attracting a lot of attention around the globe. The horticultural sector can really strongly distinguish itself with regards to these two topics. By growing their crops in a responsible way, with due regard for People and Planet and a strong focus on quality and taste, growers have struck gold. The demand for sustainable, healthy and also tasty vegetables continues to increase. This is certainly the case when these vegetables are grown ‘local for local’, because consumers nowadays attach more importance to products from their own country or region.

Financially attractive industry
The golden future for horticultural products has attracted the attention of investors from outside the horticultural sector. A growing number of newcomers make their entrance in horticulture, because they see opportunities in the near future or in the long term. Dutch vegetable breeder Rijk Zwaan thinks it is a positive development that investors are embracing horticulture. Both when it comes to investments in technical companies and in production companies. New investors can contribute to the further professionalization of the global horticultural industry. According to Rijk Zwaan’s Jan Willem Cirkel, it is important however that these investment companies are assisted in finding their way around the horticultural sector. Cirkel has been working as Account Manager Horticultural Projects at Rijk Zwaan for two years now. In this role he is the first contact for newcomers in horticulture. ‘Especially in emerging markets there’s demand for tasty vegetables which are produced sustainably and ‘local for local’. Because of the significant demand, the horticultural industry is regarded a financially attractive industry for many investors. However, they often do not have any experience in horticulture and look for partners which have the knowledge to produce and understand the market’, says Cirkel.

Rijk Zwaan can and wants to assist these parties. ‘We assist by offering actual knowledge of local markets and high tech growing, by making a wide range of varieties available, but also by using our network and connecting different parties. We strongly believe in cooperation with partners throughout the chain, that is one of the pillars within our company. In addition, we like to share our knowledge and network in order to jointly construct professional production locations around the world.’


Sustainable cultivation systems
Jan-Willem Cirkel assisted many investors in the past few years in getting connected to horticulture. ‘We helped among others companies from Russia, China, Uzbekistan, Kazachstan and the Middle East. We’ve got crop and marketing specialists all over the world. They can advise companies about market opportunities and production possibilities. Next to that we are well introduced to all the renowned suppliers of high tech greenhouses and production systems. In a challenging climate for instance, the production of lettuce or tomatoes can be successful in a semi-closed greenhouse. We ourselves offer a wide range of vegetable crop varieties which are suitable for different production methods.’


Hydroponics, cultivation on water, is one of the growing methods which Rijk Zwaan wants to bring to the attention of investors. Hydroponics can be implemented under various circumstances and climates. ‘Cultivation on water is an efficient, responsible way of producing leafy vegetables without (or hardly) using pesticides. This enables the safe production of food crops all over the world. This is why we stimulate the use of this kind of sustainable cultivation systems,’ says Cirkel, ‘and we develop high-end varieties which are tuned to be cultivated on hydroponics.’ By informing investors about promising developments like this, Rijk Zwaan hopes they are more able to make the right investment decisions. ‘It’s in their own interest, the interest of the horticultural sector and the interest of consumers all over the world that their money is spent in the best possible way.’

 

Rijk Zwaan therefore strongly appeals to companies in the professional horticultural sector to help the further growth of newcomers in horticulture and to get engaged in a healthy future. ‘By sharing knowledge we can improve and keep innovating together. As a collective sector we possess the necessary knowledge and experience to help these investors to set up a successful company. This not only benefits the horticultural sector, but also, and more importantly, the end user.’

 

Other examples of investing in horticulture

Apart from the investments in which Rijk Zwaan played a supporting role, there are several other examples of investing in professional horticulture. Like Stoffels Tomaten, one of Belgium's biggest independent producers and traders of tomatoes. The company grows, packages and trades all types of specialty tomatoes. Stoffels Tomaten currently has more than 200 employees, together generating a turnover of 30 million euro with sales in 15, mainly European, countries. In order to realize further international growth and professionalization, the company looked into various options in the past years. The company was interested to find a partner for a long-term commitment. A partner who could make the investments possible as well had the necessary M&A knowledge Stoffels needed to become a player in the process of European consolidation. The company decided to opt for a partnership with two Antwerp investment companies. Invale teamed up with BNP Paribas Fortis Private Equity. A year ago they jointly became a minority shareholder in the company. (See also https://www.freshplaza.com/article/2187872/belgian-tomato-producer-stoffels-to-expand-with-private-equity-funding/).

Then there is also the example of Van Herk Investments from Rotterdam. The investor in real estate and life sciences is currently moving into the agricultural sector. Last year it was announced that Van Herk will participate in Brightlands Agrifood Ventures, followed by a majority interest in Ceradis. Ceradis is a spin-off of Wageningen University & Research, which develops and produces environmentally friendly crop protection products for bell peppers and tomatoes in greenhouse horticulture.

 

Other investment funds also took a significant interest in technical supplier PB Techniek, greenhouse roof system manufacturer BOAL Group and Codema, supplier of custom-made horticulture solutions. Koen Brabander, owner of PB Techniek, indicated earlier that he expects more investors to approach horticultural companies. ‘Greenhouse horticulture is controlled by a small number of relatively small companies, while there's a lot of room for further growth’, he told Hortidaily.

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