7% GROWTH IN 2018

Spain 2020 | AGRICULTURE | VIP INTERVIEW

TBY talks to Álvaro Muñoz, CEO of AM FRESH Group, on expanding into Asia, and trends in the sector.

How has AM FRESH evolved since the 1980s?

AM FRESH Group is a global company present in the main markets of the world, and is the result of a commitment to innovation and passion that has been transmitted through three generations. Today, AM FRESH is part of the AMC Group holding company, founded in 1931, under the command of my grandfather and, later, my father. A vision of continuous improvement, transformation of the sector and service to customers and consumers has always prevailed. Now, more than 5,700 employees give life to this global company, with end-to-end operations. In AM FRESH we live an accelerated growth thanks to the geographical expansion,expansion of varieties of fruits and vegetables, incorporation into new categories, such as plant-based foods, and long-term contracts with the large distribution chains at a global level. Our expansion into Asia is also a very important pillar for our future growth.

Your client portfolio is impressive, including El Corte Inglés, Walmart and Tesco. What differentiates AM FRESH and makes it a pioneer in the industry?

One of our main points of differentiation is the ability to offer end-to-end operations, which allows us to offer highly competitive advantages in product quality, service quality and costs. With seven distributed operating centers globally, we have a significant capacity to execute distribution with highly efficient systems. This ability to offer end-to-end operations also allows for chains of distribution to be part of the innovation pipeline, so that the selection of varieties are in line with their strategies. These are long-term programs that we are working on with important global chains to establish programs similar to Walmart. Another aspect that sets us apart from the competition is our global presence, with coverage in the northern and southern hemispheres, that allows us to offer continuity in the supply chain, and 52 weeks of guaranteed products. On the other hand, our biotechnology programs, that are applied to varietal development, allow us to offer a long-term innovation platform that guarantees differentiation from retailers with exclusive patented varieties. AM FRESH is a highly innovative company. Innovation, science, and technology are the pillars on which we support our growth, anticipating the needs of retailers and consumers. We are not a traditional company, with predefined roles or matrix structures. We have the best talents and give opportunities and freedom to contribute to ideas, projects and proposals, both on a day to day basis as in the way of defining the company and the sector in the long term. It is precisely all these messages that we want to transmit to our clients through our new corporate identity. We present this new image so that our clients recognize us as a group and live our proposal of having a differentiated offer that is always close to their needs first-hand.

What is the role of R&D and the importance of consumer habits for AM FRESH?

For AM FRESH, consumer knowledge is vital. The consumption boom of fresh, natural and healthy food is the result of trends and demands of consumers, what we call the 3Cs: trust, so guarantees of quality and transparency are required, convenience, as consumers demand products that are easy to eat and carry, without neglecting the sensory and nutritional value, and awareness, as consumers want to give new meaning to their food, and consume products that respect the environment. Our innovation projects focus on developing products and complete offers (product, brand, packaging, history) that meet your needs. Proof of this is the creation of FRESCO (its acronym in English: Fresh goods, Research and Engagement for Strategic Consumer Opportunity), an initiative without precedent in the fresh food sector carried out by AM FRESH that applies techniques of the consumer sector. Through quantitative and qualitative techniques, as well as Big Data analysis and neuroscience studies, we work hand in hand with the retailers with whom we have strategic alliances for the continuous development of their categories to establish a new era for the industry. The initiative is led by an international team with decades of experience in the consumer sector and market research and has been implemented in its first phase, in Spain, UK, Germany, and the US.

What specific markets are you looking to expand into?

In the late eighties, AM FRESH was a Spanish company, with local production, that exported to certain countries in Europe. Now we are already globalized: we sell in 60 countries around the world and produce in 26, a direct consequence of understanding our clients and consumers well, optimizing the processes of the supply chain. Today, one of our strategic levers is in geographic expansion throughout Asia, as well as in the consolidation of our operations in America. Today you can say that we have already entered the Asian market, which undoubtedly represents the biggest growth opportunities for our company, since it is growing significantly not only in terms of population, but also in terms of Fresh produce consumption per capita. Also in continental Europe and in the United States and Canada we have a great understanding and potential to grow from where we are, since they are becoming attractive destinations for agrotechnological companies and for innovation. This is what the results tell us. The preliminary closure of fiscal year 2018 (September 2017 - August 2018) has meant a growth of 7% (adjusted currency), closing at almost EUR1,000 million, and an EBITDA growth of 20%. For 2019 we hope to maintain a percentage growth similar to last year. In AM FRESH we expect solid growth in the company's core operations including the production and sale of fruit. We anticipate that our platforms of innovation and biotechnology will have accelerated growth as a result of the interest of farmers, supermarkets and consumers in innovative and exciting products. Our future ambition is to reach EUR2 billion in 2025. We anticipate a change of forces in which the highest quality offers with differentiated products and supply guarantees gain ground, and with which the sector will benefit from the continuous demand from consumers of fresh foods that offer better taste attributes, innovation, and nutritional profile.