Growing great fruit may not be enough

A paper on the performance of South Africa’s fresh fruit exports has been released by Henley Business School Africa in collaboration with the Gordon Institute of Business Science and Stellenbosch University. It emphasises that maintaining strong exporter-importer relationships could be critical to keep the industry on top

A unique three-way research collaboration between Henley Business School Africa, the University of Pretoria’s Gordon Institute of Business Science (GIBS) and Stellenbosch University recently published new research that cautioned South Africa’s fresh fruit farming industry is facing a perfect storm of challenges that may require a more strategic relationship-driven approach to secure its economic viability.

The industry, which is the biggest contributor to the agriculture export sector by value, has achieved remarkable success. The largest exporter of fresh fruit in the Southern Hemisphere, the industry generates more than US$3 billion (about R55 billion) in foreign exchange annually and has created over 400 000 employment opportunities throughout the value chain. But rising competition and logistical challenges could threaten the industry’s sustainability, the paper argues.

Decaying infrastructure, bottlenecks at ports, rising shipping costs, electricity and water crises, and the lingering effects of the COVID-19 pandemic lockdowns are among the key challenges outlined in the white paper. According to the lead author of the research, Prof Daniel Petzer, head of research at Henley Business School, these obstacles not only hinder logistical efficiencies but also jeopardise South Africa’s global competitiveness.

“While South Africa has a wide export reach (Russia and the EU are our biggest buyers of fresh fruit) and our prices are competitive, pressure from fellow Southern Hemisphere producers, namely Chile and Peru, which share the same winter window, are threatening to grab market share. Should our production slip, or our relationships with key buyers fray, these competitors will be ready to step into the gap,” he says.