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Belgium: Colruyt integrates the agricultural value chain

Updated: Oct 3, 2020

Discount Retail Chain Colruyt (owned by family owned Belgium Colruyt Group) is going one step further with its integration into the agricultural chain.

The Belgian soft discount retail chain Colruyt Group wants to buy agricultural land and actively manage it. The crops that are grown on it must be sold in the Colruyt stores as much as possible. It is not the first step that the soft discounter takes to integrate more into the agricultural and horticultural chain. For example, Colruyt bought the sales rights for two new exclusive apple varieties in 2017 and developed them outside of sales organizations. Colruyt has started selling the apple varieties in its stores in direct collaboration with three Belgian growers. A year later, there was a direct collaboration with first nine and later sixteen potato growers. The growers deliver their potatoes directly to Colruyt, in a so-called short chain. The collaboration started with a volume of 6,000 tons of potatoes per year and has now increased to 12,000 tons annually. A little later, the grocer announced a collaboration with various parties in the pig sector for the development of a 100% Belgian organic pork chain.

Acquisition of an organic horticultural company

In the same year, the discount retail chain went one step further. It bought a 25 hectare organic horticultural company when the owners, who were already suppliers to Colruyt, wanted to sell the company. With this purchase, the chain wanted to help ensure local production of organic vegetables, as well as its own supply of them.

Offer locally

“An essential element in all these projects is that it is done in collaboration with Belgian, local farmers. After all, as a Belgian player, we want to offer and anchor our offer as much as possible in Belgium and locally, ”Stefan Goethaert told the Flemish news site

Active on the land market

The desire to buy agricultural land and manage more is the next step. Colruyt wants to more actively manage the land it already owned, which was bought with a view to possible expansion around distribution centers. In addition, the chain wants to become more active on the land market to purchase new land. Colruyt does not want to enter the market in an aggressive manner for this. “We keep our eyes open and if opportunities arise, we will take advantage of them”, Stefan Goethaert tells Vilt.

Diversification and risk spreading in the purchase of agricultural products are indispensable for a retailer

Colruyt is looking for farmers who will grow crops on the land for its stores. In the longer term, the chain want to start thinking together with the farmers concerned about how to grow more sustainably, in the field of, for example, the use of water and crop protection products. The purchase of agricultural land will not be the last step in the supermarket's involvement in the chain. “Diversification and risk spreading in the purchase of agricultural products are indispensable for a retailer, crises such as Covid-19 emphasize this even more,” Goethaert told Vilt.

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