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07 november 2016

De Ruiter conquers Kenya

KENYA – De Ruiter Innovations B.V. is a gentrificator / developer of roses and has amply earned its spurs. Due to its 100 years of existence, The company received the right to call carry the 'Koninklijk Wapen Hofleverancier' (Royal Weapon of supplier to the Royal crown) last year. De Ruiter was one of the first enterprises that foresaw Kenya’s opportunities as producer market for roses. Now, in 2016, this is still paying off. Oscar Peters, director, talks about the past, present and future of De Ruiter in Kenya.

Joep Derksen

With a market share of around 18%, De Ruiter belongs to the top 3 of largest developers in Kenya and the rest of Africa. At this continent, De Ruiter is already active in seven countries. Besides that, the company also introduced a number of varieties in the hard colours; especially in the red tints. Peters thoughts go back to the beginning of the 1990s, when De Ruiter became active in Kenya: 'Our company wanted to become more active on the international market and we focussed on upcoming markets. At the time, the flower industry in Colombia existed for 15 years already, but we set up our activities in amongst others Kenya. During the initial years, De Ruiter only worked with agencies and from their network the cooperation with Oserian Development company arose. Oserian already occupied an important position within Africa'.

Peters: 'As a gentrificator you are constantly developing the breed and pass it under license over to a grower. In the early years business was booming, because there were mainly four breeders active in Africa. But over the course of years more and more suppliers entered the market and the market share of the four largest gentrificators shrunk to below 50%.'

Since 2004 more gentrification companies have entered the market and competition is fierce. Newbies penetrated the market with aggressive sales tactics. However, since a few years ago, the market seems to become saturated with regard to the varieties. Peters: 'The desire to experiment with new breeds has gone down and all parties are searching for more security. Because of this, companies prefer to do business with a maximum of three to four gentrificators. And these are the steady companies, with an extensive portfolio in breeds.' Frankly, Peters thinks it is a shame that there is less room for renewal of the assortment. 'Each market benefits when it is innovative. However, it is understandable that the market is more reluctant and conservative. Mishaps cannot be afforded, since all margins are under strain.'

De Ruiter has creatively focused on innovative marketing strategies and following trends. Peters: 'We are not only here to cash royalties, but we brainstorm with the market and the clients themselves. We have a solid long-term policy, based on the building up of relations.' About ten years ago, De Ruiter entirely took over the agency from Oserian. 'It was a deliberate choice driven by the market situation.'

The sales of roses from Africa has also changed dramatically. Up to twelve years ago, the larger part was sold through various (import) auctions. It was a highly productive variety of roses that were developed and bred, especially for this type of trade. But since a few years, change has come. Nowadays a lot of production takes place in higher altitude growing areas, amongst them Nakuru and the Mount Kenya region. With a cooler climate, the flowers have a longer production cycle. This causes the rise of other types of breeds. Peters: 'For this purpose Africa created its own market for large-flowered T-hybrids; up till a few years ago these roses were not yet sold to this continent.'

The gentrification programme of De Ruiter is constantly subjected to change. Since 2007, the enterprise occupies itself consciously with the selection process of breeds and the interaction between the gentrification, selecting as well as the players in the market itself. De Ruiter has developed itself from supply driven gentrification to demand-focused gentrification. The latest rose breeds are developed based on information from growers and their clients. It can be said, that this has been a true revolution. Peters: 'It was a subtle change to let the market watch and have influence from an early stage. Thanks to the growers, their clients and other players in the market, such as unpackers, it is possible to realise an improved choice of selection. And at the same time make sure that the speed in the selection process goes up.'

How does Peters look at the future of De Ruiters' presence in Kenya? 'We are aware that it is easier to get to the top, rather than to stay on top. Economies of scale will be ever increasing in the market. We will focus on larger deals. With its own extensive assortment, De Ruiter tries to link her sorting policy to an optimal market value of the breed. By limiting the issuance to a selected group of growers, who ensure quality, we will realise a better brand building and be able to steer supply and demand and with it the shaping of prices. De Ruiter's slogan “Creating Flower Business”stands for brainstorming with all players interactively, within a chain. Because of this, the company continues to play a role in creating added value for all parties within the flower industry.'