Rabobank and Frenchfries

Monday, May 22, 2006

Hello from the Netherlands! 

Today we got on the bus to Utrecht.  After being stuck in traffic a la
Holland and being led by Hamish to the wrong building, finally we
arrived at Rabobank for two pretty exciting lectures. 

First, they talked to us about consumer trends in Europe.  We learned how the
retailers and discounters are doing business in Europe.  We learned
that consolidation of food retail is rising.  This means that more and
more products are condensing into fewer products.  We learned that a
large part of supplier sales are channeled through a few retailers so
large organizations are taking over and retailing food through them. 
The term concentration of power emerges through this.  Concentration of
power is grouping merchandise into a few large corporations.  From
this, discounters have risen in popularity.  Discounters are like
generic items.  Discounters account for about 100 billion euros in
sales in Europe.  Discounters offer consumers clarity, simplicity, and
low prices.  Private labels are also on the rise as well.  Private
labels are usually local producers putting their own name on a product
and selling them regionally.  In The Netherlands, discounters account
for around 50% of private labels. 

Then, Van-Dirk Mulder gave a presentation on avian flu.  He discussed how the
threat of an avian flu outbreak depressed the market on poultry, the
oversupply of poultry in EU countries, as well as import/export
regulations on the poultry market.  Mr. Mulder also gave us insight
into the spread of bird flu through wild bird migration paths and
discussed how it might spread into the US.  At the same time, he
balanced the challenges of the threat with the fact that media
influence has, in many cases, overstated the risks.  He stressed
that short-term depression in the poultry market has already seen
improvement, especially in the Asian markets that now export cooked
chicken meat.  In conclusion, he told us strong communication, an early
alert system, and close government and industry understanding was
crucial to controlling this and future outbreaks.

Mr. Mulder even took the time to let us interview him at the end, which will definitely help us with our final project.

After Rabobank, we headed to McCain Corp. one of the main suppliers of fries
to McDonald’s.  In fact, more than 1 in 3 McDonald’s fries comes from
McCain’s.  This visit was very interesting.  We learned that McCain
produces 300 million tons of potatoes every year.  Half of that comes
from Europe and Russia.  Potatoes grow so well in this region of the
world because it is ideal weather (not too hot and very moist).  The
average farm size in this region is between 150-300 acres.  After we
learned a little about the company’s background and what they do today,
we were taken around the production plant to see the whole process. 
The first step of the process after receiving is skinning the
potatoes.  This is done by dumping the potatoes into a huge vat and
turning up the heat and pressure.  After about 15 seconds, the skin is
blown off.  The next step is cleaning the potatoes.  Then the potatoes
travel to a machine that shoots them at 45 mph into a series of blades
that cut them into the shape of french fries.  From here the fries are
greased up, heated, then cooled and packed for shipping to McDonald’s.
From unloading to packing, the whole process takes around an hour. 
Imagine how hungry we were to see this huge river of fragrant,
tantalizing, perfectly shaped fries moving slowly past us.  Luckily, we
got to try some fries at the plant, and they tasted just like
McDonald’s fries!  Those will definitely be the freshest darn “chips”
we’ll ever have.

We thought we couldn’t top that, but hold your horses!  A few minutes down
the road, we hopped off for a presentation from NakArgo, a food safety
inspections and certifications company in the Netherlands.  They talked
to us about how they carry out inspections of farms and farm groups in
the EU and internationally (Asia, Africa in order to ensure that farms,
especially those in Europe are meeting Eurepgap regulations.)  They are
an independent inspections group that act as auditors for 80% of the
farmers in the Netherlands.  This kind of assurance service was a new
concept to many of us, but extremely interesting considering how many
parallels this profession has with the accounting audit profession. 
Afterwards, Hans Roefs, an alumnus of UIUC, actually invited us over to
his house on the water for wine and beers.  We followed his (awesome!)
car up to the beach area, saw about 14 huge rainbows, and walked across
the pier to his house.  It was decorated with the utmost taste and
rather immaculate until we arrived.  Hans and his wife feted us with
red wine and at least two kegs of great tasting beers, Gouda cheese and
bowls of cashews.  We took the chance to take as many pictures of the
water from the deck and had an amazing time despite intermittent spurts
of rain.

After we said goodbye to the Roefs, we had a long bus ride to our hotel and settled back at the hotel bar:and we are going to leave you there.

Love from the Netherlands,

Ryan, Jajah, and (in spirit!) Paul

Posted by IBIP Administrator