The packer - Grading exclusively free range and organic (Netherlands special part 3 of 4)
Founded in 1876 by the great grandfather of the present managing director, the Van Zetten egg packing and distribution business in Ommeren has played a prominent role in the Netherland's Free Range sector from that day to this. Each generation has been quick to anticipate egg trends. Even when the cage sector was still expanding in most of Europe, the founder's son was quick to anticipate that Dutch consumers would soon have ethical problems with cage eggs, and Van Zetten was one of the first packing stations to look into alternative systems. In 1989 the company was one step ahead again when it introduced the Free Range concept into the Netherlands. Then, in the late 1990s, Van Zetten set up the Netherland's first packing station to grade exclusively Barn, Free Range and Organic eggs – which at the time were produced by just 800 hens.
Today, the company has 70 Free Range farms, all of whom are 100% KAT and IKB accredited. Each farm has on average 24,000 hens, and between them they produce a total of 10 million eggs per week. This includes 260,000 Organic hens on 18 farms. Mr R. van Zetten, MD of the company, estimates that the Organic sector is growing by between 4% and 5% each year. The majority of his Organic farms are new businesses; only around a quarter of them have converted from Free Range to Organic.
Van Zetten also has its own producing farm; this ensures that the company stays completely up to date and experiences first-hand the issues that are being faced by producers.
Automated egg handling system
In 2006 the company invested in an innovative egg handling system which uses the Twinpack Eggs Cargo System with a fully automatic Prinzen de-palletiser. The Twinpack packaging is a three-part assembly consisting of plastic pallets, egg trays and dividers. The durable plastic is easy to clean and has a very long life expectancy. The producer places his eggs in these, ready for collection; the pallets are then transported from the farm to the packing station, where the de-palletiser transfers the eggs from the pallet to the egg-grader belt at a rate of 120,000 eggs per hour. This has eliminated much of the heavy manual work that used to be involved. Van Zetten was the first packing station to install this system, and Mr van Zetten is very pleased with it; over the two years since it was installed, it has proved very reliable and has improved egg handling efficiency tremendously.
Van Zetten's Egg Contracts
There is no such thing as a 'standard' egg contract in the Netherlands; it is up to producers to negotiate their own terms of agreement with a packing station. Sometimes a fixed egg price is agreed upon for the duration of the flock; more often, the price varies each week. However, Van Zetten has recently started to offer an innovative compromise that is finding favour amongst producers. Under this system, the egg price is made up of two elements: 50 per cent is fixed, with the figure agreed at the outset for the life of the flock, and the other 50 per cent fluctuates each week according to the current market price. Mr van Zetten explains: "In the winter a fixed price contract is not good for the producer, and in the summer it is not good for the packing station. This seems to us to be a fairer system."
The Retail Link
The Netherlands is the world's biggest egg exporter. The country has around 32 million laying birds, and less than 40% of their production is required for the home market, so more than 60% can be exported. Germany needs a lot of eggs and imports around 5 billion a year. Between them, the two countries are able to match supply with demand, as their combined production equates to their combined consumption.
Most of the Free Range and Organic eggs from Van Zetten's producers are sold to the German supermarkets. Mr van Zetten explains: "We found it hard to market Free Range eggs in the Netherlands – but we had a lot of success in Germany. German consumers were ahead of the Dutch in beginning to think about how the food they were buying had been produced."
Eggs are collected two or three times a week from more than 90% of van Zetten's producers; the remainder, for whom this is not possible, are equipped with temperature-controlled storage and have their eggs collected once a week. From the time of collection, van Zetten aims to complete the entire grading, packing and distribution process within 48 hours, so that eggs are on the retailers' shelves with 22 days still to run before the expiry date. Forty per cent of eggs are packed in boxes of six, and 60% in boxes of ten. Around 95% of all eggs are branded under the retailers' own labels; Van Zetten does not have its own label.
Seconds, small eggs and any surplus production are sold to the industrial sector. The catering industry is a growing marketplace, currently accounting for some 20 to 25 per cent of Van Zetten's business. UK catering companies import a lot of Van Zetten's small (less than 53g) eggs.
Mr van Zetten believes that the price of a shell egg is not very important to the consumer. "Consumers are interested in three things – they want their eggs to be fresh, tasty and safe. The price does not matter so much," he says. And yet, as in the UK, German retailers are keen to keep prices down. "I haven't dealt with UK retailers – but it's difficult to imagine that they could be much more demanding!" he comments.
"It's an interesting time at present. Retailers must understand that they cannot keep on pushing for the cheapest possible price. As long as they do that, the packing stations will have no money to invest. The number of packing stations in the Netherlands is decreasing; each year we lose one or two. If this trend continues, in ten years' time there will only be a few packing stations left. That would mean that retailers have a choice of only, say, three packing stations that they can deal with, and then it will be a lot harder for them than if they had a choice of six. I think they are beginning to realise this."
Quality Systems
Inspections are a frequent event for Dutch packing stations. KAT auditors visit each of their approved packing station between four and six times a year. The packing station receives no advance warning of the visit, and the auditors usually stay for around three hours to check that printing is being carried out correctly, that all the eggs on the site are from KAT approved producers, and that the number of eggs corresponds exactly to the number recorded on the KAT database. Van Zetten also receives regular visits from IKB and IFS inspectors, and by retailer customers from various countries who have their own quality systems, including the leading Belgian food retail group Delhaize – and Marks & Spencer, who buy industrial egg products from Van Zetten.
Mr van Zetten is well satisfied with the level of regulation that governs the egg industry, both in terms of animal welfare and food hygiene. This ensures that consumer can buy with complete confidence. "Every good Quality System has to begin with stamping eggs on the farm," he says. "The reason why farm printing is so important is that it guarantees the consumer is getting what it says on the box. That is what they are paying for. When an egg has been stamped on the farm, the chances of a mistake being made in the packing station are below zero. For that reason retailers will pay more for eggs that have been stamped on-farm."
He agrees that there was a lot of work involved in bringing in on-farm stamping. "We had a very hard year when we introduced it. But now we have scarcely any problems. Over the last five years, we might have one or two producers who ring up during a week because they have a problem – and the problem is always solved within two or three days." When problems do occur, there are strict procedures that must be followed. Documentation must be completed recording the
