Mercabarna weathering the financial storm

We all know the economic downturn is hitting sectors like construction and property hard and having a knock-on effect on other industries such as automobiles and restaurants. Other sectors are suffering the crisis, too, but are holding out better. This is the case of the food sector and, more specifically, fresh produce distribution. In this framework, Mercabarna has become one of the best indicators of sector health. Although 2010 figures showed moderate falls in marketing and the market’s businesses are struggling, Mercabarna and its 700 companies have continued to demonstrate their dynamic spirit.

Antonio Jiménez is a manager at Frutas Tony, a Mercabarna-based fruit and vegetable distribution firm that supplies around 80 supermarkets and its own stores. Despite the downturn, the company closed 2010 on a positive note. “Our sector is keeping its head above water for now. I think we are holding up because consumers consider fruit and vegetables to be a necessary part of a healthy diet,” Mr Jiménez said.
Of course if customers have to cut goods from their shopping lists, the last things to go will be fruit, vegetables, meat and fish. But even so, the general slump in consumption impacted the fresh produce sector last year. Josep Lluís Gil, who owns a number of stands in different municipal markets and who buys from the Mercabarna Central Fish Market every day, revealed, “Our customers are spending less. They used to spend 30 euro on a paella, whereas now they spend 10.” He added that customers “come in with very fixed ideas in mind and it is extremely hard to tempt them with other products”.
This situation translated into a moderate fall in overall marketing volumes at Mercabarna in 2010. Sales at the Central Fruit and Vegetable Market dropped 7.5%, while at the Central Fish Market turnover was down 3%. Conversely, activity at the Slaughterhouse held steady, where the same number of tonnes of meat were sold as in 2009. This is very good news, particularly considering, as José Cánovas, manager of Carns Catalana-Pallejà, a meat business that specialises in beef and lamb products, pointed out, “We have to compete with other, cheaper types of meat which have taken off among consumers because of the crisis, particularly chicken”.
One of the hardest-hit Mercabarna sectors is the flower sector, because flowers aren’t considered essential goods.

More local produce
One effect of the current financial situation that was seen clearly in 2010 was the reduction in the volume of imports. The main reason was cost, as imports are generally more expensive because of the logistics costs involved. The wholesale business Fruits Ràfols imported less fruit to save money. “We tried to find a way to optimise transport costs so we imported less produce by plane and decided to market more local goods,” admitted manager Eduard Ràfols. Although Mercabarna continues to be one of the main entry points of produce from around the world, before the crisis the volume of imported fruit and vegetables was 38.6%, whereas in 2010 the figure fell by 4%. The change was clearer at the Central Fish Market, where imported produce accounted for half the number of sales in 2007 but fell by 7.5% in 2010.

Imagination comes to the fore
In Chinese the word ‘crisis’ also means ‘opportunity’. And that is the attitude many business operators are taking: that the downturn represents an opportunity to begin with new projects and to further promote the business lines they already have. Smart companies are looking at different ways to keep afloat beyond cutting sales margins and adjusting prices in these difficult times. One example is the fish marketing firm Consignaciones Aixa e hijos, which has turned to exporting as a way of maintaining sales volumes. Manager Jaume Pijoan informs, “We are working more on the export lines we already had and expanding our field of action to other countries in the Mediterranean region.” The restaurant service business Guzmán Gastronomía decided to open up to a new business segment and add group customers (hospitals, prisons, retirement homes, etc.) to its regular customer portfolio of restaurants and luxury hotels. General manager Joaquim Arasanz spoke about this at one of the conferences in the Stimulus Plan for the Foodservice Cluster that was held at Mercabarna recently.
Other companies have chosen to include new products in their regular offer. This is the case of Mercabarna-flor company Flors Catalunya. Manager Toni Parra says, “We began to sell plants this year. It has let me offer a home delivery service to more customers because I am getting bigger orders that make it worthwhile to offer the service.” Having an enterprising spirit in a difficult period is not easy and some people even worry that expanding facilities, either to gain more customers or provide added product value, is risky under the current circumstances. But there are companies in Mercabarna that did decide to expand in 2010. One example is Frigoríficos Ferrer, a fresh and frozen fish distribution firm for the foodservice channel, which set up shop in one of the market’s cold rooms. Other companies that already worked out of the market have reserved areas in Multiservicio III, Mercabarna’s big new warehouse set to open on the grounds formerly occupied by the Central Flower Market and which will house new businesses.

Service companies
Mercabarna is home to a great variety of service companies for businesses and users, whose operations are closely linked to how well Mercabarna’s other companies are doing. Onsite businesses such as the optician’s, restaurants, the petrol station and industrial vehicle sales firms say they saw sales fall in 2010 but are all working to a greater or lesser extent on finding ways to ride out the storm, providing special offers and either cutting prices or keeping them steady. “For the first time in 17 years we opened in August,” recalls Francisco Villalba, the head of the newspaper stand, “which made up for the yearly fall in sales, which were very low. People put more thought into whether to buy something, even if it’s just a packet of sunflower seeds!” Tobacconist’s shop owner Núria Serena recognises that things in her sector are much worse outside the market. She believes Mercabarna continues to be “a good prop” because “there is lot of money still circulating here”.