Value-added Potato Product Passion
Always in High Fashion at Agrarfrost

Distributed in microwaveable steaming pouches, this 300-gram Prinzess Kartöffelchen pack of buttered baby potatoes is made with spuds farmed according to high standards implemented and strictly enforced by Agrarfrost.

Agrarfrost’s Knusper Safari value-added product, a big hit with children, features animal-shaped potato treats.

Potato harvests come and go. Most, fortunately, are ample to meet demand. Some are abundant in yield, and occasionally others are short. When it comes to potato product innovation, there is never a shortage of ideas and creativity among the folks at Agrarfrost GmbH & Co. KG.

Ever inspired by the motivating mantra “Potatoes, Love, Passion,” the Wildeshausen/Aldrup, Germany-headquartered company has been in the business of transferring tubers into value-added convenience products for more than 40 years. And since 2006, following the divestiture of fish and delicatessen operations, it has been focusing exclusively on spuds.

Not surprisingly, a steady stream of new retail items has made a splash, along with foodservice products in the QSR segment, during the past few years. In 2008, the parade of innovations seen at supermarkets and grocery stores has ranged from Prinzess Kartöffelchen (precooked buttered baby potatoes) in 300-gram microwaveable steaming pouches, to Knusper Safari animal-shaped potato treats in 450-gram bags for kids, to like-size packages of grill-friendly Chili Rösti, and Knusper Blüten “Flower Power” Potato-Vegetable Rösti for children and adults alike.

With a new generation of leadership now at the helm of Agrarfrost, Quick Frozen Foods International magazine recently paid a visit to company headquarters to get a first-hand account of current activities and learn about the firm’s strategy for future expansion. John M. Saulnier, chief editor and publisher, put a number of questions to Managing Director MANFRED WULF. Excerpts from the interview follow.

JOHN SAULNIER: Agrarfrost has a long and rich history as a leading supplier of frozen potato products to the German market. How did the company begin, and what is the vision that has successfully driven it for more than four decades?

MANFRED WULF: Agrarfrost was founded in 1967 by a farmer, Reinhold Stöver. Starting off as a producer of frozen french fries, the company has grown to become one of Europe’s leading all-around suppliers of value-added potato products, offering a wide assortment of deep-frozen fare to the retail trade, the hotel and catering sector, and the fast food industry.

Alongside the booming potato business, Reinhold Stöver also built up the Stöver Food Service operation to serve the out-of-home segment with a full convenience product range including everything from fish and meat to salads and desserts. In 2006 this unit was sold to REWE-Grossverbraucher-Service GmbH.

There were good reasons for this strategic decision. By concentrating on the core competency of potato production and marketing, the company is guaranteed healthy growth and positive economic development. Our tradition is closely rooted in nature, which accounts for the concentration of our own original business field. Since the beginning over 40 years ago, we have always maintained and consistently developed the concept of sustainability in its original form. It was, therefore, only logical that when the new generation took over in 2006, the principle of sustainability was still given the utmost priority.

Agrarfrost Managing Director Manfred Wulf is enthusiastic about the future.

JOHN SAULNIER: Please follow up on the subject of sustainability by discussing Agrarfrost’s commitment to environmental protection. Furthermore, what is the company’s role in controlling energy consumption and reducing its carbon footprint?

MANFRED WULF: Climate change is marching on, and with it global warming. This is why it is absolutely essential that CO2 emissions be reduced. One of many solutions under discussion is bio fuel, made from renewable raw materials. As a result, however, important basic foodstuffs such as wheat are being “burned up” in car engines and are consequently no longer available for human consumption. A further impact on the world’s ecological and economic equilibrium is coming from Asia, where the demand for high quality foods is growing faster and faster.

Experts all agree that these two factors combined are sufficient to shrink supply more and more, leading to an explosion in food prices. The impending crisis is a sign of a serious structural change, the effects of which cannot yet be foreseen. It is absolutely essential that a process of rethinking is set into motion. The food industry, commercial and political sectors are equally called upon to offer consumers quality and security while, at the same time, focusing their actions on the sustainable treatment of our environment and resources. Agrarfrost is one of the first companies to do this, giving a clear signal to the potato industry. With our “Agenda Sustainability” program, the biggest German potato producer has pioneered an effort aimed at triggering dynamic economic development that systematically promotes sustainable production.

JOHN SAULNIER: Your company is especially strong in the foodservice sector, and ranks as Germany’s leading supplier to the quick service restaurant segment. How has this business evolved, and what are future prospects for continued brisk and profitable business?

MANFRED WULF: My father-in-law, Reinhold Stöver, started his business in the foodservice sector. After setting up the Stöver Frische Team and developing it into Germany’s leading multi-temperature distributor to the foodservice sector, it remained our core business for about forty years. All the while, the Agrarfrost retail brand was strengthened.

After the successful merger of Stöver Food Service with REWE-Grossverbraucher-Service GmbH, we are focusing on this sector with our Agrarfrost brand. We are entering this segment in Germany with our famous brand name in connection with our competence as category leader in frozen potatoes. There is no better key to success than this.

JOHN SAULNIER: What did Agrarfrost’s gross sales amount to in 2007, and what is the target for 2008 and beyond?

Agrarfrost’s farmers work the land in a sustainable way, making sure that productive agricultural techniques are always employed in an environmentally-friendly manner.

MANFRED WULF: We had a successful year in 2007, generating approximately 200 million euros in turnover. For 2008 we are targeting an increase of five percent at least. Our general objective is to grow every year!
The main measuring unit is tonnage due to the high volatility of raw material prices. In this respect, we are increasing volumes in double digits each and every year.

JOHN SAULNIER: Retail is also a sector in which the company projects a high profile – both in German-speaking countries with the well known Agrarfrost brand name, and further afield under the brand and private labels. What percentage of your business is rung up at retail stores?

MANFRED WULF: The retail sector is of big importance to our business. It stands for roughly 50% of volume share.

The importance is even bigger than one can read in the shares, because we expect high potential for growth. With our proprietary Agrarfrost brand, we intend to be the innovation leader in promising segments and to occupy these fields with consumer-focused marketing activities. This should strengthen our brand firstly, and also enlarge the private label business in the second step.

JOHN SAULNIER: How about industrial accounts? Kindly elaborate on prospects in this segment of the business.

MANFRED WULF: Industrial clients require flexible and individual solutions. Utmost food safety, experience and expertise are key factors for sustainable cooperation with our partners in the food industry. For more than 20 years now, that’s what Agrarfrost has been standing for. If someone in Europe is thinking about a provider for processed potatoes, we’re likely the first choice.

Finished potato products at their best are represented in Agrarfrost’s assortment, which range from french fries and croquettes to to steak frites and much more.

The company’s extensive retail line of frozen potato products is typically distributed in 450- and 750-gram bags, as well as in boxes containing various weights.

JOHN SAULNIER: What about the export scene, both overseas and throughout Europe? I know that Agrarfrost has had noteworthy success in Japan and other markets. How has this been achieved?

MANFRED WULF: Our strategic objective for the future is to generate strong international growth with our long-term fast food partner, as well as intensify the presence of the Agrarfrost brand within the worldwide foodservice sector. We already have fundamental market shares in a number of European nations outside of Germany, as well as in overseas countries. Emerging markets in East Asia, the Indian subcontinent and Africa are on our expansion list.

Agrarfrost is providing a well balanced mixture of experience, expertise, flexibility and innovative power. This is what has convinced our customers around the globe to select us as a partner and to continue doing business with us.

JOHN SAULNIER: What has been the impact of the depreciated US dollar and strong euro on export sales outside of the Euro Zone? How is your sales team coping with this situation?

MANFRED WULF: Surprisingly, there has not been too much impact. We started reducing our sales activities in dollar markets at the beginning of the depreciation. But we couldn’t keep it up, as we want to maintain our market position. Financial strength helps a lot when facing up to such situations. We can withstand lower margins for strategic reasons, when necessary.

On the other hand, we are present in so many areas that it is relatively easy to compensate for lower returns in some markets by switching over and boosting sales in more profitable locations.

Our export sales have grown by 50% since 2003. Concentration on expanding sales internationally will by far be our main objective in the coming decade.

JOHN SAULNIER: On the production front, what is being done to maintain supplies of raw materials at a time when farmers have perhaps more attractive crop options. Many are increasingly tempted to cultivate non-potato staples such as grains, and to plant crops that will be used to produce bio fuels.

MANFRED WULF: Agrarfrost has some 7,000 hectares of farmland and approximately 400 farmers under contract, thus guaranteeing the potato harvest. The farms are all located very close our two production sites in Aldrup and Oschersleben, where some 500,000 tons of raw produce are turned into frozen and refrigerated potato specialties every year.

This means that Agrarfrost has complete control of potato production. Our raw materials are assured, and we are virtually independent of external suppliers. This gives our customers clear advantages, since our independence and self-sufficient structures guarantee capacities, as well as ensure a consistently excellent level of product quality and availability.

Over the years we have built up and enhanced cooperation in close partnership with our network of farmers. The result is not only cultivation across a wide expanse of high quality soils, but also cultivation of our own seed potatoes. We have 30 agricultural engineers on the ground, actively controlling every aspect of cultivation and harvest.

Country Steak Frites, Toscana-style, deliver a decidedly ethnically-accented flavor for consumers to savor.

JOHN SAULNIER: To what extent has modernization of factory machinery and systems enhanced efficiencies, and thus boosted output and competitiveness?

MANFRED WULF: In all areas of our production process, we are striving for permanent optimization. To do this, every year we invest several million euros in upgrading and expanding our production facilities. Currently we are modernizing our potato specialty production plant, and building one of the most modern cooling production systems in Europe with a freezing capacity of 10,500 KW.

JOHN SAULNIER: How about new product development? What is in the pipeline, and how does your R&D team come up with creative new offerings time after time?

MANFRED WULF: We fill up our new product pipeline continuously, launching three to five products each year on average. In doing this, we take into account the demand for menu change from consumers.
The assurance for continuous development of innovative product lies in steady input and a diversity of ideas from experts across different departments within our organization. At the end of day, a sense of vision and keen awareness of consumer needs combine to refill the new product pipeline with innovative, on-target products.

JOHN SAULNIER: Please address the issue of food safety a bit more by telling us what is being done by Agrarfrost to assure that only wholesome, nutritious and tasty products enter the marketplace.

MANFRED WULF: The processing plants of Agrarfrost are on a high standard in Europe as to technology, economy and quality. This is permanently approved by both internal and external audits.
In addition, we welcome and successfully pass muster on a considerable number of national authority audits – such as those performed by veterinary and government safety organizations, as well as audits from our domestic customers and those elsewhere in Europe.

JOHN SAULNIER: 2008 has been designated as the “International Year of the Potato” by the United Nations. At a time when the cost of rice has tripled, and pasta prices have spiked, potato products seem to be a relative bargain. Spuds require less water to grow than rice. Furthermore, tubers are rich in vitamin C and have the highest protein content of any root crop. Will value-added potato products, then, become a greater component of diets in successfully developing countries such as China, India and South Africa? What is being done to better serve such emerging markets?

MANFRED WULF: Surely potato products will be playing a more and more important part in consumers’ diets in emerging markets. However, we do not think that potato specialties such as croquettes or hash browns will see big volumes there any time soon. The story is altogether different with fries. The expansion of QSRs, and the clear positioning of fries as a core item on their menus, is opening and building overseas markets for us. This creates demand in both foodservice and retail segments.
JOHN SAULNIER: How about the organic sector? Is Agrarfrost active in it, and what are prospects for future growth?

MANFRED WULF: Up until now, the organic sector has been of minor importance in our activities. Currently some competitors are trying to establish organic products in niches, but the degree of their success does not induce us to follow the example.

We believe that sustainability will continue to be the mega trend of coming years. By placing sustainability in the core of our brand personality and occupying this field as a pioneer, we feel confident about having a very good position in the future and participating in growth segments.

JOHN SAULNIER: A company can never be prosperous without good people both at the helm and within the ranks. Agrarfrost’s leadership is fortunate to have a high number of loyal employees who have dedicated many years to its success. How do you retain this valuable and talented personnel pool?

The fat content of these healthy-eating Knusper Frites from Agrarfrost does not exceed six percent.

MANFRED WULF: Loyalty is a result of many factors. First, when seeking new employees we strive to find local people who are at home regionally. Sustainability of our workforce, like sustainability of the environment, is achieved by understanding the needs of people and their surroundings, and working in unison to fulfill them.

The doors of management here are always open. Our employees profit from an optimistic atmosphere, as well as from established relations and trust with management.

Human resources development ensures that employees cultivate and realize their potential internally. Last but not least, our employees see and appreciate the future prospects of our company. They want to continue working for a winning team and achieve even greater success.

JOHN SAULNIER: Now for the last, but not least, question. Where do you see Agrarfrost’s standing in the marketplace five and ten years down the road?

MANFRED WULF: We will continue to stand tall as a sustainable, quality- and agriculture-focused, independent company that is based on profitable growth and actively operating in all major national and international markets.

Agrarfrost Founder Reinhold Stöver Inherited a Farm And Built Germany's Leading Frozen Potato Business Reinhold Stöver, founder of Agrarfrost. rom farmer to frozen food industrialist, Agrarfrost founder Reinhold Stöver began his successful commercial climb with vision and vigor back in 1967. That was when, at the age of 29, he bought a used french fry cutting machine and took a leap of fate that would turn an inherited family farm into a potato processing powerhouse. Ever optimistic, Mr. Stöver initially hired a five-person crew to start up the potato plant in the rural heartland of northwest Germany at Aldrup (near Bremen). That first year some 600 tons of spuds were turned into fresh pommes frites, all of which were personally delivered to customers by Mr. Stöver. In 1972 the entrepreneur got into the frozen food business in earnest, by then employing 120 people engaged in producing french fries under the newly launched Agrarfrost brand. The following year output increased to eight tons of finished product per hour, and by 1975 the growing company was turning out 100,000,000 portions per annum, with exports going as far afield as Australia. Members of the executive management team are (from left) Karl Scharpekant, Eike R. Stöver, Andreas Jürges, Franz Uhlhorn, Wolfgang Jakuszeit and Manfred Wulf. In short order, Agrarfrost emerged as the nation’s No. 1 producer of frozen french fries, a position it holds to this day with a commanding domestic market share exceeding 50%. Total output of finished products is currently in the range of 250,000 tons produced at two factories employing more than 500 people. Raw materials are sourced from over 400 contract farmers in Germany. While officially retiring in 2006, Mr. Stöver nonetheless continues to consult with the company, and family members run the firm on a daily basis. Son Eike R. Stöver is in charge of production and procurement, while son-in-law Manfred Wulf serves as managing director.