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News

Interview: Manuel Goncalves, Chief Commercial Officer, Sugal Group

21/05/2025 - Madeleine Royère-Koonings
Madeleine Royere interviewed Manuel Gonçalves, Chief Commercial Officer at Sugal Group and WPTC Vice President, exploring his journey to the tomato industry, the company's global presence and sustainability initiatives, and the impact of weather on the current Iberian crop. Manuel also shared his insights on the global market, the importance of balancing production, and key future trends like the green transition and consumer demand for ethical and transparent food sourcing.
Madeleine Royere: Good morning, everybody, and good morning, Manuel. I'm very happy to have you today for a conversation on Sugal and the crop, and a lot of different topics. Starting, I'd like to ask you some information about your background; because I did some digging on LinkedIn for your background, and I found out that you had a very broad experience, that you didn't start with the tomato processing industry, but in a very different sector. Can you first introduce yourself?

Manuel Gonçalves: Of course, first, thank you for having me, and for showing the interest of knowing a bit more on Sugal and indirectly, also about myself.
Indeed! I have been in the tomato industry for 6 years now, but prior to that I have had a different working experience, both as a consultant for different American consulting firms. And I also did some limited in time missions or assignments at the public sector, both in Portugal and with the European Commission in Brussels.
It has been a long and different journey till I got to the tomato industry. But I'm very happy now, and very happy, that I found this industry that I fell in love with from the very beginning.

May I ask you what brought you to the tomato processing industry?

Well, it wasn’t something I could envision many years ago, but I mean, I had a chance to. I don't know if I ever told this to anyone, but I had a chance to meet Joao through a common friend. Joao is CEO and we started discussing. He was looking for people to join the team and we started discussing how that could be done, and how I could eventually help the company. And that's ended up happening when I joined it in 2019. It was done...

In a very natural way.

Very natural way. And I mean, it was not something very, let's say, very and programmed or something that I could imagine happening before.

Thank you. So Sugal has celebrated its 68 years of existence. I think it's been on LinkedIn, right?

Yes, it has been in business for many years, almost 7 decades. This is something that makes all of us very, very proud. The fact that we have this longevity must mean something in the way we do things, and of course everyone somehow carries with it wherever he goes, and whatever someone at Sugal does carries with him, this history behind. The company was established in 1957 in Portugal, in a small town called Azambuja at the core of the tomato production areas here in Portugal and since then, and for 50 years the company remained more or less unaltered in the sense that it was only one plant operating locally. Then, after 2007 the company started expanding, both inorganically, but also organically, to what it has become right now, where we have 5 plants in 3 countries, and a leadership position within the industry.
The only thing that has remained a pattern throughout all those years is that it has been a company pretty much focused on exports since the very beginning. We have been selling our products abroad. Currently, around 90% of what we do in each country, we sell outside of the original country. And it has been the nature of the company since the beginning.

You mentioned that you have 5 plants, 2 in Portugal, one in Spain, 2 in Chile. How do the activities differ from one another, in terms of plant and/or production?

There is a common element. We are always talking about tomato processing, and tomatoes are grown in the fields and are transported to the plants and are transformed into tomato paste or any other tomato products that we do. But indeed, there are lot of differences between the countries.
First, from a human perspective, there are very different cultures, especially if we look at Chile versus Portugal and Spain. Despite the language being the same as in Spain, and very close to Portuguese as well. And a lot of similarities exist. There are, for sure, differences in the way people work, how people interact with each other. So, this is something we really need to take into account when doing business in this in these 3 countries. Secondly, we have climate differences. We are currently facing similar challenges in the different countries, but they are not exactly the same, and the basis from where we come from are not the same. Climate plays a huge role in our business, and in this case it affects differently. Each country.
And in third place, of course, there is a difference in the clients and the markets we serve. We have in Chile, a business that is mostly dedicated to the American, more North American and South American markets as well as the Japanese market. While in Europe, we have a focus, or we are focusing much more on the European market. Of course, we also do some business with the Middle East and Japan. But I would say Europe is the big chunk of what we do. So those differences, of course, lead you to work and manage the business in different ways in each country.

Definitely, and in terms of products, sectors, is it more industrial, food service or retail? How is it split?

So, we currently have business in industrial B2B, tomato paste, in food service coming out of Europe mostly. And we also started in Chile this year. With some food service lines addressing new markets from Chile and we also have a retail business that is based in Portugal and serves mostly the European market. These are the 3 segments we are operating in. Of course, tomato paste and industrial tomato paste represents around 80% of our business. It's definitely our core business. And then the remaining 20% are split between food service and retail.

So your biggest market is industrial, B2B.

Yes, it is.

Good. Let's talk sustainability. I've read a bit about Sugal, so I think I've seen things about cover crops for instance, regenerative agriculture…

Let's take a step back and give you a bit of an overview on our sustainability strategy that we have in place since a couple of years ago, and with the vision until 2030 sustainability strategy based on 4 pillars.
The first one is energy efficiency and carbon neutrality. So how we can transition to a cleaner production process and reduce our C0
2 footprint.
The second pillar is about sustainable food and agriculture where those types of initiatives you just mentioned on cover crops play a big role, and I can come in detail a bit better afterwards.
In third place, we have a pillar dedicated to circular economy, where we want to make sure that we reduce the waste throughout our whole supply chain.
And in fourth place, we have a pillar dedicated to our people and the communities we are in, I mean the communities that we are inserted in.
Now going through each one. We have set very clear goals for each of the areas and at the same time, supported by very clear initiatives and projects. To make sure that we can achieve the targets, we have given ourselves until 2030.
To give you a couple of examples. When it comes to energy efficiency, we want to, by 2030, reduce versus our baseline or the initial baseline, to have a reduction of at least 35% of our carbon emissions. And in terms of renewable energy, we want to make sure that 100% of the electric energy that we use is going to be renewable. We are on the way to that already over 60%. If I'm not mistaken by 2024. So, we are clearly on the road to achieve that. And hopefully, we can do that by 2030.

Do you have photovoltaic panels?

We do have photovoltaic panels in our plants. We also make sure that the electric energy we buy comes from renewable sources. This is happening in Chile, where 100% of our electricity is already renewable. And in Europe we are on the way to that, being it through solar panels, photovoltaic, or also understanding how we can work with the energy providers, so that we can ensure that 100% of our electricity is coming

Are you also planning to change the production lines and to use new machinery that is more energy efficient.

Yes we are currently developing a very strong investment program, especially in Portugal where we are revamping our plants. And we are introducing significant novelties to our process through the through the installation of very recent technology in the market, which is the Artemis equipment from Rossi. We are also putting in place, and to my knowledge, I think it's the first, but at least it's one of the few biomass boilers in the tomato sector, which, of course, will reduce carbon emissions.
And we are doing a couple of other changes to our plans so that we can anticipate the targets we had until 2030. We hope to anticipate those to 2025 or 2026, we still need to check. But hopefully, this will happen, and we are pretty much focused on delivering these investments this year, so that we can effectively have a more sustainable, greener activity. But at the same time, we can also make sure we serve our clients with better quality and in the most efficient way.

Thank you for all those details.

Yes. It's not on the news, of course. But I think we can say that these investments are happening. And for that reason, we believe that 2025 starting in Portugal, But for sure we're going to go to the other plants as well. It will be a much more efficient and sustainable year from an energy perspective due to these investments.

So that's pillar number one.

Correct, then we have in the second pillar sustainable food and agriculture, and we have on this regard several initiatives and several targets I would be focusing in two of them. One is about making sure that we have a sustainable reduction of water consumption on the fields. We have been doing a lot of work in our own fields, but also together with our farmers, to make sure that water consumption in tomato fields is reduced, and we have set a target of at least 15% of reduction per hectare of planted area. And we are doing this by introducing several techniques. We are also using, some say, new technologies and big data to start improving some of our farming activities. I was mentioning the irrigation process. It's drip irrigation, of course, but on top of that we are also automating the process year on year, so that we have better control. And also, with that we can make sure that we don't have any waste of water that might come from, let's say, not human mistake, but from human activity, that it's normal to happen.
The second thing has to do with all the measures that concern soil protection. Soil protection is something that is increasingly important to tomato farming. It’s an intense agricultural activity that, of course, demands a lot from the soils in terms of nutrients and other components. Making sure that every year, we are able to regenerate, be it through a proper rotation or be it through strong and consistent cover crop activities. It's key to make sure not only that we can effectively protect the soils, but also this has a very positive externality for the yields on the tomato and also the capacity or the possibility to reduce the farming costs, because you would be demanding less external factors to be added to the process given that, you'd have a richer and more protected soil.
Third on circular economy. We are mostly concerned here in 2 main areas. First regarding the packaging we are using. We are introducing in the market and with our clients new packaging solutions that can either make sure that you are able to reuse more packaging over time and reduce the waste coming out of those of those elements of the process but also making sure that you have optimized packaging and transport systems that can reduce the number of transports that are used to make our product come, go from our plants to our clients. This is really important, because it actually plays a big role in not only reducing waste but also reducing the CO
2 emissions along the value chain, namely, when it comes to us in Scope 3 of the carbon footprint.
The second element very important within this pillar has to do with how we use water in our plants, and make sure that we can increase the water utilization within our plants and reutilization so that we are able to reduce the need of new water being captured from the dwells throughout the process, as you know, and this is very important. At the end of the process. We are net contributors of water. We are not water consumers. We are net contributors with high quality treated water at the end of the process. But of course, if we can reduce the fresh water that we need to introduce into the process, it is, of course, good for not only the water reservoirs, but for the whole ecosystem.
Lastly, and not least important, we have the pillar on our people, where we have several initiatives on the way. But two, perhaps, are the most relevant, and the ones we have been paying more attention to. The first one has to do with the safety in our plants. We have a very clear goal of achieving 0 accidents by 2030 in our plants. We have been reducing it very consistently over the over the years. We are not there yet, but we are on the right track to achieve it. And this is the first and more important aspect in my view, that we make sure that everyone that gets in to work at Sugal leaves safe and sound back home to their families. This is really important to us.
And the second thing that we have been focusing on is how we can impact positively the communities we are involved in. This, of course, affects two special aspects. The first one has to do in all our social responsibility, policy is pretty much focused on helping and supporting realities that are close to our plans where we can make a real difference. As you know, most of tomato plants are placed in remote places in rural areas that sometimes need an extra support. From that perspective, we focus pretty much our social responsibility policy in local activities, in local realities that we can support. And secondly, we are putting in place a volunteering program within our plants where we can or we want, it's volunteer. Of course, we don't want to make it mandatory. But we make sure that everyone, but at least half of our people every year, can participates in one activity, one volunteering activity that is organized by us, and then can be, of course, impactful and meaningful for the communities close by.

Well, that's a big plan with lots of actions and projects, very impressive. May I ask a bit more about the people aspect. You mentioned earlier that there were cultural differences between the countries, mainly between Chile and Iberia. Do you have a lot of temporary positions? How is the split between the permanent position and the temporary? Is there a lot of turnover or not?

Well, of course we make use of a significant part of seasonal work in in our plants. I mean, it couldn't be otherwise, because we have a seasonal activity, and what we see, of course, is some turnover on those people. Of course, we in some cases make sure that we have some repetition going on because they may play more important roles within our plants in some areas where we would like. And we would need the experience from previous years, it could also be helpful. But of course, there is some turnover. I don't have the exact figures, , it depends a lot on the plant. But I would say that nonetheless, there is a quite high level of repetition year on year, depending on the plant. We also have in some plants something very interesting, which is the fact that we have university students joining our season so normally, they come and work with us for 3, 4, 5 years, depending on how much their university degree takes. So at least we are able to keep some stability also through that population that every year works with us.

Do they work with you during the high season?

During the season, mostly. Regarding the permanent workers, there is some rotation, it has been going down again. We also have a very clear target for turnover. We are not there yet, but we perform well versus the market when it comes to turnover overall speaking.

Moving to the future for Sugal. You've got these very ambitious plans. And in the last 20 years you had a big expansion. What does the future look like? A bigger geographical expansion, or more expansion in terms of products? What's the plan?

Well, I'll try to answer this. First, I think it's important to state that within the tomato industry we serve 70 countries already based on the plants we are working right now. We have hundreds of clients worldwide and working with the major companies, with the medium companies, the small companies we have a strong footprint, a strong commercial footprint today. And of course there is still room to grow. That said, right now, our focus over the years is that we make sure that we seize and take advantage of all the assets, all the leverage that we currently have, to grow. Our focus, of course, is to grow. I would say organically, based on where we are. We believe we have a very balanced production footprint that ensures our clients continuity in the sense that we have 2 hemispheres, 3 locations with 3 different climates. We are really, from a risk perspective, sure that we can supply and ensure the needs of our clients.
And we also believe that we can grow, based on the locations we have currently. At the same time, we have a very wide product portfolio. We can claim or could say that there are only a couple of references that we are not present for the time being. But we believe also that we have the adequate, the right product portfolio to address our client needs and to address the market needs. And now I think that if new opportunities come, that make sense from a risk perspective, synergies and growth perspective. Of course, we will be looking into those as we did every time.
But it is not our strategic focus or focus number one. And we believe we have room to grow and serve our clients the best way possible, based on the locations we currently have.

Thank you. What do you see as the biggest challenges for Sugal in the next few years?

I would probably answer that not only for Sugal, but I think for the industry. I believe there are 2 aspects that play a big role. And actually, both of them were things that we took for granted. And for different reasons, they are not secure anymore. The first one is climate. I think we have experienced over the last 10-15 years significant changes in climate behavior, in the places we are present right now and overall in the world. And this is affecting our industry in a significant way. It is making crops less predictable. Reducing or increasing the normal and average crop duration is affecting and changing the quality of the fruits, it's making at the end everything more unpredictable versus the past. And I think this is something we cannot individually or alone control. But it's certainly something we need to adapt to. Therefore we need to work, starting with the seed, and how we adapt the plants to how we program the season, how we adapt also our production process to cope with those changes and make sure that we maintain the quality and the standards that we have been pursuing over the last few years, but also improve them for the future.
The second major challenge that I see that we took for granted for many years, and unfortunately, we cannot take them for granted anymore. It has to do with international trade. As I told you, Sugal is a company focused on exports. That's our nature. That's what we have been doing for 70 years almost. Changes to the way international trade is done is something that, of course, affects our business and affects definitely. How? The whole industry is currently built and organized in the sense that it trusts a lot on international trade as a way of working. And to that respect, I think and I'm taking this opportunity to pass something. I think that in this environment Europe has been especially vulnerable, versus other regions of the world. We have in Europe a situation where for different reasons one could argue the pros and cons, but for different reasons, my perspective is that Europe has a more vulnerable situation, versus other areas of the world, when it comes to international trade, in the sense that it is not as protective of our own, of its own production as other areas of the world. Of course, the positive side of that is that I think European producers have come a long way introducing efficiency measures, competitiveness measures and innovations so that we can strive in this market. But I believe it has come the time where we need to be strong. We need to at least make sure that reciprocity exists in the sense that Europe has to make sure, and we need to ask our governments and our authorities to make sure that there is reciprocity in the markets and that European industry has a level playing field of operation versus other areas of the world. This is particularly relevant when we look at environmental rules that European countries are facing. And we know that other areas are not as strict, as product from those areas is entering the market. Also from labor laws, social conditions, all those aspects need to be taken into account. And my perspective is that Europe has been a bit naive in that respect. And I think, with what is happening now in international trade, with the tariff situation, and so on. I think we have the opportunity, and I also think we have the duty of making sure that we remain competitive. There’s no doubt about it. But make sure that we, as European industry, have access to a level playing field situation versus other areas of the world.

I agree, and you're not the first one that I hear speak that way. So, how do you want to tackle this?

I think one of the most important aspects we need to, and I think also our governments need to take into account is that this is not something affecting the industrial companies alone. This is affecting a whole supply chain built from thousands of farmers, most of them pretty small farmers that work in this area, together with other farming cultures, of course, but this has a tremendous impact in the whole supply chain. In several countries, we are talking mostly of Southern European countries, and on top of that we are talking mostly of areas that within those countries are the ones that have more difficulties, in the sense that the rural areas where tomatoes are grown, in Portugal, Spain, Italy, Greece, even France, are not the richest areas of the countries. They are not where the people have the most opportunities and tomato farming is an important aspect of the local economy. And if we don't make sure that this value chain is there for the coming years, we are not only talking about an impact for the industrial companies but also talking about a huge impact for thousands of farmers and their families, that depend on this type of work for their subsistence. So how do we want to tackle this? First, I think we need to make sure that authorities understand the importance of this  value chain. Not only from an economic point of view and social point of view, but also from a food security point of view. It is an important ingredient of the food basket these days for European families and worldwide. So I see it as something very reasonable that politicians look at the tomato value chain with a very comprehensive look, and understand the impacts. I don't know if there will be any changes to the rules. I don't know, but I think the industry needs to make its voice be heard. And I think we need to work together to do it.

I agree, very important topic. Let's move to this year's crop. first of all, the transplanting has been delayed so by a month about, because of all the rain we had previously in the south of Europe.

Yes, we are facing a bit of an unprecedented situation where both in Portugal and Spain, we have been dealing with very heavy and persistent rains throughout March and April, and even in beginning of May, which has delayed significantly the transplanting process, and it will for sure delay the start of the crop. To what extent? We still don't know.

It depends on how the weather is going to be from now.

Of course, and how the plants develop themselves, and I mean a lot of variables are still at play. But I would say that in the case of Spain we would be roughly 3 to 4 weeks delay, versus our regular starting date. In Portugal, it's still a bit early to say, but for sure there will be some delay, so we should not expect the crop to start before the beginning of August in Portugal. This means that transplanting the whole quantities is at risk right now. I cannot quantify it yet, but I don't believe that all the intended areas will be planted in Portugal and Spain, and for sure that we're going to have a more compressed window. And with that, the more compressed crop, and of course, some products within the portfolio will be more affected than others. Especially if we talk about low brix products, it is likely that the overall production in the Iberian Peninsula goes down significantly, given the reduction of production days.
This is the beauty of the industry, every year has something unexpected, and the way you adapt to that unexpected situation is how you can be successful or not. I think that's the beauty of the industry. That's what I like personally as well. This year we are facing this situation. Hopefully, we will be able to adapt and overcome it and again make sure that we serve our clients as usual. It's our main concern right now.

It never gets boring, does it?

No, it never gets boring.

Well, at least there's enough water to go with for the crop.

The solar side of the situation is indeed, that we had in Spain and Portugal a very good recovery of the water reservoirs. Especially in the south of Spain, where we were facing a critical situation. This has improved significantly. And we are currently with water levels of around 50% of the total capacity, a bit more, which was not seen for the last 3 years, 4 years. This is really important and positive. From that perspective, it has improved the outlook on the water situation for Portugal and Spain. However, we must say that Portugal thankfully has a very strong water situation. I mean, we were never in a situation where water was an issue. So, of course, there are droughts and more severe weather events, and more unexpected. But the truth is that Portugal is very resilient when it comes to the water situation, especially if you take out the southern part of Portugal. But there are no tomatoes grown there. Most of the of the Portuguese territory is very resilient on that regard.

And Chile, the crop is just finished right?

Yes, we just finished the crop. I mean, at the time we are speaking now, 2 weeks ago. We ended in the first or second day of May, a bit later than we wanted, affected by some late rains that delayed the finishing of the crop. It was overall a very positive crop. We had good production, high quality, good quantities so we were happy with the outcome of the crop. Chile is a very good country to grow tomatoes and to do business. But at the same time, it is facing some important challenges when it comes to some diseases in the fields that are preventing productivity to ramp up; so this is something that the industry is dealing with and looking at very carefully. Because we need to indeed act too be sure that the country's potential is not hampered by that situation.

Lots of things to improve and to work on, and to make sure that we are as resilient as possible.

Exactly.

The lack of water, too much water, the diseases and everything. Let's talk 2025 forecast. The latest being 40.7 million tonnes, if I'm not mistaken. What do you think of this number? Do you think we're going to make it? Do you think it's the right number? What's your view on it?

The numbers are the numbers. If we're going to make it or not, I don't know, if I would need to bet, I would say we won't make it, but I mean it's too soon to tell. I don't know. But most importantly, and regarding the number itself, I would say two things. It is indeed too big, given that we had two record productions in 2023 and 2024, this number is higher than it should. And it is not balancing the situation in terms of stocks. I was hesitating to say, but to that extent I think the analysis must be done on a more individual area, I think. One has to look at their stock situations, their carryovers, and understand the changes and adaptations you need to do for the production the year after, and perhaps we could have had a bigger adjustment this year than than we are having. This is my first comment. Second comment is that if we look at world statistics and trade statistics, we need to perhaps start looking at balances and stocks and production forecasts more from a regional perspective rather than a global perspective. It is true that tomato paste travels quite well, that international trade is very strong, but I think with all the situations we are living in right now, I believe that we should also look at regional forecasts versus demands and balances, and to that extent I would say that the numbers are not the same. While I have to say that there is a clear imbalance in the Chinese situation, at the same time, I would say that by the middle of 2026, given the forecast the United States has, I would say it's going to be pretty much in balance. I would also say that Europe is pretty much in balance, if you look at it individually, and I also say that the remaining parts of the world, including South America, are probably in balance. I think the overall number is high. I think it's higher than it should be, given the excess productions that occurred in 2023 and 2024, but I think the problem is not global. It's rather regional, so I think the adjustment has to happen as it did in the past. And hopefully, we're going to be here to tell how it went. I don't know if everyone but hopefully most of us.

Thank you. To finish our interview, how do you see the future of the industry and globally, and the evolution of the market this year, next year, following, as you said, the overproduction that we had recently.

Starting with the consumer and the consumption. Historically, we have been complaining in the industry that our consumption growth is quite stable, not very strong around 1, 2%. And numbers vary, that doesn't matter. Of course, we need to have more ambition and make sure that consumers see the benefits of consuming tomato-based products. But at the same time, I think it's a very positive thing we have a product that remains a staple in the food basket in the sense that you see it. It's not dependent whether you are poor, rich, if you can afford it or not. It's a very affordable product. It's a very convenient product, most of the products we produce. And it's a very healthy product most of the products are done with our ingredient. In that regard, I think we have a very strong end product. And we have a very strong value chain and resilience to face uncertainties that might arise in the future. I think demand for our products will be there, and that's good. And we don't see substitutes coming in. It's really, I think, a positive sign from that perspective.
Second thing, I think in general countries will continue adapting the volumes, the total production, in the sense that the situation we have currently is not sustainable, excess stocks that are produced every year versus demand is something that the industry needs to correct, otherwise it cannot develop in a sustainable and a healthy way.
And thirdly, I believe that if we have the right balance, if we have a balanced situation where there is at the same time no excess production, but also no short productions as we have in 2021, 2022, my perspective is that the industry will be able to start looking a bit more long term, in the sense that it will give them also the base to understand that there are some changes we need to do. We are already in the way of doing it. But I think overall the green transition, the transition to a less carbon intense industry; I think it's not only something our clients are increasingly asking us to do, but I also think it's something that has this very positive impact from a cost and efficiency standpoint.
Secondly, I think there will be increasing pressure to have a very healthy, very secure from a food safety perspective, very secure products. So that is something that won't change. And I think it will actually increase in the future. Consumers will want that more and more, to know where the products are coming from, what's the story behind the product, where was it grown, what were the practices that were used to grow those raw materials, were people treated fairly, was the soil protected, was the water use responsible, and so on, and so on. I think consumers are increasingly wanting to know how things are done, and where do they come from. And I think that trend will remain, and this will also have an impact in the industry as a whole, in the sense that it will make us adapt and make sure that we are very strong. I think, in general, not only speaking about Sugal, but I think in general, it's a very robust and compliant industry overall, and I think that will need to be reinforced, and perhaps we will need to provide more transparency about it. That's something that also might be changing. And of course, hopefully, there is some strong change in consumer habits and tomato consumption or tomato-based products. Consumption may increase dramatically, especially in areas where we see that the per capita consumption is not as high as we would wish. I think that's something we also need to work directly and indirectly to improve. But most of all, I believe in these trends.

Okay, well, thank you very much for a very interesting interview, Manuel.

Thank you.
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