Archive for 'Consumer'

Food Prices, Food Prices

There has a lot of talk in the media recently, and in homes too I’m sure, about the escalating food prices and the price of fresh produce in particular.

Here are just two of the recent articles, one from the NZ Herald and one from the Business Desk of One News.  In essence, fresh produce gets the blame for the increase in the weekly shop, and we can’t have high fresh fruit and vegetable prices now, can we?  Apparently fresh produce, along with potable water and petrol, are a basic human right and shouldn’t be expensive… especially in this time of rising obesity and the associated spiraling health costs.

What a burden to place upon the humble tomato and broccoli!

The thing is, and I think the media has missed the point again, there is nothing more natural than the cycle of bud, blossom, fruit, harvest.  When it is ready – eat it.  It is an irrefutable law of nature; there are some things we humans can not alter – try though we might.

But it is the 21st Century! We can have anything, anytime!

Well, yes – yes you can.  If you are prepared to pay for it.

When you buy your fresh produce item out of its season, then you are paying a premium for the logistics required to make it available to you.  The flip side of that statement is this: your local grower, being part of this 21st Century global market, will send his produce off shore if he knows he’ll make a better return on it.

Which brings us to that other law: the one about price being driven by supply and demand.

Fresh produce is particularly sensitive to this law.  For example: in season, with a good volume crop, strawberry prices quite naturally will be around the $2 to $3/punnet level.  And that volume crop will sell – there’s a demand because Kiwis love their strawberries, especially at Christmas.  But if the volume available is reduced thanks to bad weather, the price will rise and the market will bear it because the demand is there.  To a point.  As we have seen from the media, fresh produce prices aren’t “allowed” to be too high.  But as I’ve said before – why shouldn’t the grower get a return for his efforts?  Every other business owner is in the business of making a profit, why is the grower excluded from that basic business tenet?

Whilst this article from The Guardian has some good points, it still assumes that people have access/ time/ skills to do the things it suggests.  Where does that leave the high-density urban dweller?

Back at the supermarket, wondering why she can’t buy local tomatoes at a decent price anymore…

 

The Role of Fruit & Veg in Society

I have discussed fresh produce pricing on a number of occasions – as those who visit here regularly will have noticed.

Well, I had an epiphany last week.  I think I have the answer to the problem of fresh produce pricing…

I was listening to the segment on National Radio where they rattle through the headlines from the New Zealand newspapers around the regions and one headline caught my ear – enough to make me look up the news item in question from the Dominion Post.

So, what are the issues again?

People need to eat fresh fruit and veg.  But the price of fresh produce is too high for people afford, so their health is at risk.

Growers need to make a living from growing and supplying fresh produce.  But the price of fresh produce is too low for them to do that, so their livelihood (and our food supply) is at risk.

“Somebody” isn’t prepared to pay growers a high enough price for their produce and that “somebody” is being driven by the behaviour of the consumer.

So who is driving this consumer behaviour?  The influences are many and varied, ranging from the mother-in-law, the school, the mommy bloggers, the kids, nutritionists in the media, and so on…

I’m going to stick my neck out here:

the glass ceiling for fresh produce prices exists because people like nutritionists persist with pushing the idea that fruit & veg should be cheap!

Here’s my answer, then.

What needs to happen is that the fresh produce industry takes the nutritionists in hand and makes them understand the commercial realities of growing fruit & vegetables, so that the nutritionists’ ability to influence can be harnessed better to correctly position produce on the consumers’ plate.

 

How to Boil an Egg

Egg timerRecently my attention was caught by this egg timer bought by Sara.  So what is so snazzy about this egg timer, you may be asking; after all, what is so hard about boiling an egg?

It goes IN the pot, dear readers.

And, it got Sara and I thinking: how could something like this be used to benefit fresh produce marketing.

How great would this be for, say, boiling potatoes?  Are they new pototoes, or do I want them boiled for mashing, or maybe parboiled in preparation for roasting… imagine the traction potatoes could get utilising one of these in a “Cooking for Dummies” ad campaign.  And that would go for all sorts of other vegetables, too.  Plus, there is the marketing hook that the modern human loves gadgets.  I could see teenagers liking this – I wonder if there is an app for that?

One of the biggest barriers facing a consumer of fresh produce is “when is this piece of fruit ready for me to eat?”  If they can not be sure, then they tend not to buy it – and certainly they won’t attempt to cook it.

The industry has already shown that it can pursue innovation in this area – remember ripeSense?  What else can the fresh produce industry do to give the consumer to confidence to buy more produce, more often?

In the meantime, Sara, our Iraqi Kiwi with her eye for gadgets, her penchant for travel and her mastery of our facebook, twitter, linkedin and webmarketing affairs can be relied upon to discuss the next ‘very useful’ innovation in a matter of weeks. We will keep you posted.

At the Food Show

I made the point of going to the Auckland Food Show; a number of my team did too – and the feedback I received was that it was a very enjoyable experience.

So here is some feedback from my experience:

Allan Fong: A Fresh Grower

Allan Fong, a grower of Chinese vegetables in Pukekohe, working to go to the consumer directly. A fantastic example of where the mindset needs to be.

 

Fairtrade banana stand

Fairtrade banana importers working to raise their profile. But I saw no sign of Dole, Bonita or Turners & Growers!

 

Mahana Red stand

Marketer and wholesaler Freshmax promoting the "only available at Countdown" apple variety Mahana Red.

 

Singing Chef

This singing chef was part of the entertainment provided by the Pams range from Foodstuffs.

So that was some of what I saw at the Food Show.  What did strike me was what I did not see…

The only bananas on show were Fairtrade ones – no sign of any other brand; now New Zealand is known for being fond of bananas. We certainly do not need to be introduced to the crop per se. But Dole Bananas also travel with some sort of ecolabel or other. And I have no idea what Bonita is up to in this area. But if I were a banana merchant, I would be inclined to keep an eye on the Fair Trade crowd. We are not talking about a passing fad here, but a serious effort to build a sustainable economy in third world countries that has human dignity as its centre piece, something ignored at peril.

Progressive were only there in the form of Freshmax promoting a Countdown exclusive product; while Foodstuffs were there in the guise of their house brand Pams (which they have been promoting heavily over the last several months).

Fresh produce was not there in force at all, unlike other years.  No mushrooms, for example, and no mainstream brands such as Wilcox potatoes.

What is going on here?  I would have thought that a large Food Show, in a major urban centre, would have marketers out in force.

Is the cost of having a stand at one of these events so expensive that the ROI simply isn’t there?

On the other hand, looking at the many niche exhibitors trying to carve out their place in the sun with the visiting crowds, are the known brands getting just a little complacent?

The Nonsense Continues

I had the weekend edition of the NZ Herald sitting around on the dining room table all weekend, pondering whether I should add my 5 pence worth to the article entitled Fruit, vege bargains at supermarket in theweekend edition. Then I sat down to watch the 6 o’clock news tonight.  First up –the milk price again. The Minister of Agriculture, David Carter,  now suggests that a Parliamentary Select Committee should investigate milk prices.  The CEO of the Consumers Institute made ridiculous comments on camera about a “secret manual” she alleged Fonterra uses to set milk prices and a TV One reporter found that supermarkets sell 2 litres of milk for $3.60 compared to $5.20 at a dairy and $5.60 at a service station. Doh.  Oh really?  Ah, there is a story that has gone off the rails.  That does not fit the intended direction –because we all know its supermarkets which engage in price gauging right?  Carter, luckily for him, was interviewed on Q & A this morning, rather than in the evening.  His “I never buy my milk at the supermarket and I would encourage consumers to shop around” wisdom therefore went unchallenged.  Let’s get some of the facts straight.  Supermarkets are in the volume business which works really well for them with processed food; milk for example.  Milk will always be cheaper in a supermarket  than in a dairy or service station, so please stop wasting time during the news bulletin and instead report the real issues we want to hear about.  When have you last seen a super market chain advertising  milk or bread at special prices or even as a loss leader?  The answer is “you have not” as it simply does not happen. The same goes for eggs by the way. They could, but they typically do not!  Accusing supermarkets on price gauging on those products is therefore an exercise akinto shooting oneself into one’s foot!  Back to the Herald’s fruit & veg story.  At a time of extreme shortages, you can rely on supermarkets to exert pressure to keep the prices down. Not because they want to be good citizens but out of self interest.  They have worked out a few years back that consumers have a pain threshold. When cauliflower prices go beyond $3.99 per head retail, consumers pull the hand break.  Tomatoes at $20 is pipe dream territory of unheard proportions.  Food & Grocery Council CEO Katherine Rich also has a thing or three to learn about the fresh produce value chain, judging by her comments in the NZ Herald story.  Of course, the produce will be fresher at a farmers market – if it has been locally grown and is being sold by the grower himself.  And of course, supermarkets are subject to greater controls and attempt to offer produce of greater uniformity.  And where do we think the produce supermarkets does not buy disappears to, hm? Whilst it is great that we as a society are focusing back on the basics, i.e., the quality and availability of our food and its price, there is a lot of nonsense being talked out there and the sooner that changes the better.