Fruit & Vegie Prices – What Does Count?

Somebody is on the right track at last and is trying to wrap some rationale around the annual “the world is ending because fruit & vegetable prices are going through the roof” routine offered by the scaremongering social do gooder fraternity. Getting the fruit & vegetable value equation right is one of the great challenges for growers, wholesalers and retailer alike – and of course, the consumer is the ultimate judge on whether the industry is succeeding with its endeavours – or not as the case may be.  To balance the equation we need to have informed consumers at the other end of the spectrum and too often, unfortunately, the media goes out of its way to ensure that rationale is suppressed in favour of populist opinion.  I view this NZ Herald article as a genuine attempt to add some depth and fact to the argument.  Will the message get through?  I doubt very much on the first attempt.  For that we need a sustained effort.

Fruit World, Greenhithe, Auckland, New Zealand

Fruit World, Greenhithe, Auckland, New Zealand

The fact that the Herald’s shopping basket is not weighted for relative importance is a significant factor with the potential to paint an inaccurate picture as is the fact that we can not be sure that apples are being compared with apples.

What do I mean? Well, let’s have a look what the Herald’s price index is based on – 1kg each of oranges, bananas, apples, kiwifruit, lettuce, potatoes, mushrooms, carrots, tomatoes, cabbage and broccoli.  Depending upon the time of year the produce is being purchased we could be talking about Australian, Californian or New Zealand oranges, with the varieties being either Navel or Valencia.  The term ‘apples’ covers a multitude of sins from old favourites like Granny Smith to new exciting varieties like Jazz or Mahana Red.  Kiwifruit come as green or gold, in several fruit sizes , in various grades and either loose, bagged or packed.  Aka tomatoes.  My local supermarket had tomatoes in 12 different SKUs yesterday.  Potatoes range from loose to 20kg bags, white or red, brushed or washed, new season or main crop.  Iceberg lettuce or Cos lettuce?  Field grown or from hydroponic production?

And bananas for that matter were retailing at $2.69 per kg in 1987 when government price controls still applied in this area.  Today they typically sell for between $1.49 – 2.99 per kg.  One could hardly call that price gauging.

I think you get my point.  The fruit and vegetable business is a sophisticated industry where FMCG based marketing techniques are fused with the cycles of nature.  The industry deserves to be taken serious and that includes that journalists  attempting to analyse the fruit and vegetable business make an effort to understand it thoroughly or go away and write about something that is easier for them to understand.


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