Tag: value chain

The Role of Fruit & Veg In Our Society

I HAD POSTED THIS CONTRIBUTION A COUPLE OF YEARS AGO…THINGS DO NOT CHANGE THOUGH.  THE CURRENT DEBATE HERE IN NEW ZEALAND ABOUT THE NEED FOR A “FOOD IN SCHOOLS” PROGRAMME IS HIGHLIGHTING THAT THE PROBLEM OF PRODUCE PRICE PERCEPTION IS ALIVE AND WELL. BUGGER.

NEAT AND TIDY PRODUCE DISPLAY

NEAT AND TIDY PRODUCE DISPLAY

 

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, according to nutritionists.

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, according to growers.

“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, the consumer’s own perception and so on…

I’m going to stick my neck out here:

the glass ceiling for fresh produce prices exists to a large extent 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 in correctly position produce on the consumers’ plate.

Cavemen and Calculus

I have a team member with a propensity for out of left field utterances.  A recent one got me thinking, especially as it matched a theme I’d been exploring for that presentation at Peking University I mentioned in the previous post.  It went something like this:

“We’re still cavemen trying to live in a 21st century world”

And one of my themes in myPeking speech was about the rate of change in my lifetime, how it is accelerating and methods of learning to cope with the problems this causes.

Whilst I don’t consider myself a caveman, there are times when the rapid rate of change happening everywhere I look does make me wonder if we, homo sapiens, are ready for it from an evolutionary standpoint.  Let’s face it, the human body is not built to withstand travelling above a certain speed.  We are soft flesh over a breakable skeleton.  Yet here we are, able to buy and drive cars that can travel well in excess of that certain speed.

Much of what we do, a caveman would recognise: we live in caves, albeit called houses and with air conditioning; we wear furs, although the clothes we wear come from mammoth stores, as opposed to a woolly mammoth; and we still eat nuts, berries, fruits and vegetables – although what Mrs Cro Magnon’s opinion of supermarkets would be, I dread to think.  So we’re still doing all the same things the cavemen did, we’re just more sophisticated in how we go about it.  We can devise changes in technology far faster than Mother Nature can in humans by evolution, so it’s no wonder the two are increasingly out of step.

How has this rate of change affected our food?
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Who Gets To Drive The Produce Bus?

What comes to your mind when you see a vehicle like this?  Brightly coloured, two front bits and no rear end, a re-engineered middle and a ruddy great banana on the top of the roof?

I don’t know about you, but what comes to my mind is that this very cleverly put together promotional vehicle reflects the state of our produce retail  industry.

The two front bits represent respectively the supermarkets – Foodstuffs (New World, Pak N’ Save) at one end and Progressive (Countdown/Wooolworths/Foodtown)  at the other.  The ‘bit in the middle’ is the rest of the retail industry – the urban green grocers, the fruit shops at the edge of town, the gate sellers, the farmers markets, the opportunitists at the roadside selling produce from their vans, the office fruit bowl stockists and the internet ‘box of stuff’ vendors.

There are several questions that play on my mind in connection with this state of the retail industry:

  • How big are the two front bits, i.e., the supermarket produce share, really?
  • What is a realistic level for the supermarket share of produce sales before it disturbs the industry value chain equilibrium?
  • To what extent is ‘the middle bit’ dependent upon the two ‘engine drivers’ for its well being as opposed to being in control of its own destiny?
  • How will the local New Zealand model be impacted by international trends in the next five years?

Let me start with this observation.

Fruit and vegetable ranges stocked in supermarkets are continuing to reduce, driven by item based shrink and profit consideration at both merchandise and buying office level. Buyers and category managers whose performance is judged by the profitability of narrow product categories are not prepared to gamble by stocking niche products.  Store staff with insufficient training are not best placed to sell non-mainstream produce.  So if I am looking for whitloof, fennel and red currants, I know that I will not find those in the supermarkets.

This thread will be continued over the next few weeks and comments are as always welcome.