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Supply management: latestdevelopment for selected fruits
and tropical products and theirimpact on growers.
Errol W HewettInstitute of Food, Nutrition and Human Health
Massey University
Albany Campus, Auckland,NEW ZEALAND
Presentation prepared for the FAO/CFC China WorkshopOpportunities and Challenges in the World Markets for Fruits and Tropical
ProductsGuangzhou, China, 29- 30 November, 2007
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Overview
Horticulture is organising internationally Know your markets
Nurture a champion Develop strong producer organisations Adopt modern supply chain management
systems from farm to fork Utilise sustainable production and postharvest
systems Challenge the food mile concept
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Horticulture is gaining favour!
Revival in interest inagriculture Horticulture specially as
a driver for economicdevelopment
Major donors arebecoming aware of thiscritical link
CGIAR, EU Directorates,World Bank
Of course FAO andUNDP has always beenthere!
Recently published
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Horticulture is organising?
ISHS, World VegetableCentre (AVRDC), andCIRAD have joinedforces to create
Global HorticultureInitiative [GHI]
Links with CTA, ASHS,
EU and other donorsincluding ICRAF
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Market requirements
Consumers are the target; they must besatisfied again and again
Consumers are individuals
Consumers are irrational and illogical
Consumers spend their own money so
they buy what they want and like Production must be market (demand)
led and not producer (production) push
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Purchasing decisionsDriver for choice in purchasing products
0 10 20 30 40 50
The price of food
A brand name I know
Sell by date
Fat content
Knowing ingredients in product
Sugar content
Salt content
I like the taste of the food
Which country food comes from
Product looks nice
The food I usually buy is available
Standards of animal welfare
The food is organic
Presence of artifical colours or flavouring
Time from farm to marketFood is GM free
Trying new foods not eaten before
Stories in paper or on news
Percentage of shoppers
Primary
Secondary
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Market needs
Understand market and consumer; marketdata must come back to producers
Health, safety, appearance, taste, texture,
novelty and indulgence are driving forces Consumers becoming globally conscious and
environmentally aware
Quality is critical to satisfy consumers Quality needs will vary according to income,
age, tradition, necessity, mood.
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Purchasing of premium productsPremium attributes influencing consumer purchasing
0 5 10 15 20 25 30 35 40 45
High quality ingredients
Well known brand
Free range
Organic
Locally produced
Added health benefits
Fair trade
Packaging looks good
More expensive
Environmentally friendly
Quality assured product
Retailers best own brand
Produced to high animal welfare standards
Country of origin
Exclusivity
Retailers standard own brand
Added convenience
The way it is advertised
The people who buy it
Celebrity endorsed
Percentage of shoppers
Key issue s
1. A significant proportion of UK
shoppers associate e htically sourcedproducts as having "Premium
attributes".
2. About 25% of shoppers associate Free
range with Premium
3. 25% (1 in 5) shoppe rs as sociate Locally
produced with Premium compared with
17% for Fair Trade and 12% for
Environmentally friendly products
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Market research
Understand consumer needs - essential Understand retailer needs- critical
Understand the competition, and this may not
only be fruit vitamin pills, fruit flavouredsweets, and snack foods
Understand market dynamics, volumes,
seasonality, price fluctuations Plan strategically using all of the above to
establish specific market niche
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Finer Foods 16%
Price sensitive 17%
Traditional11%
Mainstream foods25%
Healthy Foods10%
Convenience
21%
Affluence Tesco Segregation of Customers
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The supermarkets
What do they want? Excellent quality Same day freshness Rapid cooling and quality
refrigeration
Extended shelf life Moderate, sustainable prices Consistent pricing through
year/season Regular, consistent supply Appropriate packaging Guarantee of product safety Produced using GAP Product specifications
achieved
What do they get? Poor quality Not fresh Poor storage and
transportation facilities
Short shelf-life High prices expected High fluctuation of prices Inconsistent supply
Variable and inadequatepackaging Food safety requirement not
adhered to No use of GAP practises
Product specifications notfollowed
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Market quality
Intrinsic attributes Appearance Big is not always better Taste and texture critical
Nutritional and healthbenefits vitamins,antioxidants
Storage and shelf life
Quality, volume and pricedifferentiation Tropical fruit have it all
After Kader 2005
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Market quality
Extrinsic attributes Environmental impact; carbon footprint
Fertiliser and pesticide use Packaging biodegradable
Organic products IFP systems
Storage, transport and distributionefficiency
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Promotion
Consumers must know about the product Promotion, promotion, promotion!
Costly but essential
Spend money to make money
In store sampling and assistance
Cultivate chefs in restaurants Use stories womens magazines
Radio and TV