27 supply presentation

8/8/2019 27 Supply Presentation

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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

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