Comparing the fresh produce industry to any other market is like comparing apples to oranges
While identical consumer goods, widgets, can swiftly be created en masse thanks to automation and manufacturing technology, growers and buyers of fresh produce are still bound by the unpredictable forces of nature. Moreover, fruits and vegetables come in an array of different shapes, sizes and quality that affect its value.
All of this is to say that the fresh produce industry is unique from other commerce. And, for too long, stakeholders have been relying on luck when unexpected weather events strike, consumer tastes shift or contracts break. Now, there is a digital marketplace that can accommodate the complexities of produce to help enhance your procurement processes.
Spreading the gamut of fresh produce
What do raspberries and potatoes have in common? Well, the truth is, not much. Though both fall under the term produce and are traded within the marketplace, that’s where the similarities stop. You won’t find a grower specializing in both of these products, yet you need them to stock your shelves. These two items are the perfect examples of how diverse and unique the fresh produce industry is, and how a digital marketplace can accommodate these complexities:
Numerous Product SKUs
Products in the fresh produce industry are a combination of many attributes: Commodity, Variety, Item Size, Package Type & Size, Grade, Growing Method, Maturity, Country of Origin and Label. A comprehensive list contains more than 8,000 Varieties within the industry’s 140+ Commodities. Thousands of PLUs exist, which still aren’t a fraction of the potential combinations of attributes. Managing this level of product complexity is challenging even with the aid of digital technology, and it’s near impossible to grasp in a verbal negotiation.
Perishability: Condition & maturity
Raspberries are a finicky fruit. When picked at the peak of freshness, they must be kept cool (at 32-36 degrees to be exact) and have a high risk of spoilage in storage. Once they reach a store, their shelf life is just a few days. Potatoes, on the other hand, can be kept in a cool, dark place for weeks without it affecting appearance or taste. Other commodities, such as ripening fruit (tomatoes and avocados), may actually improve as they reach peak maturity. An online marketplace is able to house listings for these products with their perishability in mind.
Knowing the product quality from pack dates, photos and quality control reports allows you to shift your focus to the specific product that is being purchased. A marketplace allows for the optimal procurement strategy, whether that is a combination of program contracts, ad pricing and spot buys. Efficiency is maximized, and produce is able to move directly in less time and with fewer food miles.
Growing methods and conditions
Most consumers have little understanding of the real differences between conventional, organic, GMO, field grown, shadehouse, greenhouse, indoor, hydroponic, sustainable, local and a myriad of other buzzwords that describe how our food is grown. However, we all know that transparency is increasingly important. Expectations are higher. The way business was conducted in the past will not be sufficient with tomorrow’s enlightened consumer.
Consumer’s demand (and deserve) information. A digital marketplace has an advantage in efficiently providing this valuable information. Food Safety plans and certificates are easily accessible, traceback is seamless, and accurate product descriptions become the norm. No longer does a transaction require the trust formed from prior transactions, but trust may be formed by the ability to verify the actual product and it’s journey to market.
Another complication in fresh produce involves packaging. We count more than 350 packaging combinations, comprising 90 types of packaging with 180 different sizes. Types include everything from bins to cartons containing film bags. To make the world of produce even more complicated, not all “bushels” are created equal, and “cheater” packaging is commonplace.
Further, box dimensions vary, even for the same volume size, which causes the number on a pallet to vary by source. With all of these combinations, having an efficient digital tracking method is key to knowing what you are getting. We all know that it’s not possible to determine the detailed specifications from a simple price sheet.
An online marketplace works to create a standardized system. It guides users to define products carefully and precisely, which is a benefit to all. It helps users speak a common language, allowing the jargon of our industry to be objectively defined.
Variability in results
There’s no way to grow perfectly identical produce like how a manufacturer can create a T-shirt or an automobile. Farmers and retailers are each well aware of the variability in growing results each season. Perhaps cold weather caused the fruit size to be smaller, or excessive rain caused easy bruising in the bell peppers. A dynamic marketplace needs to address these ever-changing factors.
With a digital marketplace, growers can have precise descriptions, upload photos of the specific produce, and offer quality control reports to gauge quality that your operation seeks. Instead of buying based on a verbal conversation, you are able to purchase the fresh produce you want based on a clear understanding of quality with live inventory available.
Stay tuned for the next part in our “Produce is Different” series discussing food safety, PACA, standardized contracts, and dispute resolution.