Produce Markets have been around for as long as mankind itself. Starting off as the place where people brought their surplus food to trade for that surplus to others, the markets turned into the place where everyone congregated to not only purchase their food but exchange news, catch up with friends and relatives, discussed business and establish new connections.
Today we have to differentiate between wholesale and retail versions. This page is about the wholesale market concept. Traditional retail markets are discussed elsewhere on this site.
Wholesale fruit and vegetable markets have undergone significant transformation in the last 50 years. This is on one hand due to the fact that society as a whole has not stood still and consumer shopping behaviour has undergone nothing other than a revolution. On the other hand, the place where wholesale markets find themselves in the fruits and vegetables supply chain has dramatically changed and not for the better from their perspective.
The big change in the latter area has been the shift of power to the retailer. This shift directly relates to the emergence of supermarkets and their derivatives as the dominant purchaser of staggering volumes of fruits and vegetables world wide. As supermarkets buyers became aware of their purchasing power, they began exploring alternative avenues to buying their produce from a central facility, typically located by then at the outskirts of the major cities. The concept of sourcing produce direct from growers rapidly gained in popularity.
Wholesale Produce Markets still exist today and they even have their own World Union of Wholesale Markets association! The reality though is that these markets are struggling - and struggling badly - as the retailers pursue marketshare growth and its focus on fresh food as a key driver continues to marginalise the wholesalers' role.
There are several factors that contribute to that situation. They start with a very practical aspect. Retailers earn money when their shelves are full. Empty shelves loose business. At the most basic level, retailers will do everything in their power to ensure that they are not caught by empty shelves. The larger the retail business, the less tolerant the retailer when it comes to being dependent on the market and its inability to know how much produce growers are consigning to the market on any one day.
Then there is the consistency aspect. Not only do retailers want fruits & vegetables to be available but they would like the produce to be consistent in terms of size and quality on display in a single store, from store to store on any given day and, preferably, every day of the year.
Such degree of consistency is not in the gift of a wholesale market anywhere as its business is dependent upon what growers choose to assign to them.
The consequence of not being able to deliver on just that one factor is essentially responsible for the decline of the wholesale produce markets. This is nowhere more obvious than in the US, where produce markets are known as terminal markets...the place growers send that part of their crop they were not able to place with a more preferred direct purchaser!
This decline is very much a developed world scenario. In developing countries, wholesale markets are still very much an essential link for getting fruits and vegetables from producers to consumers.
To be continued
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