The Buyer Takes Control

Consumers don't worry about when the buyer takes control of the produce they come to buy in a store, they just want to make sure they can find what it is that they wish to buy. Growers, packers, wholesalers and retailers on the other hand, take a a very strong interest in how their supply chain works, as this can make an enormous difference to the way their respective businesses perform.

When growers send their fruits and vegetables to terminal markets, the buyer - who is typically a small retailer of sorts - takes control of the produce after the purchase, as long as his credit is good. It is his job to then organise the transport of his produce to where ever he wants to sell it from. When growers of highly perishable produce, for example strawberries, have sold their produce to a local store or retail chain with the proviso that they deliver directly into store, the buyer takes control of the produce at the rear store delivery dock.

More often these days, growers or packers deliver their domestically grown produce to a supermarket distribution centre. In that case, the product passes to the buyer at the point of delivery to the DC, with the journey to the individual stores being the retailer's responsibility.

The standard operating procedure for imported produce until not so long ago was for wholesalers to import the produce by reefer vessel or shipping container, either on consignment or for a firm price. This meant the point at which the wholesale buyer took control varied, based on purchase method. Once 'in country', imported produce is distributed in the same way as domestically grown produce.

In recent years many behaviours which were once considered standard have changed. Growers have consolidated around packing operations. The auction system has just about disappeared and wholesalers are trying to build seamless supply chains through integrating with growing and packing operations. Grower/packers have started to export in their own right, packers of domestic produce who manage an entire category, say tomatoes, on behalf of  a retailer, are turning into importers in the off-season to ensure a continuous supply, and retailers are developing direct import programmes, bypassing the wholesale trade altogether.

Just who the "buyer" is these days is therefore getting blurred and it pays to spend a little time to understand exactly how one's supply chain actually works.

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