The production and
distribution chain of fresh fruits and vegetables is made of all the activities
and tasks carried out by different operators, all of them necessary to pass
from the agricultural product to the food product ready to the consumer.
A distribution
channel is the path of a product from its production origins up to locate it in
its place of consumption. In general terms we can distinguish between:
Ø Modern supply chain. Mainly characterized by the integration of different operators and the
role of the figure of the great distribution with self-services in various
formats. It is identified with large distribution chains. Therefore, in the
consumer field, the following sales areas are part of this channel:
- Services of
proximity, usually less than 400 square meters, self-service format; small
shops.
- Medium surfaces, supermarkets above 400 square meters and
below 2,500 square meters offering a wider range of products than the previous
ones at discounted prices. These mainly offer food products.
- Supermarket
is a commercial format that offers the advantage over hypermarkets to be
located in the inner part of the cities as part of local commerce, while
hypermarkets are usually in peripheral urban areas. According to its sales area
can be classified into:
• Small supermarkets
(400-700 m2)
• Medium supermarkets
(700 - 1000 m2)
• Large supermarkets
(1000 - 2500 m2)
- Large
hypermarkets possess surfaces over 2,500 square meters.
- Discount stores
have a limited range of products at very low prices, where there is a greater
presence of own brands. These establishments base their trade policy on poor
service to the clientele, but extremely competitive prices.
- Convenience
stores or convenience. This term refers to the establishments belonging to
supply chains that are situated in strategic places, such as shopping centers,
gas stations or train stations, in order to capture sporadic consumer
purchases.
Ø Traditional supply chain. It is characterised by trading companies in origin, intermediary
agents and small businesses. The traditional channel is one wherein the
product passes through the central markets or wholesalers and ends in small
trade establishments more or less specialized. The most linked to traditional
distribution system operators are the wholesaler at destination, importer,
exporter, agents in different versions and specialized retailer. These traders
buy a certain amount of product for distributing to their customers, which can
range from a supermarket to small retailers and can cover different areas depending
on their size and importance.
Among the retailers of fruits and vegetables is possible to
differentiate traditional different types of operators, depending on the
different sales services they provide: the variety offered, the level of
specialization or specialized care and/or customized. According to the sales
surface and variety are classified in:
- Department
Stores: metropolitan location stores with a wide range of products
(textiles, appliances and food) which is divided into groups of products by
specialized departments, with or without self-service.
- Specialized
self-service shops that link the amplitude range of a specialized shop with
the policy of a self-service retail store.
- Traditional
retail trade, with lower area of 200 m2. The decrease in their number has
been much higher than the supermarkets. Corporate concentration in the sector
has been accompanied by a process of transformation. The "big ones"
in the distribution trade volume of purchases very important and get good
prices. This other distributors, medium and small are having difficulties
reducing their margins.
The trend is clearly
towards reducing the number of these small establishments and expand the sale areas, therefore the traditional
trade is passing through difficult times. Specialized retailers try, as the
only means of subsistence, profiled against discounters, hypermarkets and
supermarkets with a wide range of products, a good selection of international
specializations, good prices and best service to the consumer.
In short we can say
that organized distribution or mass distribution is due to the confluence of
several factors:
1. The expansion of
ranges and volume in international markets, with the emergence of large global
operators.
2. The homogenization
of ranges in many countries.
3. Less seasonality
of supply and demand.
4. The development of
logistics.
5. The increased
emphasis on the supermarket, responsive to the needs of everyday shopping.
6. The option of
placing more importance to fresh product, capable of ensuring greater affluence
to the shop and more frequent purchases, always raise the total volume sold
product.
7. The centralization
of the decisions to acquire product by a central unit, either a department or
subsidiary, which requires buying large volumes and concede great bargaining
power to these firms.
CONCLUSION
From the foregoing
clearly is derived a shortening of the supply chain and consequent elimination
of commercial agents and intermediaries.
Gradually the figures
of the wholesaler at destination, commercial agent and specialized retailer
will disappear. This shortening is due to the continuing policy of reducing
costs in the fruit and vegetables industry which is being carried out with
ferocity and requires the concentration of its suppliers.
In general terms, in
the great distribution chain of fruits and vegetables the following changes
will take place:
- A
shortening of the number of stages in the distribution chain and an increase in
the volume of those who serve the great distribution, which promotes
concentration at origin. This in turn causes small trading companies need to be
provided with product by other similar companies in order to carry out its
obligations to deliver and meet deadlines. Agreements will have to be made
between small producers, although they want to maintain their independence.
Otherwise, they will not be able to compete with large producers and marketers
and lose market share little by little.
- A
segmentation of markets, differentiating those who access to these channels
from those who left out.
- A
generalization of agreements in the medium term and a product certification
requirement that reaches all stages of the chain. The importing company
that demands a continuous supply requires guarantees and quality certificates.
The most important are GLOBAL GAP and AENOR.
To learn more about
quality certificates, visit
- Increased
vertical integration and orientation of the marketing and producing companies
to the customer. The use of information technology and Internet allow
us to bring the product to the customer, understand their needs and establish
agreements.
Also, the language
barrier will not be a problem thanks to online advertising websites as www.infovegetables.com offering this free interpretation service. These websites will take the
place of the wholesaler, commercial agent, intermediary and retailer, allowing
direct contact between producers and importers facilitating the whole process
without added cost.
- Better
and faster transfer of consumption trends towards agriculture. This is
because the information flows faster, producer meets customer needs, the
contact will be more direct and any changes in their tastes, new preferences or
strategies will have a direct impact on the farmer.
- In those cases in
which large importing companies require exclusivity of supply, the supplier can
grow with his client, but, at the same time, the supplier will be in a
situation of maximum fragility if a hypothetical failure or change of strategy
of this client take places.
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