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Marketing Fruit Crops in the United States

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Marketing Fruit Crops in the United States Wen-fei Uva, Ph.D. Senior Extension Associate Department of Applied Economics and Management Modified by Georgia ... – PowerPoint PPT presentation

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Title: Marketing Fruit Crops in the United States


1
Marketing Fruit Crops in the United States
Wen-fei Uva, Ph.D. Senior Extension
Associate Department of Applied Economics and
Management Modified by Georgia Agriculture
Education Curriculum Office June, 2002
2
Presentation Outline
  • Situations of Fruit Production in U.S. and New
    York
  • Consumption Trends
  • Marketing Systems
  • Marketing Risks and Opportunities

3
Situations of Fruit Production
4
Fruit and Tree Nuts Production in the United
States
  • 11.6 billion Farm Production Value in 2001
  • 122,892 fruit farms (1997 Census of Ag.)
  • 5.3 million production acres (1997 Census of Ag.)
  • 7 of farm receipts (inc. livestock and crop)
  • 14 of total crop sales in the U.S.
  • 11.9 billion in 2000, 12.0 billion in 1999
  • Low receipts for citrus, apples cranberries

5
Major Fruits Produced in the U.S.
  • Orange, Grapes, Apples and Strawberries are the
    four major crops dominate the industry (61)

Source Economic Research Service, USDA, 2002,
Fruit and Tree Nuts Outlook
6
Regional Specialization of Production
Source Economic Research Service, USDA, 2002,
Fruit and Tree Nuts Outlook
7
  • Hawaii is the only state producing bananas
  • CA produces almost all of the canning peaches
  • FL processes 95 of their oranges
  • CA-AZ producers market 75 of U.S. fresh oranges,
  • WA apple production

Challenge Balancing Marketing Power
8
Trends in New York Fruit Production (Millions of
Dollars)
Source New York Agricultural Statistics Services
9
Relative Value of New York Fruit Crops Total
Fruit Production - 179 million, 2000
Source New York Agricultural Statistics Services
10
Characteristics of Fruit Marketing From
Producers Perspective
  • Perishability - Sell it or smell it
  • Product Bulkiness - Processing facilities
  • Sensitive to Price Quantity Risks - Supply
    demand
  • Seasonality - Global sourcing

11
Consumption Trends
12
Per Capita Consumption of Fruits and Vegetables
Total per capita use of fruits and vegetables
rose 24 from 573 pounds in 1970 to 711 pounds in
1997
13
Changes in Per Capita Consumption, 1970-99
14
Away-From-Home Consumption are Up
  • About 50 of food spending in U.S. on meals away
    from home (2000)
  • Spending increases during 1990s (adjusted for
    inflation)
  • Meals away from home 25
  • Food at home 5
  • Product exposure - A good target for new products

15
American Food Consumption Trends
  • Year-round availability
  • Natural, Organic, Wholesome Healthy -
    Functional Food
  • Convenient products

16
American Food Consumption Trends
  • Something New - Exotic and Ethnic

17
American Food Consumption Trends
  • Packaged well - image, food safety

18
American Food Consumption Trends
  • Branding - Private Labels and National Brands

19
Retailers Responded with Bigger and Better
Produce Departments
20
Fruit Marketing Systems
21
Fresh Market Channels for Fruit Growers
  • Wholesale
  • Packer/shipper
  • Wholesale distributor
  • Auction
  • Sales agents
  • Brokers
  • Terminal markets
  • Retailer distributors
  • Food service outlet
  • Export/Import
  • Retail
  • Farm stands
  • Pick your own
  • Farmers Markets
  • Mail order/E-commerce
  • CSA

22
Processing Market Channels for Fruit Growers
  • Sell to proprietary processors
  • Market through processing cooperatives
  • Custom processing for the grower
  • Growers own processing facilities

23
Major Marketing Channels for Fruits in the U.S.
Exports
Imports
Shippers Packers
Retail Outlets
Consumers
Wholesalers Distributors
Growers
Institutions Food Service Outlets
Processors
Brokers
Direct Marketing
24
Dynamics of the U.S. Fruit Marketing System
Exports
Imports
Shippers/ Packers
Retail Outlets
Wholesalers Distributors
Consumers
Growers
Processors
Institutions Food Service Outlets
Brokers
Direct Marketing
25
Trends Influencing Fruit Marketing
  • Globalization

26
  • Imports - Fruits 4 billion (2000)
  • Top four fruit imports
  • 1. Bananas 2. Fresh grape 3. Fresh frozen
    pineapple 4. Fresh apples
  • Export
  • Fruit Exports at 3.4 billion in 2000
  • Fresh Fruit -- 62
  • Destinations
  • 1. Canada , 2. Japan, 3. Taiwan, 4. Mexico,
  • Export to India and Australia increased --
    Trade agreement for allowed U.S. grapes to market

27
  • Growing concentration in the retail sector

28
  • Continuous concentration of retail buying
  • Fewer produce buyers in 2001
  • Centralized buying
  • Buying more from top 10 suppliers

29
More Contracting
30
  • Changing retail marketing practices
  • Growing category management (58.5 in 2001)
  • Establishing and enforcing performance guideline
    with produce suppliers (70 in 3-5 yrs)
  • Looking to share responsibilities

31
  • Changes in Wholesaling

32
  • Depressed grower/commodity prices

33
  • Changes in consumer attitudes
  • Need for alternative marketing strategies

Survival of producers is often at RISK!
34
Crisis
Risk Opportunity
35
How Can Farmers Get their Fair Share??
36
Changing Opportunities and Challenges in Fruit
Marketing
  • Consumer can have direct input and interaction
    with any point of the supply chain
  • Middlemans changing roles - Become the
    Preferred Supplier
  • Food Safety issues
  • Effective and efficient market tools- To satisfy
    the needs of specific customer sectors
  • Multiple interfaces - transaction efficiency
  • Barriers of Entry

37
Challenges and Opportunities for the NE Growers
  • Market fragmentation -- Small compared to major
    fruit producers, but many are too big to depend
    solely on direct marketing
  • Nearness to market - Blessing or Curse??
  • Food travels an average of 1,300 miles before
    reaching the consumers table in the U.S. - Can
    we become the preferred supplier for the NE
    marketers and consumers?
  • Better Marketing is Critical - Collaboratively
  • Be Small Do Not Have to Look Small!!

38
Differentiation -- Meeting Customers Needs and
Wants
Mega Player Niche Player, or Former Player?
Max Brunk (1983) Marketing is Not Just
Selling! To Market is to Create Value To Offer a
Service Which Someone is Willing to Pay.
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