The global fresh produce market has been growing steadily. In 2016, market research provider Euro monitor International reported that the global demand for fresh food increased by nearly 3% over global demand in 2015. This was in line with Compound Annual Growth Rate of 3% achieved over the 2011-2016 review period.
The growth of this market is also supported by a separate report from Wiseguyreports.com, which forecasts that the global fresh produce market will grow at a CAGR of 3.01% from 2017 to 2021.
Various factors account for the massive growth of the fresh produce market. These include the increasing middle-class population, rise in disposable income, rapid urbanization in many key fresh produce importing countries, shifting consumer lifestyle preferences and (last but not least least) the significant advancement in logistics, storage, and cold-chain facilities.
However, the growth of this rapidly expanding market is also constrained by several challenges such as volatility in prices, disease outbreaks in farms, climate change, and quality control issues. Read on as we detail the key challenges and trends that are shaping the global fresh produce market.
One of the most noticeable trends in the fresh produce trade is the increased demand for organic produce. These are a type of fresh item that are produced by methods that comply with the standards of organic farming and are often marketed as pesticide and additive free.
While this category was once classified as a specialty item only available in selected outlets, it’s distribution channel these days has widened and it has now become a staple in many grocery shops and supermarkets around the world.
According to a report from TechSci Research, the global organic food market stood at US$110.25 billion in 2016, a figure that is expected to reach US$262.85 billion by 2022.
While the demand for organic produce is strongest in US and Europe, strong competition in these areas means they need to venture elsewhere to establish their market. For European organic fresh produce exporters, this can mean exploring opportunities in the densely-populated Asia-Pacific Market which have strong GDP growth rates.
Another growing trend in the fresh produce trade are superfoods. According to Live Science, superfoods – such as spinach, beans, sweet potatoes, salmon, fruits, nuts, whole grains, and berries – are foods that are nutritionally dense and have an extra-large dose of vitamins and minerals which most health-conscious people seek these days.
Superfoods have gained a popularity as food trends shift rapidly over social media for the past 7 years. In fact, a London-based market research company, Mintelís, revealed that between 2011 and 2015, the number of new food and drink products carrying the label “superfood” recorded a phenomenal growth of 202% worldwide.
One example of a superfood that any European fresh produce exporter cannot afford to ignore is the avocado. In 2006, the top ten exporting countries only exported 500 thousand tonnes of avocados. Fast forward to 2016 – these countries exported more than 1,750 thousand tonnes of avocados.
This opens a significant growth opportunity for European exporters as the popularity of superfoods in the global market increases, yet the production is getting slower. In fact, according to the latest World Fruit Map report from Rabobank, the trade in avocados has grown by more 12% per year globally but its production, with growth of only 5% a year, is struggling to keep up.
Looking at the production figures for fresh fruit and vegetables in Europe, 2019/20 might qualify as a normal year. But global figures are often misleading – apple growers in Poland who lost their crop due to late frosts are unlikely to draw comfort from the fact that Spanish peach producers had a large harvest. The European Statistical Handbook allows a sufficiently detailed analysis that takes such regional and sectoral differences into account. Weather is still the decisive factor in fruit and vegetable cultivation, and climate change exacerbates this problem. A young lady from Sweden and the spectre of huge forests aflame in Australia have shown us that it can no longer be ignored. Sustainability has been on the agenda in recent years, but now it has become a priority. How to avoid packaging waste while protecting the product will remain one of the major issues in the industry. At the same time, the trade in fresh fruit and vegetables is becoming more international and new suppliers are appearing. For this reason, we have included countries from Eastern Europe in this edition. The European Statistics Handbook provides valuable information that can help you make decisions in most relevant European markets.
FRUIT LOGISTICA encompasses all Fresh-Produce business areas and market participants worldwide and offers a complete overview of all innovations, products and services at all levels of trade. In this way, Fruit Logistica creates excellent contacts with the most important target groups at decision-maker level.
Consumers are becoming more sophisticated in terms of how they shop, as highlighted in last year’s FRUIT LOGISTICA Trend Report Surprises in Store. They expect information on where and how fruit and vegetables are produced. Resources have to be used in a better way and the negative impact of production, packaging, storage and transportation has to be reduced. At the same time, as a major source of healthy food, fresh produce companies can play a vital role in creating a more sustainable global food system. Lowering the negative environmental and social impact, and being transparent about this, is becoming part of the fresh produce business. This year’s FRUIT LOGISTICA Trend Report Do The Right Thing (Right) will picture a framework of the most important sustainability issues for the fresh produce industry. The sustainability concept includes three pillars: people (social), planet (environmental) and prosperity (economic). This report will focus on people and planet, assuming that economic viability is a condition for any company to remain in business. It will touch upon the business case of sustainability and the benefit of labels and metrics in sustainability. Finally, it will roll out a proposed roadmap towards making sustainability an integral part of the business. After all, a ‘just do it’ attitude is the only real force bringing sustainability in the fresh produce industry to a higher level. Throughout this report, compelling examples show how producers, distributors and retailers are contributing to an increasingly sustainable industry.
Looking far beyond the horizon, the fruit and vegetable industry is moving towards circular business models. In a circular economy, the value of products, materials and resources are maintained for as long as possible by returning them into the product cycle at the end of their use, while minimising the generation of waste. That means a shift towards the use of renewable energy, towards excluding toxic chemicals and towards the elimination of waste. The circular economy concept is currently promoted by the EU and several national governments around the world including China, Japan, Canada, Netherlands, UK, France, Sweden and Finland, as well as by many businesses globally. But it still has many limitations31. We should regard this as a long-term direction and vision, rather than a clear objective. There is no one-size-fits-all strategy when it comes to harnessing the value of sustainability or circularity, but certain steps are relevant regardless of scale, company type, market focus and sphere of activity (Figure 11). Mapping the sustainability impact for your company, making choices, measuring the performance and monitoring are all vital steps in managing your sustainability plans. One final step that has not yet been discussed, but is just as valuable as the sustainable performance itself, is transparency. Increasingly, businesses are choosing to be open about their behaviour. German discounter Aldi, operated via the companies Aldi Nord and Aldi Süd, is among the largest food retail chains in the world today, operating over 10,000 stores in 20 countries around Europe, the US and China. It has published an impressive amount of information on its social corporate responsibility policies, displaying it on various company websites.
The information is very detailed, illustrating what Aldi considers to be high-risk product groups. It explains how high-risk supply chains – like the one underpinning its coffee procurement – are organized, how the company works on sustainability issues, what goals are targeted, how it selects sustainability priorities, how suppliers are audited and much more. Various statements on human rights, packaging and other issues are published and explained, including statements on chemical use that is considered as harmful for bees. For a retail giant considered to be somewhat reclusive when it comes to public announcements, Aldi’s lack of shyness in the field of sustainability is certainly causing a buzz. So it seems, the greatest opportunity to get a return on your investment in sustainability may lie in the long-term strategic value associated with being a trusted source of sustainably produced fruit or vegetables. Without transparency, there is no trust. And without trust, nothing is sustainable.
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