How the global recession has reshaped this business
01 November 2009 09:08
Mike Knowles
As we approach the end of what has been a memorable year, a look back at my editorial comments in the previous 10 issues of Eurofruit Magazine is pretty revealing: only two of those comment pieces didn’t mention the global recession. And now I’ve gone and mentioned it again. The trouble is, very few things in this world – let alone this industry – are truly independent of the international financial system. Even if we are now heading out of recession in Europe, so much of the fresh fruit and vegetable business is linked to markets, spending, demand, investment, banking, loans, confidence, cash flow…
The list goes on. The fresh produce trade has been changed irreversibly by the economic downturn. As our lead news story on p5 of the November/December issue of Eurofruit Magazine about Tesco’s drive towards increased direct sourcing confirms, supply relationships have come under pressure as retailers seek to trim costs in the value chain. Producers and growers, having witnessed dramatic price decreases amid rising costs, now want to meet that demand and cut out the intermediate stages that some in the trade feel add an unnecessary layer of extra cost. In the next year, it is likely that alliances and marketing partnerships among rival producer groups will continue to make a comeback, restoring a more unified approach that, in stark contrast to consolidation within the retail sector, has been missing over the past decade. Importers and marketers, as a consequence, will be compelled more than ever before to justify the role they play in the chain and underline the value they add.
Every consumer trend has been shaped by the recession. In some instances, such as price, the effects have been obvious: who would have predicted, for example, that high-end retailers would suddenly begin to extol the virtues of their value proposition instead of distinguishing their products on the basis of terms of things like taste and provenance? Elsewhere, changes have been more subtle: interest in ethical sourcing has grown, despite the premium placed on Fairtrade. As we head into the next decade, all we can predict for certain is that this trade will never stand still.
See you in 2010!
As we approach the end of what has been a memorable year, a look back at my editorial comments in the previous 10 issues of Eurofruit Magazine is pretty revealing: only two of those comment pieces didn’t mention the global recession. And now I’ve gone and mentioned it again. The trouble is, very few things in this world – let alone this industry – are truly independent of the international financial system. Even if we are now heading out of recession in Europe, so much of the fresh fruit and vegetable business is linked to markets, spending, demand, investment, banking, loans, confidence, cash flow…
The list goes on. The fresh produce trade has been changed irreversibly by the economic downturn. As our lead news story on p5 of the November/December issue of Eurofruit Magazine about Tesco’s drive towards increased direct sourcing confirms, supply relationships have come under pressure as retailers seek to trim costs in the value chain. Producers and growers, having witnessed dramatic price decreases amid rising costs, now want to meet that demand and cut out the intermediate stages that some in the trade feel add an unnecessary layer of extra cost. In the next year, it is likely that alliances and marketing partnerships among rival producer groups will continue to make a comeback, restoring a more unified approach that, in stark contrast to consolidation within the retail sector, has been missing over the past decade. Importers and marketers, as a consequence, will be compelled more than ever before to justify the role they play in the chain and underline the value they add.
Every consumer trend has been shaped by the recession. In some instances, such as price, the effects have been obvious: who would have predicted, for example, that high-end retailers would suddenly begin to extol the virtues of their value proposition instead of distinguishing their products on the basis of terms of things like taste and provenance? Elsewhere, changes have been more subtle: interest in ethical sourcing has grown, despite the premium placed on Fairtrade. As we head into the next decade, all we can predict for certain is that this trade will never stand still.
See you in 2010!
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