This article covers fresh fruit and vegetable retailers as well as wholesalers in Australia. The retail side of this industry was last covered in BVN 101 of September 2007.
The industry should be benefitting from an increasingly health conscious consumer. However growing competition from supermarkets is stifling growth. Businesses in this sector are now having to find new ways to differentiate themselves from the supermarket offerings.
Retailers of fruit and vegetables make up a gross revenue of around $4 billion in total. This is divided amongst around 2,500 businesses in Australia. Over the past five years growth has been constrained to around 0.4% per annum, being well below overall GDP growth.
Growing demand from more health conscious consumers should logically result in higher revenues and profits for retailers. This is not the case however, as supermarkets have upped the ante in terms of their product diversity and presentation. Time poor consumers also have a tendency to do as much of their food shopping at the supermarket as possible. Higher prices of fruit and vegetables also affects the quantity sold and profit margin that the retailers are able to pass on to their clients.
(For access to this article in full please subscribe to the Business Values Newsletter at www.jarot.com.au)