How Marketing of Fresh Produce will make you Rich
Introduction to marketing
Marketing of fresh produce forms an integral part of the produce value chain. Post-harvest losses in the developing countries amount to 30-40% of all crops. The number increases if narrowed down to horticultural produce. These losses are due to damages or wastage resulting from a poor marketing strategy.
In developing countries, most farmers lack the essential market intelligence that is the single most important factor in succeeding in Agribusiness. Production of fresh produce depends on a wave of peer producers.
If farmer X for instance, grows beetroots in a particular season and becomes very successful, all the neighboring farmers will follow suit without considering if the demand for beetroots is there or not at the time.
Subsequently, the glut in supply of beetroots fills the market thereby lowering the prices. The flipside is because farmers didn’t get good prices from their beetroots in the previous season, none will produce the following season creating a deficit in supply.
Another incidence is where a farmer waits until the crops attain the desired maturity before looking for a market. I believe that it’s every farmer’s objective to achieve zero losses or at least minimize postharvest chain losses and get the best price for their produce.
This article’s aim is to;
- Explains the most important aspects of marketing
- Tells you exactly what you need to do to get the return on your investment.
Marketing of Horticultural produces explained
To understand the marketing concept better, I’ll introduce the issue of production and distribution chain. It’s paramount always to remember that consumer is the first person in the distribution chain as well as the initiator of the process.
The biggest mistake made by many farmers is just to produce anything and impose it on the consumer. Keep in mind that the primary characteristic of most horticultural produce is perishability.
Therefore, to be successful, one needs to have the end in mind at the beginning and get everything right the first time. The diagram below shows a typical produce chain.
So what is marketing? In the words of a famous business author Peter Drucker “Marketing is the whole business seen from the point of view of the final result, that is, from the customer’s point of view….Business success is not determined by the producer but by the customer” For our case our business is farming, and the customer is the consumer of the fresh produce.
Master this concept and you’ve mastered all there is to marketing.
TIP: In marketing remember that customers/consumers buy benefits not products.
Importance of Marketing
The best way to understand the importance of marketing is to think of your farming business as a speeding vehicle, and marketing as the steering wheel. Without it, you’ll hit objects and even lose direction.
Marketing is therefore very essential to ensuring that the produce reaches the desired consumers as soon as possible. It is through marketing that one determines the distribution channel that will accommodate the perishability nature of horticultural produce.
To have a competitive advantage over your peers, you need to evaluate where your farming business is, where you want it to go and how you are going to get it there. Marketing in its most basic form is to help you achieve long-term profitable growth. In a nutshell, it’s your roadmap to a successful agribusiness.
TIP: Design a marketing strategy for your agribusiness and keep referring to it to stay on track.
Marketing trends of fresh produce
Over the recent past, the fresh world market as witnessed immense changes in consumers’ preferences, distribution channels and value addition. The modern consumer is willing to pay for extra value attached to the produce. Amongst the many trends, the following are significant and indicative of the many opportunities in the horticulture sector.
- Margin pressure at all levels of the food supply chain
- Many produce suppliers facing lower profits margins.
- Growing concern for food safety, traceability and sustainability expectations all increasing cost of production.
- The need for significant investments in information technology systems to match up with the ever changing market.
- There is an increase in mergers are (retailers, foodservice, shippers).
- Higher income and socially conscious foodies are driving demand; their preferences lean towards organic, convenience (fresh-cut), flavor, local.
- For mainstream consumers, positive attitudes about wellness benefits of fresh produce not translating into higher purchases. Improving the flavor might help.
- The perception that produce costs more and may perish quite fast. Better shelf-life might help.
TIP: Follow the market trends of fresh produce to enable you to make informed decisions that resonate with the consumers.
Despite the many opportunities, the horticulture industry still faces a myriad of difficulties ranging from unscrupulous middlemen who offer farmers very low prices for their produce. These middlemen get gross profits from extorting the farmers who have limited access to market information.
In most developing countries, the infrastructure necessary for preserving fresh produce is always lacking. This support involves things as cold storage facilities, small warehouses, inadequate transport systems and the list continues.
As if that is not enough, there are silly cultural beliefs (African tradition) that fruits and vegetables are for the children, old and sickly people in the society. For these reasons, there are always changes in demand for fresh produce.
TIP: Challenges will either make or break you. You decide.
I am going to categorize the challenges listed above into two;
- Those that you have control over (e.g. Middlemen)
- Those that you either have indirect control or none at all (e.g. Infrastructure)
For this session, I will recommend a few issues focussing on the first category only. These recommendations are according to the importance of marketing strategy by Nimble Division.
Recommendation 1: Conduct a situational analysis by studying the competition, reviewing and selecting the enterprise to produce.
Recommendation 2: Develop brand positioning by defining the target market, the frame of reference, a reason to believe and point of difference. Could be how you do your packaging etc.
Recommendation 3: Consider the “The marketing mix.” These are product, price, place and promotion.
This post has covered the most fundamental aspects of marketing fresh produce, follow these essential tips and recommendations to get the return on your investment. Similarly, if you know someone who could benefit from this article, kindly share with them and let’s make market information public knowledge.