7. In the market - wholesale, retail, and market information
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7.1. Wholesaling of fresh produce
7.1.1. What is Wholesaling?
Wholesaling is the business of selling relatively large quantities of consumables to retailers or other merchants rather than to consumers.
In most countries in the world, a strategic role in fruit and vegetable marketing is played by one or two central wholesale markets. The wholesale market constitutes the basic source of supplies for retailers in the largest cities and their surrounding districts, and for wholesalers supplying retailers in more distant centres. It also serves as the main outlet for nearby growers and, through transporter/traders and commission agents, for those producers further afield. Such a market is also the main centre for the sale of imported produce and that to which exporters in other countries send their produce. At the wholesale market, supply and demand find an equilibrium price and this becomes the mayor determinant of prices throughout the area.
7.1.2. Wholesaling in the Eastern Caribbean
Port-Of-Spain in Trinidad boasts a large central wholesale market which operates generally along the lines described in 7.1.2. above, but no such wholesale markets are in existence in the other English-speaking islands of the Eastern Caribbean. This is largely a reflection of the small land masses, low production volumes, and small consumer populations with a relatively low daily demand volume for fresh produce. However, the absence of a wholesale market in these islands does not mean that wholesaling of fresh produce does not occur, it is just less obvious in its activity.
Wholesaling of imported produce from extra-regional sources generally proceeds with the importers acting as initial wholesalers who either sell to retailers directly or may sell to other wholesale traders that handle domestic and imported produce. In St. Vincent, on the leeward side of the island, there are a number of transporter/traders who buy produce from farmers and sell it onto traffickers and retailers, and who are clearly wholesalers who also supply a transport service.
In the same way the inter-island traders are wholesalers with a more integrated system of marketing and distribution in that they will buy from farmers directly (as well as other sources), pack the produce, arrange for transportation to the dock, complete shipping documentation and arrange for sea transport, travel on the boat themselves or fly to the country of import, then they will clear the produce through Customs and phytosanitary control before arranging transport if necessary to the selling point. All of these activities invoke a tremendous risk for the trafficker or huckster, but in the absence of improved transport and consignment services, are the only effective means of sustaining the regional export trade at the moment.
Some wholesalers may also become involved in extra-regional export by virtue of the volume of produce handled and a greater appreciation of the requirements of these distant markets. In this sense exporting is really just another form of wholesaling.
In Barbados, there is a considerable amount of by-passing of the wholesale trade in domestic produce because many farmers, both large and small, enter into regular supply contracts directly with supermarkets and shops, and the numerous hotels and restaurants supplying food to the large numbers of tourists present nearly all the year round. Under these circumstances the activities of wholesalers can often be largely confined to importation and wholesaling of imported fresh produce, most of which is from outside the region. Although there is substantial consumer demand for fresh produce, there is no real demand for a specialized wholesale market because there would be very little if any increase in marketing efficiency as a result - which is after all the main reason for having a wholesale market!
In Trinidad, the large wholesale market complex in Port-Of-Spain was established many years ago to increase marketing efficiency and to help ensure that the many small farmers would have a market in which to sell their produce. A large retail market is included in the Port-Of-Spain market complex and which offers an immediate vending point for retailers buying from the wholesale market and which attracts a great many consumers in search of fresh produce, dry goods such as rice and peas, and meat.
The market operates around the clock with regular closing times to ensure that cleaning operations can be performed as well as other administrative functions. Unfortunately, the location of the market has become a restraining factor because of the need to develop more rapid transport and communication between Port-Of-Spain, the ever-expanding urban corridor, and the other cities such as San Fernando.
The wholesale market is successful, but needs to be expanded and to be more accessible, otherwise the wholesaling centre becomes a delaying factor in fresh produce marketing and distribution when farmers cannot reach the market without queuing for long periods on traffic-jammed highways and then cannot get into the congested market itself.
A new wholesale market is being proposed for the Piarco area so that produce can be marketed more rapidly and wholesalers from San Fernando can buy their produce more quickly and conveniently. At the same time the large number of retail outlets in the urban corridor can obtain their supplies much more efficiently. The existing wholesale and retail market in Port-Of-Spain will the be better able to cope with the marketing needs of the capital itself and its immediate surrounding territory.
The relatively small populations of the Windward and Leeward Islands and the consequently small demand volume for fresh produce means that wholesale markets are not likely to be needed in the forseeable future. However, the absence of a central wholesale market creates special problems relating to market information and intelligence and the maintenance of stable prices for domestic produce. Without proper market information on daily or weekly prices and produce availability, prices obtained by farmers can and do fluctuate considerably with the result that while a few farmers occasionally benefit from high prices, most may only recover production costs or possibly make a loss. Under these circumstances, production planning by the farmers and extension workers is rather hit and miss.
The presence of a central wholesale market might also offer a solution to the serious problem of praedial larceny which is prevalent in the region in that all growers and traders could register with the central market and all sales of produce be documented with the registration number of the grower. Nonregistered sellers of produce would not gain entry to the marketing process. However, the relatively low volume of domestic produce traded is likely to continue throughout the Eastern Caribbean and no matter what particular advantages there may be in establishing a wholesale market facility, if there is not sufficient economic Justification then it will not be successful.
7.1.3. How Can Wholesalers Avoid Post-Harvest Losses?
Wholesalers handle produce which may or may not have been freshly harvested and may be packaged in various types of container. Depending on how well the farmer and transporter have done their job, the wholesaler must decide on the most appropriate sale and distribution system so that the produce can reach the consumer in the best possible condition.
Above all, the wholesaler must strive to keep post-harvest losses at a minimum or he will have to raise the selling price to counter the losses or bear the financial loss directly himself. Wholesalers in the Eastern Caribbean rarely have specialized storage facilities other than an ordinary warehouse and it is recommended that they concentrate their activities on selling and moving the produce as quickly and carefully as possible in order to avoid losses from spoilage of all kinds.
The general principles of keeping produce cool by stacking it in well shaded and ventilated locations and avoiding exposure to sun and rain at all times are the most important things to remember. Whenever the produce is handled it should be done so carefully and cleanly so as not to inflict cuts and bruises. If the produce is purchased from the farmer in bulk, or 'off the tree', then suitable packaging should be invested in so that multiple handling steps can be avoided and the produce protected from compression and other injuries.
The best way to avoid post-harvest losses is to only buy good quality produce in the first place and to regularly inspect the produce for spoilage if sale is delayed. Re-grading and repacking of produce may be permissible but this will depend on the cost of the process and the value added as a result. Wholesalers are in the business to make money, not as charitable suppliers of fresh produce. All staff employed by the wholesaler should be trained in the basic causes of post-harvest losses and recieve demonstration type training on the importance of careful handling and stowing of fresh produce in preventing such losses.
7.2. Retailing of fresh produce
7.2.1. What is Retailing?
Retailing is selling to the consumer and is the last commercial act before fresh produce is consumed. Consequently, the fruits and vegetables offered for sale at retail may have passed through many different hands from the time they were harvested. Some of the produce will have come from domestic sources but a significant proportion will have been imported, either from within or outside the Eastern Caribbean region.
Whatever the source of the produce its natural perishability will almost certainly mean that it is nearing the end of its marketable life. Post-harvest losses occur at all stages through marketing and distribution but tend to be greater at retail. A significant proportion of the produce purchased by the retailer may never make a sale due to spoilage soon after reception by the retailer, or during storage at his shop or supermarket.
Retailing fresh produce is undoubtedly 8 risk business and the high price mark-ups made by the retailer are necessary to cover the cost of the post-harvest losses as well as the general overheads for the shop and still give a profitable income. It therefore stands to reason that a smart retailer will make more profit if he or she can reduce post-harvest losses by selling more of what they buy or alternatively they can sell a greater volume of produce at a slightly lower price and attract more customers and a greater market share.
7.2.2. Who are the Retailers in the Region?
There are four principal groups of retailers which can be recognized in the Eastern Caribbean region:
(i) Hawkers. higglers, hucksters. and street vendors
These retailers sell in open public places, often main streets and busy corners where they can attract a passing trade. They are opportunistic salesmen often depending on impulse buying of small quantities by the public. High value or sought after imported fruits are often the main produce sold by these vendors including single fruits such as prepared pineapples, small bunches of imported grapes, or imported mangoes when the local crop is out of season.
Individually, the sales volume of each vendor is relatively small but collectively the volume of produce sold is often very large.
(ii) Market vendors
These retailers are mostly engaged in selling fresh produce at the busy weekend markets in the capital cities or larger towns. Market vendors are more institutionalized in that whether they sell from permanent stalls within the Public Market building or from make-shift and temporary portable stalls in the open outside the market, they must pay a licence or stall fee for the privilege. Market vendors are mostly women and may be related to the producer from whom they bought the produce, or they may be independent in their operations.
Some inter-island traders, also called hucksters or traffickers, are regular market vendors in that they concentrate their selling activities to retail in the Public Market. Often, the bulk of fresh produce vending during the week, when Public Market buildings are often almost empty, is by these inter-island traders.
As with the street vendors, the individual sales volume of the market vendor is frequently very small, but collectively is still significant even though an ever increasing proportion of fresh produce sales is being diverted to the higher volume shops and especially supermarkets.
Unlike street or market vendors, the shop keeper sells fresh produce as part of a whole range of consumable items, most of which are not perishable. Both domestic and imported fresh produce is sold. Although some refigeration is often in place in the shop, it is not often used for fresh produce but more commonly for meat and dairy products. Retail volumes of fresh produce may only be small.
Occasionally, a shop may elect to specialism in fresh produce sales only, but the history of such ventures in the region would indicate this is not often profitable and the shops usually close down or convert back to general grocery and provision sales. The exceptions to this pattern are the many roadside fruit and vegetable 'shops' lining the main highway from PortOf-Spain to Piarco Airport in Trinidad. Here the very high volume of traffic throughout the day, but especially during the evening rush-hours when commuters return home along the urban corridor, affords a useful opportunity for farmers with fruit and vegetable plots close to the road to engage in regular retail activities.
These shops started as temporary structures but today many have become almost permanent and sell quite high volumes of produce. Farmers with a shop may be selling their own or other farmers produce. However, the long-term future of these shops is threatened by legislation designed to prevent traffic from stopping on the highway to purchase produce because of the traffic Jams and accidents resulting. Also, many large and sophisticated supermarkets are opening up in key areas of the urban corridor and offer increasingly large volumes of diverse types of fresh produce as well as a full range of other consumables and hardware. However, the roadside shops presently satisfy a need among consumers by offering a convenient supply of freshly harvested produce.
Supermarkets are an increasingly popular retail outlet for fresh produce in the Eastern Caribbean, but they also sell all kinds of other items in their bid to attract the 'one-stop' shopper. Fresh produce volumes sold in supermarkets are often far greater than other retail outlets and collectively, supermarkets are rapidly becoming the principal retail suppliers in many of the islands.
Supermarkets usually have some form of refrigerated retail display for fresh produce and the larger supermarkets also have larger refrigerated stores exclusively for fresh produce. Produce is obtained from small and large farmers, wholesalers and importers. The produce may be delivered in a variety of packages, grades and maturities. Considerable skill is needed by the supermarket manager or buyer in selecting the produce if substantial postharvest losses are to be avoided. Fresh produce is frequently sorted, graded, washed and packed and priced prior to refrigerated retail display, so that the busy shopper can 'grab and go'.
Small farmers are often at a disadvantage when supplying very large supermarkets, such as those in Barbados and Trinidad, because they cannot consistently supply large enough volumes of fresh produce at a quality demanded by the supermarket for many weeks or months of the year. Often, the supermarket manager prefers to import fresh produce from extra-regional sources because it will often be cheaper, the quality standards and packaging will be guaranteed, and volume supply can be obtained nearly all the year round, with fewer post-harvest losses and consequently less risk and more profit.
7.2.3. How Can Retailers Avoid Post-Harvest Losses?
In the first place, the retailer should be aware of the importance of post-harvest losses and their effect on profits, as well as understanding the basic causes of post-harvest losses and what can and cannot be done to prevent them. The principal concern to the retailer will be the cost of any loss prevention programme and its effectiveness rather than any desire to prevent losses just for the sake of it.
Reduction of post-harvest losses requires an investment in time, planning, management and possibly capital equipment. The level of investment will thus largely be governed by the nature of the retailer and the volumes of fresh produce sold.
(i) The smaller volume retailer - All retailers should be very selective about the produce they buy. Produce with the first signs of wilting, physical damage, or decay should be avoided. Unless storage facilities are available there is no point in buying under-ripe fruit, and over-ripe fruit should never be considered unless they can be sold immediately (ie. on the same day) to consumers prepared to buy them.
Having bought the produce, it should be handled and transported as carefully as possible to avoid physical damage and prepared for retail display in an attractive manner. If it looks good to the consumers it will be sold more rapidly and at a better price. Retailers should try not to mix attractive and unattractive produce together. Grading of produce by quality and maturity helps add value to the produce and for the small volumes sold takes only minutes of the vendors time.
If the vendor has no covered stall they should try and invest in a portable stall with a canopy or umbrella to shade both the produce and themselves from the sun and rain. Produce in the sun heats up and spoils very quickly, while rain sodden produce may rot.
Vendors should be very selective about what they carry over for sale the next day. It is better to lower prices and make a sale rather than to carry over poor produce that will not be sold the next day and thus thrown away with no income gained.
(ii) The shop and the supermarket - The recommendations for the small volume retailer apply equally well here, but in addition there are a number of problems which relate specifically to storage, preparation and display of fresh produce in shops and supermarkets.
If no refrigeration is available, or there is insufficient space for all storage needs, then the unrefrigerated produce should be sold as soon as possible. Only the best quality produce should go into refrigerated storage because only the best quality will store with fewer postharvest losses and give sufficient returns to warrant the expense of refrigeration. The refrigerated store should only be loaded with amounts of produce that the cooling capacity can cope with at one time. Overloaded refrigerators cannot cool produce properly with the result that the produce will often spoil more rapidly because of confinement in a warm and humid environment with high levels of carbon dioxide (See Section 8.5.3. for more details.). In other words, supervise loading properly such that smaller quantities are added to the store at regular intervals.
Remember, that the store contents should be clearly identifiable with the date the produce was put into the store marked on each package. Do not keep older produce in the store when better quality and fresher produce needs the storage space.
When washing and preparing produce before storage or retail display it is important to do the job thoroughly and to make sure that the produce is dried sufficiently, with a dry soft cloth or by air-drying, before bagging or wrapping or it will get slimy and rot. Remember that not all produce is suitable for washing and may be better prepared by gentle wiping with a soft dry cloth, as with green peppers, or simply selecting out of very dirty produce, as with green beans.
Polythene bags are a cheap and effective container for retailing of fresh produce but must not be completely sealed or the living produce will suffocate and spoil very rapidly. Make sure that the polythene bags have small holes in, by using ready perforated bags or by perforating them with a paper-punch or similar instrument. A very simple method of ensuring adequate ventilation of plastic bags is to Just snip off the corners with a pair of scissors.
Even if the produce does not suffocate in a polythene bag, it will rapidly sweat and look unsightly and with the real danger of rapid spoiling from bacterial soft rots in the sweaty conditions.
Leafy vegetables can lose water and wilt very rapidly, and if not wrapped may benefit by occasional spraying with clean water. Many of the condiments, seasonings/herbs and other vegetables such as carrots are very sensitive to ethylene gas produced naturally by ripening fruits and fruit vegetables. Celery and parsley will wilt and yellow very quickly, and carrots will get bitter if exposed to ethylene produced from ripening fruits. Wherever possible they should be stored and displayed separately.
Not all produce can be stored at the same temperature. Mango, pineapple and banana should not be held below 14øC (56øF) or they will be chill damaged and spoil rapidly. Most other commodities will store adequately between 7 and 10ø C (45 to 50øF) for a short period.
Fresh produce management in a busy supermarket is a very demanding job. Careful planning and preparation are vital if post-harvest losses are to be reduced and profits maximized. All new staff involved in fresh produce handling and sales at the supermarket should be trained properly before they assume responsibility for the produce.
7.3. Market information
Market information includes any aspect of information ranging from production to the final point of sale which improves our ability to market effectively. Some areas of information required on both domestic and export markets are:
7.3.1. Why Do We Need Market Information?
Market information and intelligence helps producers, traders and consumers balance supply and demand in the marketing system for fresh produce and thus avoid gluts and deficits in supply and corresponding price fluctuations. Farmers need information about probable supplies and prices in order to make decisions when planning their production, harvest and sale of produce. The knowledge that a farmer can compare one price offered by a trader with another price elsewhere, also influences buyers in offering fair prices.
Access to better information enables wholesalers to develop those consumer demands and producer supplies whiching might otherwise have been neglected. This reduces their business risks and enables them to operate profitably on lower margins. This in turn brings benefits to both producers and consumers. Consumer purchases can also be influenced by market news in that they may choose not to buy expensive produce which is in short supply in favour of more plentiful and cheaper alternatives.
Programmes of price and supply stabilization are more effective when based on reliable estimates of production, storage, internal movements and prices. To collect and broadcast such information is a complex operation and must be performed rapidly if the latest market news is not to become of historical interest only. Market information must be presented in a simple style which can be understood readily by all those that need to use it. This kind of public service is generally sponsored by government or possibly by aid organizations because a permanent staff and budget are fundamental to its operation.
For the local market most farmers are aware of what crops consumers require, how they expect them to be presented, and the time of year when they are required. This information is not usually consciously acquired - it is simply known from a farmers general experience of producing and selling. Thus the average farmer knows a great deal about local market conditions, and, if he intends to be successful, must plan his production accordingly. The difficulty which confronts many market information services in the Eastern Caribbean as regards domestic market information is telling their clients something that is needed and not already known!
For export markets, particularly the extra-regional markets, the necessary information cannot be acquired through everyday experience. There are three principal methods of obtaining information:
In the initial stages of planning an export programme, an exporter will rely mainly on published information, but once exports begin, information obtained through market contacts and by visiting the markets will be of primary importance. This applies particularly to items currently exported from the Eastern Caribbean which, due to their small volumes, are not adequately covered by published sources of information.
7.3.2. Market Information in the Eastern Caribbean
Market information capability in every territory is located in the public sector within either the Ministry of Agriculture or a statutory body with responsibility for marketing. All of these market information units (MIU's) supply domestic price information as well as on other areas, including:
All MIU's use the newsletter/report format to disseminate their information but relatively little use is made of other media such as newspapers, radio, television and notice-boards in strategic places such as public markets. The use of the Extension Officers of the Ministry of Agriculture as disseminators of selected market information for farmers is strongly suggested since they are in regular contact with the people who need to know.
St. Vincent and Grenada continue to struggle without an effective market information service despite efforts in the past to establish them. The GAINS report in Grenada is produced but on an apparently irregular basis and contains very little information of practical and immediate use for the farmers. Admittedly, farmers and rural communities are served with local information on the radio but there is ample room for improvement. In St. Vincent, the only information on farm-gate and retail prices published is in the bi-monthly report of the Statistical Unit of the Ministry of Trade, Industry and Agriculture. The information is largely historical by the time it is released and even then the report's circulation is fairly limited.
CARDATS produces a weekly radio programme on Radio Antilles covering prices from Grenada, Dominica, St. Lucia, Montserrat and Antigua, and occasionally from Trinidad as well.
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