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Goodwill: Georgia’s first hypermarket chain to focus on premium products

Goodwill sq

Goodwill Ltd “never compromise on quality,” according to its commercial director Beqa Petriashvili. By 2015, the retailer had opened 7 hypermarkets: 4 in Tbilisi and 1 in Rustavi, Gori and Batumi each. And this year, the company is going to open 2 new hypermarkets.

“We sell 50,000 SKU in our stores; 25% of the products are produced for us by local suppliers and we import another 25% directly ourselves. This enables us to guarantee high quality and freshness as well as the best processes,” said B. Petriashvili.

“We are going to increase the share of direct imports. As the result, we will be independent of distributors, control the whole logistics process and optimize prices.”

The main exporting countries for Georgia are Turkey and Iran, due to the country’s location (Tbilisi is 2,000 km from Istanbul and the goods are delivered by sea).

At the same time, after the introduction of an embargo in Russia, European exporters began to look for new markets and Goodwill is getting offers from them every day.

Modern Retail since the 2000’s

The modern retail sector is quite new in Georgia. The first chains opened in 2000 and their share does not exceed 15%. However, it has been developing very quickly and the competition has been toughening. This is why Goodwill has made a commitment to quality; its customers know they can find innovative products and specialties.

“We are glad to introduce novelties for our clients and we will diversify the sources of our range,” Petriashvili said.

NB

This article is from issue 137 of Eurofresh Distribution magazine. Read more free content from that edition online here.

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Ukrainian retailer ATB retains its lead

Despite the difficulties, ATB Market maintains its volume of sales at last year’s level

Despite the difficulties, ATB Market maintains its volume of sales at last year’s level.

At the moment, the company imports 50% of its foreign fruit and vegetables directly and buys the rest through Ukrainian importers. “We import a lot from Spain: stone fruit, persimmon, lemons, tomatoes, etc. We are generally satisfied with the quality of Spanish products,” said produce buyer Svetlana Hosalova. The main competitor for Spanish citrus fruit is Turkey. “In season, we order 700-1,000 pallets of citrus fruit from Turkey at least twice a week.”

ATB Corporation carries out several activities, a major one being the development and marketing of the largest discounter retail chain of food supermarkets, ATB Market. The history of ATB began in 1993 with the opening of 6 grocery shops in Dnepropetrovsk (the second largest city in Ukraine and the country’s industrial capital). Since then, the company has seen the highest rate of development in Ukraine, and in April 2015 the number of stores exceeded 750 shops in some 170 cities and towns in 16 regions.

The retailer’s competitive advantage is in its prices, which are 10-15% lower than average, but quality is also an important issue. To offer the best prices and control quality, the company has private label production in various categories. Their assortment now covers more than 600 items.

ATB chains also run a social programme to ensure minimal prices for the main social product groups. Price reduction is part of a longterm programme with the company’s suppliers. Thanks to the effort of the management and staff, the retailer has won numerous prizes in different competitions and is ranked highly in a lot of research work.

To ensure the freshness of its products, ATB Market owns one of the largest logistics infrastructures, including 16 distribution centres and 300 trucks. Daily turnover of the company’s DC exceeds 4,000 t. The company provides jobs for over 31,000 employees and helps most of them improve their professional education and skills.

This article originally appeared on page 20 of issue 137 of Eurofresh Distribution magazine. Click here to read more highlights from that edition.

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Tudespensa earns a staunch customer base in Spain

“Our most loyal customers are those who buy fresh produce from us.” Juan Carlos Chillaron

One of Spain’s first exclusively online supermarkets, Tudespensa.com was launched in October 2012 and now has 80,000 registered customers with 30% growth expected this year.

Tudespensa– which translates as ‘Your pantry’ – aims to set the benchmark for quality and freshness in fresh produce e-commerce in Spain. Head of fresh produce procurement and pricing, Juan Carlos Chillaron, explains how.

What is your fresh produce strategy?

Fresh produce is the most important part of the www.tudespensa.com online supermarket and so we always aim to exceed our customers’ expectations in terms of the quality of our produce. This applies to all kinds of fresh produce, but in the case of fruit implies achieving this amid the idiosyncrasies of these products, where the quality perceived by the customer is not just influenced by freshness, but by other factors such as the calibre of the fruit and, above all, the ripeness of each piece fruit, as well as the packaging and labelling. For all our fresh produce we aim to keep the supply chain as short as possible, selecting and packing the product for delivery the same day or at the most the next morning, giving the customer the maximum possible product life – these are our competitive advantages.

How are you able to offer competitive prices, particularly when you have to factor in delivery costs?

You have to bear in mind that all our products arrive in fully labelled packaging, ensuring product traceability, and via refrigerated transport. They are kept in conditions of maximum food safety until they reach our customers’ fridges. Also, the formats for each of our products are adapted so they meet the needs of all our customers, without having to buy too little or too much of something, with the above-mentioned food safety guarantee, and every tray must carry full product information, such as on origin, category and weight. As well, every product has its own information sheet customers can view online while making a purchase. Taking into account all these factors, our pricing policy is based on a comparison with our online competitors selling comparable – of the same quality and calibre – labelled and pre-packaged products. We try to keep a balance, as do all retailers, in trying to offer the best prices while also achieving the margins the company needs.

What is the biggest challenge in selling fruit and vegetables online?

It’s the same for all online food retailers, it’s getting consumers to change their shopping habits, with the additional factor that we will be selecting their fruit and vegetables for them. The immediacy expected of online sales adds other challenges, such as the need to not only have the produce available, but of the desired quality and as soon as possible, as well as to offer a very wide range. For all these reasons, the rigour we require of ourselves at www.tudespensa. com must reflect that demanded by the customer, but without incurring very high costs as they also want competitive prices.

How many of your first-time customers return?

Nearly two-thirds of customers stay with Tudespensa after trying us the first time and we are especially pleased that 9 out of 10 customers recommend us to their friends and acquaintances. Another positive aspect is that our most loyal customers are those who buy fresh produce from us. Indeed, 81% of all orders include something from the fresh produce department, and 28% involve something from every section. We think this indicates that most of our customers understand and appreciate the complexity of doing their shopping for them, and the daily effort that goes into picking and delivering the best products in a timely manner, and their loyalty is the best possible response and biggest asset we could have. Although there will always be some consumers who want to keep buying these products in a traditional way, we have developed different ways to show them how much more convenient it is to not have to go to a store and carry heavy weights. One is the site www. valoratutiempo.es (assess your time), which we launched to prove to customers that doing their own shopping ends up being more expensive, and which has already been used by 8,500 people.

Where is your logistics platform?

For fresh produce, we are strategically located right near Mercamadrid, one of the biggest fresh produce markets in Europe, where our partners in the supply of meat, fruit, vegetables and fish are also based. Every day before 9am they deliver produce – packaged and labelled – to our automated warehouse, where it is soon dispatched to fulfil our customers’ orders. 
 

KEY FACTS

Turnover 2014: €8.9 million (expecting +30% 2015)
Expected to break even for first time this year  
Average customer spend: €115
Total assortment: more than 7,000 products
Fruit & vegetable items: 158 (including pre-prepared products): fruit 69, vegetables 89
Current top-selling fruit: bananas, oranges, mandarins
Current top-selling vegetables: potatoes, onions, courgettes
Fruit & vegetables imported: 25% of total (due to off-season produce & big tropical range)
Orders including some fresh produce: 81%
Delivery: 98% of orders delivered within customer’s chosen 2-hour slot
Logistics base: more than 8,000 m2  (incl. automated warehouse) beside Mercamadrid
Coverage: Madrid, Barcelona, Toledo, Guadalajara
Main competitors: Ulabox (100% online) plus retail chains Mercadona, Carrefour, El Corte Inglés
Forecast growth in food e-commerce in Spain: 18% by 2017

JB

 

 

 
 

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Vegetable prices keep climbing in Russia

Russia’s retail sector is highly dependent on imported vegetables – particularly during the off-season. In 2014, Russia imported 2.4 million tons of fruits and vegetables making it the third largest importer globally.

Fruit and vegetables prices in Russia were up 43% in February 2015 compared to the same month last year, a new report by the US Department of Agriculture says.

Titled ‘Vegetable Prices Keep Rising’, the report on the Russian Federation blames the import restriction, in combination with a depreciating ruble, for the soaring prices.

It also says many Russian consumers are buying less vegetables or switching to cheaper ones as their purchase power drops along with Russia’s weakening economy.

Russia’s retail sector is highly dependent on imported vegetables – particularly during the off-season. In 2014, Russia imported 2.4 million tons of fruits and vegetables making it the third largest importer globally.

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The report also says that the most popular vegetables for Russian consumers are cabbage (21% of total vegetables volume), tomatoes (20%), onion (13%), carrot (11%), cucumbers (10%), beets (6%), pumpkin (4%), and squash (3%).

In 2014, Russia produced 15 million metric tons (MMT) of fresh vegetables which covered around 86% of total domestic consumption needs. The vast majority of all vegetables in Russia (70%) are grown by households and do not enter modern retail channels.

The main vegetables produced in Russia, besides potatoes, are cabbage (3.4 MMT), tomatoes (2.2 MMT), onions (1.9 MMT), carrots (1.6 MMT), cucumbers (1.1 MMT), pumpkins (708,000 MT), squash (508,000 MT), and garlic (248,000 MT).

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USDA Gain report “Russia: Vegetable Prices Keep Rising

Click here to read more news about the Russian market. 
 

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Macfrut expects over 1,000 exhibitors and 40,000 participants

Macfrut, horticulture innovation in the spotlight

Innovation in technology and packaging – sectors in which Italy stands out – and the internationalisation process will be given special attention at the 3.2 edition of Macfrut, taking place on Italy´s Emilia-Romagna coast September 23-25.

Being held at the Rimini Expo Centre, the 2015 edition of Macfrut, an event for all professionals in the fruit and vegetable industry, is expected to attract about 40,000 participants – up significantly on last year’s 25,000 – and more than 1,000 exhibitors in the 33,000m2.

It will be spread over six halls, including four dedicated to the post-harvest sector, and two halls for the pre-harvest sector (technical equipment, nurseries, greenhouse crops, producers of new varieties, etc). Altogether, there will be 11 exhibition sectors representing the entire fruit and vegetable supply chain.

“We will be hosting this event with great pleasure, since it highlights the ability of the Romagna region to implement a system,” said the Director of Business Unit of Rimini Fiera, Patrizia Cecchi.

“UniCredit has decided to support the 2015 edition of the event not only as a sponsor but also as a strategic partner,” said Leonardo Gregianin, Manager of Territorial Development and relations with Stakeholders at UniCredit Centro Nord, “because we believe that the future of export and the promotion of “Made in Italy” products are a key element for the development of productivity in the agri-food sector.” Macfrut is a real occasion where professionals in the fruit and vegetable sector can meet and discuss current issues at international level.

At the same time as Macfrut, Rimini will be hosting Flora Trade, the international trade fair dedicated to floriculture.

Thanks to the strategic agreement with Unicredit, Macfrut 2015 will be attended by a large number of buyers in the large-scale retail trade coming from Eastern Europe and major non-European countries. The leading international newspapers in the industry will also be attending.

source: Macfrut

 

 

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Tough time for Israeli citrus market, says USDA

The Israeli citrus market's export value has been negatively affected by external shocks and unfavorable weather, reports the USDA.

External shocks and adverse weather have rocked the export market for Israeli citrus, according to a report by the US Department of Agriculture.

The Israeli shekel has strengthened about 10% against the Euro in the last year, making Israeli citrus exports less profitable in the EU, a market to which two-thirds of its citrus exports go.

The Russian financial crisis is also hurting Israeli citrus exports. The rapid depreciation of the ruble against the shekel has brought trade to a standstill since February. And exports to Japan have also taken a hit due to economic slowdown there.

Israel is consequently increasing its exports to long distance markets, mainly South Korea, the US, and Canada, the USDA said. “However, these markets remain small with the US and the Canadian markets capturing 3-4% of the total Israeli citrus exports.”

Meanwhile, in January, about 6,000 ha. of citrus were damaged due to hail storms and winds estimated to have caused overall damage worth NIS 70 million ($17.7 mil) to Israeli agriculture, affecting thousands of acres of avocado and citrus crops and some row crops in the south. The citrus damage would have been worse if not for the protective nets used in groves. “Despite the weather disturbances, export quantity was not affected significantly and this is mainly to a good crop and that made up for the weather,” the USDA said.

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Israel’s best seller in citrus is the Orri mandarin, an easy-peeler which accounted for about 40% of Israeli citrus exports (64,478 tons) in the 2014/15 marketing year and mainly goes to the EU and. “Orri is still profitable, but it’s just less profitable per unit than it could be and this is due to the weakened Euro,” the USDA said.

“Orange exports in MY 2014/15 have declined marginally compared to the previous two years because of strong domestic demand (see table).  The decrease in grapefruit exports in MY 2014/15 is mainly due to the fact that about 1,100 ha of red grapefruit (star ruby and Rio-red varieties) were uprooted in the last 3 years due to low profitability,” it said.

Source: “External Shocks and Weather Conditions Challenging Citrus Revenues” a Global Agricultural Information Network (GAIN) report by the USDA’s Foreign Agricultural Service (FAS) 

Image: “Lemon Orchard in the Galilee by David Shankbone” by David Shankbone (attribution required) – own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons.
 

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Africans tour Philadelphia Port as new season fruit arrives

Holt and African Delegation - Edited

On the eve of the start of the African fruit season, in which perishable summer commodities originated on the continent begin to arrive on shores in the US, a delegation from several African nations has visited the Port of Philadelphia.

Holt Logistics Corp said that as part of their historic visit and participation in the African Business Roundtable at the Philadelphia Federal Reserve Bank, dignitaries from Côte d’Ivoire, Ghana, South Africa, Togo, and Tanzania toured facilities at Gloucester Marine Terminal to learn about the numerous quality initiatives and processes utilised by the company. 

Additionally, the delegation discussed potential expansion of trade partnerships that will come as a result of the proposed African Growth and Opportunity Act (AGOA) currently before the US congress, Holt said in a press release dated June 15.

The first vessel of the 2015 South Africa fruit season arrived this morning at the Gloucester Marine Terminal. The Lapponian Reefer, a specialised refrigerated cargo ship discharged approximately 3,600 pallets of fresh oranges from the Western Cape of South Africa. The cargo arrived under the strict guidance of 360 Quality, an international shipping association dedicated to ensuring quality and safety in supply chain management for perishable fruits and vegetables, it also said.

“This visit of the delegation of West African leaders is timely in many ways,” said Peter Inskeep, general manager of the Gloucester Marine Terminal. “The beginning of the Summer Citrus season has created a heightened interest and awareness in developing nations of the value of fast, dedicated and direct transport of food products. We are also eager to share best practices in food handling and production with these potentially very important trade partners in support of AGOA, which will greatly increase commodities traffic between our two continents. Holt Logistics Corp is foundational terminal operator member of the 360 Quality Initiative, and we look forward to sharing a framework that can be transposed onto the many high quality food products that reach the North American Market through the Delaware River Ports.”

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In the photo: (left to right): Sander Daniel, Global Marketing, Holt Logistics Corp; The Honorable Thulisile Mathula Nkosi, Consul General, Republic of South Africa; Florizelle B. Liser, Assistant U.S. Trade Representative for Africa; His Excellency Joseph Henry Smith, Ambassador, The Republic of Ghana; Leo A. Holt, president, Holt Logistics Corp; His Excellency Daouda Diabate, Ambassador, The Republic of Cote d’Ivoire; His Excellency Limbiye E. Kadangha Bariki, Ambassador, The Republic of Togo; Her Excellency Lily Munanka, Ambassador, Republic of Tanzania; and His Excellency Api Assoumatine, Togolese Ambassador to Ghana.

source: Holt Logistics Corp

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Sisa: retailers of excellence

Sisa Centro Sud's philosophy is always to try to favour local and short supply-chain products of excellence and products from Italy.

Sisa Centro Sud favours top quality local produce from Italy

Sisa Centro Sud, the branch of the Italian retail multiple Sisa that looks after the central and southern regions of the country, controls around 500 points of sale with floor areas ranging from 200 to 1200 m² in Campania, Apulia, Basilicata, Molise, upper Calabria and lower Lazio from its operations headquarters at Gricignano di Aversa (province of Caserta). The company philosophy is always to try to favour local and short supply-chain products of excellence and products from Italy.

Apple and pears: origin Italy

In apples and pears, Italian fruit are very strong: 90% of the apples on the shelves are from the Trentino-Alto Adige region, with a strong show of PDO labels such as Melinda and Val Venosta as well as generic Trentino fruit. Only 10% are imported, and only at the end of the season. Dr Palladino explained that “in this area too, PDO and PGI labels are very important for consumers, particularly in varieties such as Golden Delicious, Red Delicious, Fuji and Royal, but also for Granny Smiths”. The same holds true for pears, which to a very great extent (over 90%) come from Emilia Romagna and largely in varieties such as Abate and Conference, while Kaiser and Williams have not achieved the same popularity.

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The best comes from Sicily

In citrus fruit, much importance is attached to red oranges such as Sicily’s Tarocco variety, sold under the red oranges from Sicily PGI only during its season. “The market has responded very well, as consumers appreciate not only these oranges but all the GPI and PDO products from Sicily,” commented Agostino Palladino, the head fruit and vegetable buyer for Sisa Centro Sud. Tomatoes are one of the greatest strengths of Sisa Centro Sud, which mainly sources all the varieties from Sicily: cherry, Piccadilly, different oblong types, ribbed tomatoes etc. A small proportion also come from lower Lazio, particularly from the Fondi area, and the imported product comes from Morocco. As Palladino explained: “Sicilian tomatoes allow us to discover a very precise identity of our own that is unique in the world”. The potatoes are also local – the centre and south of Italy can boast a crop of a good standard – with 60% coming from Avezzano (Abruzzo) and Campania and the remaining 40% imported from France. Leafy vegetables and lettuces are sourced almost exclusively from Battipaglia (Campania), with the sole exception of iceberg lettuces, which are imported from Spain, Germany and the Netherlands.

Sisa brand: a big success in convenience foods

Sisa Centro Sud has also developed very successful branded lines of fresh cut products, with twelve Sisa brand products including baby leaves, baby rocket and baby spinach and a further six under the Primo low-price brand, as well as Sisa brand potatoes. Palladino emphasized that “the market has responded very well, particularly to the Primo mark, which price-for-price offers better quality than our competitors in this area”. „

GO

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More Brits choosing salad for lunch

UK retailer Tesco says exotic salads are snaring more of the lunch market

Exotic salads have increased their share of the lunchtime snack market for office workers and those on the go, reports Tesco.

The retailer said increasing numbers of shoppers across the UK are now choosing a salad over a sandwich, wrap or roll and the healthier end of the salad market is growing fastest.

In a press release, Tesco included IRI data showing that in the last 52 weeks, demand for leafy salads has grown 13%, while demand for lighter, healthy salads rose 19%. Over the same period, the sandwich market gew just 5%, according to Nielsen data.

Tesco said this trend has seen it “completely overhaul and more than treble its ‘on the go’ salad range to nearly 50 lines.”

Included in the new range are exotic salads such as:

  • finest* Crayfish and Mango Salad
  • finest* Coconut Asian Chicken Salad
  • finest* King Prawn, Spicy Charlotte Potato Salad with Sour Cream and Lime Dressing
  • Salmon and Edamame Sushi Rice Salad
  • Yakitori Chicken Sushi Salad

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Tesco salad buyer Helen Dwyer said: “The quality and range of ready to eat salads has improved so much in recent years that they are attracting shoppers who might otherwise have bought a sandwich, roll or wrap. Traditionally, sales of prepared salads would rise during the summer months and drop again during the winter. Now, because of the exciting number of new gourmet salads available that demand is not only sustained throughout the year but is bringing in plenty of new customers who might otherwise have chosen a sandwich as a lunchtime snack.

“This current boom has prompted us to launch what we believe to be among the most sumptuous and wide-ranging ‘on the go’ salad range available on the high street but at equally mouth-watering prices. We’ve included something for everyone – from our finest* top of the range lines to lighter sushi rice salads and Healthy Living range for those looking to maintain a balanced diet,” she said.

The new Tesco ‘on the go’ salad range also includes four new first to market lines that can be eaten hot or cold.

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Click here to read the press release and here to see the full range of new Tesco salads.

 

 

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Why the PMA is reaching out more to younger Americans

PMA chairman Kevin Fiori explains the reasons behind marketing fruit and vegetables to young people as cool and convenient and ‘one big iconic brand’ .

Marketing fruit and vegetables to young people as cool and convenient and ‘one big iconic brand’ is one of the goals of a campaign in which the Produce Marketing Association (PMA) is now involved. New PMA chairman Kevin Fiori, also vice president of marketing for Sunkist Growers, explains why this matters and key trends in America’s fresh produce consumption.

Why is the PMA is investing $1 million this year in the new Partnership For A Healthier America initiative, FNV, promoting fruit & vegetables to teens and young adults?

The FNV campaign (www.fnv.com/) is designed to build an emotional connection to fruits and vegetables among young Americans using marketing strategies and tactics relevant to them. Health and nutrition messaging is obviously a strong motivator for making better choices, but it’s nothing new and research shows it’s not changing the mind of the ‘skeptical’ teen who is choosing the heavily-marketed, less healthy options over what s/he might find in the produce department. We need to take our marketing straight to younger demographics in their environment – on social media, through their local community activities and with the help of their favorite celebrities.

What trends are you seeing in fresh fruit & vegetable consumption in the USA?

According to Produce for Better Health Foundation’s 2015 State of the Plate research, which PMA co-sponsors, children of all ages are consuming more fruit “as-is” and they are consuming more of it at all meal occasions. This research further emphasizes the importance of programs like eat brighter!™ and FNV to leverage these trends to continue increasing consumption.

From the foodservice perspective, menus and recipes are evolving to deliver global inspiration and local sourcing to better serve consumers changing preferences and expectations.

According to the National Restaurant Association’s What’s Hot in 2015 chef survey, healthful kids’ meals and providing produce sides in kids’ meals are among the top trends. Kids’ menus Increasingly include bolder, global flavors and healthy, smaller versions of items from the adult menu, featuring whole grains, vegetables, oven baked items and entrée salads.

Who else is eating more fresh produce?

According to The Packer’s 2014 Fresh Trends, Asian and Hispanic consumers are the demographic groups most likely to serve fresh produce every day and Produce for Better Health’s 2015 State of the Plate report found many demographic groups are eating more fruit.

Hispanics make up 17% of the population, approximately 54 million people. and are the fastest growing ethnic group in the country. That combined with the fact Hispanic spending power is projected to reach nearly USD $1.7 billion by 2017 mean this consumer segment will continue to influence food and flavor choices for years to come.

And who is eating less?

According to PBH’s 2015 State of the Plate report, almost all age and lifestyle groups are consuming fewer vegetables compared to 2010 report (with the exception of teens and adult males ages 18-34).

The trend towards convenience may be contributing to this decline because as consumers seek to simplify their in-home meal preparation they use fewer ingredients, exclude side dishes that are difficult to make or time consuming, and/or opt for ready-to-eat frozen meals or store prepared meals, all of which can decrease vegetable consumption. Other barriers impacting vegetable consumption include uncertainty about how to prepare them and concerns about spoilage.

Why do transparency and authenticity matter so much?

Demonstrating both is the first step to gaining credibility and loyalty with consumers. Fast Company recently noted, “as technology generates more transparency, consumers will hold businesses to higher standards, with no room for fabrication or deceit”.

This year we will see growing consumer concerns with not only the authenticity, origins and integrity of food products, but how they are made, by whom, and with which ingredients. Transparency and authenticity will continue to be key variables to generating a “unique value” for companies in the future because unlike prices, products and technologies, they cannot be duplicated. Millennials have the strongest inclination to spend more on products from companies investing in social and environmental betterment.

Why are millennials so important?

It is vital that we engage millennials now and in the future to continue driving fresh produce consumption in this country. This demographic represents a quarter of the U.S. population (according to Nielsen data), and they’re now having children of their own. We need to enter their space (mobile, social media, etc.) and address their concerns

What can the F&V sector learn from the floral industry?

The floral industry thrives by making an emotional connection with the consumer, every day selling a product (flowers) not because the consumer needs them but because they want them. In today’s produce industry, the consumer has many year round varietal options. We must drive the emotional connection.

JB