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Fresh produce business management
Fresh produce marketing
Fresh produce marketing software reduces shrinkage, increases efficiency, and makes compliance easy. Turbocharge your profits now with farmsoft!
One hundred percent accurate traceability starts at the purchase order or delivery phase, and follows the fresh produce through all of the fresh produce processing and storage phases all the way to the customers doorstep and beyond. Recalls can be performed based on only a small amount of supply chain information, making farmsoft one of the best fresh produce traceability software solutions on the market. Trace software marketed to customers using any of the following: pallet number, inventory number, batch number, customers reference, purchase order number, sales order number, contract number, delivery date, invoice, delivery docket number and more. Farmsoft makes fresh produce marketing, importing, exporting, and sales and distribution easy with a range of handy features to ensure maximum traceability and efficiency in the fresh produce sorting, grading, packing, processing, warehousing, wholesaling, and sales & distribution processes.
Farmsoft fresh produce marketing software has solutions for all produce marketing enterprises and packhouse and pack shed.
Fresh Produce Marketing Software
Farmsoft delivers many handy tools to help manage fresh produce marketing and distribution activities. Comprehensive inventory, packing, processing, cost monitoring, and traceability is combined with fresh produce marketing tools to enable rapid planning and distribution of fresh produce.
Sales Contracts – fresh produce marketing software
Fresh produce marketing doesn’t get any easier with the ability to manage sales contracts based over any period of time. Print legal contracts for execution, and include detailed product specifications, quality requirements, pallet, packaging, shipping container packing, comments, notes, attachments, and more.
Sales Orders – fresh produce marketing software
Farmsoft records sales orders from clients. Orders can include specifications, features, notes, attachments such as contracts, emails, photo, and more.
The fresh produce marketing, sales, and dispatch processes are easy to use, and flexible enough to work for the majority of fresh produce marketers.
Production Management – fresh produce marketing software
Using data from the Purchase Orders and Sales Contracts, production can be scheduled to process or manufacture the fresh produce required by customers. Production orders include specifications, pack type, shipping container details.
Multi Site Management – fresh produce marketing
Production orders can be issued to specific warehouses / packhouses / factories. This feature allows and unlimited number of warehouses or packhouses to operate independently, viewing only data relating to their sites operations. Central management can view all sites and issue instructions as required. This feature also allows distributed enterprises to have warehouses and storage in multiple locations including across multiple states, or even countries and time-zones.
Shipping Container & Freight Management – fresh produce marketing
Manage shipping containers, serial, measuring devices, and order containers from freight forwarders.
Customers Required Documents – fresh produce marketing
For each customer, configure the documentation that must accompany their orders. Farmsoft will present the documentation for that customer when their order is ready for shipment.
Administration & sales & marketing staff can monitor the status of orders being physically put together, and be alerted when an order is finished. At this stage, administration is presented with the exact documentation required for the specific customer.
Dispatch finished goods & generate invoices using many methods including :
Issue pick slips (based on Sales Orders) and instruct staff with them, admin will assign specific goods with each order/invoice
Assign specific finished goods to specific customers / orders, staff use this as their picking instructions
Allow staff to use mobile devices to assign goods to orders. Farmsoft will enforce FIFO and tell staff where to find goods to fill each order item with
Traceability Systems for better food safety
An analysis of 3,500 food-poisoning outbreaks between 1990 and 2003 found that contaminated produce was responsible for the greatest number of individual foodborne illnesses. The study, by the Center for Science in the Public Interest , found that produce caused 428 outbreaks and 23,857 cases of illness. 1
Annoying stickers may not be society's most fearsome concern right now, but at a moment when consumers are increasingly concerned with wasteful packaging and traceability, tattoos seem a compelling alternative. Imagine that you can code each piece of produce so it can easily be traced back to its origin,” says Douillard. Think of how helpful that could be when there is a food safety issue.”
Hy-Vee has always put high quality and consumer confidence at the forefront of everything they do, which makes them an ideal partner for us,” said Peter Mehring, CEO of Zest Labs. By working closely with growers, we're all creating true transparency throughout the entire cold chain and ensuring only the freshest products arrive at their stores a complete record of the product through every step in the cold chain.”
At Townsend Farms our customers are an extension of our family and we take food safety very seriously. Our farm as well as our affiliate source farms all utilize Good Agricultural Practices (GAP) following stringent safety strategies to prevent and reduce the risk of microbial contamination.
The one remaining milestone is Read and store information on outbound cases.” According to a survey by the PTI Leadership Council last year, 82 percent of the group's retail members, 71 percent of wholesalers and broker members, and 70 percent of food service members expected to meet the 2012 deadline for this final milestone.
Why emotive marketing is the wave of the future in fresh produce
The way businesses interact with consumers is changing, according to a leading international marketing expert. Lisa Cork, founder of Fresh Produce Marketing told the Australian Banana Industry Congress that as consumers change, the way producers need to market and communicate with them also needs to change and evolve.
"We are moving from a time of rational connection to a time of emotive connection," Ms Cork said. "We are moving more away from facts and more towards feelings. We are moving away from features and more towards benefits. The reality is in the produce business is that we are very, very rational. When connecting with consumers, often growers think from a rational production perspective; tonnes per tray, yield per hectare. Those are all the (current) communication platforms."
Ms Cork has worked with growers for nearly 30 years and says it is time for them to start thinking about taking a more consumer-centric focus. Ms Cork believes that the consumer world is going through a 'renaissance', with the increase in online bloggers and television programs focusing more on fresh fruit and vegetable.
"It is a good chance for us to consider if we want to capitalise on this interest in fresh produce and how we go about optimising this moment in time for both sales growth and value growth," she said. "What is required is that we have to think differently. So we have to stand more in the shoes of consumers and say 'what does my product look like from their view of the world'?"
She says that before she started working on the 'Eat Smart' brand in 1992, there was no consumer-focused branding in fresh produce - it was more location, or industry based names. She says it is important to build a story, because it moves beyond what is grown, to thinking about how consumers think and feel about a product. Ms Cork believes this is the next step in the marketing of bananas, which are already at the top of the category.
"If you look at the headlines from around the world - the UK, U.S.A, berries are overtaking banana's position in those markets," she said. "But let’s not be closed minded about thinking differently or finding new opportunities at a deeper level."
One area Fresh Produce Marketing suggests could be explored is the conversation of health versus wellness. Ms Cork says the health space refers to the physical activity driven behaviours, which is already being used effectively across the industry. But she sees a trend switching towards wellness, or a more relaxing, balanced, 'feel-good' space.
"The difference between health and wellness is subtle but important," the FMP founder said. "The phrase we would use is that shoppers are developing mindfulness, around not only their life, but the foods that they are consuming. So how can bananas take that opportunity and create a wellness platform? Is there an opportunity? I don't know, but my gut feeling would tell me that it would be a really good opportunity to look at campaigns for the next 3-5 years."
Another area she says could be discussed is what constitutes a portion of banana. Ms Cork noted that Australian bananas are often larger than other international exports such as Ecuador and the Philippines, but says it can create confusion for consumers who are becoming more health and wellness focused. In addition health guides from around the world have different information regarding sizes/weight of the fruit and how much calories it contains.
"The way that we look at portions, to me, says there is opportunity, particularly when you look at trade specifications," Ms Cork said. "Bananas are measured in terms of length, but what does length have to do with weight? What is the portion if I buy a small (length) banana, how many grams is that? From a consumer-centric point of view, I am incredibly confused that if I was interested in wellness and only wanted a small portion - what should I buy?"
She adds that portion in itself creates a new marketing opportunity, through segmentation, which offers products that meet different consumer needs. She uses the example of the 'kids pack' of bananas, which have a smaller size and questions whether there is an option for branding the same form of product, but at an adult audience.
"If you think in demographics there's maybe an opportunity for different portion sizes for different people - so when athletes eat a banana, they might want larger portion to a woman trying to lose weight," she said. "But when you are offering segmentation you have to be careful that what you are offering is not product-centric. So why wouldn't we want a world where mum buys the kids pack bananas - but then also buys a big banana because it's marketed as a 'man's banana'."
Ms Cork concluded by pointing out that marketing is a powerful because creates awareness and desire, but it needs to be backed up by a product, or a range, that meets a consumer's needs in order to be effective.
For more information:
Fresh Produce Marketing
Phone: +64 274 772 842
“Understanding China’s fresh produce market”
From November 14th to 16th, the iFresh China Fruit and Vegetable Expo, an international exhibition for the fresh produce industry, will be staged in Shanghai. The event is one of the first in China that covers the domestic and international fruit and vegetable industry.
The Chinese fresh product market is developing fast. Investments are being made in cold chain logistics and storage solutions, albeit from a low base. China's fruit imports are increasing and retail sales are growing. Retail has moved almost entirely online in the big cities on the East coast. A substantial part of the fresh fruit retail is done online, marketing and packaging being key to online sales and promotion. iFresh provides a platform to understand the latest developments in the industry and to get to know some of the key players. Exhibitors include fruit importers and exporters, growers, machine builders, technology providers, and (online) retailers. A number of international companies will be present too, with or without trade offices in China.
According to the organisation: “In 2015, we gathered 450 exhibitors and 12,000 visitors from over 20 countries to our exhibition in Shanghai. The vast majority of attendees have given positive feedback; they commented that they had been able to gain insights into the full market information, make new business connections and will be returning. This had greatly motivated us to organise this year’s show. We wanted to inform the audience about the Chinese fresh produce market and its peculiarities. The market is distinctly different than any other market. In addition to the exhibition, we have also organised a conference. For this people in different parts of the Chinese produce and import industry have been invited to share their opinions with our guests.”
For more information:
Ms. Huang Jing
iFresh Information Ltd
Successful fresh produce marketing with social media
As more and more new retail brands emerge in the fresh produce sector, differentiating oneself from competitors becomes more and more important. Branded produce sales are expected to reach almost US$7 billion by 2018, up from $5.6 billion in 2013, and to meet consumer demand for branded goods, as well it differentiate oneself from the competition, social media is proving to be an effective marketing tool.
As consumer trends shift towards healthy eating, fresh produce is challenging processed food as the first choice for consumers, marketing themselves in spaces that are traditionally dominated by junk food. Consider Super Bowl XLIX where advertisements for fast food and cars shared the platform with a 60 second avocado ad (costing nearly US$4 million), funded by a Mexican non-profit avocado organization that co-ordinates the marketing activities for their growers.
Social media builds loyalty, adds value for fresh produce brands
Social media platforms such as Facebook, LinkedIn, Twitter and Instagram all have their role to play in marketing fresh produce brands, after all, if you want to connect with your consumers, why not do it in the places they hang out? Social media allows brands to connect with consumers in a low-cost, real-time, conversational way (and vice versa) allowing them to uncover the wants, needs and values of the people who are buying their product.
Social media sites are excellent platforms for the fresh produce industry, particularly avocados, which are the most posted food on Instagram — a site with 500 million active monthly users. West Pak Avocado is one leading avocado brand that is successfully leveraging social media channels to communicate with consumers and build brand loyalty. "Our Social media channels play a big part in our yearly marketing strategies. Our mission is to add value to our brands by sharing merchandising, promotional information, and company updates to our customer audience, as well sharing relevant avocado recipes and educational content about our products with our loyal followers." Doug Meyer, Sr. VP of Sales & Marketing – West Pak Avocado.
As fresh produce demand increases, so does the convenience factor. Fresh produce is being sold pre-packaged to compete with other readily available snack items. Take the demand for prepackaged guacamole which has sky rocketed with the growth of the avocado category. Packaging plays a big role in this new marketing investment as brands attempt to catch consumer attention at the point of sale and offer pack types that suit consumer’s lifestyles.
Consumers share experiences-both good and bad
Consumers are looking for a quality, safe product, available 365-days a year — and are willing to pay a premium for it.
Fresh produce brands shoulder the responsibility of food trust, and must ensure traceability from orchard to consumer guaranteeing the produce is safe for consumption. Packhouses are looking to technology to ensure that every piece of produce meets the standard of their brand promise. As the saying goes, one bad piece of produce can spoil the bunch — and one bad eating experience can turn a consumer away from your brand. While social media has the ability to build brand loyalty for consumers, it can also take it away. Consumers will share their experiences, good and bad, with their followers.
By maintaining control over the supply chain and food safety standards, fresh produce brands can breeze through compliance standards, maintain global profitability and above all else, hold on to a consumer’s precious trust.
Fresh produce marketing and PR company expands
DMA Solutions, Inc. has been dedicated to delivering high quality, measurable results to the fresh produce industry for twelve years, with the purpose of increasing the demand of fresh fruits and vegetables. In the last 18 months, the company has increased its pool of talent by 40 percent, with the expectation to continue growing over the next five years. Recent changes at DMA Solutions, Inc. have been fueled by the company’s proven success of advanced marketing techniques that have led to increased sales amongst the brands who work with the agency.
“Fresh produce marketing is in the midst of a renaissance and our company’s evolution is a direct result of an industry that is rapidly recognizing that marketing can be as much of a catalyst for growth as sales,” said CEO of DMA Solutions, Inc. Dan’l Mackey Almy. “We are progressively adapting our business and services to support the growing needs of fresh produce companies as they seek to be present in a meaningful way by connecting with the people consuming their products.”
As a result of more a progressive adoption of results orientated marketing, DMA Solutions, Inc. has seen growth and expansion in the following areas:
DMA Solutions, Inc. has been actively engaged on social media since 2008, and in 2015 recognized the need to restructure their approach for social media by creating a team of social media specialists. This team is 100 percent dedicated to developing and implementing social media strategy, content creation, engagement, and reporting. Where social media traditionally has been a “hat” worn by a marketer, it has become a fully-integrated role within DMA Solution Inc.’s team of experts in order to keep up with the demand that fresh produce brands be relevant and accessible 24/7.
In 2015, DMA Solutions, Inc. expanded its portfolio of services with public relations by introducing Beth Atkinson as public relations manager, committed to elevating each brand’s unique story. Under her leadership, the PR team has championed successful influencer marketing campaigns and communication strategies, while earning significant national and local media attention for fresh produce companies.
As the company has added talent to support brand teams, Brock Nemecek and Marci Allen stepped into elevated roles as account directors, overseeing two account teams that manage the day-to-day marketing efforts for each brand. As directors, Marci and Brock have built teams to support results-driven inbound marketing strategy, promotions, partnerships between fresh and CPG brands, digital marketing, public relations, and social media campaigns. Additionally, Megan Zweig was promoted to vice president of the company, committed to ensuring that clients’ goals and objectives are met, while supporting consistent business growth and development.
To request a personal meeting with DMA Solutions, Inc. at United Fresh Convention in Chicago June 20-22, please email [email protected].
Interactive webinar launched to discuss opportunities for fresh produce marketing
DMA Solutions welcomes fresh produce professionals to join an interactive webinar named “Marketing Matters.” Launched to offer fresh produce marketers a forum for learning, sharing and an open dialogue, each webinar is hosted twice a month on Zoom at 1PM CST.
For several months, Dan’l Mackey Almy, along with the team at DMA Solutions, have hosted webinars covering important topics such as how to navigate marketing during sensitive times, managing virtual trade shows and utilizing digital promotions to achieve brand goals.
“Marketers in the fresh produce industry are often faced with similar challenges,” said Almy, president and CEO of DMA Solutions. “We launched ‘Marketing Matters’ to create a space for us to come together and gain context and confidence as we continue to proliferate and protect the brands that we serve.”
In each session, Almy presents and offers insights on relevant topics before opening the floor for attendees to ask questions or share thoughts. DMA Solutions plans to cover other important topics in the near future, such as:
- The current state of social media
- What your CEO needs to know about marketing
- How sales and marketing can work together
- Preparing for a virtual Fresh Summit
Those interested in attending future Marketing Matters webinars can register at the link provided here or email the DMA team at [email protected]. Previous webinars are also available on the free resources page of the company’s website.
Tshwane fresh produce market "on the brink of collapse"
The absence of management over the past decade has led the Tshwane fresh produce market to the brink of collapse.
The market is the second largest in South Africa with an annual turnover of approximately R3 billion (156 million euros). The market earns around R150 million (7,8 million euros) per year for the Tshwane Municipality in ad valorem commission, but in return the market only receives around R3 million (156,000 euros) annually for maintenance. that represents 0,1% of the market's turnover and 2% of the municipality's income generated by the market.
Banana ripening facilities and refrigeration equipment have not been maintained for a decade or more. "Maintenance that would have cost a couple of hundred thousand Rands a year, will now lead to repairs costing millions," says Julian van der Nat, chairperson of the Institute for Market Agents of South Africa (IMASA).
In an attempt to reverse the situation, the institute's Tshwane branch last week (27 January) met with the Tshwane municipality, Potatoes South Africa, representatives of independent market agencies and the agricultural produce marketing council.
Agricultural business chamber Agbiz mediated the meeting since requests for meetings from IMASA were fruitless.
"We want to convey the message that the market is on the brink of collapse. We want to assist the authorities to return the market to being a proud asset of the city. The fact that we were able to listen to each other and elucidate problems at all levels, is already a step closer to a solution. A solution is not going to be easy. We've set up a committee to manage the process."
The committee will meet again on 10 February to discuss a plan of action.
Tshifiwa Madima, head of fresh produce division at the Tshwane municipality, could not be reached for comment.
Original source: Landbouweekblad
Competition entry deadline looming to win ‘Best Fresh Produce Marketing Promotion to Children’ award
Produce Business UK (PBUK) and The London Produce Show and Conference have announced that applications will remain open for a short while longer for any international fresh produce company wishing to enter the annual industry competition that recognises marketing efforts to inspire children to eat fresh fruits and vegetables.
Titled ‘The Best International Initiative for Marketing Fresh Produce to Children’, the global competition is in its third successive year.
Open to international fresh produce growers, packers, importers, exporters, marketers, retailers, distributors and foodservice operators, as well as trade organisations and charitable or government entities, entrants have until midnight on Friday May 17, 2019, to make their application online here.
The prestigious prize recognises an original and exceptional marketing campaign that through effective communication has encouraged and increased the consumption of fresh fruits and vegetables among children.
The winner will be recognised as an industry leader for their inspirational marketing achievement to raise the profile and appeal of fresh produce among children, and will rank among previous award recipients Swedish retailer ICA Sweden (2018), and UK discount chain Lidl UK (2017).
Jim Prevor, Editor-in-Chief of Produce Business UK and the Founder of The London Produce Show and Conference, comments: “Children should be encouraged to eat a variety of fruits and vegetables, and this award is a celebration of the industry's creative initiatives to increase the consumption of produce among the younger generations.”
Sponsored by The Embassy of the Netherlands in the UK on behalf of the Dutch fresh fruit and vegetable sector, the award will be presented this year by Simon Smits, Dutch Ambassador to the UK, at The London Produce Show and Conference during Perishable Pundit's Thought Leader Breakfast on Thursday June 6, 2019.
Smits explains: “The Netherlands is a proud worldwide supplier of sustainably produced fruit and vegetables. But many children are missing out on this crucial part of a healthy diet.”
“That is why we applaud initiatives that aim to reconnect the younger generations with fresh produce and how it’s produced. We believe in the power of innovation and, as a long-term sponsor of this award, look forward to seeing the newest creative marketing approaches.”
Last year ICA Sweden won the accolade for its kids marketing initiative over the Halloween period, during which it launched a line of monster-themed fruit and vegetables, including: Spider bodies (blue potatoes), Dracula hearts (pre-boiled beetroot), Zombie brain (cauliflower), and Witch fingers (purple carrots).
Runners-up in 2018 were Netherlands-based HillFresh International for its Nickelodeon branded snacking fruit campaign, and UK-based The Fruit and Veg Kids for its awareness campaign.
In 2017, Lidl UK scooped the award in recognition of its ever-evolving range of children-sized portions of fruit, vegetables and salads under the Oaklands Fun Size brand and its accompanying campaign to engage children and change their perception of fresh produce.
The criteria for the award is based on originality, creativity, call-to-action, execution based on budgetary constraints, and significance of results.
Zambia’s first agent-based fresh produce market to open in 2020
Zambia’s cholera outbreak of almost two years ago has been the impetus behind the development of the country’s first agent commission-based fresh produce market, specifically aimed at taking the produce of small-scale farmers.
Fresh produce sold at informal markets was implicated in the outbreak which killed 114. Highly variable quality, inconsistent supply, little waste removal and absolutely no traceability are the issues that Savenda Global Capital Partners want to address in the planned ZambiaFresh Lusaka Market, to be situated on 10ha southeast of the capital Lusaka.
At last week’s PMA Fresh Connections conference, Sean Moolenschot of Savenda Global Capital Partners (right) announced the construction of the market, planned to be in operation next year. It will consist of a 6,500m2 trading facility (whose floor space could be more than tripled) with cold rooms and ripening facilities, and complemented by a food hub precinct in order to add further revenue lines from fresh, frozen and dried product.
Living leaves and lettuce are difficult to find in Zambia, thus an aeroponic growing facility will be attached to the market.
Market for the benefit of farmers
Two principles inform the market: it should be an active roleplayer in sourcing supply, building capacity among farmers and it should be established for the benefit of farmers (as was the case in the development of South Africa’s fresh produce markets over many years and within a comprehensive enabling legal framework, resulting in a system Sean calls “unique” and largely responsible for the country’s horticultural success).
“The horticultural sector in Zambia is thriving,” Sean told delegates, “Approximately one million tonnes of produce is traded every year, of which a third is consumed in the general area around Lusaka. We want to bring the possibility of real price discovery to small-scale Zambian farmers.”
Food stalls in Chipata, in the east of Zambia (photo: Brian Dell)
At last year’s PMA Fresh Connections conference, independent consultant Coillard Hamusimbi and the head of agribusiness at FNBZambia (subsidiary of the South African First National Bank) Cheyo Mwenechanya and Jaco Oosthuizen, CEO of RSA market agency, delivered a presentation on the growth of the urbanised middle class in Zambia. The influential RSA Group are involved in the Zambian development.
Partnerships, even outside fresh produce sector, vital in Africa
A 2018 feasibility report by Zambian organisation Musika and the Indaba Agricultural Policy Research institute (IAPRI) did, in fact, recommend South Africa’s model of fresh produce market for Zambia.
However, the supplier base is highly fragmented and unmapped, but Sean and partners have come up with an ingenious solution to finding the farmers they are looking for: Vitalite is a Zambian distribution company of solar cookers and other solar equipment, reaching over 30,000 households in Zambia through its network of 500 agents throughout the country.
“They have nothing to do with the fresh produce industry, but we have signed an exclusive agreement with them to draw produce back to the market. Currently they’re running at 50% capacity, with their vehicles coming back empty. It’s a hugely symbiotic relationship and demonstrates that strategic partnerships are vital for doing business in Africa.”
He continues: “Savenda Global Capital Partners has a specific bias towards businesses that support the bottom pyramid sectors in Africa.”
“Farmers don’t go out of business because of low prices but because of low income”
At last year’s Fresh Connections conference, Jaco Oosthuizen explained of the African fresh produce sector: “The real opportunity is setting up markets where local traders can develop. Farmers don’t go out of business because of low prices, they go out of business because of low income.”
In South Africa fresh produce markets have the ability to reduce price volatility by offering a good longterm average price. Currently, much fresh produce destined for neighbouring countries are procured at these markets and privately trucked cross-border and across many hundreds of kilometres to be sold at informal markets.
South Africa's unique fresh produce market system
The South African fresh produce market system is unique in the world because it functions on a commission basis, as Attie Horn, president of the Institute of Market Agents of South Africa (IMASA) and Michael Cordes, general manager of IMASA, explain to FreshPlaza. This system is governed by legislation that protects the seller (the farmer) and the Agricultural Produce Agents Council (APAC) which trains, licenses and, if need be, disciplines market agents. It enables a farmer to be more of a “price maker” than a “price taker”.
Attie Horn, president of the Institute of Market Agents of South Africa (IMASA), and Michael Cordes, general manager of IMASA
There is currently an ongoing investigation into alleged price-fixing at some markets after a complaint was laid at the Competition Commission, but no charges have yet been laid. Potatoes SA released a statement in defence of the free market system of selling fresh produce, stating “it provides the ideal, inclusive and transparent trading environment to all fresh produce producers, be they small-scale, emerging or commercial producers, to sell their produce directly to buyers.”
Some major producers like ZZ2 have so much faith in this system of fresh produce trading, that not only does the vast majority of their produce (in excess of 80%) go to the fresh produce markets, but they have helped to establish two markets in Polokwane and Mooketsi to service the north of the country.
IMASA is of the opinion that there might be an imperfect understanding of how the system functions, perhaps because of the volatility of prices which are acutely sensitive to as many as 45 pricing factors, of which the main ones are supply and demand, quality, continuity of supply and communication between farmer and market agent. It is a purely free market system, with no fixed baseline prices.
The Tshwane fresh produce market (copyright: City of Tshwane)
This system provides South African farmers with the opportunity to decide on their own marketing and gives them a daily insight into fluctuating prices, according to which they can decide whether to send stock to the market or hold back. A relationship of trust is of cardinal importance and some producer-agent relationships go back decades. Good market agents regularly visit producers to acquaint themselves with the production conditions.
All stock sent to the market remains the property of the grower until it is sold; at the market an agent acts as intermediary and it is in the agent’s interest – because his or her commission depends on it – to negotiate the best possible price for the farmer, while still attracting willing buyers. Furthermore, in terms of the law, producers have to be paid within five days, quite unlike when selling per contract to some supermarkets.
The software used at the market, the Freshmark Electronic Sales Processing System, is another unique feature of the South African commission system. It provides agents with a comprehensive database of prices across all categories – there are easily 200 different products traded on these markets – with an overview of stock levels, price fluctuations as well as averages across a season. Moreover, farmers have full access to this data and therefore can see the exact prices of produce and the available stock already at the market at any given point and need not only rely on what they are told by an agent.
The agent commission follows accepted usage, around 7.5% on most produce with the exception of potatoes and onions for which lower commissions were negotiated; 5% and 6% respectively. One of the misconceptions regarding the system that was evident in some media reports recently, is that this agent commission pushes up the price of commodities. “The agent’s commission doesn’t influence the consumer price because it is subtracted from the selling price, not added on top of it,” explains Attie Horn. At the municipal markets (of which there are thirteen, like Tshwane (Pretoria) and Durban) a further 5% commission is added which goes to the municipality for upkeep of the infrastructure and facilities. The Johannesburg market is corporatised while the Cape Town market was privatised in 2010; a further ten markets are also in private hands.
Copyright: City of Tshwane
“Agencies are in strong competition with each other, even across the different markets, in order to attract business. Any kind of conspiracy amongst agents from different agencies would be to cut your throat. Farmers can easily move their produce to another agency if they’re unhappy,” he continues.
For instance, since Pretoria and Johannesburg are so close to each other, it would be easy for a producer to decide to rather send produce to the one if unhappy with the other. The Johannesburg market has always been the dominant market, accounting for about 37% of the industry. Where the Tshwane market has a monthly turnover of about R110 million (€7.52 million), it is approximately R220 to 225 million (€15.05 million to €15.39 million) a month in Johannesburg.
The market regularly receives overseas visitors who are at first surprised and then envious of the price sensitivity which allows farmers to take full advantage of factors like supply shortage or increased demand.
According to Michael Cordes, who was a farmer and then a market agent himself, if the system has a weakness, it is that people don’t understand how it works. “Producers will always want a high price but the ideal is to maintain an average price over a long period, and the only way you can do that, is to market consistently. If the system can do that, there’s no better system on earth for the farmer.”
For more information:Fresh produce marketing
Institute of Market Agents of South Africa
Tel: +27 12 326 8821
Email: [email protected]