2014 CIOPORA Chronicle

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Fruits The range of fruits now available to consumers around the world is large and continually expanding. Fruits also vary in stage of market development, from novel to mature products. All major fruits, however, face common forces on both the demand and supply sides. (Photo credits: Better3Fruit). Preparing for future markets for major fruits World Fruit Complex, Large and Growing Table 1 shows both the growth and diversity of the world fruit complex over the last two decades. Between 1990-92 and 2010-12, world population grew by about 30 percent. In all cases except grapes, world per capita supplies of fruit grew dramatically faster than world population. Production of major fruits, excluding melons and watermelons, jumped by over 22 kilograms per capita. Growth was strong both in mainstream fruits like apples and pears, and in minor fruits, whether deciduous, citrus, tropical or berries or miscellaneous other fresh fruits. The growth in the size and diverby Dr. Desmond O'Rourke All the fruits will be affected by population shifts, income swings, changes in consumer preferences, retail developments, and public and private efforts to boost consumption for health reasons. On the supply side, all fruits must compete for access to suitable land, water, energy and labour. Fruit growers differ in how they seek to tackle these challenges. The rest of this article discusses some of the common challenges being faced, and the different approaches being taken. sity of world fruit production was stimulated by increasing affluence in both developed and developing countries. Consumers demanded more fruit choices twelve months a year. Large, chain retailers catered to these demands as they expanded around the world and enlarged their produce sections. Falling trade barriers and technological advances enabled fresh fruit to be delivered over long distances, and long periods, in excellent condition. However, it will be very difficult to slow growth in fruit production in the near future even if demand falters. Production has moved increasingly to more productive environments. It is now in the hands of well-capitalized, integrated firms that manage all the functions of production, packing, storage, processing and marketing, and need early and high production to justify their large investments. Market Opportunities Shifting The best opportunities for increased fresh fruit demand are shifting from the developed world to emerging markets. Developed countries face stagnant and aging populations and slow income growth. They have low propensity to increase purchases of mainstream fruits, but are more apt to purchase high-valued, novel fruits. Many have been pummelled by the Great Recession and the subsequent debt crises. Thus, there is little prospect that the total volume of fresh fruit demanded in the developed world will increase much in the decade ahead. In contrast, many emerging markets have rapidly growing populations, rising purchasing power, a growing middle class, a rapidly modernizing food retailing sector, and buoyant demand for many imported fruits. Consumer motivations Consumer motivations for buying different fresh fruits are becoming more complicated. Consumers want access to familiar products, but also occasionally yearn for something new or different. As product choice within individual fruits, and among fruit categories, has grown, it has been a challenge for food retailers to accommodate the desires of their customers for both novelty and continuity. Consumers still care about the intrinsic attributes of different fruits, but many are equally concerned about food safety, sustainability, status, and ephemeral concepts like fun or excitement. 30 www.FloraCulture.eu | CIOPORA Chronicle June 2014
Table 1. World: Per Capita Supplies of Major Fruits and Fruit Categories, 1990-92, 2000-02 and 2010-12 (kilograms) Category/Fruit 1990-92 (kg) 2000-02 (kg) 2010-12 (kg) Change 1990-92 to 2010-12 (%) Apples 7.73 9.27 10.63 + 37.5 Other Deciduous 6.06 7.76 9.70 + 60.1 Total Deciduous 13.79 17.03 20.33 + 47.4 Total Grapes 10.92 10.10 9.74 – 10.8 Oranges 9.67 9.99 9.86 + 2.0 Other Citrus 5.43 7.05 8.72 + 60.6 Total Citrus 15.10 17.04 18.58 + 23.0 Bananas 9.05 10.82 14.95 + 65.2 Other Tropical 14.33 16.35 19.76 + 37.9 Total Tropical 23.38 27.17 34.71 + 48.5 All Berries 0.77 0.93 1.08 + 40.3 All Other Fresh 2.94 3.95 4.58 + 55.8 Total Fruits 66.90 76.22 89.02 + 33.1 Source: UN, FAO, FAOSTAT database online. Future certain – heightened competition The trends in fruit supplies, marketing opportunities and consumer motivations mean that in the next ten years competition within the fruit category will become even more intense. There will be strong downward pressure on producer prices. Many firms will seek to survive by lowering unit costs, either through more efficient use of inputs, or through greater output per hectare. Unfortunately, increased yields will increase the risk of global supplies outrunning demand. Salvation through breeding advances Over the last two to three decades, many progressive fruit growers have sought to escape the downward price squeeze in commodity markets by differentiating their products through brands, marks of excellence, protected geographical indicators or other methods. However, the small price premiums earned have helped little when overall price levels sank. In contrast, the breeding of new varieties has brought significant gains in individual fruit categories. The development of seedless grapes and easy-peeler oranges has transformed those categories. In summer fruits, there has been a steady parade of new, named varieties. In the case of sweet cherries, the focus was on breeding earlier or later varieties to lengthen the season and avoid the dramatic price drops that used to occur during a single peak harvest. This effort has so far been only partially successful. Can apples be the exception? There is much optimism about the value of breeding new apple varieties. Varieties such as Jonagold, Elstar, Gala, Fuji and Braeburn earned large price premiums for several years. When those premiums eroded with increasing volumes, a consensus developed among the apple industry leaders that price premiums could be maintained for longer periods if the Intellectual Property of the new variety was tightly controlled, the number of trees planted and volume marketed was limited, and if the image of the new variety was protected through tight control of names, packaging and promotion. These are usually referred to as ‘managed’ or ‘club’ varieties. (Photo credits: Better3Fruit). >>> CIOPORA Chronicle June 2014 | www.FloraCulture.eu 31
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