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Fresh Fruit and Vegetable Procurement Dynamics: The Role of the Supermarket Buyer

Author

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  • McLaughlin, Edward W.
  • Perosio, Debra J.

Abstract

Over the past several decades, the fresh fruit and vegetable industry has been one of the most dynamic sectors in the U. S. food system. Consumer demand has soared to record levels and both suppliers and distributors have responded with impressive new programs, products and technologies. The objective of this report is to provide critical information on one of the most influential but least studied elements of the produce system: the supermarket produce buyer. This buyer represents the "gate-keeper" between the supply end of the distribution channel and the supermarket shelves. His standard operating practices (SOPs) and decisions have an enormous influence on industry performance. A "framework" for produce buying and selling SOPs is set forth in Section 2. The methodology employed for this research relied on both secondary information and primary data collection (Section 3). The primary data were gathered from the produce director or buyer in one hundred supermarket chains who responded to an extensive mail survey. Together, these respondents represent approximately 75 percent of overall supermarket chain produce sales. Additionally, several groups of key industry leaders, suppliers and buyers, were interviewed to assist with interpretation of the survey data. The empirical results and analyses of the study are contained in Section 4 and categorized into five principal themes: • Produce buying organization • Produce buying process • New product issues • Produce department management: pricing and performance • Produce department of the future: buyer projections Further, perspectives and strategic implications of these results, particularly from the view of the supplier, are elaborated in Section 4 and summarized in Section 5. Among the key findings: produce buyers are operating under increasing pressure as their stable to declining numbers are now responsible for three times as many items as they were 30 years ago; terminal markets continue to decline as important sources of produce, particularly for larger supermarket companies who currently procure only about 7 percent of their total needs at a terminal; "quality" and "consistency" were repeatedly reinforced as being more important than "price" alone in buyers' purchasing decisions; despite considerable industry urging, DPP has not been widely adopted as a produce department evaluation tool; and, despite POP material being the most frequently available type of promotional material from suppliers, produce buyers report that this is the "least influential" factor in their new product acceptance decisions. These and other findings present numerous opportunities for positive responses from produce grower/shipper operations. This type of in-depth knowledge of customer behavior and decision-making criteria allows forward-thinking companies to develop successful sales and marketing strategies. This research suggests that closer supplierbuyer relationships and alliances are not simply needed to prosper, but are required to survive.

Suggested Citation

  • McLaughlin, Edward W. & Perosio, Debra J., 1994. "Fresh Fruit and Vegetable Procurement Dynamics: The Role of the Supermarket Buyer," Research Bulletins 123000, Cornell University, Department of Applied Economics and Management.
  • Handle: RePEc:ags:cudarb:123000
    DOI: 10.22004/ag.econ.123000
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    References listed on IDEAS

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    1. Bobby G. Beamer & Warren P. Preston, 1993. "Organizational structures and strategic management of produce marketing in retail supermarkets," Agribusiness, John Wiley & Sons, Ltd., vol. 9(2), pages 103-117.
    2. Fredericks, Peter J. & McLaughlin, Edward W., 1992. "New Product Procurement: A Summary of Buying Practices and Acceptance Criteria at U.S. Supermarket Chains," Research Bulletins 123087, Cornell University, Department of Applied Economics and Management.
    3. Russo, David M. & McLaughlin, Edward W., 1991. "The Year 2000: A Food Industry Forecast," EB Series 186185, Cornell University, Department of Applied Economics and Management.
    4. Pierson, Thomas R. & Allen, John W. & McLaughlin, Edward W. & Halloran, John M., 1982. "Food Losses: Overview and Summary," Agricultural Economic Report Series 201305, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    5. McLaughlin, Edward W. & Hawkes, Gerard & Perosio, Debra, 1992. "Wholesale Club Stores: The Emerging Challenge," EB Series 186219, Cornell University, Department of Applied Economics and Management.
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    1. McLaughlin, Edward W. & Perosio, Debra J., 1996. "The Role of the Supermarket Buyer," Research Bulletins 122826, Cornell University, Department of Applied Economics and Management.
    2. Zuurbier, Peter J.P., 1999. "Supply Chain Management In The Fresh Produce Industry: A Mile To Go?," Journal of Food Distribution Research, Food Distribution Research Society, vol. 30(1), pages 1-11, March.
    3. Sterns, Patricia Aust & Codron, Jean-Marie & Reardon, Thomas, 2001. "Quality And Quality Assurance In The Fresh Produce Sector: A Case Study Of European Retailers," 2001 Annual meeting, August 5-8, Chicago, IL 20494, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. McLaughlin, Edward W. & Park, Kristen & Perosio, Debra J. & Green, Geoffrey M., 1998. "FreshTrack 1998: Marketing and Performance Benchmarks for the Fresh Produce Industry, with a Focus on People," Research Bulletins 122696, Cornell University, Department of Applied Economics and Management.
    5. Kreider, Craig Robert & McLaughlin, Edward W., 1996. "The Feasibility of a Mid-Hudson Valley Wholesale Fresh Product Facility: A Buyer Assessment," Research Bulletins 122829, Cornell University, Department of Applied Economics and Management.

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    Keywords

    Agribusiness;

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