Continued Grower Challenges

Major chains now command outsized buying power, the product of years of mergers and consolidation. Slotting fees remain a built-in cost of entry, cutting margins before a single case ships. Retailers expect continuous allowance programs, advertising support, off-shelf promotions, and case-movement guarantees, and “Pay to Stay” fees have become standard, with annual charges tied directly to contract terms.

Microbiological contamination risks now carry heavier liability across the supply chain. Inspection standards are tougher, more frequent, and more expensive. Regulatory pressure continues to intensify as new laws and policies reshape production and distribution.

Foreign competitors, especially China, are expanding aggressively. Food-security concerns keep terrorist-related threats on the industry’s radar.

Consolidation

Consolidation has permanently altered the produce supply chain. Mergers and acquisitions have reduced the number of food chains while creating larger, more powerful supermarket operators. Fewer buyers now hold significantly more leverage, and consolidated buying offices work with fewer suppliers, tightening competition.

Where onion procurement once involved six suppliers, it may now be limited to two or three. Buyers increasingly prefer suppliers capable of delivering full year-round produce assortments. Grower/shipper consolidation has not yet caught up with retail consolidation, but it’s coming.

Geographical Growth

Fresh produce production and supply is now fully global. “Not in season” has all but disappeared from industry vocabulary. Retailers and consumers expect year-round availability on every item.

A rising share of U.S. produce comes from foreign sources, with imports from China continuing to climb. Global foodservice sales are projected to grow annually. Suppliers with access to worldwide growing regions will hold a competitive edge, and importers who deliver strong category data will win the business.

The New Reality for Growers

Growers must look beyond the farm fences. Success now depends on understanding retail customer needs, anticipating consumer expectations, and delivering consistent value in a global, year-round marketplace.

What do you think? Write to me at ronprocon@gmail.com