Global Fruit & Veg market worth €246 billion

Berlin - A world market which will experience moderate growth in the West up to 2022 (+ 0.9% EU, + 1.7% United States - from data in a report by Dutch financial institution Rabobank), and, most importantly, emerging economies which are getting increasingly more urbanized and, hence, increasingly interested in trading and exchanging fruit. Through to 2030, in fact, an increasingly widespread middle class beckons in China, Africa, and the Middle East, according to the analysis made by Rainer Münch, partner at Oliver Wyman, and author of the Fruit Trend Report presented yesterday at Berlin’s Fruit Logistica, the EU’s largest fresh produce industry event. According to a Market & Market report, the fruit and vegetables market was worth 246 billion dollars in 2017, and is expected to grow by an average of 7.1% up to 2022, when it is expected to reach 346 billion. According to Münch, that figure could reach the 400-billion mark in 2030, with fruit representing 32% of the world’s population daily diet.

Logistics 4.0

Distribution, as in all other freight segments, plays a central role. Although the Berlin event is sponsored by logistics heavyweights - such as Maersk, Marfret, Panalpina - high-tech and IT companies stood out amongst the 3100 exhibitors, alongside the more traditional firms. In fact, the global market will not only be larger, but also more demanding. Consumers will expect fruit and vegetables to be continuously available, regardless of their location or where the product originates from; logistics 4.0 applications, therefore, still have ample room for growth in the industry (global online sales in 2017 grew by 6% in the sector, compared to a 23% overall growth, source: eMarketer). A survey conducted among the exhibitors by Münch showed that 25% of the produce from agricultural enterprises could be sold online. Meanwhile, global chains like Walmart and Carrefour, have proposed implementing a QR code system to identify the company of origin of fruit sold in bulk at the supermarket, in order to provide the impression of shortening the supply chain between producers and consumers.

An evolving business

However, as everything must follow the vagaries of the weather, and bacteria, the flow of truckloads of fruit and vegetables, and billions in profits, can never be entirely controlled. This year, bananas, a market worth seven billion dollars, with 100 billion bananas produced every year, and 400 million habitual consumers, have been a case in point. Fritz Kai, Global Crop Manager at chemical group Bayer, sounded a warning about the TR4 virus, which is afflicting the tropical and Caribbean areas of the Americas, and which threatens to lower production by a fifth through to 2040. While prices are likely to increase, consumer demand for bananas cannot be curtailed; for this reason trials are underway involving its cultivation in China and the Philippines, with one out of ten new plants becoming successfully established.

Focus on Italy

Italy plays a key role. In fact, while, in the first ten months of the year - according to a report by Fruitimprese, the Italian association of fresh produce companies, based on ISTAT data - there’s been a negative trade balance in the sector (-2.1%, or 769 million euro), exports have grown by 3.3%, to around four billion euro, with a 14.8% increase in turnover over the three-year period from 2014 to 2016). In terms of greater-value products, Italy exports mainly grapes and berries, although over the last ten months of the year the volume of tropical fruit, which can command a higher retail price than traditional Italian fruit, has grown (a 16.4% rise, for instance, in avocado, mango, papaya, pineapple and passion fruit).