A Growing Dilemma
نویسنده
چکیده
In 1999 the Food Industry Management Program at Cornell conducted a study of produce buyers and shippers which was sponsored by the Produce Marketing Association in Newark, Delaware. Although the study was conducted for the produce industry, it can serve as a demonstration of how retail buyers' operating practices are impacting our agricultural producers and middlemen. Two findings in the report should cause shippers to review, in particular, their sales strategies. First, retail produce executives were asked what percentage of their produce purchases are from their top 10 suppliers. Currently, on average, retailers buy 69.3 percent of their produce purchases from their top 10 suppliers. By 2004, retailers report that this will increase to 70.1 percent with most of this increase being driven by large retailers with over $1.5 billion in annual sales. This concentration of purchasing by large grocery firms is particularly interesting when juxtapositioned with discussions about global procurement. Talks and experiments with global procurement are underway in some retail companies who are looking to negotiate with one or a few shippers the opportunity to supply all the companies' stores. For example, one shipper may be asked to provide all the kiwi fruit for 2,000 stores. Second, the same large firms reported, on average, that they will decrease the number of suppliers from the current average of 450 down to an average of 404 by 2004. It is these large
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