The University of Georgia
College of Agricultural and Environmental Sciences
WHOLESALER AND DISTRIBUTOR PRELIMINARY
OUTLOOK FOR FRUIT AND VEGETABLES
PRODUCED IN GEORGIA
Kent Wolfe, Greg E. Fonsah, Chris Ferland
Introduction
Georgia is the fourth largest producer of fresh market vegetables in the country. It is
third in harvested acreage and fifth in value (USDA 2002). Georgia produces 33
different vegetable crops and fruit crops (Doherty et. al., 2001a, 2001b). The Foreign
Agricultural Service Report indicates that fruits and vegetables are among the fastest
growing sector in the consumer-related high value products industry (Sharpless 2001).
The Center for Agribusiness and Economic Development (CAED) has conducted a
marketing study aimed at understanding the dynamics of the Georgia fruit and vegetable
industry.
The overall objective of this study was to determine wholesalers and distributors’ supply
sources for fresh produce. Additional points of interest were to:
(a)
(b)
(c)
(d)
(e)
(f)
estimate the percentage of fresh produce purchased from Georgia;
determine the factors impacting purchase decisions;
estimate the percentage of purchase directly from growers;
determine the most frequently purchased fresh produce items;
determine produce marketing opportunities for Georgia growers;
determine whether wholesalers and distributors were satisfied with current
suppliers;
(g) determine which crops are being processed and re-packed;
(h) derive marketing strategies to better serve this market based on the study
findings.
2
Materials and Method
A total of 127 wholesalers and distributors were identified by the Center for Agribusiness
and Economic Development. Each of the 127 businesses was mailed a confidential
questionnaire and a letter explaining the importance of the study and the beneficial
effects. A reminder letter was sent to those businesses that did not respond to the initial
mail-out. Approximately 10% of the identified businesses returned a completed survey;
the information obtained provided valuable insight into the industry.
Results and Discussions
(a) Percentage of Fresh Produce Purchased from Georgia
There appears to be sufficient demand in Georgia for fresh produce. Unfortunately,
Georgia’s wholesalers and distributors are purchasing significant quantities of fresh
produce from outside Georgia. It appears that southern vegetables and pecans are more
likely to be purchased from Georgia while the bulk of the other fresh produce is obtained
out-of-state.
Table 1. Produce Most Frequently Purchased from Georgia.
Item
Percentage
Pecans
100%
Peaches
100%
Butter/Lima Beans
100%
Spinach
100%
Vidalia Onions
100%
Collard
80%
Mustard
68%
Watermelons
51%
Sweet Onions
50%
Sweet Potatoes
50%
Source: 2001 Center for Agribusiness & Economic Development Wholesaler
and Distributor Survey
(b) Factors Impacting Purchase Decisions
Table 2 indicates that quality is the most important factor in wholesalers’ and
distributor’s purchasing decision. However, it was interesting that quality and price were
ranked higher than reliability. Unfortunately, the origin of fresh produce was ranked last.
Wholesalers and distributors consider quality, price, and reliability to be the most
important factors in making a purchase. Being “Grown in Georgia” will not help growers
if their produce cannot compete on quality, price, and reliability. These three factors are
the minimal requirements needed to enter this market and can be thought of as a baseline
from which “Grown in Georgia” products must be differentiated.
3
Table 2. Average Ranking of Wholesalers and Distributors Purchase
Decision for Fresh Produce
Importance of Specific Factors in Wholesalers and Distributors Purchase
Decision for Fresh Produce – 1 Being Most Important
Factor
Average Ranking
Quality
1.13
Price
2.00
Reliability
3.63
Quantity
4.13
Convenience
5.00
Transportation
5.25
Origin
6.88
Source: 2001 Center for Agribusiness & Economic Development Wholesaler and
Distributor Survey
(c) Buying Direct From Growers
The data in Table 3 suggests that wholesalers and distributors do buy directly from
growers. Three-quarters of all watermelons and two-thirds of cantaloupes and bell
peppers are purchased directly from growers. The percentage of direct-from-grower
purchases declines drastically for other produce. The most frequently consumed fresh
vegetables are less likely to be purchased directly from growers. For example, less than
25% of onions, tomatoes, and carrots are purchased directly from growers. This suggests
that there is a significant opportunity for Georgia’s growers to market fresh vegetables
directly to wholesalers and distributors, thus, eliminating middlemen. If producers want
to eliminate wholesalers and distributors, they will become responsible for generating
sales, coordinating product transportation and delivery as well as addressing consumer
complaints. However, growers are going to have to ensure competitively priced, quality
products that can be reliably supplied.
4
Table 3. Produce Purchased Directly from Growers
Number of Companies Responding
Percent that Buy Directly From
Fresh Produce
“yes”
Growers
Watermelons
6
75%
Cantaloupe
5
63%
Bell Peppers
5
63%
Peaches
4
50%
Zucchini
4
50%
Cucumbers
4
50%
Eggplants
3
38%
Jalapeno Peppers
3
38%
Cabbage
3
38%
Yellow Squash
3
38%
Pecans
2
25%
Blueberries
2
25%
Crooked Neck Squash
2
25%
Sweet Corn Peppers
2
25%
Roma Tomatoes
2
25%
Vine Tomatoes
2
25%
Okra
2
25%
Green Tomatoes
2
25%
Turnip Greens
1
13%
Carrots
1
13%
Mustard Greens
1
13%
Green/Snap Beans
1
13%
Kale (greens)
1
13%
English Peas
1
13%
Field/Southern Peas
1
13%
Butter/Lima Beans
1
13%
Vidalia Onions
1
13%
Regular Cut Beans
1
13%
Long Hot Peppers
1
13%
Collard Greens
1
13%
Green Onions
1
13%
Cherry Tomatoes
1
13%
Source: 2001 Center for Agribusiness & Economic Development Wholesaler and Distributor Survey
(d) Frequently Purchased Fresh Produce
With the exception of beans, wholesalers and distributors buy a wide variety of fresh
produce. The information in Table 4 provides insight into what percentage of
wholesalers and distributors purchase specific fresh produce. Watermelons and
cantaloupes are very popular produce items and are purchased by 80% or more of the
respondents. Excluding bell peppers, about four in ten wholesalers and distributors
reported buying different types of peppers.
5
Table 4. Georgia Wholesaler and Distributors Purchasing Fresh Produce
Fresh Produce
Number of Companies
Percent Purchasing
Responding
Fruits
5
50%
Blueberries
8
Cantaloupes
80%
6
60%
Peaches
3
30%
Pecans
9
Watermelons
90%
Vegetables
Beans:
Reg. Cut
1
10%
French Cut
1
10%
Butter/Lima
1
10%
Green/Snap
3
30%
6
Cabbage
60%
7
Carrots
70%
8
Cucumbers
80%
6
60%
Eggplants
Collards
5
50%
Greens:
Kale
4
40%
Mustard
3
30%
Spinach
5
50%
Turnip
5
50%
5
50%
Okra
Onions:
Green
3
30%
Sweet
4
40%
Vidalia
4
40%
English
2
20%
Peas:
Field/Southern
2
20%
Bell
7
Peppers:
70%
Habenero
1
10%
Jalapeno
4
40%
Long Hot
3
30%
Scotch Bonnet
2
20%
5
50%
Sweet Corn
4
40%
Sweet Potatoes
Roma
3
30%
Tomatoes:
Vine
6
60%
Green
5
50%
Cherry
4
40%
5
50%
Yellow Squash
Straight Neck
2
20%
Crooked Neck
4
40%
7
Zucchini
70%
Source: 2001 Center for Agribusiness & Economic Development Wholesaler and Distributor Survey
(e) Produce Needed in Georgia
Table 5 indicates the types of fresh produce wholesalers and distributors would like to see
more of in Georgia. The results suggest that all bell peppers (red, green, and yellow),
cucumbers, zucchini, and watermelon are areas where Georgia’s growers could supply
additional products.
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Table 5. Types of Fresh Produce Wholesaler and Distributors Would Like To See
More Grown In Georgia
Fresh Produce
Red Bell Peppers
Cucumbers
Green Bell Peppers
Yellow Bell Peppers
Zucchini
Watermelons
Crooked Neck Squash
Yellow Squash Straight Neck
Cabbage
Carrots
Sweet Potatoes
Vine Tomatoes
Sweet Corn
Cantaloupe
Cherry Tomatoes
Green Tomatoes
Sweet Potatoes
Roma Tomatoes
Pecans
Spinach
Green Onions
Okra
Peaches
Serrano Peppers
Poblano Peppers
Habenero Peppers
Jalapeno Peppers
Grape Tomatoes (Red and Yellow)
Anaheim Peppers
Green/Snap Beans
Blueberries
Field/Southern Peas
English Peas
Scotch Bonnet Peppers
Vidalia Onions
Long Hot Peppers
Kale
Collards Greens
Eggplants
Yellow Tomatoes
Pears
Turnips
Butter Beans
Number of Times Mentioned
6
5
4
4
4
4
3
3
3
3
3
3
3
3
3
3
3
3
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Percentage of Respondents
75%
63%
50%
50%
50%
50%
38%
38%
38%
38%
38%
38%
38%
38%
38%
38%
38%
38%
25%
25%
25%
25%
25%
25%
25%
25%
25%
25%
13%
13%
13%
13%
13%
13%
13%
13%
13%
13%
13%
13%
13%
13%
13%
Source: 2001 Center for Agribusiness and Economic Development Wholesaler and Distributor Survey
7
(f) Satisfaction with Current Supplier
Overall, the majority of the wholesalers and distributors appear to be satisfied with their
current suppliers, quality, delivery, quantity, and seasonal supply of fresh produce they
are able to provide. There are some areas where wholesalers are less than satisfied, for
example, the quality and delivery of cantaloupes in the fresh fruit category and onions,
tomatoes, cucumbers, and cabbage in the fresh vegetable category.
Satisfaction with current suppliers makes market entry more difficult. If the data had
suggested that wholesalers and distributors were dissatisfied with their current suppliers,
then the opportunity to market to these organizations is greater than a situation where
supplier satisfaction is not an issue.
(g) Processing and Re-Packing
Carrots, cucumbers, and bell peppers are to be the most frequently processed fresh
produce. Approximately 50% of the wholesalers and distributors indicated they process
carrots. Tomatoes and zucchini were the most frequently mentioned re-packed produce.
(h) Policy Implications
Table 6 indicates Georgia produces more fruits and vegetables than actually consumed in
Georgia. It further indicates a surplus productivity of onions, watermelons, cabbage,
cucumbers, bell pepper, peaches, snap beans, eggplants, pecans, and lima beans.
Table 6. 2001 Georgia’s Market Potential vs. Production for Selected Fruits and
Vegetables.
Per Capita
Ga 2001
Georgia Market
Georgia
Excess Ga
Consumption
Population
Potential
Production
Supply
Item
(Ibs)
(millions)
(million Ibs)
(million lbs)
(million lbs)
Onions
18.3
8.2
149.8
316.2
+ 166.4
Tomatoes
17.8
8.2
145.7
136.5
9.2
Watermelons
15.9
8.2
130.2
468.0
+ 337.8
Carrots
13.5
8.2
110.5
57.6
- 52.9
Cabbage
8.5
8.2
69.6
248.5
+ 178.9
Cucumbers
6.9
8.2
56.5
176.0
+ 119.5
Bell Pepper
6.8
8.2
55.5
90.1
+ 34.6
Peaches
5.3
8.2
43.4
115.0
+ 71.6
Snap Beans
1.9
8.2
15.5
86.8
+ 71.3
Eggplant
0.5
8.2
4.2
48.4
+ 44.2
Pecans
0.39
8.2
3.2
80.0
+ 76.8
Lima Beans
0.04
8.2
0.3
6.2
+
5.9
Source: Georgia Market Potential for Select Produce, Center for Agribusiness and Economic Development
One method of addressing the issue of excess supply could be to increase per capita
consumption through an advertising campaign to encourage Georgians to purchase
locally grown produce over out-of-state produce. Further developing regional and
export market is necessary to move surplus fresh produce in order to maintain price
levels. However, the fact that wholesalers and distributors are currently satisfied with
their current suppliers makes it difficult for new entry if aggressive marketing strategies
are not implemented.
8
Conclusion
This study reveals that Georgia wholesalers and distributors are purchasing a significant
quantity of their fresh produce outside of the state. This is not necessarily a problem as
vegetable production travels up the Atlantic states as the seasons change. However,
during Georgia’s production window, it is important to better market fresh produce to
wholesalers and distributors. According to the study results, quality, price, and reliable
supply are the most important factors influencing wholesalers’ and distributors’
purchasing decisions. An appreciable number of fresh produce such as watermelons,
cantaloupe, bell peppers peaches, zucchini, cucumbers, and eggplants, were bought
directly from Georgia growers. Fresh produce in high demand included blueberries,
cantaloupes, peaches, pecans, watermelons, cabbage, carrots, cucumbers, eggplant,
zucchini, and tomatoes (vine and green). Since this is a preliminary study, a more
detailed follow-up investigation is recommended.
Authors
Dr. Kent Wolfe is a Marketing and Finance Specialist in the Center for Agribusiness and
Economic Development, Department of Agricultural and Applied Economics, University
of Georgia, Athens, Georgia, 30602. Dr. Greg E. Fonsah is an Assistant Professor and
Extension Economist, specializing in fruits, vegetables, and pecans, University of
Georgia, Tifton, Georgia 31793. Chris Ferland is a Finance and Marketing Specialist in
the Center for Agribusiness and Economic Development. Senior authorship is shared.
Acknowledgement
We are indebted to Dr. John McKissick, Dr. Dick Schermerhorn, Mr. Chris Ferland and
Ms. Teresa Byrd who assisted in compiling and editing the survey questionnaires.
REFERENCES
Doherty, B., N. Dykes, and J.C. McKissick (2001a) 2000 Georgia Farm Gate Value
Report. College of Agricultural and Environmental Sciences, The University of Georgia,
Center for Agribusiness and Economic Development, SR-01-07.
Doherty, B. and W.O. Mizelle. (2001b) Vegetable Acreage and Value Estimates 2000.
College of Agricultural and Environmental Sciences, The University of Georgia, Center
for Agribusiness and Economic Development, SR-01-08.
Sharpless, R. Mattie (2001) “Status of the U.S. Agricultural Export Situation, the U.S.
Department of Agriculture’s (USDA) Strategy for Expanding Overseas Sales, and How
Coming Policy Decisions can Benefit our Food and Agricultural Sector.” Speech
delivered before the Senate Agriculture Committee, the Subcommittee on Production and
Price Competitiveness, Washington, DC, August 1 (FAS online).
USDA, (2002) Vegetables—Annual Summary (PVG-BB). Foreign Agricultural
Statistics Board, NASS, USDA.