Analysing the Fresh Fruit and Vegetable market

There are groundss demoing a growing of Fresh Fruit and Vegetable ( FFV ) market at planetary and national degree which was a consequence of increasing ingestion and production. Harmonizing to Food and Agriculture Organization ( FAO ) , over 1,400 billion dozenss of FFV universe production in 2007 has stepped up over 20 % from 2000 while continuously lifting the volume of trade making 7,900 billion USD in 2008. This enlargement of FFV is a important chance for husbandman, peculiarly little husbandman, to sell their FFV through different channels of markets.

A series of articles portray selling channel and supply concatenation in different parts demoing how farmer supply their FFV to consumers through assorted types of mediators. These articles had significantly pin pointed the modern retail ironss and their modernized procurance system into marketing channel ( Cadilhon et al, 2003 ; Narrod et Al ( 2009 ) ; Ghezan et Al, 2002 ) . The rise of modern retail ironss e.g. Supermarket, Hypermarket and Convenience Stores ( “ supermarkets ” ) and its impacts on husbandmans have been dramatic in several developing parts. In many parts, big modern retail ironss are of import participants in a nutrient sector and going a dominant influence on nutrient retail market ( Stringer et al, 2009 ) . In developed parts ( Europe and America ) , supermarkets usually account for 50-80 % of nutrient market While, supermarket has about 20-50 % of nutrient market in developing parts e.g. Asia and Africa ( Weatherspoon & A ; Reardon, 2003 ; Dobson et Al, 2003 ; Cadilhon et Al, 2006 ) . Their increased engagement has resulted in increased integrating and concentration in sector ( Louw et al, 2007 ) . Besides rapid enlargement of supermarket, increased income and changed in ingestion behaviour of consumers had besides resulted in increasing portion of FFV gross revenues in those supermarket ( Cadilhon et al, 2003 ; Reardon et Al, 2008 ) .

FFV is considered as one of cardinal constituents and of import for supermarket, as a strategic merchandise in pulling client into the shops ( Oli, 2005 ; Reardon et Al, 2004 ) . It typically constitutes about 8-12 % of entire supermarket nutrient gross revenues in Latin America and Asia. Concentrating on Thailand, supermarkets accounted for 40 % of fruits and 30 % of veggies in urban country ( Bangkok ) , but a lower per centum in the context of the whole state ( Shepherd, 2005 ) . FFV was non merely to be increasing its per centum of gross revenues but besides really profitable relation to other merchandises in the shop ( Reardon et al, 2004 ; McLaughlin, 2004 ) . In effect of increasing importance of supermarket on FFV, its procurance system has an impact on little husbandman who are major FFV manufacturers and prevalent in Thailand. The published instance of many developing states have revealed that most of little husbandmans have experienced many jobs in providing supermarkets and excluded from supermarket ‘s procurance system due to their deficiency of needed capital, rely on rain-fed production, unable to keep consistent supply throughout the twelvemonth. ( Shepherd, 2005 ; Chen et Al, 2005 ; Reardon et Al, 2008 Gaiha et Al, 2007 ; Chen et Al, 2005 ; Emongor & A ; Kirsten,2006 ) . In instance of Thai little husbandmans, they, every bit good, are confronting these jobs. In this respect, policy intercession is being initiated by the authorities and has been included in national policy. Helping little husbandmans and bettering FFV selling system are the aim of such intercession. The paper has made an effort to analyze the FFV selling concatenation of Thailand and supermarket procurance system with concentrating on policy deduction in associating little husbandmans to supermarket of Thailand.

The paper is organized as follows. Data and Methodology utilizing in research and context in paper was introduced in subdivision 2. Section 3, background of retailing in Thailand was outlined. In subdivision 4 nowadayss marketing concatenation of FFV and its major histrions. Section 5 explains FFV procurance system of supermarket with treatment on provider sourcing, their major providers, merchandising and distribution system. Then policies by public sector and supermarkets were framed and analysed. Finally, the paper concludes with suggestions on future policy and deductions.

Data and Methodology

Datas of this paper is combination of primary and secondary beginnings. Secondary information was compiled from a assortment beginnings e.g. authorities declarations, ministry ‘s one-year study, statistic book, newspaper and research company. The research paper done by research bureau and bookmans outlined the background of Thailand retailing in subdivision 3. Statistical informations in economic facet and retail concern was provided by authorities bureaus at national degree. Insight interview and information from supermarkets were used to carry through the overview image of Thailand retailing.

Primary information was collected utilizing field study, detecting market at different degrees. Cardinal sources were interviewed in 2010. The primary information was used for explicating FFV selling concatenation and procurance system of supermarket. For stand foring Thailand FFV, a sum of 10 FFV were collected as sample of FFV to response the standards of of import tropical Thai FFV in both ingestion and production. The undermentioned fruits including Mango, Durian, Long Kong, Rambutan and Mangosteen are selected for fruit due to their high volume of production and trade value. Vegetable including Chinese boodle, Chinese chou, Morning Glory, Chinese Lettuce and Yard Long Bean are selected due to their ingestion popularity and of import points in market. Key informant interviewed included husbandmans, mediators, jobbers, supermarket directors, concerted representatives and authorities officers. The interview and field study were conducted at cardinal and eastern parts where those selected FFV were mostly cultivated. Procurement system of taking supermarkets was provided by their director and/or staff of those taking supermarket. However, some information is confidential due to their concern codification of behavior. Hence some information added in this research was from the writer ‘s old experiences working in the two taking supermarkets in Thailand.

The subdivision of FFV policy and its deduction is chiefly based on secondary information derived from authorities declarations and authorities bureaus ‘ study. A longitudinal method was employed for seting the full FFV populace policy in the historical position. Policy of private sector concentrating on supermarkets is examined and collected by questioning the cardinal sources and utilizing a content analysis method. Analysis of policies and issues related to sampled FFV and inclusion of little husbandman in marketing concatenation were based on top-down attack. The policies and deductions were analysed from national degree to regional, provincial and local degrees severally. In order to analyze bing FFV public policy, SWOT analysis is employed to size up policy instruments ‘ strengths and failings. External environmental of FFV selling that pose chances and menaces was analysed.

Background of Retailing in Thailand

Retailing has significantly played an of import function in state ‘s economic system since 1981. For the last 30 old ages, agricultural sector had played critical function in economic development as major export merchandises and domestic merchandises lending 20 % of state Gross Domestic Product ( GDP ) in 1981. While the sweeping and retail trade sector was the 2nd largest sector stand foring 18 % of GDP. Nowadays, sweeping and retail trade sector has been taking over agribusiness sector, while agribusiness had been diminishing its function in GDP due to economic structural altering. As increasing its function in state ‘s economic system, sweeping and retail trade sector has progressively stepped up their value about 40 % increasing during last 10 old ages, from 800 billion ticals in 1999 to 1,100 billion ticals in 2009 with about 400,000 sweeping and retail mercantile establishments ( Ministry of Commerce Thailand, 2008 ) . The figure could stand for that Thailand is one of the fastest turning nutrients retailing in Asia ( Shannon, 2009 ) .

The traditional Thai retail mercantile establishment has taken the signifier of a shop-house and been a household concern dispersing about every community throughout Thailand every bit good as many other parts of Asia. Then the first major measure of Thai modern retailing was introduced about 40 old ages ago with the gap of the state ‘s first section shop in 1956 ( Feeny et al, 1996 ) . Turning point in Thailand retail concern could be seen since lifting of new retail class with influx of foreign direct investing from fiscal liberalisation in 1997 and over investing during 1989-1996. These phenomena are same tendency as other developing states in Asia, Africa and Latin America specifically in South East Asia states. ( Cadilhon et al, 2006 ; Weatherspoon and Reardon, 2003 ; Suryadarma et Al, 2010 ; Kaliappan et Al, 2009 ) . Similarly to those states, supermarkets in Thailand were dominated by transnational retail concatenation e.g. Tesco ( UK ) , Casino and Carrefour ( France ) since Asiatic Economic Crisis in 1997.

By 2010 there were over 7,800 nutrient retail mercantile establishments distributing countrywide. In this respect, there are four shop formats considered as nutrient retail mercantile establishments including Hypermarket or Discount shop ( selling infinite of 6,000 to 12,000sq.m. ) , Cash and Carry ( rank based jobber ) , Supermarket ( selling infinite of 800-1,500 sq.m. with concentrating on fresh nutrient and food market merchandises ) and Convenience shop or C-store ( selling infinite of 30-300 sq.m. ) . Among these four classs, C-store is the highest class of mercantile establishments shown in figure 1. The figure presented the sum of 220 hypermarkets, 44 hard currency and carry, 192 supermarkets and 6,858 convenience shops. From 1997 until 2010, these nutrient retail mercantile establishments were sharply growing with over 370 % . This aggressive growing of nutrient retail mercantile establishment and diffusion of these mercantile establishments in Thailand are effect of shop format transmutation with increasing of consumer buying power, growing of urbanisation countrywide and loop hole of enlargement ordinance.

Major retail ironss are breakdown in table 1. There are five major participants in Thailand nutrient retailing ; Tesco Lotus, Big C, Carrefour, Makro and Tops supermarket. Among hypermarket format, all of them are foreign owned retail merchants e.g. Tesco Lotus ( United Kingdom ) , Big C ( France ) and Carrefour ( France ) . Makro ( owned by Siam Makro ) is merely 1 concatenation in Cash & A ; Carry format. Tops supermarket ( owned by Central Retail group, Thailand ) is the largest supermarket concatenation with entire 109 shops. There are two major participants in C-store market ; 7-Eleven ( Japan ‘s C-store franchise operated by CP group ) and Tesco Lotus Express. The latter is an illustration of shop format transmutation from hypermarket and supermarket format to convenience shop taking at capturing community market and evading zoning and town planning ordinances. Hence, taking off of retail mercantile establishment can be seen since 2004 with a consequence of format transmutation and loophole of ordinance as good.