Economic and Marketing Information
FOR INDIANA   FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana
June  28,   1963
Future Marketing Of Fresh Fruits And Vegetables
by John  T. Porter, Agricultural Economics
INDIANA GROWERS will witness several changes
during the next few years which will influence marketing of fresh fruits and vegetables. Corporate chainstores
and affiliated independent food store organizations will
increase direct buying of fresh produce in the main
producing areas, with the volume handled by terminal
markets declining. However, terminal markets will continue to serve restaurants, hotels, institutions and unaffiliated independent grocery stores too small to make
direct purchases. Chainstores will continue terminal
market purchases such as fill-ins, specialty items and
prepackaged items.
Corporate chainstores purchased 38 percent of the
total volume of fresh fruits and vegetables in 1958, while
voluntary and cooperative buying groups purchased only
4 percent. However, many of the voluntary and cooperative groups have not purchased fresh produce for their
affiliated independent stores in the past.
Direct Buying Increasing
Twenty-six percent of all reported fresh fruit and
vegetable receipts in 23 cities during September, 1961,
were delivered directly from producing areas to the
warehouses of corporate chains and affiliated groups.
In 1936, direct purchases of these groups from the producing areas accounted for only about 12 percent of
total market volume received in these cities. Thus, there
is a trend toward bypassing wholesale terminal markets
in cities as retailers buy directly from the shipping
points in the producing areas.
In the late 1950's the U.S.D.A. found that the 257
corporate chains and 66 affiliated groups buying produce at 52 wholesale markets purchased 56 percent of
all their fresh produce directly from shippers and growers
in the producing areas. The three largest chainstores
bought 70 percent of their total produce directly from
the shipping point in the producing areas—most of which
was purchased by their own buyers in the field.
The regional chains with two or more warehouse divisions bought about 50 percent of their supplies directly
from the shipping point with about 45 percent of their
direct purchases made by their own buyers in the field.
Local chains with only one warehouse division bought
almost 30 percent of their supplies direct from the ship
ping point. The few voluntary groups handling produce
bought a third of it directly from the shipping point,
and retailer cooperatives bought about 13 percent directly.
One of the main factors to influence the amount of
direct buying from growers, grower cooperatives and
other shippers in the producing areas in the future will
be the number of corporate chains and affiliated independents which are large enough to buy economically
direct in the producing areas. Local and regional chains
are expected to grow during the next few years and be
capable of more direct buying.
Chainstores are increasing demand for mixed loads
of several different commodities from the same shipper
in the producing area. This allows buyers to purchase
more often at the shipping point, resulting in more frequent arrivals of a greater variety of fresh produce. This
development will increase in importance and facilitate
more direct buying in the producing areas by smaller
wholesalers and retailers. It will lead to more production contracts between private assembler-shippers and
growers, especially in the western region where this practice is gaining in importance.
Production  Unit Size Increasing
Another factor which will influence the extent and
geographic location of direct buying is the size of farm
production units. According to the census figures the
average size of production units for all fruits and all
vegetables has increased greatly in all regions of the
United States during the 1949 to 1959 period. The
western region had the largest production units in 1959
with 21.2 acres per farm for fruits and 51.7 acres for
vegetables. The north central region had 6.2 acres per
farm for fruits and 16.9 acres for vegetables.
Large chain buyers will probably continue to buy
much of their fresh produce from western supply areas
where about 45 percent of the fresh market vegetables
and about 52 percent of the fruit have been produced
in recent years. Retail buyers like to deal with producers
and shippers in the western region because they are more
assured of large lots of high and uniform quality produce throughout the year.
Trends in Consumption
The trend in per capita consumption will affect the
amount of fruits and vegetables marketed fresh in the