2018 ASHS Annual Conference

The increasing demand for fresh fruit and vegetables offers important market opportunities to US farmers. Increasing popularity of local and organic foods and the expansion of direct-to-consumer and new intermediate market outlets allow farmers to capture a higher share of the consumer dollar. Despite these economic opportunities, developing new market linkages is challenging for fruit and vegetable farmers; particularly in light of the seasonality and volatility of the fresh market industry (Klonsky et al., 2002). Moreover, it is unclear what are the main trends driving retailers’ purchases as supply shortages, contract work, and small procurements become commonplace in the fresh market industry. This study investigates fresh market retailers’ preferences and requirements with respect to their produce suppliers. Face-to-face interviews with fresh produce retailers in Indiana were conducted in 2014 and 2015 about their current retailing operation, the buying decision-making process, supplier attributes, supplier-buyer contracts, retailers’ perceptions, and the importance of organic, conventional, and local attributes for retailers. The article also draws from a growers’ survey to tackle on the marketing gaps between growers and buyers of fresh market fruit and vegetables. Results show that Indiana fresh market retailers source from a variety of suppliers ranging from local farmers to local and regional wholesalers. Large grocery chains source mainly from regional distributors and wholesalers, for which formal written contracts and specific packaging, labeling, delivery, and traceability are key suppliers’ attributes. Smaller retailers in urban and rural counties source mostly from local farmers where flexible sales arrangements, trust-based transactions, and supply reliability are important farmers’ attributes. While product pricing is an important supplier attribute, most retailers offer farmers price premiums for locally grown produce. Regardless of size or location, most retailers recognize the effect of television and internet on customer purchasing behavior. Large and small retailers reported the value of capturing consumers’ preferences for developing marketing strategies, but they tend to gather consumer demand differently. Large grocery chains capture consumer trends through inventory turnover and weekly sales, while small specialist retailers strive to know their customers, understand their needs, and encourage employees to answer customers’ questions. Increasing the marketing opportunities for local fruits and vegetable farmers is important to assure the sustainability of the specialty crop industry. This research shows that quality produce, affordable prices, and reliability are key attributes sought by retailers Policymakers, researchers, and extension agents can use these findings to assist farmers in developing new and maintaining existing market linkages.