Marketing tips: How quality improves fresh produce sales


By Digital team | 10 September 2018
market; fresh; produce; storage; exporting; quality
Photo: Thevoicebw.com

It has been shown many times that people don’t mind paying more for fruit or vegetables – as long as the quality is good.

Most people are familiar with the saying “beauty is in the eyes of the beholder”. In agriculture this could be changed slightly – to “quality is in the eyes of the beholder”.

Quality in fresh produce is judged in various ways, but the simplest is the way in which we see a product. Another could be how we plan to use the product; for example, if you’re looking for baby potatoes to make a potjie, even the most beautiful large potatoes are not going to appeal to you.

But what does product quality mean to a farmer?

BETTER SALES

I remember a time, years ago, when the market was hopelessly oversupplied with onions. At the Joburg Market there was hardly space to move on the sales floor and unloaded trucks stood outside.

Salespeople were only too grateful to get whatever price they could – down to R2 a pocket in some cases. Thousands of poor-quality onions were condemned and discarded.

Buyers could pick and choose, and most simply walked past the salespeople, ignoring them. But top-quality onions were still selling at R10 – R12 a pocket.

I’m not saying those farmers made money, but they certainly covered some costs and nothing was discarded because of quality. There is always a demand for good quality fruit and vegetables.

PREMIUM PRICES

Top brands sell themselves. Salespeople become order takers (no disrespect intended) as buyers queue to buy quality products at above-average prices. Top brands always get better prices than the average.

Ask a buyer why he pays more for one tomato than for another and his answer is likely to be, “because I can sell them all”. And what he won’t tell you is that he can probably charge a bit more because of the quality.

Consumers are happy to pay that bit extra because they know they’re getting value for their money.

LOWER COSTS PER UNIT

Farmers who don’t try to grow good quality products and pick whatever they can off a piece of land are throwing money away and eventually cause their own downfall.

I will show you how by using a simple financial example:
You have 1 ha planted to potatoes.
You harvest 4 500 pockets (the average for potatoes under irrigation). It costs, for example, about R28 per pocket to grow and market those potatoes. So 4 500 x R28 = R126 000.

You sell as follows:
2 000 pkts Class 1 @ R30 each (average) = R60 000
2 000 pkts Class 2 @ R25 each (average) = R50 000
300 pkts Class 3 @ R15 each (average) = R4 500
200 pkts discarded – no sale
Total income = R114 500
Total costs = R126 000
Loss = R11 500
Plus cost of 200 discarded = R5 600
Total loss = R17 100

Some farmers blame the weather, while others blame the market. But how many will admit they did not have sufficient good quality potatoes to sell.

Let’s go to the neighbour and see why he’s doing so well. He has exactly the same as above but his sales are different.

3 800 pkts Class 1 @ R30 each (average) = R114 000
600 pkts Class 2 @ R25 each (average) = R15 000
100 pkts Class 3 @ R15 each (average) = R1 500
Total income = R130 500
Total costs = R126 000
Profit = R4 500 (R1 per pocket)

  • Please note that the numbers given are simply intended to illustrate the importance of good quality.

HIGHER PACK-OUT

The importance of packing a higher percentage of quality products is illustrated above and applies equally to the cost of grading and packing. The higher the percentage of top-quality products, the lower the final cost per unit.

Also read: Sorting, washing, grading and packing your fresh produce

PRIDE IN THE PRODUCT

Farmers are proud of producing quality products, and so they should be. The production process has many challenges that could upset everything, so when he gets to the final product and it looks great he has every right to be proud of his achievement.

If you’re not farming to achieve high quality products, you are wasting your time. You are farming for now, not for tomorrow. Quality takes time and money to achieve, and that’s why it is all about sustainable farming, not making a “quick buck”.

Also read: What happens to fruit after the harvest?

  • This article was written by Michael Cordes and first appeared in Farming SA.