Many publications have been released to document and predict some of the trends that have occurred in the global fresh fruit and vegetable market in 2022. The trends are highlighted while factoring in ever-changing consumer preferences, global supply chain disruptions and changing trade relations. Every year, Fruit Logistica releases a report to spotlight these opportunities for fresh produce suppliers and brand owners. In the 2022 edition, a group of experts across the industry gave these insights and forecasts for the industry.
1. A more joined-up approach to supply
Over the past 5 years, there have been massive disruptions affecting food supply chains across the world, including the COVID-19 pandemic. This rapidly shifted market requirements, supply capacities, and the existence of a harmonious supply chain. Usually, fruit and vegetables are moved from farm to fork through several different intermediaries. This is particularly common across African food systems, which are often scattered, making them prone to potential obstacles along with several transit points. The result is usually hard-to-anticipate quality, temperature, logistics, staffing, and traceability challenges. For this reason, the chain needs to be shorter and faster now, more than ever. The development of such strategic supply chains will continue to be a central feature of the fresh produce business for at least the next 12 months. This has been the case with several companies working to shorten the supply chains, including Kenya’s Twiga Foods, Kibanda TopUp, iProcure, and Ghana’s Ghalani. Within the fresh food ecosystem, there will be more forged partnerships or acquisitions. For instance, in 2020, Twiga Foods, an end-to-end distributor of fresh and processed food partnered with the e-commerce platform, Jumia, to offer last-mile delivery for fresh produce consumers. In 2021, InspiraFarms and FreezeLink partnered to build and integrate the fresh produce cold chain in Ghana focusing on export crops supply chains, through asset finance, refrigeration-as-a-service, and technical services. In 2022, we shall see more such collaborations in the ecosystem.
2. Technology related solutions
Agri-tech has evolved over the past decade to cover all kinds of applications and subsectors, including on-farm solutions, transportation, distribution, retail, and marketing. But this year, more than ever, the various technological advances we see are poised to have a substantial impact on how fruits and vegetables are grown, traded, sold, and consumed across the world. There will be an increase in extensive data systems, the automation of production, and demand projection using machine-learning software. Across Africa, there have been emerging on-farm tools to monitor and automate crop health and soil conditions relating to moisture, and plant nutrition levels depending on crop needs with greater accuracy. For example, Kenya’s Farmdrive utilises machine learning to close the gap for farmer access to financial services. Other data-driven and IoT based solutions will expand to post-harvest to incorporate remote monitoring in cooling. For instance, InspiraFarms’ has integrated IoT and a remote sensing system to analyse the performance of fruit and vegetable cooling conditions, energy data, and cooling machinery performance. For this reason, this trend in ag tech, is here to stay, with companies increasingly adopting precision agriculture.
3. Web-based operators adopt different approaches to ordering and delivery
In an increasingly urban world where people are more remote from each other, delivery services are at the forefront of logistics, with established fresh produce retailers wanting to extend their reach to online marketplaces. While such marketplaces have existed for years, there will be an increasing lean in towards omnichannel retail to bring people fresh produce to the last mile within the shortest possible time. On the B2C front, there will be an increasing emergency of fruit and veg in meal kits, which is a new and exciting area of growth for established retail companies. Within the African market, such startups catering to this niche market, among many others, are South Africa’s DailyDish, and Kenya’s TryCooked, both on-demand and subscription-based meal kit companies that offer recipes with pre-measured, pre-portioned ingredients, including fresh produce.
While the pandemic accelerated the development of solutions to food distribution gaps, the lines between retailers and the rest of the supply chain, including producers will blur further. The result of powerful e-commerce players will go beyond providing services to consumers only, but to also cater to their production needs. Within Africa, Ghanaian agri-tech startup Farmerline, recently raised $12.9m in funding to further expand its operations beyond being an industry’s marketplace, to provide all in one supply, from production to marketing. This trend allows large platforms to add value to farmers by providing not only a marketplace for their products, but also creating a production pipeline across farm inputs, knowledge, and capital.
4. Sustainability in production, distribution, and consumption
Sustainability stands as one of the most influential trends by far in 2022, with most companies adopting it as a non-negotiable headline. This has seen fruit and vegetable growers, suppliers, and retailers setting ambitious environmental goals while quantifying and documenting the sustainability of their enterprises. Companies will increasingly document more how resources, people, communities, and biodiversity can be incorporated into their operations. In some instances, sustainable packaging plays a role, with other countries adopting regulations banning plastic packaging for unprocessed fruit and encouraging steps towards more recycling. Sustainability will increasingly be used by marketers in 2022, with recent studies suggesting that younger consumers are happy to spend more on sustainably sourced produce. This will see an increasing number of brands conveying this message to reinforce the strength of their brand.
6. Restructuring to the cost of fuel
The sharp rise in energy costs and the subsequent increasing inflation will be a major factor for the fresh produce industry. In Nigeria, inflation was 15.75% in December 2020, with food inflation rising sharply by 19.56%. With the unfortunate war in Ukraine having poured even more fuel on that fire, the price of many other items is also increasing. International fresh produce businesses, on the other hand, are facing the major headache of shipping strains with freight. Estimates in a report by the United Nations Conference on Trade and Development estimated that with a surge in freight rates reaching five times the ten-year average, there is a projection of further inflation of consumer prices by 1.5 per cent this year. To adjust to the cost of energy, fresh produce companies and growers have passed on the increased cost to consumers. While some have had to close offices, and scale back production rather than spend money on inputs that they cannot recoup.