Food Distribution Centres

A few cities have recently built new food distribution centers which can save money by pooling purchases; by sharing construction costs; account servicing, food handling, and service facilities; by joint promotions; and by collective expertise and financial strength in planning, site selection, and construction.

Not all cities need, or can support, such facilities. They cost from a few million to sev­eral hundred million dollars. It seems unlikely that cities servicing fewer than 300,000 persons could justify the cost of building such facilities. Because of economies of scale, costs do not increase in proportion to the size of the project. Food dealers operating out of small centers may find themselves at a competitive disadvantage if buyers are willing to travel longer distances to large facilities to obtain bet­ter prices and higher quality merchandise.

There is no guarantee that the volume of produce sold by dealers will increase even where food distribution facilities are established successfully. Produce dealers can only hope that sales volumes will dedioe less rapidly than if the new centers had not been constructed.

Conclusions

The high costs of marketing fresh vegetables reflect, in part, an archaic marketing structure. Chain store organizations have captured a major share of the retail outlets once served by oon­chain markets in large measure because the chains have made economies in the marketing process.

Producer-oriented markets were most im­portant in volume handled, and city terminals dropped to less than fifty percent of the total. The smaller quantity sold through terminals was the result of direct buying by chain grocery organizations and by large in­stitutional outlets from producer-oriented mar­kets.

Terminal markets should have the greatest opportunity for improving their sales volumes in areas which are farthest from major pro­ducing regions, and where national and large regional chains account for the smallest share of local retail produce sales.

Most terminal markets must modernize their facilities and merchandising practices to im­prove their competitive positions wth the chains. The smaller and least efficient markets must be closed, and markets in proximity must merge into single, large volume facilities.

Producer-oriented markets will probably con­tinue to decline in numbers as output per grower increases, chain store merchandising practices become more common and areas of minor production abandon commercial output of fruits and vegetables.

Distribution areas for fresh produce sold through producer-oriented markets are not likely to change appreciably, although some expansion in sales territories is likely if pro­ducing areas continue to become more specialized.

The evolving marketing structure for fresh vegetables seems to consist of fewer but larger markets, with larger trade areas and good facilities that carry a complete line of products through the year and ship directly to large vol­ume retail and institutional outlets. If the evolution of such a structure is too long delayed, and if tbe price spread between pro­cessed and fresh vegetables continues to favor processed foods, all but a few fresh vegetables that are not suitable to modem methods of processing may virtually disappear from American tables.

Дата добавления: 2015-10-31