trends in the global fresh produce industry: focus on citrus

Trends in the Global Fresh Produce Industry:

Focus on Citrus

Trends in the Global Fresh Produce Industry:

Focus on Citrus

DR. ROBERTA COOKDept. of Ag and Resource Economics

University of California Davis

November 2005

World Area and Production of Fruits and Vegetables, Million Metric Tons and Hectares

Source: FAOSource: FAO

2004 1990 Fruit Area 52.1 41.2 Fruit Production 497.4 351.6 Vegetable Area 51.3 31.0 Vegetable Production

855.1

462.1

103.4 Total Area

Total Production

1,352

72.2

813.7

Food Demand Trends• Global per capita availability of fruits and

vegetables grew from 155 kg in 1990 to 212 in 2004.

• Consumers in Latin American and Asia are registering the fastest growth in food demand in the world – in the face of slow growth mature food markets in the developed world.

• Growing global importance of supermarket chains plays a key role in stimulating fresh produce trade – shelf space needs to be full year-round. This is a positive factor for citrus demand.

Convergence…Supermarket Share of Grocery Sales, by Selected

Country

0

20

40

60

80

100

1940 1950 1960 1970 1980 1990 2000 2010

%

USA FranceBrazil & Korea China

Source: Tom Reardon

13%

15%

13%10%

15%

1%

11%21%

AppleOther DeciduousGrapeOrangeOther CitrusBananaOther TropicalBerry

The 2004 World Fruit Pie, Share of Production

Source: World Apple Review 2005

79-81 89-91 99-01 02-04 02-04 v. 89-91-

%

Total Citrus 59,321 77,073 103,620 106,274 +38%

Oranges 38,751 53,578 63,433 61,808 +15%

Other Citrus

20,570 23,495 40,187 44,466 +89%

Total Fruit 275,663 311,642 440,242 458,736 +47%

World Production of Citrus and Total Fruit, 1,000 Metric Tons

• This compares with 40% growth in population.• Citrus production growth has lagged

population as demand has diversified for other fruit.

• On the other hand, developing countries are increasing consumption of fresh produce, including citrus, as incomes improve.

• Developing countries also have higher rates of population growth.

• Trade liberalization through the WTO is opening markets and reducing tariffs.

Citrus markets and trade will continue to diversify: – between 1990 and 2003 imports of oranges,

tangerines and clementines into all countries grew by an average of 23%, v. 20% into developed countries and 39% into developing countries.

– between 1990 and 2003 imports of grapefruit and pomelos into all countries grew by 9%, v. 6% into developed countries and 63% into developing countries.

The US and the EU dominate global horticultural trade.


U.S. Horticultural Imports and Exports by Key Product Category, $Billion

0

5

10

15

20

25

30

1999 EX

P

1999 IMP

2000 EX

P

2000 IMP

2001 EX

P

2001 IMP

2002 EX

P

2002 IMP

2003 EX

P

2003 IMP

2004 EX

P

2004 IMP

Process/Other

Tree Nuts

Nursery/Flower

Wine

Fresh

Source: FAS/USDA, as compiled by Roberta Cook.

EU Exports of Horticultural Products by Category

$0$5

$10$15$20$25

1997 1998 1999 2000 2001 2002 2003 2004

Other Fresh Fruit

Processed Fruit & Vegetables Wine & Beer

Tree Nuts Fresh Vegetables

Fruit & Vegetable Juices

Billion

Source: Global Trade Atlas, includes: Vegetables, Fruits, Nuts, Essential Oils, Nursery Products, Cut Flowers, Wine, and Beer.

01,0002,0003,0004,0005,0006,0007,0008,000

Brazil China MexicoUSA Spain ArgentinaJ apan Korea

Total Consumption of Fresh Oranges in Selected Countries, in 1000 Metric Tons (excludes processing)

Source:FAS PSDOct. 2005

05

101520253035

1990 1995 1998 1999 2000 2001 2002 2003

Apples Mandarin/orangesGrapes StrawberriesBananas PearsPeaches Other FreshTotal Fresh

Japan: Per Capita Consumption of Fresh Fruit in kg


05

1015202530354045

1990 1995 97- 98 98- 99 99- 00 00- 01 '01- 02 '02- 03

Apples Oranges

Bananas Other Fresh

Total Fresh

United Kingdom: Per Capita Consumption of Fresh Fruit, in kg


United Kingdom: Per Capita Weekly Consumption of Fruits and Vegetables, by Age

Group, 2002-03, grams


0

500

1000

1500

2000

< 30 30-39 40-49 50-64 65-74 75 & >

Fruit

Veg.

0

2

4

6

8

10

Oranges Lemons Grapefruit

USA: Per Capita Consumption of Fresh Citrus in kilos, 1976-2004

Source: ERS/USDA

05

10152025303540

1990 2000 2001 2002 2003 2004

Mexico Spain Korea

China J apan

Per Capita Consumption of Oranges, Selected Countries, in kilos

Sources: FAS/USDA PSD, Oct. 2005 and IDB demographic data, as compiled by Roberta Cook.

0

10

20

30

40

50

Oranges, all Fresh J uice

USA: Per Capita Consumption of Oranges, Fresh and Juice, kilos, 1976-2004

Source: ERS/USDA

Obesity Goes Global: Globesity!• WHO estimates that obesity grew from 200

million people in 1995 to over 300 million in 2000.

• 115 million of the obese live in developing countries.

• Even in France, obese people are now 11% (vs. 8% in 2000) of the population and expected to reach 20% in 2020.

• The number of obese people in Britain almost tripled between 1980 and 2001; overweight or obese pre-school children doubled in the 90s.

Concern over Globesity Affects Public Policy • Fresh produce is set to benefit. • Competition from non-healthy snack foods is

finally being challenged by health messages and changes in availability, such as in schools.

• Growing evidence on the health benefits of fresh citrus must be aggressively communicated and promoted, to all age groups.

• Citrus can be made more convenient to consume, witness the launching of Sunkist’s Fun Fruit program.

Net Sales Grocery Net Grocery Company and Origin ($ billion) Sales ($ billion) Rank

30 grocery retailers account for 29% of modern global grocery retail sales.

TOP GLOBAL GROCERY RETAILERS, 2004

Wal-Mart U.S. 285.2 138.72 1

Carrefour/Promodès France 90.3 84.54 2

Ahold Holland 88.8 75.03 3

Germany/Switz 70.1 38.35 8

Tesco U.K. 62.2 50.45 4

U.S. 56.4 41.22 6

Germany 50.7 41.54 5

Costco U.S. 47.1 30.74 13

Source: PlanetRetail, June 2005


Target U.S. 46.9 17.15 26

Aldi Germany 43.0 38.75 12

Schwarz Germany 42.6 37.79 11

ITM France 42.3 32.47 18

U.S. 40.0 28.78 17

AEON UK 38.8 30.13 14

Walgreen’s U.S. 37.5 14.53 31

Auchan France 37.3 30.22 15


Safeway U.S. 35.8 29.54 16

Ito-Yokado Japan 39.5 37.52 9

France 32.8 22.72 19

Edeka Germany 32.5 33.11 7

CVS U.S. 30.6 10.16 38

Tengelmann Germany 29.8 21.73 20

Casino France 28.8 37.53 10

Sainsbury U.K. 28.2 23.02 21

TOP GLOBAL GROCERY RETAILERS, 2004Net Sales Grocery Net

Grocery Company and Origin ($ billion) Sales ($ billion) Rank


Coles Myer Australia 23.7 14.37 30

Morrisons 25.5 20.06 24

Delhaize “Le Lion” Belgium22.3 18.58 23

Woolworths Australia 20.7 16.46 22

Loblaw Canada 20.1 17.41 25

El Corte Ingles 19.2 5.44 62Total Estimated Top 30 1,054.42Others 2,610.33Total Worldwide 3,664.75




Retail Banner Sales Grocery Company ($ billion) Sales ($ billion)

Source: PlanetRetail as compiled by Roberta Cook.

TOP GROCERY RETAILERS IN MEXICO, 2004

Wal-Mart 13.2 5.9

Soriana 3.9 2.4

Gigante 2.9 2.0

Comercial Mexicana 2.6 1.8

OXXO 2.1 1.5

Costco 1.4 .81

Chedraui 1.2 .66

HEB .64 .58

Retail Banner Sales Grocery Company ($ billion) Sales ($ billion)

Source: PlanetRetail as compiled by Roberta Cook

TOP GROCERY RETAILERS IN MEXICO, 2004

Carrefour .72 .50

Calimax .31 .27

Subtotal Top 10 28.76 16.35

Other 54.41 49.71

Total 83.164 49.713

Top 10 grocery retailers account for 25% of

modern grocery retail sales in Mexico. Much of

food sales move through traditional channels.

Key Drivers• global retail players

• global retail brands?

• growing role of private labels

• retailer–supplier contracts/partnerships, interest in large year-round suppliers

• declining role of spot market

• Suppliers all coming up to the same level

trends in the global fresh produce industry: focus on citrus

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