Online Produce: A key battleground for consumer dollars

Fresh fruits and vegetables are quickly joining the ranks of the most profitable and rapidly growing segments of online shopping. While still a relatively new entry in the United States, the report indicates that the segment is growing and could reach as much as $25 billion dollars by the year 2023. The new report by Rabobank’s Food & Agribusiness Research and Advisory group (FAR) titled “Online Produce-Potential Winners Act Early” goes on to examine what opportunities the fresh produce supply chain has to impact the e-grocery channel.

Roland Fumasi, Senior Analyst with FAR says that these opportunities are really surrounding the changes caused by e-grocery. “Members of the fresh produce supply chain are going to have an opportunity to become early solutions providers for many e-grocers,” said Fumasi. “Those that help e-grocers achieve their goals will reap the benefits of this quickly growing channel.” The report goes on to outline the four key areas of change caused by e-grocery; Greater Retail Control Online, New Core Competencies at Retail, Virtually Unlimited Space, Lower Consumer Search Costs.

One of the main reasons fresh produce is expected to gain significant attention is due to the fact that in brick and mortar stores, produce is typically one of the highest gross margin items and a large contributor to net profit. “It is early yet in e-grocery adoption in the US,” says Fumasi. “That said, current retail players are increasing investing in e-commerce models and are driving the grocery sector toward a supply side tipping point. Progressive produce suppliers can take advantage of this and gain market share not only online, but in traditional channels as well.”