In this Edition
With Spring on our doorstep, August has proven to be a great month in the produce industry. With the weather warming up, it seems almost 'unreal' that only week ago, we Queenslanders were shivering after the arrival of our first proper Winter in a long time.

This cold snap was enough to inject some vigour into the markets and there is a great energy about at present.

In this edition we take a look at August trading, and also introduce you to Mick Spence, who heads up Pershouse's Country Order Division.

And, we have a look at some emerging consumer trends as the current economic climate starts to bite into the grocery budget.

Have a great month.

Surprising Consumer Trends in Tough Times
This month, Pershouse Produce Joint Managing Director, Peter Kedwell, attended the Produce Marketing Association’s (PMA) Fresh Connections conference.

The conference, held in Sydney, provided some insightful presentations on consumer trends and how the fresh produce industry can capitalize on them for the future, as well as a snapshot of what is happening in the fresh produce industry globally.

“Pershouse Produce has been a member of the PMA for a number of years. I have attended a couple of their industry education conferences and have found much of the information – particularly the trend forecasting, to be really interesting.” said Peter.

In his presentation, Focus on Fresh, Mr Kris Walker from The Neilson Company made a couple of fascinating points.
His presentation revealed fresh fruit and vegetables are still an extremely important factor in a consumer’s choice of retailer and have maintained their position in the shopping basket.

“Given the information on the importance of fresh fruit and vegetables to our health, it makes a lot o sense that consumers are responding by looking to fresh produce as an answer to healthier lifestyle.” said Peter.

“And interestingly, despite the impression we are being given by the media, fruit and vegetables are still seen as an essential item and haven’t even been considered as a cost target when consumers are looking at ways to adapt to the changing economic conditions. Quite simply the price increases in our sector have not been as imposing on the household budget as other items.”

In fact, the price of fruit and vegetables has only increased around 2%, relative to other items like water and fuel that have increased by as much as 17%. When you look at these price increases, compared to inflation (which is running at around 4%) fresh produce has actually been in a period of deflation over the last six months.

“But this is complex economics for the average consumer. They are looking to try to reduce the food bill and our industry won’t be completely immune from this despite the good value our sector is compared to others."

"One thing that retailers need to take from this is that in adapting to the new economic climate, consumers are certainly looking for the specials and paying attention to coupons and discounts. And, items classed as ‘luxury’ are being left on the shelf. What that means in terms of produce varieties we have yet to see. What does a consumer regard as a ‘luxury’ fruit item, for example, when most produce varieties are readily available all year?”

However, despite its popularity, Mr Walker’s research suggested the growth in the fresh produce sector at retail level has been fairly constant over the last few years.

“You could look at this research two ways. On one hand, as an industry we ‘hang in there’ and are viewed as a staple in the grocery basket. It also indicates that there is certainly some potential for growth too.”

“On the other hand, it also indicates that we aren’t doing enough to improve our market penetration in our retail category – particularly when you consider that categories such as bread (also seen as a ‘healthy food’) has grown its category significantly.” said Peter.

“But I believe that we will start to see a bit more growth in our sector. There is certainly opportunity there and consumers are becoming better informed about healthy food everyday, not just in what they buy, but how they buy. In fact, we have had the best August in terms of prices that we have seen for some time. Demand was high and supply was a bit tighter due to the cold weather. For most growers, August was good news, not the doom and gloom that is hitting other sectors.”

“Fresh Produce is still important for our health and it is affordable. In trying to maintain a little bit of luxury when times are a bit tighter, I can’t think of anything more luxurious and affordable than a Kensington Pride in the middle of the mango season. As an industry we need to keep driving that home to consumers.”

Staff Profile - Mick Spence
Mick is living proof that you don’t need to be an ‘international man of mystery’ to be well travelled with your work. Indeed, working in the fresh produce industry has afforded Mick and his family the opportunity to see a great deal of this country (and overseas).

Mick is a great example of how you can make a career out of fresh produce and there are very few people in the Markets (Australia-wide) who have as much experience –across a range of different business areas – as our Mick.

Starting out at the young age of 16 in Griffith, NSW, Mick started in the dehydration and processed fruits divisions of Griffith Producers before ‘chasing his sweetheart’ (Maree – his wife of 23years) up the east-coast of Australia, living in a caravan, and eventually meeting up with his brother in Darwin in 1985.

This was to be the start of a long stint in Darwin that stretched over about 18 years.

“I started at McGowan’s as a casual and ended up permanent in 4 weeks. I was Operations Manager within 9 months and then their Operations/Export Manager for around 9 years. It was a great experience. I travelled a lot during this time – to Singapore and Indonesia.”

“But then I was offered a great job in Cairns with Market Garden and so I took off to Cairns, leaving Maree to follow with our sons Josh, Sam and Zac who were all little at the time. She had a hell of a trip too. Driving from Darwin with three little boys in the Kingswood is bad enough, but to add to that, our cat had kittens in the car on the way over!”

“And to top it off, while she was in transit, I was offered an even better role as an owner of Tully Wholesale in Darwin, so within eight weeks of her arrival, we had to go back to Darwin! I didn’t think she’d speak to me again!!” said Mick

So back to Darwin they went and Mick spent around 10 years in Darwin until a bit of a health scare forced some changes.

“I was a bit lost. I wanted a change, but produce is in your blood. It was just a matter of finding the right opportunity that was a good move for the whole family.”

“And into my life came David Pershouse. I had known Dave for many years and when he heard I was looking for change – you know how the grapevine in this industry works – he offered me a job in Brisbane.”

“So Maree and I shifted the family again and landed in Brisbane where we have been ever since.”

“Initially I stared at Pershouse assisting in the operations area until the opportunity to take over our country order division came up. We have managed to grow this business to the point where it is a separate entity to Pershouse produce, with its own buying brand – 588.”

“Having our own brand better enables me to provide a genuine full buying service for the retail buyers. I have been at this now for over 4 years and service a number of big buying groups.”
And while Mick has enjoyed his time in the produce industry – with wife Marie still working with him – the boys are all making their own path with Josh being the only one to stay in the Markets.”

“Josh worked with Pershouse for a time, but has now moved on. I think it is important for sons to work away from their fathers for a time. He will develop his own style and I think will do well.”

“But this second and third generation of family continuing in the produce industry is going to be interesting. There just isn’t the money in it for the amount of work and hours involved and it is hard to attract the younger generation into the business. It is tough. It is hard work and not many seem to be interested in that.”

Outside the produce industry, Mick is a keen fisherman and he and Maree enjoy bushwalking, particularly around Flanagan’s Reserve.

“And while I don’t look like a prop forward, I love my rugby union and league. In fact I was heavily involved in the NT Junior Rugby Union”.

August Best Month Yet!
August proved to be an outstanding month for the produce markets with demand high and prices surging across many lines.

The cold snap across Queensland meant that growth slowed for most vegetable lines, despite the full moons. The Granite belt alone had around 10 consecutive nights of sub-zero temperatures during prime growing time meaning that many of the cruciferous varieties (especially broccoli and cauliflower) were in tight supply – and are only just starting to recover.

The cold weather also bought consumers back to the vegetable lines, so demand was also high. The market has indeed been a vibrant one this August.

Prices for vegetables are starting to come back as the weather warms and supply increases. Capsicums are plentiful and we expect lettuce to start to tighten early in September. But demand is still very strong and we believe that this will help to keep prices buoyant at least in the short term.

Bananas have reached their highest prices since Cyclone Larry with the cold weather slowing growth and therefore tightening supply. Lady Fingers are also following suit.

Tomatoes are still representing good value, and demand is starting to increase with the warmer weather, and apples are still steady.

Joke of the Month
Why did the zucchini go out with a prune?

Because he couldn't find a date.

(Bad...I know...but someone has to make Peter Kedwell's jokes look good!!- ed.)

If you have a story or article that you think would make a great addition to Fresh Perspective contact;

Laura Koman
Ph: 07 3379 3034
Email: laura@pershouse.com.au