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Three Big Issues for 2017…and What They Mean

An end-of-the-supply chain perspective
Retail Reflections

There are going to be a significant number of issues that concern the produce industry in 2017. Here are a few I think will have the biggest impact on the marketplace.

Local produce will continue to have a rising impact on suppliers, but not in the way you might think. Virtually all major retailers have been touting an increase in “buying local,” and this is playing well with consumers. While this sounds great, let’s consider the practical reality: unless you live in California, Florida, Texas, or Arizona, the availability and product range is short. If the land used to grow these items is fixed, where is this increased production going to come from? If we can’t expand the assortment of what is grown, we must increase the consumption of what is already being produced. Many of these local items have very short windows of availability, so really, all the talk about ‘buying local’ is more of a feel-good marketing tool than a significant driver of increased sales.

There is a potential danger, too: many local growers are small producers without the capital resources of larger commercial farms. Major suppliers are concerned that the standards imposed on them are not applied to smaller growers.

What happens if a food safety outbreak comes from a small, unregulated local source? The entire commodity gets painted with the same brush in the eyes of the consumer. An entire commodity group could be impacted by the failure of one small grower to meet specific food safety standards. Watch for increased scrutiny on locally sourced products.

Labor: There’s no doubt the needs of commercial agriculture are going to continue to run head on into concerns about security and illegal immigration. The recent presidential election raised a new level of expectation regarding specific ethnic groups. While it’s not my intention to get into a political discussion, there will certainly be anxiety on how to deal with immigration and increase national security. And regardless of actual regulation or vetting, there will continue to be a “social scar” on the psyches of individuals who feel disenfranchised.

Fear of the unknown will cause many to reconsider whether they want to come to the United States at all. And while this may be just fine with many people, agriculture has already been feeling the crunch from shrinking immigrant labor pools. Today’s political climate will only exacerbate the situation.

Water: While seasonal rains helped some areas of the country, weather will remain a front-page item. There will always be conversations about El Niño and La Niña, but the real issue is people. As mentioned earlier, most of the fruits and vegetables in this country are grown in California, Florida, Texas, and Arizona. And where is the biggest population growth occurring? California, Florida, Texas, and Arizona!

Infrastructure support is a big challenge, and while we think about things such as roads, schools, and housing as priority items, water is clearly at the top of the list. Municipalities will continue trying to secure water rights away from agriculture and in many cases, these rights could be worth more than the land. And while recent rain has brought some relief, it only took the problem from dire to terrible. Look for continued regulatory activity in this area as well as research and product development to try to deal with this issue.

We could talk about international issues such as currency impacts, Cuba, Brexit, China, and others, but we’ll save these for another time!



Bruce Peterson is the founder and president of Peterson Insights, Inc., a consulting company specializing in the complex challenges of the fresh food industry. Peterson began his career bagging groceries, and went on to work for several supermarket chains, including 17 years at Walmart Stores, Inc. He has owned and operated a wholesale produce company, and served as chief executive officer of both Naturipe Foods LLC and Bland Farms.