Fresh produce guaranteed, by working together within the supply chain

The soaring costs of raw materials, gas, and electricity have a direct effect on the cost price of fresh produce, like tomatoes. To keep delivering high-quality products at an affordable price, we need to look beyond our growers’ co-operation. We should search for sustainable solutions together, with the entire supply chain.

No one benefits from the sight of empty shelves; from growers to retailers and consumers. They should always have access to fresh tomatoes: in the supermarket, the shopping basket, the kitchen and eventually, on their plate.

Current inflation hits highest level in past 40 years

Inflation is caused by a disrupted balance between supply and demand. Too much demand and not enough supply will ultimately lead to a price increase. In the Netherlands, the current inflation rate lies around 7%, the highest level in the past 40 years. But we are not the only country dealing with inflation, the whole world is showing similar alarming numbers.

The question is how quickly this situation stabilises. Economists say it will become dangerous when inflation stays above 5% for a longer period of time. After the crisis in 2008, the numbers stabilised within a year, and after the crisis in 2011 it took five years before things were back to normal. This time, it is expected that it will take even longer before there is any form of stability.

Increasing costs force consumers to make conscious choices

Consumers are confronted with a wide range of price increases in their daily living expenses. Not only gas and electricity costs are increasing – according to the Centraal Bureau voor de Statistiek (CBS) with a staggering 90% compared to January 2021 – but petrol prices also keep breaking records. The recent geopolitical turmoil does not help either and will drive up the soaring costs even further.

Due to the increasing costs, consumers are more conscious of their expenses which also include daily groceries. More than ever, priorities need to be set; which isn’t surprising when a full tank of petrol already blows your budget. For some consumers it is becoming more difficult to purchase less urgent products, such as an indulgent moisturiser or delicious bar of chocolate, next to household goods such as toilet paper or food groups like bread, dairy, fruit, and vegetables.

Searching for sustainable solutions together, within the supply chain

How can we stand up to the current inflation? And not only as a co-operation of tomato growers, but as an entire supply chain? By being more transparent about the true cost price of our fresh produce and by working together even more. When raw materials are becoming scarcer, it immediately influences production; this becomes more expensive. To keep delivering high-quality products, and at an affordable price, we need to find a way to limit costs in other areas of the supply chain.

Analysing the entire production, packaging, and logistic process together, will benefit every party in the supply chain. When soaring gas and electricity costs increase the production costs of our tomatoes, we might still make a profit in the packaging and logistic process. To guarantee fresh produce today, tomorrow, and the day after, it is important to keep searching for sustainable solutions within the entire supply chain.

Growers United / Prominent is always looking for sustainable solutions. How about staying stronger together in this situation and the next? Do not hesitate to get in touch with Wim van den Berg of Growers United / Prominent: w.vandenberg@growersunited.nl of +31 (0)6 5756 4346.

Prominent is a brand of Growers United UA. This organisation is responsible for the sales, marketing and quality control of the product.