Health-Conscious Consumers Drive Up Fresh Produce Prices

Consumer interest in healthy eating is pushing up sales of fresh produce. But looking at the commodities that experienced the highest growth over the past few years, one thing is clear: information, marketing, packaging and branding hold the key to increasing demand and staying competitive. Lindi Botha spoke to industry experts Jaco Oosthuizen and Kandas Cloete.

- Lindi Botha

Market trends can be fleeting, and any business would be remiss were it to change direction and invest in fads without a clear idea about the longevity of the public’s interest. This is especially true of agriculture, where the return on investment is often realized years into the future.

Amongst the changes in economic activity seen over the past few months as a result of the coronavirus disease (COVID-19) lockdown has been a noticeable increase in the consumption of fresh produce. Upon closer inspection, however, it appears that demand for certain fresh produce items has been increasing for quite some time, as consumers re-evaluate their eating habits and make permanent changes (see table and graph).

However, contrary to the laws of supply and demand, which normally see the price of a product going down as supply increases and vice versa, most of the products that have shown the highest price increases have also experienced a surge in production. Another development worth noting, according to Jaco Oosthuizen, CEO of the RSA Group, is that thanks to improvements in farming operations due to new technology farmers are now able to provide certain produce year-round.

“This increases demand significantly because as more products are available, more consumers are including them in their diets on a more regular basis, instead of just from time to time when the product is available. And because the supply has grown, so has the demand, keeping prices stable, and in some instances increasing them.”

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