Business Cooperation in Order to Deal with the Crisis

Twenty years ago, the Central Fruit and Vegetable Market changed its schedule from night-time to daytime. In commemoration of this anniversary, Mercabarna and the Fruit and Vegetable Wholesale Dealers Association (AGEM) organised a technical conference on 3 March, in which different agents from the horticultural distribution chain took part. The objective: to discuss the sector’s evolution over these past two decades and, in particular, the future of fruit and vegetable sales.

The conference was opened with an eye on the past, specifically on the year 1988, when the horticultural wholesale business owners decided, with Mercabarna’s support, to change the Fruit and Vegetable Market schedule from night-time to daytime hours. This was a pioneering but controversial move, since no wholesale market was operating at that time during the day. The retail group opposed the decision due to concern about the consequences the new schedule might have on the operation of their businesses. Even so, the initiative moved forward.

“Those were complicated days. Many people did not understand why we wanted to change the schedule. Twenty years later, I think few question whether it was the correct decision,” declared the president of the Mercabarna Dealers Association (Assocome), Joan Llonch.

Llonch, who 20 years ago led the movement in favour of the daytime market, recalled those difficult times at the opening of the technical conference, which was presided over by Jordi William Carnes, president of Mercabarna and deputy mayor in charge of Finance and Economic Promotion for the Barcelona City Council. Also present were Montserrat Gil de Bernabé, managing director of Mercabarna, and Casimiro Llorens, president of the Fruit and Vegetable Wholesale Dealers Association (AGEM).

Both Llonch and the president of the AGEM agreed in stressing the positive aspects that operating a daytime market has had for businesses.

As the Assocome president remarked, “The quality of life has improved for operators, favouring generational renewal in businesses and training well-prepared teams of workers, in addition to helping attract new buyers from mass distribution and restaurants.”

Llorens added, “It has been a key part in the growth of these businesses and, in short, for the modernisation of the sector.”

Along the same lines, the president of Mercabarna pointed out that the decision to change the schedule “demonstrated the will of the Mercabarna business owners to get ahead of the times, to change inertias and make the Market a landmark”.

Today, even the retail sector sees the schedule change in a positive light. “Buying during the day forced us to change our mindset, to opt for modernising our establishments and means of transport,” stated Àngel Juny, president of the Fruit and Vegetable Retailers Association.

The consumer sets the rules of the game
Once the conference was opened, with around 100 people in attendance, the round table began, during which representatives from the distribution chain analysed the current and future situation of the sector. This roundtable had an exceptional moderator, Carles Cabrera, managing director of the Institut Cerdà, who knows Mercabarna well.
According to some of the presenters, two factors are affecting the current evolution of horticultural distribution: the emergence of a new type of consumer and the impact of the economic crisis.

Regarding the new type of consumer, Francisco Casallo, managing director of the wholesale company Bargosa, drew attention to the fact that “the current consumer is more segmented, asking for a more varied product offering and, above all, very well informed. They know what, how and when they want to buy. The Internet has had a lot to do with this”.

Víctor Echeverría, from the greengrocer chain Punt Fresc, agrees with this assessment. “It is today’s consumers who set the rules of the game. They have a lot of information, and this gives them much more power than a few years ago,” he emphasised.

Furthermore, delving deeper into this consumer analysis, he pointed out some of the consumption models for the fastest growing population groups (the elderly, immigrants and single-family households). “They are consumers with low purchasing power, who consume little and greatly value the proximity of the shop.”

In addition, Echeverría continued, they prefer to save money on food. As he explained, “Twenty years ago, 80% of a family’s income was spent on food. Today it is 18%. Consumers prefer to spend this money in other sectors, for example, on leisure activities.”

The effects of the economic crisis
Another factor that is influencing current horticultural distribution is the impact of the economic crisis. According to Casallo, the crisis has halted the internal demand that, up until now, was the basis for the increase in consumption. And he assures that “unemployment, the departure of immigrants and the decrease in tourism will change consumer trends over the short term.” This is already being felt on the street. Àngel Juny, president of the Provincial Fruit and Vegetable Retailers Association, confirmed that the fact that consumers are opting for more affordable, in-season products is already being felt.

What to do in this situation
According to some speakers, satisfying this new consumer and dealing with the economic crisis requires new strategies for the future. For Bargosa’s director, the path to follow is one of business cooperation among all the agents along the chain, “in order to simplify processes and be more efficient, and to promote even more the healthy attributes of fruits and vegetables and to increase the consumption of these products.” Casallo added, “We sell health, a product that is necessary for our diet at an affordable price. This is what we must communicate to the consumer.”

The representative from Punt Fresc opted for the same formula. “During this time of crisis, we must work together, create alliances and collaborate instead of competing.” In the case of this greengrocer chain, they are clear about what line to follow: strengthening relationships with customers, “treating them like friends, observing them and trying to provide them with everything they might value”.

Work is being done in this direction in the traditional retail shops. “It is important for traditional shops to adapt to the consumers’ needs and offer them added services, such as home delivery of their purchases, credit card payment and Internet sales. “Some Municipal Markets are already beginning to apply these aspects with great success,” assured Juny.

The relationship between suppliers and distributors and Mercabarna
At the round table, representatives from production and distribution also spoke about their relationship with Mercabarna. Representing the production sector, Guillermo Edo, president of the Benihort cooperative (Agricultural Cooperative of Benicarló), emphasised the importance that Mercabarna has nowadays as a recipient of their products. He went on to explain, “Over the last few years, Mercabarna has opened up new sales channels, such as mass distribution, restaurants, greengrocer chains, export, etc., and this has resulted in an increase in the volume of products that we send to supply the Market.”

In terms of mass distribution, Josep Maria Segú director of El Corte Inglés’s platform in Mercabarna, stressed the importance of having a purchasing centre located in wholesale markets, especially because of the variety of products that are to be found, in order to have a price reference, and because of the speed represented by the proximity between the platform and the supplier when distributing perishable products.

Even so, Segú explained, the purchasing policies of this large chain are based on having large suppliers at a national level, who supply products to all the stores in Spain. He also added, “From El Corte Inglés, we order products from our suppliers that are labelled in a certain manner, that come in special containers, we agree upon prices for products that must be maintained for a few days, etc. These are complicated demands for wholesale businesses that deal with perishable products, but for the moment, this is how we work.”