Exploring weather events’ impact on the produce industry
Craig Stauffer, Chief Executive Officer, Vanguard International Group
In recent years, disruptive weather events have become increasingly prevalent, leaving farmers and businesses in the agriculture industry grappling with the consequences. The media’s heightened attention to these events has raised many questions regarding their frequency and impact on our global supply chain. Today, we are delving into the implications of weather events on the produce market and examining the future of supply in an industry facing numerous challenges. We also explore the concept of food security and how it differs across various stakeholders in the supply chain. Lastly, we consider whether any opportunities can arise from these challenges.
Weather Events and Supply Chain Vulnerability
The rise in disruptive weather events, such as the recent Chilean drought followed by punishing rains or changing weather patterns in California, has highlighted the vulnerability of the global supply chain. The agriculture industry is arguably well adept at weathering storms, troubleshooting, and pivoting when variables are thrown our way. However, as these significant and long-term global climate change events continue to accumulate, can growers maintain their ability to protect the supply side? The fragile nature of the supply chain poses a significant challenge to businesses reliant on consistent access to fresh food supply.
Defining Food Security
Food security varies depending on one’s position in the supply chain. For consumers, food security may be perceived as having access to alternative produce options when their desired items are unavailable. On the other hand, growers and suppliers experience their own security concerns when they struggle to meet expectations due to weather-related challenges beyond their control. Recognizing these diverging perspectives is essential for understanding the impact of weather events on a global scale.
Connecting Availability and Merchandising
Understanding the challenges posed by disruptive weather events, there are opportunities to change some of the ways we market and communicate within the food industry. The connection between availability and effective merchandising is a critical aspect of the agriculture business. This raises the question: which comes first, price barriers or the inability to sell to consumers? Take mangoes, for example. In certain markets, mangoes exist in a sad speciality row, with little product, almost non-existent marketing, yet high pricing. In Australia, mangoes are front and center on produce shelves. So, is it that North Americans simply don’t eat mangoes at the rate Australians do, or are they just inundated with other, more attractive options? We can also explore a cucumber case study. In Canada, 80-90% of cucumbers consumed are greenhouse cucumbers, compared to the low 7-8% in the United States. Like the mango example, merchandising drives consumption. This highlights the importance of not only availability, but also in-store merchandising to drive consumer demand. By exploring untapped market segments and re-evaluating consumer perceptions, new opportunities can emerge for businesses in the agriculture industry.
The growing prevalence of covered agriculture, both in high-tech and lower-tech forms that provides weather protection, also presents avenues for innovation and enhanced resilience within the supply chain.
In conclusion, it is clear that disruptive weather events pose significant challenges to the agriculture industry, putting strain on the supply chain that demands attention and adaptation. The concept of food security varies depending on one’s position in the supply chain, geographical location, and economic context. Despite the challenges, there are opportunities for growth and innovation in retail merchandising and global market expansion. By reassessing consumer perceptions and leveraging market potential, businesses can navigate the evolving landscape and build a resilient and prosperous future in the agricultural sector.