Local Fruit and Vegetables - Plunkett Franchise Models
In response to market changes, many fruit and vegetable producers are now using non-traditional market channels to get their produce to consumers. Recent years have seen the growth of veggie box schemes, local delivery services, farm shops, farmers markets and social food outlets, as well as the development of specialist or local wholesalers and processors supplying schools and other food service outlets. However activities can be limited by time, cost and the lack of a market infrastructure; dealing with such a diverse range of customer needs is a challenge for any business.
Collaborative production and marketing by co-operative groups can bring many benefits. The primary benefit is sharing the overheads associated with warehousing and delivery costs and employing professional marketing expertise. Secondly, the opportunity is created to plan the types of crops grown and the times of harvesting across several farms increases the range and variety offered to customers and reduces waste. Bulk-buying of inputs may also be possible. Thirdly, the opportunity is created to offer customers (to a greater or lesser degree) a year-round supply of fruit and vegetables by buying-in out-of-season crops. By increasing ownership of the supply chain upstream and downstream of their farms, producers gain a larger share of the value added to foodstuffs between field and plate.
This model demonstrates the benefits of setting up two separate organisations for legal and taxation reasons. The producer group is established as a co-operative (an Industrial and Provident Society) with a wholly-owned subsidiary (a private limited company) to market the produce as the producer group’s agent. This structure allows the producer group to buy-in produce from non-members to meet seasonal demand.
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