Investigating alternative banana distribution channels
Project Outline
This project aims to find and establish alternative distribution channels for fresh bananas into the Australian domestic market. The overriding goal is to discover more ways to get bananas to consumers with a focus in and around snacking occasions.
The project has been commissioned by Horticulture Australia Limited (HAL) and is managed as project number BA09034 with funding from levies and matched by contributions from the Federal Government. It is programmed for completion by August 2010.
Project Objectives
- Assess the volume and value potential of these alternative distribution channels by state and rank on the basis of their potential to distribute bananas
- Explore the value that can be provided by using packaging and merchandising innovations to enhance shelf life or lift sales levels
- Identify the logistical solutions required to service these channels
- Establish and run retail trials to test and confirm the logistical and store operational solutions required
Key Issues
This project has many challenges that are largely centred on distributing a perishable product through a distribution channel, which is light on the skills and capacity to handle short-life perishables. However, globally the development of alternative channels has been underway for some time and their learning have already reached the local market. It is expected that the solution will be impacted by harnessing the advantages of packaging innovations that reduce order multiples, enhance shelf life, and enable easy and effective merchandising. It is also clear that an increasingly health-conscious consumer is highly likely to welcome the expanded availability of good quality ready-to-eat bananas.
Progress to Date:
- Consolidated all existing and relevant material and established their implications for the Australian market. The following findings have resulted from our study:
- International banana organisations like Chiquita and Del Monte have conducted tests of bananas trials in convenience stores (C-stores), cafes, foodservice, catering, and vending channels in the US. Several of these C-stores have enjoyed success and have now gone past piloting and conducting trials of bananas into commercial trading. The key learning from these trials include the following:
- Selling bananas by "each" rather than by random weight is possible in these types of stores that essentially provide convenience
- Many types of specially packaging innovations have undergone trials and have been introduced, which are aimed at the issues of reducing excessive product waste at store level by enhancing and extending shelf life, and/or reducing order multiple, and enabling effective merchandising
- A shared logistical solution that allows stores to order and receive smaller (4-5 kg) quantities daily and in doing so, keeping the products fresh and not discouraging the store operators with excessive stock exposure
Hence, there is every indication that the precedents of these trials can be applied to the Australian market with success.
- Identified the two alternative distribution channels, C-stores with 776 outlets and Cafe/lunch bars with 900 outlets. These outlets are estimated to have capabilities to sell 10-15 kg of bananas per week.
- Identified and developed two different types of distribution infrastructure required to service both C-stores and Cafe/lunch bars, which involve the flow of bananas through the following channels:
- Growers
- Wholesalers/ripeners
- Cross docking/foodservice
- C-stores/Cafe/lunch bars
The Australian Banana Industry participants are invited to access this page to remain updated on the project's progress. Input is welcome and can be directed to Matt Evans, Market Analyst, Freshlogic at matt@freshlogic.com.au or 03 9818-1588.