Supermarkets reshaping food business | My Machinery
CASE Agriculture
Supermarkets reshaping food business

In the middle of the night, while Melbourne sleeps, they arrive. Every night the big trucks come, some from the fringes of the city, others from Queensland, some from South Australia. As the early-morning hours tick on, they unload bananas, mangoes, packs of herbs. By 8am at Woolworths’ distribution centre in Mulgrave, this nationwide logistical feat is over and another begins. Within 24 hours, most of these fruits and vegetables are repacked and trucked to 189 stores around the state. It wasn’t always like this. Once, buyers from Coles and Woolworths-Safeway joined the early-morning haggle at Footscray’s wholesale fruit and vegetable market. In the past decade, after multimillion-dollar investments, the supermarket giants have turned their supply chains inside out. About 90 per cent of their fresh produce now comes direct from a diminishing number of growers who operate under long-term agreements. In these sophisticated relationships, supermarkets now influence not just what is grown, but sometimes even the choice of seed. “There’s a bit of a myth that farmers get up in the morning and they hoe their fields and they load their trucks and go to market,” says agrifood consultant David McKinna. “The reality is that in most high-volume categories … seven or eight producers supply 80 per cent of Australia’s supply. They are very big companies.” The story behind the brightly lit rows of fruit and vegetables at a local Coles or Woolworths is about the corporatisation of food in Australia. It is also a story about the concentration of the food supply chain – an unprecedented power shift from small growers supplying local markets to big farmers and agents, known as ”aggregators” and ”category captains”. In reshaping supply chains, the two supermarket companies – accounting for 60 per cent of Australia’s fresh fruit and vegetable market – are reshaping the nation’s agriculture, diet and understanding of what good, fresh food is. In many ways, the consumer has been the winner, as the supermarkets have improved product freshness and passed on cost savings by cutting out the wholesale middlemen such as the market traders. But critics warn that the move to a more corporate system narrows the choice of products, increases environmentally damaging, industrial-scale agriculture and makes the food supply vulnerable to climate shocks and rising fuel prices.

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CASE Agriculture