Source: Planet (ID: ValuePlanet) Author: ica Editor: Maji
Boutique fruit stores are opening more and more, but Wu Yu finds that fruits are becoming more and more unaffordable.
Wu Yu's weekly budget on fruits is 50 to 100 yuan, and the same 50 yuan, now there are fewer and fewer fruits that can be bought. "Just two oranges and two apples cost me nearly 50 yuan, and I ate them in two days. To be honest, after this price was weighed out, I was a little unimaginable. I didn't buy strawberries or cherries, why are they so expensive? ”
Not only the boutique fruit stores mentioned by Wu Yu, but also in major supermarkets, as well as online fresh food platforms such as Hema and Dingdong to buy vegetables, high-priced fruits have become common.
On the Hema fresh app, the average unit price of one Shandong Red Fuji apple is 18 yuan per piece, and the average unit price of another Wuxi Ehime orange is 25 yuan per piece.
Not to mention some quirky "niche" fruits, which are often more famous for their high prices. Ruby grapefruit from Thailand, which can cost up to 100 yuan each; A carton of 4-6 milk shakya or bird's nest fruits can cost hundreds of yuan; Produced from Yunnan Xishuangbanna finger lemon, a pound costs more than 300 yuan...
Why are high-priced fruits selling so expensive? Industry insiders told Value Planet that it is the market consumer demand that drives higher requirements for fruit quality, and "fruit commercialization" has reached a new level.
But why are these fruits still complained by the industry that they are "not profitable"?
01
Unaffordable fruit
For Wu Yu, a post-95s consumer who works alone in Shanghai, fruit is a daily necessity. "When I was a child, my family always took 'one apple a day, and the doctor stayed away from me' and urged me to eat fruit." Wu Yu told Value Planet that she believes that eating a moderate amount of fruit every day is a good way to supplement nutrition, which is natural, delicious and cheap.
In the past few years after working, Wu Yu obviously felt that there were more boutique fruit stores around him. The variety of fruits is becoming more and more abundant, and their selling prices are also rising.
KUDAMON FRUIT Harbin french fruit store naike fruit source: kudamon fruit naike fruit service
Even some of the most common fruits, such as apples and citrus, are becoming more expensive.
Taking China's mainstream apple varieties and the widest market sales range of Red Fuji as an example, on the Hema fresh APP, the red Fuji apples, which are also produced in Shandong, have a large price gap due to different sizes and other reasons.
The cheapest single fruit 150 grams of red Fuji costs about 3 yuan per piece; The Yiyuan red Fuji apple, which weighs 250 grams per fruit, costs 7.5 yuan each; the highest-priced Yantai red Fuji gift box, a single fruit weighs 500 grams, and the average apple sells for up to 18 yuan.
Citrus is another common and diverse fruit. On the Hema fresh platform, the cheapest 750-gram boxed mandarin mandarin costs only 9.9 yuan, while the 4-grain 640-gram tomorrow orange is as high as 25.9 yuan.
"Picking these boxed or bagged fruits is also relatively easy to set the price. Now many bulk zero-scale fruits, it is difficult to make consumers sensitive to the unit price, but if you do not understand the pound and two, you can't grasp the quantity, and the price is exceeded casually. After being stung by the "fruit assassin" many times, Wu Yu mastered a set of techniques to avoid excessive spending. "Look at the size, weigh two pounds, generally the larger and fuller the unit price is higher. In addition to the aforementioned oranges, you also have to pay attention to some when buying pears, sometimes a pear weighs half a pound. ”
In addition to the more common mass fruits, some high-priced fruits tend to be more curious in appearance. They also often have a more unique name to distinguish them from their common counterparts.
For example, "jujube" can be seen from its flat and round appearance, which is similar to the shape of the peach, which is also the origin of its name. In terms of taste, the jujube inherits the sweetness of the pear jujube, with a slightly acidic feeling, and the taste is thick and delicate. This new variety of dates sold for thirty or forty yuan a catty on Taobao, while egg-sized boutique dates can be sold for nearly 50 yuan per catty, with an average of 3 yuan per catty. In comparison, the price of winter dates is 20 yuan per catty, and milk dates are only 6 to 8 yuan per catty.
Jiaozuo Panjube Garden. Source: Van Star NaNa
Typical of high-priced exotic fruits, there is also pink pineapple from Costa Rica. Developed by the American food company eDel Monte over a period of 16 years, this pineapple variety has a light pink color with a "girl's heart" and is known as the "jewel of the jungle". Pink pineapple is known to have a delicious taste and unique taste, with a strong candy aroma, which is juicier and sweeter than traditional pineapple. Due to the time it takes up to 26 months to grow to fruition and production is scarce, retail prices are generally very expensive.
Pink diamond in the jungle Costa Rican pink pineapple. Source: Qi Xiaomo
A while ago, a supermarket in Nanjing, China, caused heated discussions because of the sale of pineapples for 980 yuan per piece, and the "outrageous fruit" involved was pink pineapple. Its price on domestic e-commerce platforms is as high as 600-800 yuan per unit.
In addition, the origin has also become an important indicator to measure the price of fruits. Wu Yu told Value Planet that the same is imported fruit, the price of Southeast Asian fruits is generally acceptable, but once it comes from Australia, Japan, Western Europe and other places, fruits are easily associated with a "sense of premium", "the price will be higher".
There are also some domestic fruits, because of the prefix of origin, with their own "brand effect", such as Xianju bayberry, Hainan Jinhuang mang, Dalian cherry, Yunnan mountain blueberry, etc., the price is also higher than the "nameless" fruit. This is related to the continent's appellation of origin system, which reflects the management and protection of quality geographical indication products.
Rarity in terms of seasonality and value is also often associated with "high price". The first batch of Lingnan lychees, the first batch of fresh cherries, the first winter strawberries... When fruit is first on the market, prices tend to be higher, and as production increases significantly, prices slowly fall back.
02
High-priced fruit, where does it come from
Li Xiang, a fruit wholesaler in Xinfadi, Beijing, told Value Planet that with the improvement of consumers' health awareness and purchasing power, the requirements for fruit quality and appearance are getting higher and higher. For fruit farmers and merchants, the market has put forward higher requirements for the degree of "fruit commercialization".
Shanghai Tandian | Internet celebrity retro street fruit store Source: Little Red Book Hello Little Cousin
"Fruit is not expensive now, it is boutique. More and more people have specific requirements for appearance, size, and sweetness when buying fruit. He didn't want to buy a basket of cheap fruit, but the size was uneven, and he wasn't sure if it would taste good or not. Even if it is a little more expensive, you must buy something certain and good. This part of consumers has this spending power, and their requirements force us to do fruit grading. Li Xiang said.
iResearch's "Good Life Fruit New Food Consumption Trend Report" released in 2022 confirms this change: the data shows that among the factors consumers consider when choosing fruit, fruit quality has become the most concerned factor. On the whole, young people under the age of 35 have high requirements for fruits, pay more attention to more comprehensive factors, and are the main force of consumption of high-quality fruits.
The impact of brand marketing and social psychology on fruit prices cannot be ignored. In the view of RT-Mart employee Xiaohe, people's concept of eating fruit is now very different from before.
"When I was a child, fruits were indeed cheap, and the main ones I ate were local seasonal fruits, and there were not many varieties. In northern China, apples, oranges, pears, watermelon in summer and strawberries once or twice in winter. Xiaohe said.
In his impression, durian is the earliest "net red fruit" in supermarkets, and then various imported fruits have slowly enriched the categories of the domestic fruit market, and fruit consumption has become a threshold. Boxes of cherries, crunchy sweet Qingwang grapes, avocados bundled with fitness... The freshness and uniqueness of fruits are shaped again and again with the help of the power of marketing. "I think fruit is not becoming more expensive, but the entire industry has been upgraded." Today's fruits are not the same as those on the market in the past. Xiaohe said.
Whether it is the pursuit of high-quality, more refined life, or as a social currency for sharing on social media, where there is demand, high-priced fruits will appear. Capital creates demand even if there is no clear need.
Group A contains words such as organic, green, high fiber, mineral, etc., and Group B contains words that reflect functions such as detoxification, anti-aging, anti-cancer, and cholesterol lowering. Some people joke that by randomly combining the two groups of AB, you can create a "middle-class fruit" propaganda technique.
The meaning of ridicule is implied, but it can be reflected that there are still some consumers who have doubts about high-priced fruits. Some netizens also expressed their confusion about the logic of high fruit prices on social media. "I don't understand if this is hype or what?" "Isn't high-priced fruit an IQ tax?" "It tastes mediocre, but the price is ridiculously high."
Among them, the most criticized of high-priced fruits is the mismatch between taste and price.
In the video "Sky-high Fruits", Bilibili UP master "Record Life's Egg Yolk Pie" recorded his experience of going to the supermarket to buy high-priced fruits: 5 fruits - two bird's nest fruits for 60 yuan, a ruby pomegranate for 70 yuan, 15 strawberries priced at 188 yuan per box, and golden cherries at 778 yuan per box - cost a total of 1274 yuan.
Although there are many fruits with amazing taste and taste among these five fruits, the comprehensive evaluation given by this UP owner is: "In terms of price, I don't think it's worth it, and I won't review it." Especially the golden cherries worth 778 yuan / box, when he tried 3 in a row but all sour, he was very disappointed and surprised, "I'm very uncomfortable, the golden cherries I spent so much money on are not as delicious as ordinary cherries, this fruit king is this?" ”
Compared with the "golden cherries" and "pink pineapples" that directly sting consumers' wallets, many categories of popular and ordinary taste "civilian fruits" have generally increased their prices after catching the fruit boutique express, far higher than the price envisaged by consumers.
So, does the fruit industry, where the taste and selling price do not match exactly, have higher profits?
Value Planet visited several fruit shops, but the owners generally said that the fruit shops did not make much money.
At a "Cut Fruit NOW" store in Beijing's Chaoyang District, which provides fruit cutting services, franchisee Xiao Liu told Value Planet that he started a fruit business five or six years ago, but the income was far less than expected.
Store images. Source: Cut fruit now official website
"At that time, I heard that the net profit margin of the seasonal fruit of the supermarket chain can exceed 30%. And the fruit store has no technical threshold, so I really wanted to try it. However, the reality is that Xiao Liu has put almost all his energy into the fruit store, and the unstable factors brought by the purchase channel, shelf life, and wear and tear have made him tired of coping, and the comprehensive costs of labor and marketing are constantly rising.
"In fact, there are many doors in the fruit industry. Many of the friends I know who open fruit shops close their doors after less than three months. Although he has experienced a period of living beyond his means, Xiao Liu still wants to wait and see for a while.
According to Ruida futures loan statistics, the profit margin of the fruit industry in China and abroad is generally low. From the perspective of the leading companies that have been listed, these fruit companies have not achieved high profits.
Taking Hong Jiu Fruit listed on the Hong Kong stock market as an example, its main sales margin is brand fruit products with higher profit margins, but the gross profit margin level is less than 20%, and the net profit margin is less than 8% in normal years. According to Xiao Liu, "the fruit industry earns hard money".
Even European and American companies with more complete industrial chains seem to be not optimistic. Mission Produce, the world's largest avocado company, saw its gross profit margin fall to 8.59% in fiscal 2020 and 13.96% in fiscal 2021 and 13.96% in fiscal 2022. The global fruit giant Dole has covered the entire industry chain and formed a share advantage in many fields, its gross profit margin in the first three quarters of 2022 is less than 6%.
In contrast to the low and volatile profit margins are the increasing wholesale prices of fruit. According to data monitored by the Ministry of Agriculture and Rural Affairs from January 2019 to February 2023, the average wholesale price of the five fruits commonly eaten by the public (Jufeng grapes, Fuji apples, bananas, watermelons and pineapples) rose from 3.04 yuan per catty to 3.77 yuan per catty, an increase of 24.01%.
03
High price vs low profit?
Why is the contrast between low profits and high prices in the high-priced fruit industry, and where does this part of the cost go?
First of all, from the perspective of the overall industrial chain, the fruit industry chain is relatively complex, and there are many intermediate links. From planting end, postharvest treatment, to fruit circulation, fruit retail, fruit cold chain logistics, the increase of each link and the increase of each circulation number will lead to an increase in costs.
After entering the intermediate wholesale link, fruits often go through a process of increasing prices, and the emergence of pressed goods will also bring different degrees of discount. To the final retail link, stores, labor, and standardized processes will further lead to the compression of profit margins and the increase of prices.
Secondly, the cultivation of fruits is largely dependent on the natural environment, and "eating by the sky" is extremely unstable, so the fruit supply itself has great price fluctuation properties.
At the beginning of this year, frost damage caused by the cold wave directly affected the production of longan in southern Sichuan. One longan grower told Value Planet: "The cold storage that could have stored millions of tons has only stored a few tens of tons this time. Among these, the number of final listings will shrink, so the price of longan has risen this year. ”
The perishability and perishability of the fruit itself also makes the loss rate as high as 30-40% during transportation, and the transportation cost continues to rise.
Master Zhang, a driver engaged in the fruit transportation industry, told Value Planet that transportation costs are actually higher than everyone remembers, and transportation costs have been increasing in the past three years. "Otherwise, there would not be so many overloads and speeds. Materials, packaging, labor, fuel must be taken into account, these costs are already rising in price, not to mention that fruits require timeliness, and the cost is not low. ”
In depth, the large number of intermediate links and the high loss rate of the fruit itself, coupled with the low efficiency brought by non-standardization, jointly lead to the difficulty of fruit profitability, which is ultimately reflected in the high price of the terminal.
In addition, the process of standardizing fruit grading also affects pricing. Fruit grading standards, in essence, are a unified trade language and value-establishing means, which are driven by fruit quality and promote the orderly marketing and procurement process by describing the basic requirements and specific defects of each grade.
Li Xiang, a fruit wholesaler, described this change to Value Planet: "Fruit was previously taken directly from the grower, and both good and bad were sold together. And now it needs to be screened according to certain criteria. The improvement of purchase standards requires more standardized and refined operations for fruit farmers. And the grading itself is an additional process, so the fruit grading has a great impact on the price of fruits. From the previous extensive to the current intensive farming, this is the process of fruit commercialization in many developed countries, Japan is like this, so Japanese fruits are very expensive. ”
On March 1, 2022, China began to implement the Guidelines for Fruit Quality Grading, which divides fruits into three grades: special, grade I and grade II according to indicators such as quality characteristics and different quality defects.
In the commercialization process of fruits, capital and chain fruit brands are also contributing to promote the further refinement of fruit grading.
For example, Ali Digital Agriculture Yunnan Origin Warehouse has graded the quality of 18 kinds of fruits such as yacon, rock sugar orange, and passion fruit. In general, the grading system led by enterprises within the industry is more focused on the intrinsic quality of fruits, involving more categories.
As early as 2015, Pagoda, the largest fruit chain brand in China, established its own fruit grading standard system, which was scientifically divided according to the standards of "four degrees of one taste and one safety" (sugar acidity, freshness, crispness, tenderness, aroma, safety). After that, the fruit will also undergo a grading in the Pagoda store, and it will be divided into four levels: signboard, A, B and C according to the quantitative standards of fruit size and deliciousness, so as to facilitate consumers to purchase.
Similar to Ali's digital agriculture and Pagoda's approach, the extensive "mixed package and unified sale" trading method has been broken, and the price of fruits between different grades has been pulled apart, achieving high quality and competitive prices.
For example, Laiyang pears from the Jiaodong Peninsula in Shandong are divided into four grades according to sugar content, and the difference between the price of a single pear of the highest grade and the lowest grade can reach more than ten yuan. In the grape shed in Yunnan, this price difference due to grade is even more pronounced, and the sunshine roses purchased on the same day are as large as bunches of quail eggs, and the price of one bunch can be about four bunches of slightly underdeveloped grapes.
From the perspective of the industry, the standardized fruit grading system reflects the progress of China's agriculture, making the consumption stratification clearly visible, and allowing the planting end to know the preferences of consumers with reference to the grade dimension. Fruit grading also makes production, circulation and other links more standardized, which provides convenience for procurement, quality control departments and growers, and reduces losses and waste to a certain extent.
However, from the consumer's point of view, it is difficult to market fruits that do not meet the standards, and consumers can only buy high-grade expensive fruits. For example, a few years ago, durians on the market were mostly secondary fruits and tertiary fruits, but the intervention of the grading system made this part of durian used to make pizza and candy, replacing it with better quality and expensive primary fruits that occupied more of the consumer market.
At the same time, compared with high-quality or unique high-priced fruits, ordinary fruits have lower prices, and the profits of fruit farmers, supermarkets and fruit stores are also very low, which leads to fruit farmers being reluctant to grow ordinary fruits and retail industries not being willing to sell ordinary fruits. As a result, there may be fewer and fewer affordable ordinary fruits on the market.
Looking back at the fruit industry chain and grading system mentioned above, behind the rising price is actually the requirements of the commercialization transformation of the fruit industry. However, it is undeniable that the call for "fruit freedom" also reflects consumers' desire for fruit price reduction.
In the future, with the improvement of the industrial chain, fruit prices may gradually decrease, and sales forms such as live streaming will also help reduce the intermediate links from the production end to the sales terminal and further reduce costs. Will this transformation of the fruit industry triggered by the end of consumption bring a high-quality, rich and cost-effective future to the fruit industry?
*The characters in this article are pseudonyms.
*This article is based on publicly available information and is for informational purposes only and does not constitute any investment advice
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