What distribution system is best for the farmer?

The cultivation and trade of citrus fruits, especially orange, is one of the bases of the economy of the Valencian community. This blog is not about the cultivation of the orange, but the different ways in which it is marketed. The management and logistics that is followed at each point of the chain, from the collection process to its manufacture, vary both the price of costs and the net margin that each agent obtains.

We can distinguish two main marketing channels: traditional and online sales. The process that is followed in both ways is different.

In the traditional channel, the farmer sells his production to a fruit and vegetable center that is responsible for collecting the fruit, transporting it to department stores where it is cleaned and sorted, packaged and stored until it is distributed to a wholesale market or directly to supermarkets and greengrocers. This process requires the professionalization of companies, and the participation of numerous operators that make the final price of the product more expensive.

The online sale follows a different logistics than the previous one. This system is based on the direct delivery of the product in 24 hours. After collection, oranges are distributed to families or to wholesalers in refrigerated transport.

As we see, these are two different management and marketing models. The first one stores the fruit in refrigerated chambers since the fruit is collected in advance at the right moment of maturation in order to supply the market, both nationally and internationally. The second collects the fruit of the field and commercializes it in the moment, transporting it to the domiciles in perfect state of maturation.

The following figures are a summary of the different channels of marketing of oranges:


I recommend you to see this video, which summarizes the process that follows the orange from its collection, its processing until its distribution to the customer (traditional channel).









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