Key Takeaways:
- ProducePay’s report reveals 70% annualized pricing volatility in the fresh produce sector, with some commodities, like mangoes, experiencing nearly 150% volatility at shipping points.
- Extreme weather, labor costs, and access to capital are among the top factors driving volatility in the supply chain.
- Over half of respondents reported increases in extreme weather and labor costs, as well as worsened access to capital compared to 2023.
- The report highlights volatility across supply, distribution, and trading stages, and calls for collective action to reduce market instability.
Pricing Volatility: The Central Concern
ProducePay, an AgTech company focused on transforming the global agricultural supply chain, has released its inaugural Fresh Produce Industry Volatility Report, providing an in-depth analysis of the key challenges facing agribusinesses and the global produce industry. The report revealed that pricing volatility is the #1 concern, with the fresh produce sector experiencing an annualized volatility rate of 70% in 2023. Some commodities, such as mangoes, saw volatility rates as high as 150% at shipping points. Over 10 commodities recorded volatility above 90%, illustrating the difficulty in achieving price stability.
“The central concern is the volatility in pricing, particularly for stakeholders within the supply chain,” said Patrick McCullough, CEO of ProducePay. “This report aims to show how volatility is holding the industry back and why it’s essential for all stakeholders to work together to bring more stability and predictability.”
Key Drivers of Volatility
The report builds on two years of Annual Industry Surveys and incorporates findings from the latest 2024 survey results. It identifies several factors contributing to supply chain volatility:
- Extreme Weather Events: 56% of respondents reported an increase in extreme weather events compared to 2023.
- Labor Costs: 59% noted higher labor costs and persistent shortages.
- Access to Capital: 60% of marketers and 53% of growers indicated worsening access to capital.
Stages of Volatility in the Supply Chain
The Volatility Report examines challenges across three key stages of the supply chain:
- Volatility at Supply: Climate change, rising labor costs in the U.S., and financing differences between the U.S. and Latin America are major factors affecting the supply stage.
- Volatility in Distribution and Transit: Fuel costs, driver shortages, and quality maintenance during transit pose significant challenges for distribution.
- Volatility when Trading: Economic factors such as demand forecasting, exchange rate fluctuations, and supply disruptions make trading highly unpredictable.
Call to Action Ahead of Industry Discussions
The release of the report comes ahead of the IFPA Global Produce & Floral Show, where industry leaders will gather to discuss key issues. ProducePay emphasizes the need for collective action to reduce volatility, arguing that stabilizing the supply chain will benefit businesses and promote long-term growth in the industry.
“Reducing volatility will not only help businesses across the supply chain grow but will enable the industry as a whole to thrive. By doing so, we’re cutting down on waste, lowering greenhouse gas emissions, and securing the food supply for future generations,” McCullough concluded.
The Fresh Produce Industry Volatility Report underscores the urgency of addressing supply chain instability and its far-reaching effects on both businesses and the environment.
ProducePay Recent News
Discover their profile here.
Publishes 2023 Impact Report (2024/08/15)
ProducePay, an agtech company, has released its 2023 Impact Report, detailing its strategy to address food waste, which affects 40% of the global fresh produce supply chain. The report focuses on creating stability and sustainability throughout the supply chain, reducing food waste, improving working conditions, and promoting sustainable farming practices. ProducePay partners exclusively with farms that meet the highest environmental and social standards, reduces waste through direct commerce, and stabilizes value through visibility and traceability.
To download the full ProducePay 2023 Impact Report, visit ProducePay Sustainability.
ProducePay & MAVRK Capital Partner to Enhance Fresh Produce Supply Chains (2024/07/10)
ProducePay has partnered with MAVRK Capital to enhance Predictable Commerce Programs for fresh produce. MAVRK Capital is committing an initial $500 million in forward flow capital to support top growers globally. The collaboration aims to address the increasing volatility in supply chains and reduce the financial risks associated with harvesting. This partnership builds on a successful record in table grape distribution during the 2023/24 season, demonstrating significant improvements in various areas.
Introduces Breakthrough Visibility Solution (2024/03/15)
ProducePay has launched its Visibility solution to improve predictability, connectivity, and sustainability in the agricultural sector. The solution provides real-time tracking of produce shipments and aims to reduce rejection rates, disputes, and food waste. With end-to-end visibility, the solution helps streamline the supply chain and has demonstrated success with a leading grower and distributor of table grapes.
Secures $38M in Series D Financing (2024/02/06)
ProducePay has secured $38 million in Series D financing led by Syngenta Group Ventures. The funding will be used for global expansion and technological enhancements. ProducePay’s Predictable Commerce Platform offers unprecedented levels of transparency and predictability in the fresh produce supply chain, mitigating industry challenges such as extreme weather and price fluctuations. The platform has demonstrated success in reducing waste, improving efficiency, and decreasing transit times and CO2 emissions. This collaboration signifies a shared commitment to reducing waste and enhancing the agricultural value chain.
ProducePay Joins World Economic Forum’s Innovator Communities as a Unicorn Member (2023/09/27)
ProducePay has been recognized for its innovative contributions to the global produce industry by being invited to join the World Economic Forum’s Innovator Communities as a Unicorn member, emphasizing its commitment to creating a more connected, stable, and sustainable supply chain. Through a groundbreaking partnership with Four Star Fruit, ProducePay aims to address the industry’s significant food and economic waste, enhancing predictability and stability in the face of challenges like extreme weather. This recognition, alongside accolades such as Fast Company’s 2023 World’s Most Innovative Companies ranking, underlines ProducePay’s impactful role in transforming agricultural practices for better food security and sustainability, supported by the leadership of CEO Patrick McCullough and founder Pablo Borquez Schwarzbeck.
ProducePay & Four Star Fruit Announce Direct-to-Retail Supply Chain Program (2023/07/14)
ProducePay and Four Star Fruit have launched a direct-to-retail supply chain program to address the challenge of meeting year-round demand for high-quality fresh produce while keeping consumer prices stable. The program will directly connect table grape growers and retailers, reducing economic and food waste by eliminating many unnecessary intermediaries. It also provides growers with greater financial sustainability and investments will be made in sustainable growing practices, traceability, and product quality.
Extends Its Quick-Pay Solution to Support Europe-Latin America Trade (2023/05/17)
ProducePay has expanded its Quick-Pay solution to aid Latin American growers in shipping fresh produce to Europe. This service allows growers to receive up to 50% of their shipment’s value within 24 hours of it being shipped to a European buyer. The expansion includes trade protection features and will commence in The Netherlands and Spain. This service is designed to improve cash flow for growers, enabling them to make crucial operational decisions, invest in sustainable practices, and enhance their day-to-day operations.
Named In Fast Company’s Most Innovative Companies (2023/03/03)
ProducePay (website), a marketplace transforming the global produce industry into a more connected and sustainable supply chain, has been named one of Fast Company’s World’s Most Innovative Companies for 2023. The list highlights businesses at the forefront of their respective industries, paving the way for the innovations of tomorrow. In addition, ProducePay earned the distinction from Fast Company for launching its QuickPay+ program. This financing solution empowers growers and disrupts the produce industry’s decades-old practice of Pick & Pack.
Makes Strategic Appointments (2023/03/01)
ProducePay has recently announced the appointment of Karl Varsanyi, Manolo Reyes, and Ravi Jolly to key leadership positions. These appointments are part of the company’s strategic plans to expand its reach and scale globally.
Launches Virtual Storefront to Connect Growers and Buyers in the Global Produce Industry (2023/02/01)
The Virtual Storefront is a platform that allows growers to market their products, connect with buyers, and share real-time information about their operations, farming practices, and sustainability commitments. It also provides a seamless browsing experience for buyers, who can view a grower’s specifications, acceptance rate, and successful shipment history. The platform integrates ProducePay’s financing solutions for greater convenience. Verified Members have a 97% acceptance/fill rate.
Announces CEO Transition & Record Growth in 2022 (2023/01/06)
ProducePay, a marketplace for the global produce industry, has announced the appointment of Patrick McCullough as its new CEO. McCullough has previously served as a board member and advisor to the company for two years and brings over 25 years of experience in international business development to the role. He will be succeeded as CEO by Pablo Borquez Schwarzbeck, the company’s founder, who will become the executive director of the board. ProducePay has experienced significant growth in the past year, with an 85% increase in year-on-year transactions and 279% growth in overall transactions on its marketplace. The company also launched a new Quick-Pay financing service and a carbon offset program for its grower customers.
Image provided by ProducePay
3 Comments