Fruit and Vegetable Markets

SIC 5431

Industry report:

This category includes establishments primarily engaged in the retail sale of fresh fruits and vegetables. They are frequently found in public or municipal markets or as roadside stands. Establishments that grow fruits and vegetables and sell them at roadside stands, however, are classified in a range of agricultural crop production areas.

Industry Snapshot

According to the U.S. Census Bureau, there were 2,967 fruit and vegetable stands in the United States in 2009. Together they employed 19,888 people who earned an annual payroll of approximately $416 million. About 65 percent of the industry's establishments had fewer than five employees. However, the bulk of revenues was generated by large firms. Midsized businesses (with between 20 and 100 employees) accounted for 8 percent of industry establishments. California and New York dominated the sector, followed by Florida and Texas. Total revenues in the industry reached $4 billion in 2011.

Consumption of fresh fruits and vegetables continued to grow more rapidly than that of processed fruits and vegetables, a trend that began during the last quarter of the twentieth century. Total fresh fruit and vegetable consumption per capita consumption grew steadily through the first decade of the 2000s from 725.6 pounds in 2000 to 770.2 pounds in 2008. The Organic Trade Association reported that U.S. sales of organic food and beverages grew from $1 billion in 1990 to $26.7 billion in 2010, and the most rapidly growing sector was fruits and vegetables.

Sales of organic produce increased at an annual rate of at least 20 percent during much of the first decade of the 2000s. According to the Organic Trade Association in 2009, some 73 percent of Americans buy organic produce, mostly for health reasons. Of that total, 31 percent reported that they had increased their year-on-year spending on organic. Although total revenues from organic produce topped $12.5 billion annually, only 2 percent of the U.S. food supply is grown organically.

On the basis of these trends, many fruit and vegetable markets diversified throughout the first decade of the 2000s, adding organically grown varieties, fresh cut flower sections, and space for plants, firewood, birdseed, and items of seasonal, ethnic, and regional interest, as well as promotions for locally grown produce. In addition, produce stores followed the lead of supermarkets by featuring fresh-cut fruits and vegetables (especially varieties of lettuce) in plastic bags and containers.

Fruit and vegetable stands took advantage of several health scares related to contaminated fruits or vegetables at the end of the first decade of the 2000s, which drove more consumers to buy their produce locally. The industry was also helped by a report released in 2009 by the U.S. Department of Agriculture (USDA) that showed that as yield amount increased, nutrient values in commercially grown fruits and vegetables declined through much of the twentieth century. For example, the calcium content of broccoli, which averaged 12.9 milligrams per gram of dry weight in 1950, had declined to just 4.4 milligrams per gram by the middle of the decade.

However, after enjoying steady growth during the first decade of the 2000s, by the end of the decade, concerns arose that consumers could be cutting back on fruits and vegetables in response to the global economic recession. Of particular concern was the impact of the economy on the produce-buying habits of low-income families, who needed to cut corners and tended to do so by buying fewer fresh fruits and vegetables.

Nevertheless, the USDA reported that the number of farmers' markets had increased 17 percent between 1994 and 2011, and, according to the USDA's Agricultural Marketing Service: "they've been an integral part of our efforts to bring nutritious foods to Americans who participate in programs like the Supplemental Nutrition Assistance Program (SNAP) and the Women, Infants and Children (WIC) Farmers Market Nutrition Program. Since the number of markets accepting nutrition assistance benefits has increased, ... it's a great time to look at how effective farmers markets have been when it comes to increasing low income household access to nutritious foods." To accomplish this, the USDA planned three studies to occur through 2013 to assess the role of fresh fruit and vegetable stands in the feeding of America's poor.

Despite the conflicting trends affecting the fresh fruit and vegetable market, the outlook for local fruit and vegetable stands was relatively optimistic. Joseph Masabni, a commercial vegetable specialist at Texas A&M University, told Western Farm Press in 2009, "Consumers are interested in locally grown, better tasting fruits and vegetables. Opportunities exist for small farms, especially for farms near population centers." In addition, in 2011 IBISWorld reported that "the aging population and an increase in the number of Hispanics and Asian-Americans will also have a positive effect, as these groups tend to purchase more fruit and vegetables." The report added that challenges remained, however, as "industry operators ... continue to be threatened by traditional supermarkets and big box stores that aim to provide the same variety and quality of produce."

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