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The Classification Of Fruits Marketing Essay

4864 words (19 pages) Essay in Marketing

5/12/16 Marketing Reference this

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Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.

The literature review carried out on this research contains information and data from different sources. Since there was very few numbers of literatures available on this topic locally, most of the information was gathered from the internet and through the internationally published journal articles. Some of the information was collected from locally published citations and through local institutions and organizations.

The literature review attempts to make some relevant information of fruit processing sector, namely, fruit industry, consumption and trade, fruit processing, type of processes, industry and quality practices in developing countries and quality issues related to fruit processing industry.

2.2 CLASSIFICATION OF FRUITS

Fruits can be commonly classified according to the growing region as follows: tropical, subtropical and temperate-zone (Kader and Barret, 1996). The quality of fruit is mainly affected on growing region and most significantly the environmental conditions specific to each region. Listed below are the examples of fruit grown in each region.

2.2.1 Tropical Fruits

Major tropical fruits: banana, mango, papaya, pineapple

Minor tropical fruits: cashew apple, durian, guava, longan, lychee, mangosteen, passion fruit, rambutan, tamarind, sapota, carambola

2.2.2 Subtropical Fruits

Citrus fruits: orange, lime, lemon, grapefruit, pummelo, tangerine, mandarin

Non-citrus fruits: avocado, pomegranate, cherimoya, fig, kiwifruit, olive

2.2.3 Temperate-Zone Fruits

Small fruits and berries: grape (European and American types), strawberry, raspberry, blueberry, blackberry, cranberry

Pome fruits: Asian pear (nashi), European pear, apple, quince

Stone fruits: plum, peach, cherry, apricot, nectarine

Fruits are essential in the human diet. They contain compounds of nutritional importance, including vitamins which are not synthesized by the human body. Fruits serve as a rich source of energy, vitamins, minerals and dietary fibre. The U.S. Department of Agriculture Dietary Guidelines encourages consumers to choose fresh, frozen, dried or canned forms of a variety of colours and kinds of fruits. Fruits can be defined as the reproductive organs arising from the development of floral tissues with or without fertilization.

2.3 WORLD PRODUCTION OF TROPICAL FRUITS

The availability of detailed information and reliable statistics is very less on tropical fruit production and world trade (Chang, 2007). Therefore, it constitutes a major constraint in the analysis of supply and demand trends of tropical fruits in the world market (Kortbech- Olesen, 1997; Chang, 2007; and FAO, 2008a). Most fruit producing countries do not have proper routinely record or collect data regarding tropical fruits that are basically produced and/or traded in small quantities (Chang, 2007; and FAO, 2008a). Therefore, production and trade data from reporting countries suffer from a lack of uniformity (FAO, 2003).

Data on tropical fruit production, commercial applications and trade are difficult to be estimated when analysing the global reports, an attempt has been made in this dissertation report to analyse the global production, supply and demand trends of tropical fruits in the world market. In fact, the analysis gives much importance on the research study with regard to the development of fruit processing industry in our country to foresee the future of the fruit industry.

According to the research report published by the Philippine Council for Agriculture, Forestry and Natural Resources and Development has stated that worldwide fruit species of tropical and subtropical are estimated to be around 3,000. Moreover, they have revealed that 500 out of total fruit species are found in Asia. In South East Asia around 120 major and 275 minor species of tropical and subtropical fruits and nuts are found. The most interesting part of that publication is that around 200 species of fruits are remained undeveloped and underused.

According to the report published by Food and Agriculture Organization of the United Nations (FAO), the world tropical fruits production reached 96.8 million tonnes in 2000 excluding banana. This production increased approximately 3.6% annually during the period 2000-2007 to reach 123.7 million tonnes in 2007 (FAO, 2008b). Tropical fruits production in 2004 represented 8.1% of the global world production of fresh fruits and vegetables (FAO, 2007). The annual increase of world production of tropical fruits has been estimated to be 1.7% (FAO, 2003; and Chang, 2007). The projected value of world production of tropical fruits is 139.2 million tonnes by 2014. Banana, mango, pineapple, papaya and avocado are the five major tropical fruit varieties produced and constitute the most important tropical fruit species produced worldwide which account for approximately 75% of the global fresh tropical fruit production (Chang, 2007). Asia consists of major producing region followed by Latin America and the Caribbean and Africa. The world production of tropical fruits from these countries is estimated to be 98% (Ramiro, 2000; FAO, 2003; and Centeno, 2005).

2.4 CONSUMPTION AND TRADE OF TROPICAL FRUITS

Approximately, 90% of all tropical fruits produced worldwide are consumed domestically. The remaining 10% of tropical fruits produced is traded as fresh, accounting for 5% or processed tropical fruit products, accounting for 5%. These processed tropical fruit products include dried or dehydrated fruit, frozen fruit, fruit juice, concentrate, pulp and puree which is further referred to as fruit juice and concentrate and canned fruit (Kortbech-Olesen, 1996; FAO, 2003; CBI, 2007a; and Chang, 2007). Although, the proportionally small quantities of tropical fruits traded internationally, the trade value of them is very significant. The total value of trade of fresh and processed tropical fruit products was estimated at 4.0 billion US dollars internationally in 2004 (Chang, 2007). The total international trade value of fresh tropical fruits amount was 4.7 billion US dollars in 2006. Moreover, an additional 1.3 billion US dollars accounted for the processed tropical fruit products. On the other hand, the value of international trade of bananas and plantains reached 5.6 billion US dollars in 2006 (Chang, 2008). Pineapple is the most dominating fruit in international trade in fresh and processed tropical fruits, with a significant growth in volume and value (Chang, 2007, 2008).

Asia is the leading supplier of processed tropical fruit products. According to the trade data, it shows that Latin America and the Caribbean as the major exporters of fresh tropical fruits (Ramiro, 2000). The European Union (EU) is the largest import markets for both fresh and processed tropical fruits making the United States of America (USA) as the second largest. The both import markets are together accounting for approximately 75% of import of tropical fruits in world production (FAO, 2003; and Chang, 2007). The import of fresh fruits in the EU reached 26.4 million tonnes (8.6%) and 21.0 billion Euro (10.7%) for the concerned tropical fruits. Import volume of fresh tropical fruits in the EU can be cascaded as follows: pineapple-56.3%, mango-14.7%, avocado-13.2% and papaya-2.2%. The total is accounting for approximately 86% of all fresh tropical fruits imported in the EU in the year 2007 (Eurostat, 2005, 2006, 2008). The processed fruit products in the EU increased during the period 2003-2007, accounting for 10.5 million tonnes and 10.0 billion Euros in total imports in 2007. Fruit juice and concentrate of about 62.8% accounted for the largest group of processed fruit products in 2007 in terms of volumes and other processed fruit products accounted for: canned of about 24.8%, dried of about 6.8% and frozen of about 5.6% fruit (Eurostat, 2008). From the total import volume of processed tropical fruits in 2003 constituted 15.4% and it increased to 17.1% in 2007.

One of the most internationally traded tropical fruit is banana which accounted for about one-fourth of 70.89 million tons in 2004 production sold overseas. The export of remaining tropical fruits is less than 10% of the total production. As the major exporters of banana, Ecuador, Costarica and the Philippines accounted for 85% of all tropical fruit exports. Volume of export grew up from less than 1% in 2002 to nearly 8% in 2004 (FAOSTAT, 2012). United States is the major market for banana, accounting 26% of world total production in 2004 followed by Germany and Japan.

Mexico, India and Brazil represented the bulk of mango exports. The total volume exported increased in 2004 by a modest 5% in contrast to an enormous increase of 41% in 2003. The total exported amount of mango by Mexico is about 190 kilotons while the Brazil is about 140 kilotons. USA is the major importer of mangoes accounting for 35% while the EU accounting for 20%.

Papaya is major tropical fruit with exports increased by 47% in 2004 compared with the year 2003. The largest exporter of papaya was Mexico accounting for 75 kilotons during the year 2004 followed by Malaysia accounting for 70 kilotons Brazil accounting for 40 kilotons. USA was the major papaya importer that accounted for 50% of the world total papaya production.

Import demand for tropical fruits worldwide for the next decade is expected to increase, thus import volume is also projected to expand. The projected increase in exports of tropical fruits by FAO in 2014 indicates an annual increase in export volume by 1.4% for mango, 1.7% for pineapple, 2% for avocado and 5.6% for papaya while the USA, EU and Japan remain the largest import markets for tropical fruits. (Rita M. Fabro, S&T Media Service)

2.5 FRUIT PROCESSING

Fruits and vegetables are rich sources of many nutritional intakes to human beings and are widely consumed in varying amounts. Although it has been highly advised to have good consumptions of fresh, unprocessed fruit and vegetables it is not always realistic or possible. This may be due to the cost, availability and seasonality. Processing of fruits and vegetables is, therefore, necessary and in many ways desirable. The processed forms of fruits may be complemented the increase of overall consumption as well as enabling regular intake throughout the year instead of fresh produce. Fruits are highly perishable, therefore, they need kind of processing to aid their preservation. Processing (canning, drying, freezing, and preparation of juices, jams, and jellies) increases the shelf life of fruits and vegetables (Cantwell and Suslow, 1999). Processing steps include preparation of the raw material, cleaning, trimming, and peeling followed by dehydrating, canning, or freezing. Fruit processing extends not only the shelf life but also results in value addition, generation of employments. This also enables vertical integration and diversification. Processing will, further, help to combine different ingredients, removal of inedible parts and carrying out other steps that consumer would do at home.

2.5.1 Fruit Products

Canned juices, pulps, fruit drinks, jam, cordials, jelly, dried and dehydrated fruit products are the products that can be considered as direct fruit products in the current consumer market which are available locally as well as globally. Individual quick frozen (IQF) products do not fall in to the direct product category. The IQF products are globally used as substance for baby food manufacturing (cereals), bakery productions and confectionary manufacturing (chocolate). Depending on their applications, dehydrated fruits are also considered as a substance for the derived products as IQF products.

2.5.2 Types of Processes used in fruit processing

Within the current trend in behaviours of consumers, it can be seen that the healthy eating and drinking (Datamonitor, 2007; and Hughes, 2008) have shown growing potentials. When aiming at satisfying health-related consumer needs and demands, the number and variety of processed fruits have substantially increased in the recent past. With the recent development in the technology, updated and modernized processing and preservation methods such as heating, drying or dehydration and freezing together with more commercialized varieties of processing techniques continue to serve the consumers with the increased varieties of processed fruit products. These achievements have been gained through new process protocols and products, new heating and freezing techniques, namely, microwave or ohmic heating, cryogenic freezing and radiation treatments. The trend in recent processed fruits is value addition through the increase of taste or flavour while retaining their nutritional value, making a number of varieties of fruit products with longer and more consistent shelf life. The following describes the types of modern processing techniques those are being innovated and used by the developed countries in order to get competitive advantages over the developing countries in the international processed fruit market. xxxx-more neededxxxx

2.6 FRUIT INDUSTRY IN DEVELOPING COUNTRIES

It has been evident that there is high potential growth and trend in fruit processing industry in many of the developing countries (DC) in Asia, Africa and former Soviet countries. The major trends on these DCs can be analysed on focusing the quality oriented aspects where it is a major concerned when exporting processed fruits to the developed countries especially European Union (EU), America and Japan. This will be beneficial to identify and indicate the major issues that are needed to be addressed in quality aspects when such products are exported.

The fruit processing industry in the developing countries in the Asia-Pacific region is booming rapidly. This potential is due to the less trade barriers and agreements of global trade and increasing demand of consumers in developed countries. The reason for this boom is not merely for economical factors. This has major concerns regarding healthy, tasty and safe foods. The processed fruit industry is dealt with the challenge of being competitive in the international market where quality oriented aspects are of high concern. Many of the developing countries in the Asia-Pacific region, however, have only a few fruit processing and exporting companies that are practising the modern quality assurance and improvement systems for fruit processing. Therefore, processed fruit products from such countries cannot cope in the international processed fruit market due to the lack of quality assurance and the products those have usually been declared to lower end markets.

India accounts for a wide variety of fruits and vegetables production. It is the second largest producer of fruits and vegetables production in the world while China ranks the first. It accounts roughly 10 and 15 per cent of fruits and vegetables in global production respectively. According to the report published by National Horticulture Board, during 2009-2010, India produced 71.52 million metric tonnes of fruits and 133.74 million metric tonnes of vegetables (National Horticulture Database in India, 2010). At present, the country processed around 2.2 per cent of fruits and vegetables, even though it is ranked as the second in the world in terms of production. When compared with other countries, the processed fruit and vegetable industry is comparatively low. In Brazil the processed fruit and vegetable industry is 30 per cent, USA 70 per cent and Malaysia 82 per cent.

The major fruits cultivated in India are Banana, Mangos, Papaya, Grapes, Apple, Apricots, Orange, Water Melons, Avocados, Guava, Lichi, Sapota. Mango accounts for 40% of the national fruit production and India and one of the leading exporters to the global market. The positive growth in the global market for processed fruits and vegetables products (dried or preserved and dehydrated vegetables and fruits), ready to serve beverages, fruit juices and pulps has led the country’s economy towards new way. The existence of 4000 fruit processing units offers India tremendous export opportunities. During the period of 2010-2011, India has exported fruits and vegetables worth 7 million USD comprised of fruits worth 4.8 million USD and vegetables worth 2.2 million USD (National Horticulture Database in India, 2010). The major importers of Indian fruits and vegetables are UK, UAE, Malaysia, Sri Lanka, Bangladesh, Nepal, Saudi Arabia, Indonesia and Pakistan. Even though the share of India in the global market is still nearly 1% only, the tendency towards increasing acceptance of horticulture production is high in the country. The concurrent developments in cold chain infrastructure in the areas of state of the art technology and quality assurance measures have paved the way for this tremendous growth in this sector in India. Moreover, large investment funded by the private sector and public sector has also taken initiatives with Agricultural & Processed Food Products Export Development Authority in India (APEDA). With APEDA’s assistance, several centres for integrated post harvest handling and perishable cargoes facilities have been established in the country. Also in achieving these growth rates in processed food industry, the programmes like capacity building initiatives at the farmers, processors and exporters’ levels has also contributed towards this effort.

As the Indian food processing industry is still largely based on primary processing accounting for 80% of the value addition, Indian government has set up a separate fully authorised ministry called “Ministry of Food Processing Industries” for the entire development and promotion of food processing industries within the country. Harvesting of fruits is widely practiced by manual methods due to the abundant supply of surplus agricultural labour. The fruits are mostly harvested by hand or by simple hand tools, Sorting and grading of fruits are done on a very limited scale and that are only based on visual inspection methods. Limited pre-cooling facilities are only available for grapes, strawberries etc. for exporting purposes. Indian farmers suffer from disfavour in growing fruits as it requires high initial investment and long gestation period. The yield of fruits and thereby return to the farmers are highly affected due to the poor quality of seeds and other planting material available. Low educational level together with poor technical training facilities has led the farmers to the reluctance of adaptation to the new technologies and it has always been a problematic area. These factors result in non-uniformity in quality of fruits produced in India. To ramp up the fruits and vegetables processing, the ministry is pumping financial support for setting up new units, modernization and up gradation of existing units in processed fruit industry. The Indian national policy targeted to increase the percentage of food processed in the country to 10% by 2010 and would aim 25% by 2025.

When it is taken in to the consideration of Thailand processed fruits market, its major exporting market is the United States, the EU and South-East Asia. Thailand today is accounting for a significant amount for total horticultural exports from the country. This amount is about 50% together with processed vegetables. The most exported processed fruits by Thailand comprise of juiced and canned pineapple, canned banana from which 30% goes to the United States while 90% of fresh banana are from Hong-Kong and China. The United States and EU markets are the most prominent importers of dried and canned mango from Thailand and most fresh mango importers are Asian countries. The other factors that contribute to the growth in processed fruit industry in Thailand are: maintaining of high quality of processes, products and value addition with low cost by the use of modern technology for their processing industries. To face to the competitiveness in the demanding market environment in processed fruit industry, Thailand maintains relatively high standards in processes as well as in facilities. This is of much more importance as the quality aspects of processed fruits are very stringent in countries like European Union, USA, Japan etc. The practice of GMP, HACCP and other modern quality aspects in Thailand is higher compared with other Asian countries so that they gained competitive advantage over other countries to enter into the developed countries processed fruit market.

The modern fruit processing industry in Bangladesh covers relatively small volumes of canned fruits, jams, jellies and dehydration of fruits. But the volume of production of jams and jellies are done in large quantities. Mainly the small entrepreneurs at the home or cottage scale level are engaged in this jams and jellies processing. Most of the larger companies have new facilities in fruit processing which operate more hygienically to conform with the good manufacturing practices (GMP) used by most of the food industry. When considering most of the facilities available in fruit processing sector in Bangladesh it seemed that there is a need of upgrading quality aspects, technology, processing techniques and requirement of considerable training on personnel who are engaged in the industry.

2.7 QUALITY PRACTICES IN DEVELOPING COUNTRIES

The developing countries in the world have shown a continuous growth in the fruit processing industry (FAOSTAT, 2009). The processed fruits and vegetables trade in international market is very large with an ever increasing number of different types which are processed and exported. Once the processing of fruits and vegetables was limited to mostly temperate zone climate types, but now the change has widened to include the types of tropical and subtropical species. There are many reasons for this change, but they can be broadly explained as the increase in consumers’ dietary habits in developed as well as in developing countries that have become more diverse. This is not merely due to the economical reasons of increase of per capita income but for the healthy, tasty and safe food consumption. The industry is facing to the challenges of being competitive in the international market where quality oriented aspects are of high concerns. The other reason for the change is the development and growth in processing techniques. The processing of tropical and subtropical fruits and vegetables have been improved to an extent where final product is palatable, nutritious and of long and reliable shelf life regardless of whether they are for drying, canning or freezing. Due to continuing demand for processed fruits and vegetables worldwide, many of the developing countries have taken advantages over it and earning valuable foreign exchange from exports of products to profitable markets around the globe. The quality control and inspection in this industry is very important and directed at ensuring that the final products have been processed in a registered establishment that is constructed, equipped and operated in a hygienic and efficient manner. The conformation to the requirements of the export regulations for processed fruits and vegetables and those of the importing country play a vital role with respect to the ingredients, quality grades, defects, packaging materials, styles, contaminants, additives. Apart from these, the following aspects are also of high concerns when exporting the processed fruits and vegetables. They are: conformance to labelling requirements, drained weight, filling of container.

Even though the aspects of quality matters are high in this industry, many of the enterprises engaged in this processed fruit industry are very few those who have equipped with modern quality assurance and improvement systems. Therefore, the developing countries with such kind of shortage in quality assurance systems in place lack their competitive edge in competing with other developed countries in international processed fruit market thus their product have usually been usually directed to lower end markets or in some cases products are abandon.

This situation requires immediate attention to improve the quality aspects of the fruit processing industry where the small and medium enterprises (SMEs) are in particularly of much importance in developing countries. These SME sector represents a large proportion of the fruit industry in the region. This requirement can be fulfilled by creating awareness among SMEs of modern concepts of quality assurance, good manufacturing practices-GMP and improved concepts such as hazard analysis and critical control point-HACCP and ISO 22000. Much stress is put on implementing such systems in the relevant industry. Good Agricultural Practices (GAP) can be applied in production and harvest while Good Manufacturing Practices (GMP) can be especially applied during post-harvest and Quality and Safety Assurance Systems such as HACCP, throughout the entire food chain to avoid hazard and to control them.

HACCP is currently recognized as global system for the management of food safety for all companies that are engaged in the processing, production, storage, and distribution of processed foods for the consumption of human beings. But most of the companies engaged in fruit processing industry are confronted with many technical issues, legal, socioeconomic and challenges in the process of adoption of HACCP or ISO 22000. Asian countries like, India, Thailand, Pakistan, Malaysia, Philippine and South American countries like Mexico, Brazil, Colombia, etc are in the continuous process of overcoming the barriers to the widespread adaptation of HACCP, ISO 22000 and other quality assurance systems in processed fruit and vegetable industry as this industry has now become the driving seat of the economy of most of the developing countries.

Even though some of the enterprises who have been awarded with above certifications, their applications in practical scenario are questionable in most of the developing countries due to lack of awareness, competence and management support in implementation. Apart from these quality assurance systems, there are other quality systems that can be applied to the processed fruit and vegetable industry. Those quality systems are namely, Total Quality Management (TQM), Six sigma, The Toyota Way etc. In the recent past, quality experts have put forward the approaches, concepts and systems for addressing quality during manufacturing in all aspects. Total Quality Management (TQM), ISO 9000 and ISO 22000 have been set up in large manufacturing and service industries worldwide. Most of the processed fruit and vegetable manufacturing establishments have developed and implemented TQM or ISO 9000 or ISO 22000 series programmes in order to enhance their quality objectives. Details on applications of these quality programmes in the food industry have been reviewed recently (Surak, 1992, Battaglia, 1993; and Golomski, 1993). Since the lack of availability of literature on these quality assurance systems with regard to processed fruit and vegetable industry, their correct applicability in the fruit industry should be further studied.

2.7.1 Good Manufacturing Practices (GMP)

Good manufacturing practices are the written procedures intended to be followed while the processing plant is constructed and when it is in operation to make sure the wholesomeness of foods. These practices are the minimum requirements of processing and sanitary conditions that should be followed in processing plants built on proper requirements.

GMP includes the following requirements. They are:

Cleanliness and sanitary for personnel involved in

Building and facilities used in

Equipment and utensils used in

Food processing requirements and controls

The requirements of cleaning and sanitation can be considered as a procedure involving the cleaning and sanitizing of the processing plant. Food processing and controls highlight the actual manufacturing operations which include cleaning, sorting, grading and packaging that can be applied to both fresh and processed foods. With the correct implementation of GMP will help to reduce the new forms of biological, chemical and physical contamination while eliminating existing contamination. The processing plants and facilities should be constructed as per the U.S. and European standards. These facilities should be used with approved materials and maintained under proper hygienic and sanitary requirements. The following of GMP will make sure that the foods produced in an establishment are healthy and wholesome for the consumption of human beings. The applicability of the GMP in processed fruit and vegetable sector is very useful for their quality assurance system and it establishes better perspectives in consumers’ minds regarding the products that they consume while keeping competitive in the market due to the proper quality of their products. This will lead to increase the revenue of a company who follows the GMP making more space to further development in GMP.

2.7.2 Hazard Analysis and Critical Control Point (HACCP)

HACCP is a management tool that was developed in the United States in 1971 in space flight programmes to make sure the safety of foods (Ropkins and Beck, 2000). The technique used for ensuring food safety has become widely accepted in the food industry. Most of the government regulatory agencies, food manufacturers and world organizations such as WHO and FAO are following this tool for food industry and related industries (Perera and De Silva, 1999; Ropkins and Beck, 2000). North America, the European Union, New Zealand, Australia, Singapore and many other countries have implemented the HACCP system today. Effective measures for ensuring the safety of foods and food products are the key aspects addressed by HACCP with regard to known hazards. HACCP has now become the basis for controlling and ensuring food safety in food manufacturing processes. It has become part of total quality assurance programs in the food industry and can be incorporated within an ISO 9000 quality system (BSI Quality Assurance, 1991; Perera and De Silva, 1999; and Ropkins and Beck, 2000). The implementation of an HACCP programme in the fruit industry can lead to the identi¬cation of known hazards that affect the safety of the ¬nal product. The objectives of HACCP programme are the eliminating of those identified hazards at the earliest possible stages and at any subsequent stage of the manufacturing or production system (Alli, 1993; Perera and De Silva, 1999). In the fruit industry, there are wide varieties of known hazards. In fresh, frozen or canned fruit, the detriments associated with the product might vary in signi¬cant amount depending on the types of products. Also, the HACCP is not a stand-alone system where it requires GMP as a pre-requisite to be in place before HACCP is applied.

With the successfully implemented HACCP system having a proper monitoring will make sure the effective control of hazards as well as public health risks. This will ultimately lead to improved food safety. As all the known hazards are taken care by HACCP procedures in any production line, it helps to improve product and process efficiency, reduces waste and reduces the need for rework in the production lines. This cuts down on cost, enhance sales performance and improve consumer con¬dence in the product. The relative significance in quality and safety of processed fruits are directly connected to the level of quality of the incoming fresh fruits which are used in subsequent processing. The incoming fruits must meet certain minimum speci¬cations to avoid microbial contaminations, impurities and the general appearance which are used in production. It is of much importance that the suppliers follow an HACCP procedure to make sure that all raw materials coming in shall meet the desired speci¬cations of producers of processed fruits such as canned, frozen and modi¬ed atmosphere packaged (MAP

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