Panalpina expects Asia and e-commerce to shape perishables supply chains
05 / 03 / 2018
Panalpina expects Asia’s growing middle class and digital natives to drive the development of perishable demand in the coming years.
Speaking at Fruit Logistica 2018, Panalpina global head of perishables Colin Wells said that the perishables industry was undergoing massive change in terms of trade flows and buying behaviour.
Wells said the world’s appetite for fresh products is growing, owing to constantly changing consumer behaviour in Western countries and rising incomes and increasing populations, specifically in Asia-Pacific.
The Organisation for Economic Co-operation and Development (OECD) estimates that today, China and India account for about 15% of global middle class consumption. By 2050, the organisation expects the two countries to account for more than 50%.
“To a great extent, Asia Pacific’s growing appetite for fresh products will be fed by Africa as well as South and Central America. Exports from South Africa and Kenya to China in particular are expected to go up,” explained Wells.
“In addition, new markets will develop to compensate for the loss of traditional supply into Western markets, for example Uganda.”
Another global trend that will shape the perishables industry is the changing demographics of customers
From 2020 onwards, “digital natives” are going to be the most important consumer group in many countries, for example in the UK, Wells said. This will change the way consumers and businesses purchase perishables, with speed of delivery becoming increasingly important.
Panalpina estimates that by 2020, 20-30% of all B2B purchases including perishables will be made through e-commerce.
“They grew up in an app-based environment and have lived their lives ‘online’, most do not even remember the times without the internet,” Wells said.
“A new breed of B2B buyer is emerging and they expect a more consumer-like experience. They will have a major influence on how we purchase things, including perishables.
“New models for the final mile will have to be found to meet the expectations of the consumers. I also expect new virtual retailers – companies we have not even heard about yet – to emerge over the next few years.
“The challenges we are facing are common to all irrespective of size. We should use the pharma supply chain as a benchmark to set high quality standards and share customer expectations across the complete supply chain. Knowledge sharing is the recipe for success in tomorrow’s perishables industry.”
Wells added that the industry was currently facing a shortage of airfreight capacity from Africa.
“Recent airfreight demand growth has outpaced capacity, putting pressure on low-yield cargo such as perishables,” he said.
“Airlines are deploying their aircraft on trade lanes where they can expect the highest yields, and typically that is not out of Africa.”
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