2022 Fresh Produce Industry Report by IFPA-en.pdf

Our time is 2022 State of the Industry Report Message from the CEO By the Numbers Industry Landscape Key Trends Future Outlook About Us Message from the CEO Welcome to IFPA s first State of the Industry Report where we explore how the IFPA member community and global fruit and vegetable industry can make a positive and powerful impact on the world despite daunting challenges As the remnants of the global pandemic subside our industry faces a seemingly never ending series of challenges inflation labor war extreme climate events lagging fresh produce consumption and what the future of work looks like just to name a few Yet in spite of this our future has never been set up to make more of an impact I believe and I know our time is now Health and nutrition security are in the headlines and fresh fruits and vegetables are at the center of those conversations because the world realizes we can t ignore or medicate our way through hunger diseases and ailments Our industry proudly produces products that impact the health and well being of every human on the planet The produce industry is the sustainable affordable and equitable way to health and happiness The data are clear fruits and vegetables improve lives but people simply aren t consuming enough and we have to change things Not simply for the good of the industry but for the good of the world This is our moment and we must not let this time pass without tapping into IFPA s purpose to create a vibrant future for all My promise to you is that IFPA is committed to building relationships with global allies and our member network to unlock and solve the problems facing our industry and the world We are here to clear the pathway so that more people can have more produce and floral in their lives As an organization it is our duty to champion the data insights and messages that create lasting change in consumption so that the world knows fresh produce and floral truly are the secret to vitality and vibrancy I ve been a retailer and of course I m a consumer and I ve seen up close the difference our industry can make in individual lives It is not a small difference The gap between where things stand today and the difference we need to make tomorrow and tomorrow is none too soon is what this report is all about As you look at the data and trends that follows I encourage you to consider What IS possible What if IFPA is not in this to simply change the game We are in this to change the world And together as a community we will Yours in partnership Cathy Burns CEO IFPA 2 Message from the CEO By the Numbers Industry Landscape Key Trends Future Outlook About Us 3 Source Fresh Vegetables Worldwide Fresh Fruits Worldwide VEGETABLES BY THE NUMBERS US 691 20 B Expected fresh vegetables global revenue in 2022 US 90 80 Expected per person revenues of fresh vegetables using 2022 population figures 495 656 7mkg Expected volume of the fresh vegetables segment by 2027 3 2 Expected volume growth of the fresh vegetable segment by 2023 FRUIT BY THE NUMBERS US 622 80 B Expected fresh fruit global revenue in 2022 US 81 81 Expected per person revenues of fresh fruits using 2022 population figures 272 851 6mkg Expected volume of the fresh fruits segment by 2027 2 9 Expected volume growth of the fresh fruits segment by 2023 By the Numbers Message from the CEO By the Numbers Industry Landscape Key Trends Future Outlook About Us Top 10 Commodities Global Production 4 Source Compiled from FAO data Chicago Tribune Global trade more than doubled between 2000 and 2018 and exports are a driving force behind expansion of the fruit and vegetable sector according to FAO data 370 million tons 181 million tons 304 million tons 117 million tons 100 million tons Potatoes TomatoesCassava Bananas Watermelon 100 million tons 87 8 million tons 91 8 million tons 87 2 million tons 78 8 million tons Onions Cucumbers Gherkins Sweet Potatoes Apples Oranges 1 6 7 8 9 10 2 3 4 5 Message from the CEO By the Numbers Industry Landscape Key Trends Future Outlook About Us 5 Global Fruit and Vegetable Consumption 400 grams per person per day 390 grams per person per day 267 grams per person per day RECOMMENDED INTAKE by the World Health Organization WORLD PRODUCTION WORLD CONSUMPTION Source European Parliamentary Research Service 2021 International Year of Fruits and Vegetables Global Burden of Unhealthy Diets 3 billion people globally are not able to afford a healthy diet 11 million estimated global deaths attributable to dietary risk factors Message from the CEO By the Numbers Industry Landscape Key Trends Future Outlook About Us Industry Landscape It is still too early to draw conclusive lessons from the global pan demic inflation and war that played out in 2022 but it s important to understand their impact on the industry landscape as viewed through the lens of the global economy trade supply chain and consumption The experiences highlighted increasing pressure on the global agriculture industry a growing global population climate volatility environmental degradation limited natural resources and constantly shifting consumer demand They also highlighted future challenges and opportunities The World Trade Organization WTO forecast estimates world GDP Gross Domestic Product will grow by 2 8 in 2022 and 2 3 in 2023 But there is a high degree of uncertainty associated with the forecast due to numerous and interrelated risks including shifting monetary policy in advanced economies and the unpredictable nature of the Russia Ukraine war Progress requires us to know not only where we re going but also where we re beginning As the WTO explains it In Europe high energy prices stemming from the Russia Ukraine war will squeeze household spending and raise manufacturing costs In the United States monetary policy tightening will hit interest sensitive spending in areas such as housing motor vehicles and fixed investment China continues to grapple with COVID 19 outbreaks and production disruptions paired with weak external demand Finally growing import bills for fuels food and fertilizers could lead to food insecurity and debt distress in developing countries Food prices in U S dollar terms have also risen sharply as a result of the Russia Ukraine war because both the Russian Federation and Ukraine are major suppliers of grains and fertilizers This raises food security concerns in many countries particularly low income countries that tend to spend a large portion of household income on food Many currencies have also fallen against the dollar in recent months making food and fuels even more expensive in national currency terms Major central banks are raising interest rates in a bid to tame infla tion and slow economic growth until inflation returns to acceptable levels In the U S an acceptable level of inflation is defined as 3 or less But raising interest rates often tips a nation s economy into recession Experts are also concerned about high interest rates in advanced economies potentially triggering a transfer of capital from emerging economies further unsettling global financial flows Escalation of the Russia Ukraine war could also undermine business and consumer confidence and destabilize the global economy An additional risk would be the decoupling of major economies from global supply chains which would exacerbate supply shortages in the near term and reduce productivity over the longer term accord ing to WTO analysis Although trade in the first half of 2022 was up 32 compared to 2019 merchandise trade values are growing at double digit rates 6 Message from the CEO By the Numbers Industry Landscape Key Trends Future Outlook About Us because of changes in prices while trade growth in volume terms remains in the low single digits As major central banks raise interest rates in a bid to tame inflation there is concern that overcorrecting on tightening could trigger recessions in some countries which would put pressure on imports World trade is expected to lose momentum in the second half of 2022 and remain subdued in 2023 as multiple shocks impact the global economy Economists at the World Trade Organization predict global merchandise trade volumes will grow by 3 5 in 2022 but only by 1 0 in 2023 significantly lower than a previous estimate of 3 4 Policymakers are confronted with unenviable choices as they try to find an optimal balance among tackling inflation maintaining full employment and advancing important policy goals such as transitioning to clean energy Trade is a vital tool for enhancing the global supply of goods and services as well as for lowering the cost of getting to net zero carbon emissions according to WTO Direc tor General Ngozi Okonjo Iweala The WTO forecast also highlights the resilience of trade growth in the Middle East and Africa in 2022 These regions can expect small declines in exports in 2023 but imports will remain strong with each region set to grow by 5 7 Other regions can expect modest growth in both exports and imports in 2023 China has become the top trading partner and source of investment not just in most Indo Pacific markets but in much of Africa and Latin America as well Some supply chains have moved out of China due to U S tariffs and rising labor costs but most have not and many businesses from around the globe are strengthening their trade and investment ties to China However the Biden administration has picked up the baton from its predecessor to elevate non economic concerns including human rights and national security issues and other govern ments around the globe increasingly share these concerns While stated intentions to re shore near shore or friend shore decoupling from geopolitically non aligned countries seem to be rising free trade agreements are still being signed and barriers to trade have been declining in 2022 as demonstrated by the recent proliferation of trade agreements For example the Regional Comprehensive Economic Partnership RCEP will eliminate tariffs on more than 90 of goods traded among the 15 Asia Pacific member nations over the next 10 15 years Additionally the 11 country Trans Pacific Partnership TPP is attracting new applicants includ ing the UK South Korea Taiwan and China Meanwhile the E U now has 46 trade agreements with 78 countries By contrast the United States has just 14 trade agreements with 20 countries and hasn t inked a comprehensive trade pact with a new partner in a decade To ensure American workers and industries can compete globally the U S Chamber of Commerce is pushing for the United States to get back in the game on trade and negotiate new market opening trade agreements amchan org pe 7 Message from the CEO By the Numbers Industry Landscape Key Trends Future Outlook About Us WHAT IF Understanding the global landscape in which we operate ins the decisions we make and actions we take And asking What will come our way is an important question But What will we make happen is far more important because as an organization and a community if we don t allow ourselves to dream big and act boldly then our reality will always be small and meek As you consider the following ination insights and examples think about the possibilities What if 8 Message from the CEO By the Numbers Industry Landscape Key Trends Future Outlook About Us What if produce was considered as not just a commodity but a path to prosperity On the regional level the Food and Agriculture Organization of the UN reports that most fresh fruit and vegetables are traded and consumed locally or nationally as a result of high perishability and competitiveness in export markets The report finds that while exported quantities are low compared to the produced quantities the value of trade means that they have the potential to contribute substantially to both the agricultural and gross domestic products of producing countries Latin America the Caribbean and Asia have established themselves as important exporting regions where trade in fruit and vegeta bles generates important foreign exchange that many low and middle income countries can use to import food and other items Importing countries investing in producer countries along with bilateral or multilateral agreements have also stimulated trade The expansion in global trade is also impacted by rising demand in high income countries particularly in the United States and the European Union the two largest importing blocs A preference for safe good quality attractively packed fresh produce and more widespread awareness of the nutritional benefits of fresh fruit and vegetables drive demand What if people understood the economic power of produce World export value of selected agricultural commodities 2018 Billion USD 9 Source FAOSTAT 2020 150 120 90 60 30 0 Meat Fresh fruits vegetables Cereals Coffee tea cocoa spices Dairy products eggs Oilseeds Sugar 140 138 118 106 85 83 24 Although it only represents about 7 8 of total global production fresh fruits and vegetables rank as one of the most valuable crops Message from the CEO By the Numbers Industry Landscape Key Trends Future Outlook About Us Top Consumption Markets Top Produce Consumers ranked 1 Exporter by Value USD 1 000 s 2 Exporter by Value USD 1 000 s 3 Exporter by Value USD 1 000 s 4 Exporter by Value USD 1 000 s 5 Exporter by Value USD 1 000 s 1 China Thailand 5 753 110 Chile 2 362 390 Vietnam 824 234 New Zealand 641 753 Philippines 626 910 2 India Afghanistan 304 733 United Arab Emirates 120 272 Iran 105 258 Chile 94 771 Iraq 90 167 3 United States Mexico 16 577 350 Peru 2 299 263 Canada 2 251 735 Chile 1 964 474 Guatemala 1 688 798 4 Brazil Argentina 262 780 Chile 75 858 Spain 60 513 China 46 630 Italy 23 667 5 Indonesia China 1 602 116 Australia 125 317 Thailand 108 179 United States 83 021 New Zealand 54 731 Top Import Markets Top Produce Importers 1 Exporter by Value USD 1 000 s 2 Exporter by Value USD 1 000 s 3 Exporter by Value USD 1 000 s 4 Exporter by Value USD 1 000 s 5 Exporter by Value USD 1 000 s 1 United States Mexico 16 577 350 Peru 2 299 263 Canada 2 251 735 Chile 1 964 474 Guatemala 1 688 798 2 Germany Spain 4 711 873 Netherlands 2 677 838 Italy 1 607 609 Morocco 440 804 Costa Rica 412 219 3 China Thailand 5 753 110 Chile 2 362 390 Vietnam 824 234 New Zealand 641 753 Philippines 626 910 4 Netherlands Spain 1 415 640 Peru 1 091 162 South Africa 994 197 Belgium 942 196 Germany 805 663 5 United Kingdom Spain 2 108 429 Netherlands 1 100 296 South Africa 709 476 Morocco 468 406 Peru 377 619 10 Source FAOSTAT 2019 data 2021 NA ITC Trademap 2021 data Message from the CEO By the Numbers Industry Landscape Key Trends Future Outlook About Us What if societies invested in a better food future Not surprisingly developments in the global economy and global trade have taken a toll on global supply chains While innovations in distri bution have reduced some transport costs and delivery times they have not eliminated all supply chain hurdles Buckling under the strain of unprecedented demand