Everyone wants a slice
Like most of today’s trends, the boom in perishables is driven largely by the parallel rise of e-commerce. “We have observed the rise of global demand for perishables via e-commerce from a number of fronts,” York said. “E-commerce platforms can often satiate this demand through the execution of sophisticated, just-in-time supply chain mechanisms. Prepared meals or home-meal solutions have also helped drive the e-commerce perishable demand in North American and other regions, as consumers are continuously looking towards fresh and convenient solutions to their busy schedules.”
One perishables expert with Kuehne + Nagel, who asked not to be named, agreed that e-commerce in the food sector “has taken a steep flight in the last few years.” While e-commerce orders for food in Western Europe are popular, mainly with tech-savvy millennials, China’s embrace of e-commerce has a much wider demographic range, “in particular for seafood and fruit and vegetables,” he said. “With respect to food, the growing affluent segment of Chinese consumers are keen to buy European and U.S. products, which meet the food safety and security standards, hence the imports and subsequently overseas transport of foods fast.”
In fact, York said, “Chinese consumers buy more perishable product online than any other country in the world, as they have effectively formulated trust in recognized brands from the U.S. and other Western countries.” Robinson Fresh, C.H. Robinson’s division that focuses on the development and execution of fresh food supply chains, has begun to introduce some of its licensed brands such as Green Giant Fresh and Welch’s into the region, he said.
While there have been fears that new technologies for preserving delicate foods and flowers will cause a greater modal shift of perishables toward the much cheaper seafreight option, York said there are several reasons why airfreight will always play a significant role in perishables transport. For instance, “air cargo is a good option for trialing a product to make sure it is popular enough with consumers to justify other modes of transportation, such as seafreight containers, where more substantial volumes are required per order,” he said. “Some specialty items may dictate air versus ship because smaller quantities might be more efficient to move via air, especially when perishability is a factor.”
In addition, airfreight allows for shorter lead times than seafreight. “It can match demand quickly, so it may be preferred for products that have a short shelf-life or elastic demands,” York added. “With air, customers can order several times a week, thus limiting the risk of putting product in sea containers for several weeks.”