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Wholesale markets of the future

Ioannis Triantafyllis, member of the board of the World Union of Wholesale Markets, recently set out his vision for the future, one in which markets will still be close to the cities they feed while harnessing the latest in green and cold chain technology.

What should the next generation of wholesale markets be like? Ioannis Triantafyllis, member of the board of the World Union of Wholesale Markets, recently set out his vision for the future, one in which markets will still be close to the cities they feed while harnessing the latest in green and cold chain technology. At the Fresh Produce Forum at Fruit Logistica in Berlin in February, his presentation was part of a session titled ‘Wholesale Markets 3.0 – from distribution centre to food hotspot’. Triantafyllis, general manager of the Central Markets and Fishery Organisation in Athens, said the markets of the future should be near cities, or hubs or ports, but not necessarily in them. They must be the location for “functional shops”, with loading and unloading docks and whatever other facilities the wholesalers need, especially the meeting of cold chain requirements. As for the number of merchants, Triantafyllis argued for a critical mass only – not a lot, but also not too few, to avoid any monopolisation. Tomorrow’s markets should also have the latest in sanitation, environmentally-friendly (green) technology, be technologically ready and also socially responsible, he said.

What’s wrong with today’s markets?
Triantafyllis had started his presentation by looking at the many challenges facing the world’s wholesale markets today. Why are wholesale markets so unpopular, he asked. Among the reasons are that they are blamed for unnecessarily occupying urban space, for traffic congestion and waste production, and for being unnecessary in the long term, he said. “But someone has to feed the city. How can you feed the city when far away from it?” Triantafyllis stressed that the New Covent Garden Market is in central London and Rungis, which he said is considered the most successful wholesale market in the world, is just 6 km from the centre of Paris. As for concerns about markets causing traffic congestion, he said the alternative to trucks going into a central market would be for them to be spread about on city roads. Triantafyllis also pointed to other solutions, such as at Mercazaragoza, where it is possible to simultaneously load two 600m-long trains. “One rail equals four trucks so just imagine 40 of them,” he said. As for concerns about food waste, he said he believed the amount occurring was probably less than commonly thought. The Melbourne market, for instance, produces around 5,000 tons of waste annually and achieves a 95% recycling rate. Similarly, Mercabarna has a recycling rate of more than 80%.

The problems facing many markets
Among other challenges facing the wholesale markets in Europe is that most were built more than 40 years ago and so tend to be aging facilities. As they are also often owned by state or municipal authorities and their capital turnover is not so fast, it is difficult to find a private company willing to invest large amounts of money that is going to deliver slow returns, Triantafyllis said. Other problems are that the businesses inside markets are often family owned and run along old business models by people with no specific business education. There is limited use of marketing, technology and traceability, lack of central management and networking, and the level of merchants is not homogenised. Adding to the challenge is the rapidly changing environment within which markets operate, including stricter food laws, and the need to be ‘greener’ and better manage and reduce waste – which Triantafyllis said is the biggest problem – as well as to optimise logistics management, such as by adoption of last mile policies and use of urban consolidation centres (UCCs). The latter are things that are going to come in in our lives and most markets are not ready for them, he said. Quality market management is also essential but in order to make the necessary leap to modernity, many changes are needed than the states or local governments that own the markets need to be willing to allow. Added to that is the need for funding, such as to fix up the many old facilities.

JB

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The evolution of wholesale markets into food logistics platforms

World Union of Wholesale Markets chairman Manuel Estrada-Nora explains why terms such as ‘food complex’ and ‘food logistics platform’ better define what a modern wholesale market is.

In this interview, World Union of Wholesale Markets chairman Manuel Estrada-Nora explains why modern wholesale markets now fall into the wider concept of a food logistics platform.

How are value-added services making wholesale markets more competitive?

Many of the European wholesale markets today are what we used to call ‘3rd generation markets’. They go beyond the mere sale and purchase of fresh food. Wholesalers have the space and facilities to develop a number of activities of their business: washing, sorting, grading, cutting, packaging, ripening, storage and cold-storage, management of orders, delivery, etc. These kinds of activities – product segmentation, in short – are increasingly important at wholesale markets, as wholesalers serve not only the traditional small retailers or retail markets, but also chains of hotels, restaurants, supermarkets and hypermarkets. This is why terms such as “food complex” and “food logistics platform” better define what a modern wholesale market is. In some wholesale markets, the volume of fruits and vegetables delivered from such complementary facilities either equals or exceeds the amount traded at the pavilions for wholesaling (e.g. Mercabarna, Rungis-Paris and Padova and other Northern Italian markets, especially for exports.

How strong is food security and traceability at wholesale markets today?

European wholesale markets are a benchmark for food security and food product traceability. Food hygiene is a priority for the owners and managers of wholesale markets. The professionalism of the producers and wholesalers is nowadays a key factor of food security in our wholesale markets. Luckily, the wholesale sector of fresh products is a mature and very competitive one which sets very high quality standards for itself. The maintenance of a “brand” in fresh products and the requirements of certification also impose quality requirements on wholesale traders, importers and exporters which are sometimes even stricter than official regulations.
Not only the hygiene of the products but the hygiene of the facilities, warehouses and areas of common use is a key focus for wholesale market managers. In this context, the WUWM has developed a “Community Guide to Good Hygienic Practices”, adopted by the European Commission in late 2009 as support for the sector. In addition, unannounced official inspections of wholesale markets occur at the wholesalers’ stalls: their commercial documentation is verified and samples of their products taken for analysis. In cases of food safety alerts, wholesale markets act as an efficient and rapid point of investigation and action ensuring an efficient traceability process, determining the origin of the problem and limiting the damage.

What major issues related to fruit & vegetable are being dealt with by the WUWM?

There are a number of issues highly relevant for wholesale market managers in order to improve the service rendered to the traders: green energies, food waste and food losses reduction, waste recycling, excellence in hygiene, improvement in management models, co-operation projects with wholesalers, among others. There is a big range of issues of social relevance: the support markets lend to local farmers, public education on healthy eating, support to small and medium local/regional companies, and the impact of climate change on food markets, all of them closely related with the successes and challenges facing wholesale markets worldwide.

What can you tell us about renovation in wholesale markets?

Wholesale markets in developing countries are making very big efforts to improve their standards. And in fact, in some aspects of this management they demonstrate excellence in performance. In Mexico, Brazil and China, for instance, large investments are underway in wholesale market development.
The European wholesale market sector is more mature so many markets have been partially, or even completely, modernised and refurbished. Some have had to be relocated over the years, as they became surrounded by new urban developments. This is why you may find brand new and modern “old” wholesale markets in England, France, Italy, Germany, Spain and Poland, as well as in many other countries. You also have to bear in mind that European regulation is increasingly strict in relation to hygiene, work safety, transportation and traffic, waste management, energy efficiency, etc. Wholesale market managers are responsible for these aspects, which requires the continuous update of certain infrastructures.

How do wholesale markets differ between ‘developed’ and ‘developing’ economies?

Wholesale markets are often associated with the idea of local food, local agriculture or “Km 0” production and this is correct, both for developed and developing economies. The importance of this is enormous from a socioeconomic and sustainable agriculture point of view.
The difference, in my opinion, is that in developed economies, like Europe, wholesale markets additionally absorb a large share of imported fresh products to satisfy the demand of products from other regions of the planet and of national products when off-season. Even in large producer and exporter countries, such as in southern Europe, the import of fresh fruit and vegetables via wholesale markets may represent 50% of the total.

What is happening with the ‘Love Your Local Market’ (LYLM) campaign?

‘Love Your Local Market’ was very successful in 2015, with the participation of over 2,000 food markets from 16 countries. This global campaign is effective in engendering public recognition of the role and importance of traditional markets throughout Europe and the world. I want to thank the UK WUWM member NABMA, the National Association of British Market Authorities, which in 2014 freely offered us the concept and their expertise gained from the original national campaign run in England some four years ago, so that we could run it globally and encourage markets everywhere to participate in what has now become the biggest market celebration ever seen. In 2016, we hope to further expand the campaign, with increased participation in Asia and Latin-America.

What else was a highlight in 2015 or on the agenda for 2016?

Looking back over 2015, we also enjoyed two highly interesting conferences, the first in Budapest (Hungary) in May and the other in Campinas (Sao Paulo, Brazil) in September. We also signed a formal collaboration agreement with the UN FAO which has began to show mutual benefits.
Our next international conference will be held in Lublin, Poland, in May. After the change of political system at the end of last century, Poland very quickly established an efficient network of wholesale markets throughout the country. We want to focus on the specific situation of wholesale, retail and farmers markets in Eastern Europe and in the former Soviet countries. We will also pay attention to flower markets, an essential component of many food markets worldwide.

World Union of Wholesale Markets