The U.S. fresh produce industry changed considerably in the 1990s. Consolidation among grocery retailers increased the share of grocery store sales accounted for by the largest 4th 8th and 20th U.S. retailers nationwide. Growers/shippers had also consolidated, with wide variation among different categories of goods handled. However, in general, sales of growers/shippers were still small compared to those of large retail chains. While direct sales to conventional grocery retailers remained the most important marketing channel for growers/shippers, the share of sales to these retailers was either stable or declining. In contrast, the share of direct sales to mass merchandisers was small but increasing. At the same time, new packaged salads, value-added produce, and branded produce were being rapidly introduced to the produce departments of supermarkets. Furthermore, large grocery chains had introduced supply chain management practices, and fees and service costs associated with those had increased. Suppliers such as growers/shippers not only feared the countervailing power of fewer buyers for their produce but also, more importantly, they foresaw increases in their costs and improvements in services demanded by buyers. While the issue of costs and services was controversial, the main point in the dispute was the use of the “slotting fee” associated with the stocking of new items at distribution centers. Smaller shippers can be adversely affected by costs and services if these are fixed and equal across the board. Econometric analysis indicates that retailers can influence prices paid to growers/shippers, and also those paid by consumers for some commodities. The changing processes of the U.S. fresh produce industry also serve as a reference in foretelling the future for that in Japan.

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