Besides selling fruit and vegetables, you would be able to sell other types of produce as well, such as flowers, herbs, eggs, milk, butter, cheese, and specialist foods such as olive oil, nuts and seeds, and organic produce.
Greengrocers can also offer personalised service such as a delivery service, taking orders over the phone, by email or through websites or Sms’s. They can also supply local restaurants, guesthouses, and coffee shops in the area.
The first step to take when starting any business is to prepare a business plan. This will help you understand the business process. There are various points that you must think carefully about. This sample business plan for a Whole food Sea Market may give you some pointers as a start.
1. Can a small wholesaler compete?
To be successful you need a strong interest and a good knowledge of fresh fruit and vegetables – so that you know what is in season, the shelf life of different produce, ripening times, how to identify freshness and quality.
There is no doubt that one can be successful in this industry, but you will be competing with other greengrocers in your area, so you need to get to know your direct competitors very well.
One useful key to a successful greengrocer business would be to identify potential gaps in the market. These competitors will be independent operators like yourself. However, don’t forget to research other competitors such as large outlets like Fruit and Veg City and the large supermarket groups.
Their buying power makes it possible for them to keep prices low. Greengrocers can over come this by offering better quality products, personalised service and by stocking a variety of speciality fruits and vegetables that a supermarket would not stock.
Location is important – most of your customers will be people living or working locally, so you need to choose a convenient a location with lots of foot traffic.
2. Where to get fresh produce
If the business is located in the Johannesburg area, the Jo’burg Market serves thousands of farmers from across South Africa who sends their fresh produce to the Market to be traded every day. Currently, about 15 000 farmers make use of this distribution channel.
The large buyer base – averaging about 9 000 at any given time comprises of retailers, wholesalers, exporters, processors, informal traders and those buying for households. All major centres and even small towns have local fresh produce markets or co-ops where greengrocers can stock their stores.
There are a number of national distributors who offer a reliable national supply chain. Their focus is to service identified target markets in the catering, wholesale and food service industry, with quality and affordable products.
- Dew Crisp Farms supply fresh vegetables and fruit and aim their products at the “convenience market” where all the products are washed and cleaned, packaged and then distributed to supermarkets and greengrocers.
- Yukon is the largest local supplier and exporter of baby vegetables in South Africa and supplies some of the most discerning retailers in the world. They also distribute products locally.
- For farms and produce suppliers in the Overberg are of the Cape.
3. Niche wholesale businesses
Interest in organic food continues to grow in South Africa, as many people are worried about the effects of pesticides and fertilisers.
- Go-Organic.co.za is South Africa’s premier organic website, directory, and marketing company. They trade locally and internationally in bulk organic products. Go-Organic.co.za is a private, commercial organisation committed to social and economic upliftment.
- Urban Sprout is an organic-eco directory that focuses on organic and eco-friendly products from specialist tea to organic whole foods. To access the directory go to www.urbansprout.co.za.
4. Equipment Requirements
The outlay could be costly, as you want your shop to look attractive. It should have the following items installed in the shop.
- Refrigerated display units.
- A freezer if you plan to sell frozen produce.
- Budget for shelving at various heights, to display produce.
- Scales to weigh products.
- An electronic till.
- Credit card swipe machine facilities to accept card payments. You can buy or rent these from your bankers.
5. Ongoing Costs
The need for a good cash flow is important, as you will have a number of ongoing costs in this kind of business.
- A constant supply of fruits and vegetables, packaging and promotional expenses should be included in your budget
- As your business grows you may also need a van with cold storage facilities for deliveries
- Don’t forget insurance costs such as fire, theft and damage, employers’ liability insurance for staff, as well as motor insurance for any delivery vehicles
- Staff costs
- Book keeping service