By Thomas Reardon, Peter Timmer, and Julio Berdegue

In the past decade, there has been a spectacular rise of supermarkets in the two developing regions that are growing the most rapidly. These regions are Latin America and Asia. The areas are home to four billion consumers, roughly one billion in middle class, and the fast growing food markets on the planet. The paper begins by detailing the patterns and reasons for this dramatic rise of supermarkets in these two regions. The authors draw comparisons and point out differences between the two regions concerning the developments leading to and the later impacts of supermarket growth. The paper expands by analyzing the evolution of supermarket procurement systems, in terms of their organization and institutions including standards. The driving force of this analysis focuses on the emerging effects of these changes on the fruit and vegetable markets and trade. The authors hypothesize the ways in which converging patterns in organization and institutions in food industry over the regions studied and developed regions may affect trade patterns in the future. A careful discussion is brought forth concerning the implications of these developments and the effects they may have on emerging public policy issues and questions concerning food safety standards. The most worrying implication of all is the huge challenge this transition poses for small farms and firms trying to survive in this unknown and overwhelming world of large supermarkets.

It should be noted that the data and trends discussed in this paper are based on preliminary evidence and emerging examples drawn from an amalgam of industry surveys, some government statistics, and many direct interviews by the author and collaborators. There is a general dearth of “official statistics” on these new phenomena, both for how they affect domestic markets in those regions and international trade.

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