Efficient organisation and appropriate infrastructure for horticultural products preparation for large scale turnover are one of the most essential requirements for proficient management of national production potential, which amounts to 7,5 to 9 million tonnes annually.

Export of Polish fresh produce, known in Europe for taste values, requires most effective form of management of this potential. This however needs proper packaging (if possible straight after the picking) of perishable and damage sensitive fresh fruit and vegetables. Sustaining the high quality of those fresh horticultural products depends on the packaging, which has to fulfil formal requirements determined by appropriate international regulations, EU directives, national standards and specific requirements of exporters, wholesale and retail distributors.

Main barrier for effective utilisation of Polish horticultural potential lies within the low market availability of proper and modern packaging. As a consequence, the value of product waste for years 2004-2006 is estimated on the level of 2,7 billion PLN. In addition, the costs associated with this economic and environmental deficiency are unknown. Those costs include expenses for fuel and fertilisers, which additionally influence the unjustified encumbrance of the natural environment.

This article is dedicated to present the concept of improving the situation in the field of packaging used for the horticultural industry. It relies on creation of the Internet based system of proper packaging selection support for growers, packagers of horticultural products and fresh fruit and vegetables exporters.

The notion of proper packaging selection should be understood widely, as it is not only limited to the product protection. It also comprises packaging optimisation in the economic, logistic and ecological aspects in accordance with the national and international regulations.

Design and implementation of such system is the goal of on-going project PL-0015 by Polish Packaging Research and Development Centre (COBRO) titled “Packaging as factor of economic growth of the region and improvement of natural resources protection” realised from 2007 to 2011 with financial support from Norwegian Financial Mechanism.

It is expected that the implementation of this system, in addition to the abovementioned benefits, should contribute to the economic growth of the regions with major horticultural industry and the development of national packaging production.

The total value of horticultural goods production in Poland amounted in years 2004-2006 to an average 7.120 billion PLN. This constitutes about 15,8% of all agriculture goods production.

The value of fruit, vegetables, champignons and preparations export in 2006 equals to 1.558 billion €, that is 18,8% of all agro-foodstuff products export.

In the last years, the share of horticultural products export in the total agricultural export has declined, even though the latter increased. In 2003 export of fruit, vegetables and mushrooms for the total of 1.076,3 billion € was 31,0% smaller in 2006, but amounted to the 26,8% share of all agro-foodstuff export from Poland.

Following the integration of Poland with the EU, the increase of primary agricultural products was much more dynamic that of fruit, vegetables and preparations.

Production of fruit and vegetables in Poland embraces 120 thousand farms. Concentration of fruit and vegetable production in bigger specialised horticultural farms, located in the regions with the intensive of horticultural production is the most significant structural change that has been observed in the national horticulture in the recent years.

Data from Central Statistical Office states that 6 Polish regions – that is mazowieckie, lubelskie, łódzkie, świętokrzystkie, wielkopolskie and kujawko-pomorskie – concentrate 70,7% of all fruit and vegetables production potential (table 1).

Table 1 Cultivation area of fruit and vegetables and average size of a farm in the primary horticultural production region in Poland in 2006.

Sources: Production of agricultural and horticultural cultivations in 2006, CSO, Warsaw 2007
Agricultural farms characteristics in 2005, CSO, Warsaw, 2006

In Polish fruit and vegetables production, the region of Mazowsze owns 24% of national fruit and vegetables farming areas. Mazowsze region is primarily known for, biggest in Europe, grójecko-wareckie region of fruit production, most notably apples. Mazowsze region is a large-scale producer of not just fruit but also vegetables.

Poland produces annually from 3,0 to 3,5 million tons of fruit and in the European scale (27 countries) is the third, after Spain and Italy, producer of fruit. In the European Union, Poland is well-known and respected supplier of berry fruit, frosted cherries (and apple juice concentrate)

Export of dessert fruit dominated so far in Poland by the export of dessert apples and oscillated in the last seasons from 308,8 thousand tonnes in 2005/2006 season to 516,4 thousand tonnes in 2006/2007 season.

Along with other freshly exported fruit: strawberries 3-5 thousand tonnes annually, sweet cherries 8-12 thousand tonnes, plums 8-10 thousand tonnes, pears 3-15 thousand tonnes, the export of fresh fruit from Poland did not exceed the annual level of 400-550 thousands tonnes, which amounts to 15% of total fruit production.

If, however we exclude fruit, which are grown in Poland only for processing purposes – such as strawberries, blackcurrants or cherries, then the export of fresh fruit amounts to at least 25% of all dessert fruit picked.

No more than 900 thousands tonnes of fruit are sold on the national market – this amounts to about 25% of their total production. More than 50% of all fruit production in Poland is used by the processing industry.

Production of vegetables in Poland on the level of 5,1-5,7 millions tonnes translates to the fourth place in UE-27 after Italy, Spain and France.

Export of fresh vegetables dominated by onions, and in the last years also by tomatoes and champignons, is smaller than the export of fruit. Export of Polish onion varied in the respective years due to the business cycles in Europe and the level of crops. It oscillated between 69,9 thousand tonnes in 2002, 227,7 thousand tonnes in 2004 and 128,2 thousand tonnes in 2006. Export of fresh champignons, which grows dynamically from 2000, amounted to 95 thousand tonnes in 2006. In the recent years, similarly to champignon exports, the export of fresh tomatoes, presents high dynamism of growth. In the 2003 the export amounted to 41,3 thousand tonnes and in 2006 it increased to 55,8 thousand tonnes.

The basis of hitherto production development and fruit and vegetables export, primarily including labour-intensive but relatively cheap berry fruit and cherries for processing industry, lied within the vast labour resources in national agriculture.

In 2005 however first symptoms of lack of seasonal workers were observed, and in 2006 and 2007 the problem of seasonal workers shortage, primarily for the fruit picking, has become a major issue limiting the development of Polish horticulture.

For maintaining the horticultural production, workplaces on the countryside and development of production and export of relatively expensive, high quality dessert fruit and certain vegetables, which collection cannot be automated, is needed in many regions of the country.

National turnover and export of dessert fruit and vegetables, supplied to the consumer in the fresh state, requires modern systems of packaging. Packaging must conform to the international marketing, logistics and environment protection requirements. Those should assure efficient loading, unloading and chilling of fruit and vegetables after collection. Export of certain fruit to attractive markets, for example: dessert strawberries, raspberries, sweet cherries, but also apples and many types of vegetables, is simply conditioned by the availability of appropriate packaging.

In Poland, as of 2008, there are 84 initially recognised groups and 6 producer organisations registered in accordance to the European Union regulations. State of horticultural market organisation in Poland ranked on the basis of EU market organisation criteria, that is turnover of fruit and vegetables achieved by groups and producer’s organisations fulfilling the requirements of EU legislation, is very low.

Management of considerable amount of fruit and vegetables designated for export and domestic markets (table 2) is nevertheless possible, due to the fact that few forms of wholesale trade already exist on the market of fruit and vegetables.

Table 2 Structure of fruit and vegetables production

Source: calculations and analysis of IERiGŻ

From the studies prepared in the Institute of Agricultural and Food Economics it appears that wholesale (including domestic market and export) of fruit, vegetables and champignons, which amounted in years 2004-2006 on average 4.282 thousand tonnes has been executed as follows:

• About 2.200 thousand tonnes of fruit, vegetables and champignons, that is 52% of wholesale in Poland and for export has been delivered by horticultural farms by supplying the goods directly to the consumers – on the wholesale markets and marketplaces, to the points of retail sale in Poland and to foreign customers,

• About 700 thousand tonnes of wholesale (16%) has been delivered by private companies of ‘traditional’ wholesalers.

• About 900 thousand tonnes, that is about 21% of wholesale was delivered by groups and producer’s organisations registered in accordance to the UE requirements and family and marketing groups, which are not able to fulfil the requirements of EU concerning the market organisation,

• About 480 thousand tonnes of wholesale (11%) has been delivered by logistic platforms, both independent and with the contribution of big trade networks.

4. Packaging of fresh fruit and vegetables in Poland

From the analysis of fruit and vegetables packaging market it can be concluded that wooden and plastics packaging dominates in the national turnover of packaging. In local turnover reusable packaging is used – that is crates and wood splint baskets.

Adding to that, storing, transport and sales of perishable horticultural products is performed in the ambient temperature, which is the cause of considerable goods loss and contamination of reusable packaging.

In the case of trade networks the primary rules are observed, i.e.:

However in the conditions of local horticultural products distribution the situation is extremely different. Plastics packaging is not washed properly but fruit and/or vegetables are packed there anyway – this is the example of breaking primary phytosanitary regulations. Similar situation is observed with the wooden reusable packaging. It is nevertheless accepted that the increasing prices of wood will contribute to the gradual withdrawal of such packaging from the market.

Meanwhile the large scale EU market turnover widely uses cheap, one way packaging from corrugated board and solid board. Such packaging is easy to use and is distinguished by high promotional qualities. In addition, the solidboard packaging is light, its share in the goods mass is low – which impacts the efficiency of logistics. It is also environmental friendly – after its use it can undergo material recycling or energy recovery processes.

From the economic point of view, large scale exporting of fresh fruit and vegetables is the most profitable way of entering the market for the grower.

However in Polish conditions, packaging proves to be one of the major development barriers for the export of fresh fruit and vegetables.

Defective packaging of fresh fruit and vegetables is the cause of significant losses in the goods turnover (reaching sometimes up to 50% of total goods mass in the retail market).

This does not only signifies:

1. Financial losses of wholesale and retail distributors but also:

2. Wastage of already used production components (fertilisers, fuel etc.)
   Goods losses issue finally result in the irrational encumbrance of natural environment and natural resources by producing fruit and vegetables, which are later wasted.

Particular packaging requirements concern the phases of large-scale transport and storage, for instance: vegetables packed into 5 to 10 kg solidboard boxes, from which several hundred kilos pallet transport units are formed.

Majority of especially small producers sell their fruit and vegetables on domestic market, where the European quality standards are not fully and practically enforced.

Lack of modern packaging systems is a factor that weakens the financial condition of growers and preserves the economic stagnation in many regions with high horticultural potential.

Development and modernisation of Polish fresh fruit and vegetables packaging market is essential. Conditions of Polish market are considerably weaker than the markets of EU-15 countries, which were developing for many years assisted by rational business politics and excellent organisation of horticultural markets.

Creation of systemic solution to packaging selection and subsequent acceptance of the system by the potential users (as the packaging users should be the beneficiaries of value added brought in by correctly selected packaging) requires consideration of a number of aspects. Those include: consideration of fresh fruit and vegetables goods turnover specifics, classification of its participants and place and role of packaging manufacturers in the distribution chain.

Diagram of a structure of market turnover of fresh fruit and vegetables is presented on figure 1.

Figure 1. Market turnover of fresh fruit and vegetables

Source: Own study

For the purpose of the project it has been assumed that the following entities participate in distribution chain of the market turnover

- packer of fruit/vegetables:

• national grower,

• national organised group of growers,
• other national/foreign fruit/vegetable packaging business entities

- national/foreign wholesaler/distributor:

• wholesale agricultural and food market,

• trade network

- bulk goods carrier,

- fruit/vegetables filler for niche markets

- food catering companies (catering, restaurants etc.)

- national/foreign individual customer.

In the conditions of EU markets globalisation, configuration of the market turnover participants (as the links of distribution chain) presented on the figure 1, depends on a number of issues, such as business strategy, market competition etc.

Depending on the character of the turnover (local, regional, national or international) and its scale, wholesaler of fruit is for example an international trade network, such as TESCO, business activities of which are not only restricted to wholesale turnover through distribution centres and retail turnover in the hypermarkets, but also exporting.

In the national realities the extreme case of purchaser is the local retail distributor, who receives the goods directly from the grower, for example in the secondary or tertiary packaging, not in the form of pallet unit loads, required in the large-scale turnover. Due to the local character of similar cases, they are not considered in detail, as one of the main objectives of the project is the growth of profitable export.

It is however important to underline that in the presence of national/local fresh fruit and vegetables turnover, the problem of bad phytosanitary conditions connected to the use of inappropriate packaging, can be solved by the help of packaging selection support system – this subject however go beyond the scope of this section of the article.

Other factor that impacts the market turnover of fresh fruit and vegetables is attributed to the packaging manufacturers. Figure 2 stands as an illustration of relations between these groups of producers and remaining participants of the packaged food market turnover.

Similarly to the case of fresh fruit and vegetables market turnover, layout of relations between participants of this turnover and packaging producers is determined by the market strategy of partners. For example, the physical distance from packaging producer to its user, is crucial for the market competitiveness. From the experience of western packaging producers, the longest distance, which is economically rational, stemming from the packaging logistics costs, is around 500 – 600 km.

Figure 2. Relationship between packaging producers and their purchasers.

Source: Own study on the basis of: A. Hejduk, B. Grabowska, A. Sołtan, Final COBRO report on the realisation of research project E! 2922 SHOPPING BASKET, Warsaw 2005

Complexity of business activities managed by the participants of fresh fruit and vegetables market turnover, especially regarding large-scale turnover on international scale, requires competent analysis of costs and business activity conditions. None of the participants of this turnover should ignore the properties of packaging in which such perishable and delicate produce as fresh fruit and vegetables is offered. In practice this means that the entrepreneur prefers (and often does it intuitively) packaging, which usage brings-in most value added to the packed produce.

Each of the companies presented on figures 1 and 2 functions in the specific conditions generated by their environments. Classic systematics of this issue is presented on figure 3.

Conditions in the outer, external environment area, that is legislative and international, is created through a number of packaging requirements on consecutive layers (international, union, EU, regional) – as an effect this is reflected in the economic environment of each participant of the distribution chain in European fresh fruit and vegetables market turnover and in creation of industry and inner environment.

In the example of Polish fresh fruit and vegetables, it is necessary to break the barrier resulting from the use of inappropriate packaging, which does not fulfil the formal requirements determined by the legislative and international environment on the level of European Union. Therefore the increase of Polish horticultural produce market share on the European large-scale turnover and more effective management of national horticultural production potential, depends on the fulfilment of the abovementioned conditions.

Figure 3. Micro-environment (competitive) and macro-environment (global) of the company determine the shape and form of its business – an example of packed food producer (fresh fruit/vegetables)

Source: Own study based on the model by: C.W.Hill, G.R.Jones, Strategic Management Theory – An Integrated Approach, Houghton Mifflin Company, Boston 1989.

Presented realities and problems of Polish horticultural system and its maladjustment to the needs of contemporary large scale turnover and infrastructure for the appropriate packaging of fresh fruit and vegetables are the arguments in favour of development and implementation of packaging selection support system.

It is therefore indispensable that fresh fruit and vegetables packaging selection in Poland should be supported by a system.

Such support in the shape of open Internet based system, should be an effective factor stimulating the increase of export, which is in itself a component of regional economic growth.

Simultaneously the second role of the system emerges. It relies on the initiating of information flow channels between potential business partners in the first stage of market turnover, that is when the distribution chain begins to function and when producers, fresh fruit and vegetable packers (desirably straight after picking) and bulk purchasers maintain their dominant position. The third group that consists of packaging producer/supplier seem to form natural partnerships.

Information flow on this stage has a key significance for effective organisation of preparation and shipping of perishable and fragile produce, since from it, depends the protection of goods quality in the distribution chain from the grower to the final consumer, as well as the safety of the consumer.

System functioning on the basis of abovementioned rules shall therefore support the organisation of preparation of pallet palletised unit loads of packed fresh horticultural produce, for large-scale wholesale goods turnover.

This will provide a significant help in the current weak organisational and technical infrastructure of fresh fruit and vegetables packaging in bulk goods scale.

Project assumes the open access to the system with the mind-set of stimulating the growth of infrastructure through creation of local producer’s groups and business entities acting as an intermediary between small growers and wholesalers. The essence of this intermediation will rely on, above others, organisation of supply of suitable packaging and timely shippings of palletised goods.

Concept of the packaging selection support system is founded on the determination of packaging value added based on ranking of how the features and properties of packaging fulfil the formal requirements within the specific market factors areas of packaging and attributes of those factors. Examples of such packaging market factors and their attributes are presented on table 3.

Table 3 Market factors of packaging and its attributes – features and properties of packaging.

Source: Own study

The functional concept of packaging selection support system for potential users is the result of chosen methodology.

In the instance of business entity selecting the packaging it will be necessary to input the entry data, needed for the selection of most suitable packaging. Data entered on-line by the system user (with help of suitable enquiry form) will concern:

• type of fruit and vegetables,

• type of packaging needed (primary, secondary with fittings, tertiary),

• particular packaging requirements,

• method of unit loads forming,

• selected logistics requirements.

Packaging selecting business unit shall be understood as fresh fruit/vegetables grower/packer or large scale packaged horticultural goods purchaser.

In turn, producer/supplier of packaging who publishes his offer through the system should, within the frame of recommended system option, fill the appropriate enquiry form, which will automatically rank the value added of packaging.

Next, on the basis of the rank, an automatic report will be prepared by the system (including specific commentary) along with the ranking of up-to-date packaging offers available in the system. This will be selected according to the enquiry specifications entered on-line by for example the packer.

Access to those reports will be granted exclusively to the potential packaging users, with the system status of grower/packer/bulk goods purchaser.

Table 4 presents the proposed scope and form of user system interactions for three groups of system users.

Stated below are the main assumptions of the packaging selection support system:

• System will be implemented in the form of a vortal, and its contents will be available to the users without time restrictions and for rational costs,

• System will adhere to the user personal data safety rules in order to avoid the unacceptable creation of competition within the groups of system users, which could materialise in the case of unlimited public access to addresses in the offers or offer enquiries.

• System will be accessible to the interested entrepreneurs from EU without any additional limits.

• Information concerning current formal and detailed packaging requirements will be updated,

• System user will have access to the packaging selection reports including the ranking of published packaging offers,

• Through publishing of offers and enquires system will initiate the creation of information flow channels through system users belonging to different groups, that is potential business partner in market turnover,

• System makes it possible to support the realisation of continuous remote training, which will support the setting-up of local producer’s groups, that will be able to participate in the large scale turnover of fresh horticultural products,

• Data collected by the system (on the basis of published offers, the frequency of contacts and geographical distribution of users addresses) will be processed for the needs of market research, including those related to fruit and vegetables packaging improvement/optimisation and the utilisation of regional/local horticultural potential for the needs of stimulating and managing the economic growth on the regional/district/commune levels.

• On the basis of data collected by the system, correlation of system activity and officially published data concerning the growth of large scale turnover (including export) and economic development of the region will be studied.

This article presents the causes of incomplete utilisation of Polish horticulture industry production potential. The primary barrier for export increase has been identified through the limited use of appropriate packaging for fresh fruit and vegetables. As an effect the requirements of global large-scale turnover of majority of fresh fruit and vegetables are unfulfilled.

This article also demonstrated the necessity of developing and implementing of the fresh fruit and vegetables packaging selection support Internet system with the simultaneous initiation of information flow channels between the participants of market turnover of fresh horticultural products and the packaging producers. The system will therefore serve the organisation of preparation of appropriately packed Polish fresh horticultural produce – accepted by the international market turnover.

It is expected that the starting of the packaging selection support system, planned for the end of first half of 2009, will influence the increase of Polish fresh fruit and vegetables exports and will allow to gradually improve the situation of Polish horticulture, which will in turn contribute to the improvement of economic situation in the traditional horticultural regions.

Another expected Project outcome is the stimulation of modern fresh fruit and vegetables packaging production in Poland.