UNITED STATES DEPARTMENT OF AGRICULTURE

June 10, 1926

This bulletin is a contribution from

Office of Tobacco and Plant Nutrition. W. W. GARNER, Senior Physiolo

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By CHARLES E. ARTMAN, formerly Research Agent in Marketing, Bureau of Agricultural Economics 2

Marketing fresh fruits and vegetables presents certain difficulties that are intensified by the perishable nature of these commodities. This makes it especially important that efficient methods be employed in distributing them to consumers. An attempt is made here to explain some factors which account for the large proportion of the expenditures of consumers which under present methods is absorbed. in the expenses of city distribution.

CITY DISTRIBUTION EXEMPLIFIED BY NEW YORK METROPOLITAN AREA 3

The analysis deals with distribution of perishables in the metropolitan area in and about New York City, as exemplifying conditions that prevail generally in urban centers throughout the United States. The wide geographical extent of producing regions which supply the

1 This is one of a series of marketing analyses made through cooperation of the U. S. Department of Agriculture with the Port of New York Authority.

Acknowledgment is made to H. D. Comer, formerly Research Agent in Marketing, for assistance in the statistical analyses and interpretations included in this bulletin.

For description of the New York marketing system and statistical tables, see ARTMAN, C. E. FOOD COSTS AND CITY CONSUMERS, New York. 1926.

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perishable food requirements of this area gives the New York City market national importance from the standpoint of producers. Similarity of distribution methods for serving this metropolitan population to those employed in other large cities makes analysis of these methods likewise a matter of general interest to consumers.

More than 180,000 carloads of fresh fruits and vegetables, having an estimated wholesale value exceeding $200,000,000, were shipped or hauled in the calendar year 1923 for consumption in the New York market. Ninety per cent of this food supply came from producing sections ranging from 30 to 3,000 miles distant. Over onehalf of the total was transported 500 miles or more. Neighboring States produced only about 30 per cent of the total. Over onefourth came from the Pacific coast, and one-seventh from Florida. The average length of haul for perishables consumed in the New York market area in 1923 was 1,500 miles.

THE METROPOLITAN DISTRIBUTION SYSTEM

The system by means of which perishables are distributed from the New York wholesale market to consumers in the metropolitan area is illustrated by Figure 1. Most of the fresh fruits and vegetables for the entire metropolitan area pass through a highly centralized wholesale district on the lower west side of Manhattan Island. From this wholesale market the produce is hauled by motor truck or team to five jobbing markets in different parts of the area. The car-lot receipts of the wholesale markets are thus broken down into jobbing lots con venient for handling by jobbing firms. The jobbers in turn split up their purchases into small-sized lots required by individual retailers.

The principal function of the wholesaler is to receive certain commodities in large quantities from the producing points, whereas the function of the jobber is to assemble from various wholesalers a considerable variety of different commodities in relatively small quantities. The retailer carries the process of breaking up the shipping units one step further, and expands greatly the variety of articles which he distributes.

In distributing perishables in the New York metropolitan area, the greater part from 75 to 80 per cent of the total receipts-passes through retail stores. The remainder is disposed of by pushcarts, hucksters, hotels, restaurants, and other agencies. Consideration is given here to this major group of retail stores. These are subdivided into three general types: (1) Independent grocery stores, carrying perishables as an adjunct to their grocery business, which comprise nearly three-fifths of the total number of food stores; (2) specialized fruit-and-vegetable stores which handle no other commodities, and which comprise about one-fourth of the total number; and, (3) chain grocery stores, whose number in the metropolitan area is estimated to be approximately one-fifth the total number of retail food stores. The trade of the unit and chain grocery stores is estimated to consist of about 20 per cent fruit and vegetables, whereas these commodities constitute practically the entire business of the specialized fruitand-vegetable stores. Giving consideration to the numerical importance of these three store types and the proportion of perishables sold by each, it is estimated that each type handles approximately the following proportion of fruits and vegetables retailed through

metropolitan stores: Fruit-and-vegetable specialists, two-thirds of the total; independent grocery stores, one-fourth of the total; and chain grocery stores, one-tenth of the total.

Jobbing Markets: (W, Wallabout, Brooklyn; G, Gansevoort, Manhattan;

H. Harlem, Manhattan, N. Newark, N.J.)

Retail stores included in this study

FIG. 2.-From the primary New York wholesale market, P, channels of distribution lead through regional jobbing markets-W, G, H, N, (Wallabout in Brooklyn, Gansevoort and Harlem in Manhattan, Newark Market in Newark, N. J.) to local retailers. Location of stores supplying retail price data is shown by dark circles.

BASIS OF ANALYSIS OF DISTRIBUTION EXPENSE

n attempting to determine the influence of various factors on the expense of distributing perishables, the plan was to collect a large number of original price records for several commodities from stores