Market Distribution Channel

For fresh produce, in particular, the distribution channel refers to the way and means by which the farm product is moved from the farm to the market. The mechanisms used vary depending on where the market is located in relation to the farm and on the requirements of the market. Commonly used distribution channels include wholesalers, distributors, sales representatives and retailers.

The preferred packaging required by the target market for fresh farm products is an important role in the choice of distribution channel. Meat destined for the local wholesale market is usually packed either into jute or plastic pockets, usually in 500g, 1 kg, 10kg or 5kg units, or into 15kg cartons. Cartons are stacked onto wooden palletised and transported by road or rail. Pockets are either stacked directly into trucks or palletised for the journey to the market.

Informal traders who collect meat directly from the packhouse in their own vehicles may load cattle or meat lose into their vehicles.

Meat for export is packed into specified cartons, with dimensions that are configured for palletisation. Stacked pallets are either loaded onto vehicles or rail trucks, or into shipping containers at the packhouse.

We can now see that there are many different forms and ways in which fresh farm products leave the farm for their journey to the market. Some products are transported following a cold chain.

The farmer or packhouse decide which markets to serve, ensure that the packaging form is aligned with market requirements and is cost-effectively utilised. The farmer or packhouse then decide, alone or in consultation with the market agent or exporting company, how the product will be transported to the market or port terminal.

In the case of exports, decisions also have to be taken about which logistics service provider and shipping company to use. The cost of transporting the product to the markets of choice in good condition depends on the efficiency and capability of the agencies used.

Deciding on which logistics service provider in the distribution channel to use depends on:

• The ability to provide the desired service.
• The reputation of the service.
• The cost of the service.