The year 1999 was definitely an interesting time for the produce industry. The industry has seen a business landscape that has fewer and fewer retail chains, but the ones that remain have nearly doubled in size. Industry participants are also facing technological changes that will affect the way transactions are made. Strides to increase the ease of trading globally have also been made. In the last year of the millennium, the produce industry has undergone monumental changes that will affect the way industry participants will do business in the years to come.

During 1999, grower/shippers witnessed the dawn of supply-side economics. Consolidation ran rampant among large retail chains. A study has shown that the nation's eight largest supermarkets now control 50 percent of U. S. sales. This figure is up from 1975, when the eight largest retailers controlled only 25 percent. One effect of this consolidation has been that retailers, especially larger ones, are demanding more consistent year-round supplies. The number of suppliers forging their own alliances began to rise as well. These supplier alliances took various forms: mergers, joint marketing arrangements, and collective branding, to name a few. Marketing programs grew larger in volume during 1999, spreading to more production areas across the globe. This larger global presence should aid in providing year-round availability. As a result of supply-side consolidation, distributors increased warehouse and processing capacity to keep up with the larger volume. Another result has been an increase in demand for experienced managers to run these larger and sometimes more sophisticated operations.

As 1999 came to an end and the new millennium began, a new era in produce distribution beckoned. Fax machines and telephones, which have been an essential element in connecting buyers and sellers, are now facing competition from the computer. Most companies have resolved any Y2K issues, and their attention has now turned to connecting with customers and suppliers through e-commerce. E-commerce applications are diverse, ranging from business-to-business transactions (like a retailer buying produce from a wholesaler) to business-to-business sales (like HomeGrocer.com selling fresh produce to Internet customers), as well as load-monitoring, which lets produce buyers monitor the progress of products en-route. E-commerce has been used for more than twenty years in the form of electronic data interchange (EDI), but recently, the Internet has added a different twist. Internet-based e-commerce companies allow any retailer to deal with any supplier directly, without the need for specific EDI systems. Though proponents of the various e-commerce options differ on whether Internet-based solutions will supplant traditional EDI, they do agree that business-to-business e-commerce is the future of produce trading.

Easier international trade has long been a goal of many in the produce industry in North America. The North American Free Trade Agreement (NAFTA) has helped propel this dream into a reality. For some time, many in the produce industry have felt that a tri-national dispute-settlement mechanism that could ensure greater trade volume would be necessary to fully develop NAFTA. The year 1999 saw the development of just such a committee. The Dispute Resolution Corporation (DRC) was developed during the course of three meetings, and is intended to act as a private, member-driven entity which will provide efficient and skillful dispute resolution services for the produce industry. The organization opens for business as of February 1, 2000.

Slotting fees, although nothing new to the produce industry, were put in the spotlight in September when the U. S. Senate conducted hearings on retail buying practices. Two supplier witnesses testified before the Senate Small Business Committee with their faces hidden, due to fear of retaliation from large retailers. A retail spokesman defended slotting fees as a way to allocate scarce shelf space and short out the thousands of new products that come onto the market each year. The retail spokesman also claimed that slotting fees allow retailers as well as producers to share the risk of incurring the cost of failed products. A Notre Dame University research and anti-trust lawyer indicated that these fees cannot be legitimately justified, and that they often limit competition and consumer choices, raise prices, and stifle innovation. There were also allegations that the slotting fees are higher than the actual cost of putting the product on the shelves – meaning that these fees are simply a way to increase profit for the retailer. The U. S. Department of Agriculture's Economic Research Service is currently working on a one-million-dollar study of structural changes and trade practices in the produce industry. The purpose of the study is to analyze the impact of slotting fees and other industry practices.

The last year of the twentieth century proved to be an exciting and climactic one. Several new changes took place, and they are sure to change the way the produce industry conducts itself for many years to come. The turning of the calendar to a new millennium has not shut down businesses or the economy; we can now put to rest our concerns about Y2K, and turn our attention to what the future holds.