The Challenges of Pricing and Contracting in Raw Fruit and Vegetable Processing – Part 1

Part one of a three part series on raw produce contracting and pricing.

The raw fruit and vegetable processing industry is uniquely complex, with pricing and contracting processes influenced by numerous dynamic factors. From crop quality to harvest timing and regional considerations, processors face a daunting task in adapting their systems to meet these ever-changing demands. This post explores the common challenges processors encounter and the pitfalls of relying on traditional ERP systems or in-house solutions. 

For fruit and vegetable processors, the pricing and contracting process is anything but straightforward. With variables such as crop quality, harvest timing, specific growing practices, and even regional factors affecting pricing and payments, processors face unique challenges in adapting their software to cope with frequently changing pricing parameters and contract terms. Many processors rely on traditional ERP systems or custom-built in-house solutions that often fall short, resulting in spreadsheet dependency, delays, high costs, and frequent errors—obstacles to adapting quickly in a competitive market. 

In-House Solutions 

Opting to build an in-house solution may initially seem advantageous, but it carries significant risks over time. These systems often require extensive programming support, even for small contract changes, leading to resource-heavy processes that limit processors’ responsiveness to changing market conditions. There is also a risk of key development resources leaving the company or being assigned to other projects, causing technological stagnation and limiting the ability to adapt to evolving business needs. 

Optimized ERP Systems 

Building within an ERP system can be equally challenging. The costs can be considerable, and the system’s inherent rigidity may restrict flexibility. Additionally, long release cycles often delay essential updates, impacting agility and the ability to respond quickly to market demands. 

For fruit and vegetable processors, relying on in-house or ERP solutions can create costly inefficiencies and limit responsiveness. Recognizing these challenges is the first step toward identifying more flexible and purpose-built solutions to streamline pricing and contracting processes. 

Read Part 2: Key Features of a Flexible Pricing and Contracting Platform

Next Steps:

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