Site Sees Market Ripe for Picking
"The agriculture industry is the last industry to modernize," said Gordon Hunt, executive vice president of eFruit. "The industry, particularly at the grower level, is terrified of getting a lower price than they're already getting." He believes the timing is right, however, for the industry to embrace a Web-based sales approach.
"They've gotten more efficient on the production side on the growing side, and on the processing side. They can only squeeze so much out of an orange," said Hunt. "The only place left to become more efficient is in sales and marketing."
eFruit bills itself as the one-stop marketplace that will help sales and purchasing agents in the fruit industry become more efficient. The site, www.efruitinternational.com, is not an auction site because of industry pricing fears. It provides global weather forecasts, crop estimates, trade issues and other industry news that buyers, sellers, and researchers use to estimate costs and make purchasing decisions.
The site's new Fruit Marketplace section closed its first sale last month - 22 tons of white grapefruit sold by Leroy E. Smith's Sons Inc., Vero Beach, FL-to Nishimoto, a Japanese fruit importer.
Trey Smith, sales director at Leroy E. Smith, said the company typically sells through word-of-mouth, cold calling, faxing, print advertising and other traditional methods. But an advertisement on eFruit's site in December sparked the sale.
While the transaction was relatively small, Smith thinks it foreshadows the future. "It's a great new way of getting customers and broadening our targeting group," he said. "I think it will open doors for us."
In particular, Smith expects eFruit to improve his ability to market internationally. European, Japanese and Taiwanese buyers can now regularly see his advertisements. Smith also said the usually lengthy process of negotiating the terms of an international trade is made easier because of more efficient Internet communication. "It will eliminate a few steps in the trading process," he said.
The site has two trading floors where sellers can choose to market their product to an audience of either juice or freshfruit buyers. Buyers can post a purchasing request in a trading floor. If a trade has been successfully negotiated, eFruit offers a number of Web-based features to manage the packing and shipping of the product.
eFruit has partnered with two shipping companies, enabling buyers and sellers to track the progress of a shipment as it makes its way from port to port.
"We want to help take care of the whole deal from start to finish," said Brandi Hilton, an eFruit spokeswoman.
While eFruit charges a membership fee, its primary revenue comes from transaction fees charged to sellers. Hilton said the fee, which depends on the size of the trade, is lower than the industry's standard broker fee of 4 percent to 6 percent. The company also plans to generate revenue through its logistics partnerships, and would like to offer financing and insurance in the future.
Right now, eFruit has 25 signed subscribers and 50 users testing the service. But as a BTB site, eFruit's goal is not to build a huge audience.
"We're not after eyeballs," Hunt said. "This is an industry that is continually consolidating into smaller buyers and sellers." At its peak, Hunt projects, eFruit will have 500 subscribers.