In US, Grapes are usually way more expensive than the Raisins.
While in India/China, Raisins are usually way more expensive than the Raisins.
While in India/China, Raisins are usually way more expensive than the Raisins.
Why Grapes are costlier than Raisins in US?
1.
Fresh foods have the highest markups; anything up to 75%; in a grocery store, because there is a high level of spoilage in fresh fruits/groceries - And, the grocery-shop-owner wants to keep only the best+fresh fruits to keep their overall image.
2.
Grapes need to be fat, juicy, appealing. While the grapes that would be used for raisins need not look fat, juicy, uniform, appealing, etc. To keep grapes fresh, the grocery-shop-owner has to do cautious-picking & extra-care-storage - Also, farmers go to great extent in growing juicier grapes with the use of hormones - All this adds to the cost. While when it comes to raisins, nothing such is needed.
3.
Grape is a seasonal crop and can be stored only for the season and requires cold storage facilities for the same - This leads to a highly uneven supply and high storage costs to avoid dumping in the market. While the raisins can be stored all year around with comparatively lesser expenses.
4.
Among all the fruits, grapes are often consumed by people with less price sensitivity - mostly upper middle class & rich class. This allows for having a high markup.
Why Raisins are costlier than Grapes in India, China, & other Developing-countries?
1.
In India the grocers don't care much about keeping the grade-A-fruit.
2.
The purchasers of fresh fruits are highly price sensitive (mostly poor class & middle class), while the purchasers of raisins are not price sensitive (mostly upper classes).
What is Markup in Pricing?
If a product's total Unit Cost =
$100
Sales price with a 25% markup =
$125
Gross Profit Margin = Sales Price - Unit Cost =
$125 - $100 = $25
%Markup = Gross Profit Margin / Unit Cost =
($25 / $100) * 100 = 25%
Sales Price = (Unit Cost * %Markup) + Cost =
($100 * 25%) + $100 = $125
1.
Fresh foods have the highest markups; anything up to 75%; in a grocery store, because there is a high level of spoilage in fresh fruits/groceries - And, the grocery-shop-owner wants to keep only the best+fresh fruits to keep their overall image.
2.
Grapes need to be fat, juicy, appealing. While the grapes that would be used for raisins need not look fat, juicy, uniform, appealing, etc. To keep grapes fresh, the grocery-shop-owner has to do cautious-picking & extra-care-storage - Also, farmers go to great extent in growing juicier grapes with the use of hormones - All this adds to the cost. While when it comes to raisins, nothing such is needed.
3.
Grape is a seasonal crop and can be stored only for the season and requires cold storage facilities for the same - This leads to a highly uneven supply and high storage costs to avoid dumping in the market. While the raisins can be stored all year around with comparatively lesser expenses.
4.
Among all the fruits, grapes are often consumed by people with less price sensitivity - mostly upper middle class & rich class. This allows for having a high markup.
Why Raisins are costlier than Grapes in India, China, & other Developing-countries?
1.
In India the grocers don't care much about keeping the grade-A-fruit.
2.
The purchasers of fresh fruits are highly price sensitive (mostly poor class & middle class), while the purchasers of raisins are not price sensitive (mostly upper classes).
If a product's total Unit Cost =
$100
Sales price with a 25% markup =
$125
Gross Profit Margin = Sales Price - Unit Cost =
$125 - $100 = $25
%Markup = Gross Profit Margin / Unit Cost =
($25 / $100) * 100 = 25%
Sales Price = (Unit Cost * %Markup) + Cost =
($100 * 25%) + $100 = $125
Source:
aol.com/article/2011/02/18/biggest-grocery-store-markups/19838710
npr.org/sections/thesalt/2013/03/06/173617381/we-like-em-big-and-juicy-how-our-table-grapes-got-so-fat
sandiegoreader.com/news/2012/aug/22/straight-cost-grapes-raisins
ers.usda.gov/media/320335/aer825_1_.pdf
ers.usda.gov/media/320335/aer825_1_.pdf
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