Introduction and outsourcing strategy of processed fresh produce

Purpose In recent years, the growing popularity of processed fresh produce has prompted some traditional fresh produce retailers to consider venturing into this market. This paper aims to explore optimal strategies for these traditional retailers as they face the challenges of processed produce introduction and outsourcing. Design/methodology/approach This paper develops game-theoretic models and utilizes the backward induction method to solve for the equilibrium of the game. Findings The findings suggest that introducing processed produce may not necessarily benefit fresh produce re-tailers. The optimal processed produce introduction and outsourcing strategy is determined by the sizes of the base market potential of the processed produce and the processing cost. Furthermore, retailers’ optimal strategy may harm fresh product suppliers while benefiting consumers. Interestingly, each strategy, under certain conditions, might result in a triple-win situation for retailers, suppliers and consumers. Practical implications Our findings provide general insights and guidelines for reality fresh produce retailers facing the challenges of deciding whether and how to launch processed produce. Originality/value The existing literature neglects processed produce as an emerging sales trend. This paper offers a novel perspective on the value of processed produce in a fresh produce supply chain.