(Dec. 3) If you’re into organic fruits and vegetables, you’re not alone.
The Organic Trade Association, Greenfield, Mass., estimates that 73% of supermarkets in the United States now offer organic produce.
The category leaders, however, offer more than just organics. They offer wide-ranging programs that fully meet the needs of their organic customers while fortifying their own bottom line.
But who has the time and manpower to develop a comprehensive program for a product line that accounts for a relatively small amount of department sales, especially at a time when cutbacks and belt-tightening are the order of the day?
The answer may be your organic supplier.
Good organic suppliers are experts who know how and when to buy organic produce, how to deliver it properly and how to merchandise it effectively.
Ideally, says David Weinstein, sales representative for JBJ Distributing Inc., Fullerton, Calif., organic produce should be sourced directly from local growers.
“Consumers — especially organic consumers — have a great deal of loyalty to local growers and value locally grown, seasonal produce very highly,” he says.
But if you don’t happen to have a top-quality organic grower in your back yard, you may have to look elsewhere.
Weinstein suggests that you start with whoever provides your conventional produce. The company may not be able to fill all your organic needs, but it probably can recommend a company or, more likely, a combination of companies, that can.
“The key is to use a mixture of suppliers ranging from local suppliers to wholesalers, distributors and national suppliers to assemble a program that meets (the retailer’s) needs,” he says.
Jason Hollinger, organic produce buyer at Four Seasons Produce, Denver, Pa., says that especially on the East Coast, many organic farms are small and out of the way. In that case, Hollinger says, “A wholesaler ... can provide a real resource.”
Mike Witt, corporate director of produce and floral for the 100-store Cub Foods division of Supervalu Inc., Chanhassen, Minn., wanted to offer his customers a good selection of organic produce.
But, as a discount chain, Cub simply couldn’t afford to hire its own organic specialist to buy and merchandise an organic product line.
Witt found a solution as near as one of his regular suppliers — J&J Distributing in St. Paul, Minn.
The two companies joined forces to develop a vendor-managed organic program.
Under the plan, J&J takes charge of procuring, delivering and merchandising organics for the 25 corporately owned stores in the Minneapolis area and for many of the 20 independent franchise operations.
“They came up with a program that could satisfy all of our needs,” Witt says.
The two even developed a program that includes overhead signs, channel strips and case strips, and organic stickers were created that can be used with the stores’ existing price cards.
J&J goes to suppliers, grower-shippers and certified repack facilities to find just the right product to meet customers’ needs, says Kevin Hannigan, who handles organic buying for the wholesale distributor.
Although the vendor-managed program was developed for Cub Foods, Hannigan says he sees increased interest in organics from many of his customers.
“The retailers that we are dealing with are committing more and more space to (organics),” he says.
The Whole Foods Market in Monterey, Calif., one of the chain’s l04 stores, is fortunate enough to be located in the heart of California’s vegetable basket, and produce manager Oscar Lopez sources most of the store’s organic products from nearby growers.
“As a company, we like to support the local farmers,” Lopez says.
Whole Foods also has national buyers who sometimes buy a farmer’s entire crop. But the company tends not to buy from brokers who, Lopez says, can make money off both growers and retailers just for sitting in an office and making a few phone calls.
Whole Foods likes to form relationships with growers and encourages them to meet the retailer’s criteria by, for example, leaving fruit on the tree to ripen a little longer. And, by buying locally, Lopez can have product that is picked in the morning delivered to his store by 3 p.m. the same day.
Torrey Taralli, director of produce for the 20-store Victory Supermarkets chain in Leominster, Mass., says 8% to 10% of his produce is organic, but the company buys through its regular supplier, C&S Wholesale Produce in Hatfield, Mass.
Since the chain does not have its own warehouse, Taralli says, “We just order it as we need it.”
C&S, with whom Taralli has dealt for three years, provides a full line of quality organic produce at reasonable prices, he says.
However, Roger Francis, produce manager at one of the nine Sun Harvest stores based in San Antonio, says his regular supplier “is not up to par on organics,” offering only a handful of packaged items.
So the store turns to Boulder Fruit Express Inc., Boulder, Colo., for organic broccoli, lettuce, celery, apples, oranges, tomatoes, mangoes and even packaged salads.
Francis receives two deliveries a week and says he finds buying through his supplier cheaper than buying from local growers because the supplier buys in larger quantities and passes on the savings.
Boulder Fruit Express also has experts who offer merchandising suggestions, like cutting melons in half to improve movement when prices are high and offering in-store sampling to demonstrate the flavor of organic produce.
From 5% to 40% of Sun Harvest’s produce is organic.
At Ukrops Supermarkets Inc., Richmond, Va., Lee Arthur, director of produce and floral for the chain’s 30 stores, treats organics like any commodity in the produce department. That means he surveys major players and other sources every week to procure the best product at the best price.
The company uses a broker to shop the organic business on the West Coast.
When Arthur joined Ukrops two years ago, only 1.6% of the chain’s produce was organic. Today that figure approaches 5 percent.
Arthur has developed a methodical ordering process.
Three weeks out, he sends each store a list of available items. Two weeks out, local stores provide a ballpark figure as to how much of each commodity they want for ads or promotions. These quotes are presented to suppliers, who have ample time to fill the chain’s requests.
Stores are divided into A-, B-, and C-list locations with A stores required to carry 35 to 50 organic items, B stores 80% of that and C stores 50% of that.
Once a quarter, Ukrops runs an ad featuring nothing but organics.
“We’ve really had some success with that,” he says. “Our organic sales are very, very profitable.”
Arthur usually marks up organics 15% to 20% more than conventional produce.
TAKE IT SLOW
Weinstein of JBJ says procuring organic produce can be a delicate operation, especially if you are new to the category. It’s important to start slowly, but don’t be afraid to grow as sales and customer awareness increase.
A competent local wholesaler can not only help you select the best product mix for your stores, he says, but he can help you source that product.
“If you’re buying 10, 15 or 20 packages once or twice a week, and you’re located in the Midwest or on the East Coast, it’s really not efficient to try to buy directly from growers in California,” he says. “You’re better off finding a wholesaler in your area who is handling organic produce.”
Hollinger of Four Seasons points out that dealing with a single local grower can have its pitfalls. If that grower has a bad year and can’t offer you quality product or reasonable pricing, you could find yourself in a bind.
The logistics and infrastructure that have been built up for conventional produce haven’t yet trickled down to the organic category, he says. So, a wholesaler with good connections not only can get you the variety of produce you need, it often can get you better prices.
(Dec. 3) If you’re into organic fruits and vegetables, you’re not alone.