(July 3) Midwestern grower-shippers say the recent relocation of a major retailer’s Chicago-area produce buying office could affect marketing of the Illinois, Michigan, Ohio and Wisconsin vegetable deals.

Safeway Inc., Pleasanton, Calif., transferred its buying operations from Melrose Park, Ill., to the Phoenix area in early June. The office sourced product for the Safeway-owned 188-store Northlake, Ill. -based Dominick’s Finer Foods Inc.

“It does affect it some,” said Scott Michael, vice president of Michael Farms Inc., an Urbana, Ohio, potato, corn, green beans and cabbage grower-shipper.

Michael said he compares the Safeway move to when Kroger Co., Cincinnati, moved its Delaware, Ohio, buying office to Vero Beach, Fla., during the early 1990s.

“We were still able to maintain all of the business with them,” he said. “But it’s wrong to automatically assume such a move would be negative.”

Safeway continues to centralize its procurement process. A spokeswoman for the chain said it is one-third of the way finished, adding that she expects the centralization to be completed by summer 2003.

Retail consultant Ed Odron, president of Produce Marketing Consultants, Stockton, Calif., said Safeway is following the model set by Wal-Mart Stores Inc., Bentonville, Ark.

Odron said the high volumes achieved through centralized buying will help Safeway achieve lower pricingbut continue to access local deals.

“Safeway is smart enough to make sure their divisions are provided with local-type products they may need,” he said. He cited Dominick’s need for Michigan apples and Wisconsin potatoes.

“The centralized buyers in Phoenix will still keep in contact with the growers that the division has been using in the past,” Odron said. “But I don’t think they can lose that neighborhood marketing tool because other competitors will be using that kind of product, which their customers have come to expect.”

The change, however, could bring partnerships and contracts with different large commodity producers, Odron said.

The president of a Michigan celery shipping operation that sells to Safeway said he believes the change will work well.

“Other organizations have done the same thing and have gone to centralized buying,” said Randy Van de Guchte of Superior Sales Inc., Hudsonville, Mich.

“Everyone feels uneasy when it takes place,” he said. “There will be a few winners and losers. Some guys get cut out and some others will pick up business, as you have anytime you have different people doing the buying. We’re looking for it to be a smooth transition.”

A major Ohio grower-shipper who requested anonymity said there hasn’t been enough time to see how the change will affect the region.

“Early indications are not favorable from the people I have talked with,” he said. “They’re saying it’s really tough. They (Safeway) used to get all their orders from the East Coast out of that office. Sometimes the grower-shipper gets lost between the cracks. When they moved to Phoenix, the grower-shipper has to deal with six different category buyers.”

Jim Wiers, president of Wiers Farm Inc., Willard, Ohio, said he, like some other grower-shippers, saw the trend coming.

“When consolidation happens it’s critical for growers that have product available in the summer months to have a wide variety,” he said.“That thought is what has driven us to develop the full line we have today. We can offer a retail buyer the opportunity to call in and buy up to 40-60 different items and load at one location.”

Kroger’s people have continued to visit Michael Farms, Michael said. Consolidation, however, could mean some overlooking of good local product.

“They won’t have any more inclination to go with your product than anyone else’s if they haven’t visited your farm,” he said.

Centralized procurement is prompting Safeway to cut staff nationally. Safeway spokesman Brian Dowling said Dominick’s will eliminate some of its Chicago regional office positions to end duplications after Safeway’s 1998 purchase of the 77-year-old grocer.