Bryan Silbermann, president and CEO of the Produce Marketing Association (PMA), moderated a breakfast panel during The NGA Show in Las Vegas earlier this week.
Joining him on stage were Allen Milam, owner/president of four-store South Florida grocer, Milam’s Markets; Mike Bove, VP-perishables for Nash Finch Co.; Jan DeLyser, VP of marketing for the California Avocado Commission; and Howard Nager, VP of marketing for Domex Superfresh Growers, the Washington State apple, pear and cherry grower.
Following are excerpts from the discussion.
Silbermann: Imagine that you’re talking to a customer and you want to tell them in an elevator speech why I’m proud of my produce in my store. What are you going to tell them?
Milam: For the last 20 years we’ve operated under a philosophy of what we call POD—and it stands for “point of destination.” Point of destination is giving customers reasons to drive by a competitor and come to my store. We have been able to accomplish that, and the driving force has been produce. I’ll walk in my stores and I’ll look at it and say, “Wow, I can’t believe this is mine.”
Nager: When you look at apples, pears (and) cherries, they account for almost 20 percent of produce department sales. So they’re very significant in terms of their contribution to the produce department. They’re also very significant to the shopping list of consumers. I think what I am most proud about is I travel a lot for my job, all over the world, and sometimes I like to speak to the person next to me and sometimes I just put my earphones on and just kind of tune out the world, but to say that you sell an apple or a pear or a cherry, which is very healthy, very nutritious, which they can serve their children without any hesitation…I’m very proud of the fact that we have a tremendous number of growers who are very dedicated to growing the safest, healthiest, most nutritious, flavorful product that they can. It really generates a smile on the grower’s face when they see that product being consumed by the end consumer.
Silbermann: Take off your industry hat, Howard, and think back 20 years to when you were a shopper in Allen’s stores; what appealed to you about his stores, where the rubber meets the road?
Nager: When I was shopping at Allen’s stores and living in South Florida, it was in the late ’80s, early ’90s, and what I remember most about his stores was the convenience. …It was right at the beginning of cut fruits and vegetables, even on the forefront of that whole value-added time. At the time, the store I would shop in wasn’t the largest of stores but it had everything that I needed. It was that POD, that point of destination for me that had everything I needed.
Silbermann: Mike, a question about freshness and ripeness—what do think this means to an independent retailer?
Bove: When you walk into the store, that’s what you see. I look at it as a window to the store. The produce department is so important to set the stage. You’re setting the freshness for the entire store. The customer, as soon as they walk in, that is the immediate impact that you have, and that translates throughout the rest of the store. If the customer has to come into your store and cull your rack, that impression is going to last throughout the entire store.
The ripeness is a whole other issue. That’s one of the challenges we have out there. We can learn from some of the different ethnic groups that are shopping our stores what’s trendy now. We as grocers and Americans want to have fruit that’s going to last forever, which doesn’t really make a lot of sense. You want to have product out there that’s ready to be consumed, and if you really get into ethnic markets you see that. You say, “I wouldn’t sell that because it would only last a day on my shelf.” But that’s the point, and that’s the trend we’re heading toward…to where we get pre-conditioned fruit. If you think about it, a lot of you in this room carry pre-conditioned stone fruit, and how wonderful the sales have been over the years since that has been available. Now how do we get that into other products out there, that’s ready to be consumed?
Milam: We tend to overuse that word “freshness” in our business, especially in the produce department. It can be a perception; perception is reality. And it’s not just important that the product is shipped fresh from the grower to the supplier and then to the retailer, but it’s also important from the retailer to the consumer. And it doesn’t stop there, because it can look fresh, look good, but the consumer takes it home, puts it in their refrigerator and in two days it’s already past its shelf life and turns bad—the whole freshness (notion) is shot. All those things have to happen but the final perception is what that consumer gets from the product. A lot of that responsibility falls on the retailer to hold everybody else accountable in the thing.
Silbermann: Jan, I know you folks have done so much work on avocadoes. Tell us the avocado story on ripeness there.
DeLyser: With avocadoes, you can buy them at all stages of ripeness, but I think one of the things that helped propel avocadoes from specialty fruit category to superstar is the ripe program. It allows consumers to be able to purchase an item that was ripe and ready to eat that day. A dedicated ripe program allows a consumer to come to your store every day, planned or unplanned, and be able to take home an item they can eat that night. It’s been incredible, and on the freshness subject, I would just add that bottom line, all of our responsibilities, no matter where we are in the supply chain, is providing the consumer with an enjoyable eating experience, and that’s what’s going to help continue to grow the fresh sales—that experience. And I think less than fresh is not a good experience for the consumer.
Nager: When you look at freshness, when you look at ripeness, produce is purchased with the senses. It has to look good, it has to smell good. And, of course, taste good. So when you look at freshness, we’re talking about a green crown on a pineapple or a green stem on a cherry or that calyx on a strawberry. The glistening of the water on leafy items on the rack. That’s freshness.
But when you look at ripeness, that’s the aroma, that’s the taste. As Jan (DeLyser) mentioned about the ripe avocado program, the pear industry also has done something similar (with) Anjou pears, which unlike a Bartlett which changes color and everybody can see when that ripens, an Anjou pear will not change colors so ripeness is difficult to determine. By pre-conditioning and pre-ripening that product, retailers have seen sales increases of up to 20 percent when they set out a better tasting piece of fruit. As Jan said, it’s that ultimate taste experience that the customer brings it home. If they enjoy it, that’s what’s going to drive them back to the store for more.
Silbermann: How about organics and locals? Allen, you’re the one who’s on the front line and closest to the consumers here. Can you tell us in your market area what have you seen in terms of consumer demand for organics and local? Has there been a trade-off in the last few years, a shift in the demand?
Milam: There’s no question, that’s been a tough market, I think, for any retailer. Supply and demand…you bring it in and lot of customers don’t know what it is, aren’t ready for it, so you throw it away and don’t order it next time. Then the customer comes in and does want it and it’s not there. It’s been hard to build that trade.
Over the last couple of years, especially in our area where our stores are, there is no question that it’s grown. We started with a couple of feet, four feet, six feet, eight feet. And now it’s a big part of our business. And I have a lot of customers who want just locally grown.
Silbermann: Can you give us a couple of examples of products that have grown over the past couple of years?
Milam: Locally? Green beans, tomatoes, squashes. A lot of that comes out of that Homestead (Fla.) area for us.
Silbermann: Do your customers ask for specific farmers’ products? Are they coming to you and saying “I know Farmer Bob down the road”?
Milam: Not too much. They just want to see that this is locally grown.
Silbermann: What do you do in store in terms of communicating information about that farmer to your customers? Do you have photos and so forth?
Milam: That’s a good thought, I need to do that…but we use in-store signage and that’s a big thing when you talk about service. Your people have to know what they’re selling; that how you’re going to sell your products. So our people aren’t just out there stocking, they’re out there selling.
Silbermann: Great point. Mike, you’ve seen this so much, I’m sure, this whole issue about not just organics and local but the question about training people in stores to know more about the products. Talk to us about that.
Bove: That’s always the challenge.
There are two things. It’s hard for a large distribution center to really participate in local product. We do what we can, and we encourage retailers to buy local because there are things they can buy in a smaller lot and they can actually focus on the farmers in their particular area. I do encourage putting signs up letting people know where this product came from, so we do have tags we offer.
The other thing is we have 79 corporate retail stores, so that’s actually a test kitchen for me to try product, put new programs out there.
Organic, in the Midwest, died down a little bit but it’s starting to come back. What we’re finding successful is integrating organic within traditional product. We’ve had triple-digit growth in our organic salad program right now. And we’re looking at opportunities where we can increase organics where there’s duplication of products but the consumer doesn’t really understand the duplication of products. Our herb program, for instance, is an organic program because that’s an opportunity to get into the organic without compromising shrink or causing shrink out there in the store.
Local can pretty much be described any way you want to describe it. It can be trade area; my trade area is 16 states so I don’t really call that local. But there’s a trade area around each distribution center; we look at about a 300-mile radius between each distribution center. That’s what we describe as local. I would encourage everyone if you can buy local through the distribution channel, that’s great; if you have to contract with local farmers or growers, I really encourage that. Let the consumer know where the product came from because there’s that ownership the consumer has, that relationship with that product, because they have the ownership of the locale.
Silbermann: Howard, how is it impacting the large-scale operations like yours?
Nager: Organic food is a $12 billion-plus industry, and organic fruits and vegetables represent 40 percent of all organic food. That’s incredible; 40 percent of all organic sales are fruits and vegetables. We are a full-line organic producer/grower; everything we sell conventionally, we also sell organically. It represents, on average, about 5 percent of the produce department sales, so you can gauge that as a benchmark. If you’re doing more than that, you’ve got a good program, you’re doing very well. I’ve seen retailers as high as 15, 20, 25 percent of their sales. We could spend all day just talking about organics. But it still continues to be a growing part of our industry, a growing part in our categories, represents probably about 6 to 8 percent of everything that we grow, and it will continue to be an item that we continue to drive and continue to sell to the end consumer.
Silbermann: On the local side, Howard; you folks are based in the Northwest of the United States; do you see the demand for local changing the demand for products that you folks grow?
Nager: This year was a very good example, given that with apples from Washington we certainly compete globally with the apples grown many other places, but here in the U.S., the Michigan apple crop was short due to the weather; the New York/East Coast apple crop was short because of weather. There were times when Washington apples became the new local, so as an industry, we all look to support and continue to drive sales as an industry, but we were very fortunate this year to be able to have a record crop to be able to help out areas that were hit by the bad weather.
Milam: The comment Mike made about being local—it’s one of the strengths the independent retailer has, and I encourage anyone in here who is not doing so to follow that. As an independent, I can buy from local suppliers. I can buy high-end quality merchandise that’s available that a chain store cannot buy because there’s not enough supply for it. I think that’s a critical part of it; it just opens up opportunities nowadays that I can look into that chain stores can’t.
Silbermann: It would seem to me, especially for the IGA folks, it’s “Hometown Proud,” right? That’s what local is all about; a perfect synergy right there for any independent retailer to be able to say, “I’m part of the hometown community and I’m supporting hometown growers.”
Jan, let me give you a chance to talk about the local/organic piece.
DeLyser: We initiated a new campaign, a California grower campaign, and we started it in 2007. It was developed based on consumer research indicating that consumers wanted to know the who and the how of the products they were buying and eating. Organizations like mine and other promotional commodity boards that are out there can be a great resource for you in providing materials that help you tell the story of the products that you’re selling.
I think locale has been a big part of our message because if you think about avocadoes, there are some grown in Florida, but not necessarily the Hass variety, which is about 90 percent of the avocadoes consumed in the United States. There are like 80 million Hass avocado trees around the world; it’s the most commonly produced variety around the world, but it’s a native of California, so that’s a story we like to tell. But the locale part of it, if you could put the face of the grower with the product, it adds to the connection with the consumer, and it’s a great way to sell your products in your store, so I just encourage you to reach out to groups like ours and tap into the materials we have available for you.
Bove: I think that’s so important, what Jan just said. If you can really let the consumer know where the product came from, that’s huge. It really doesn’t make a difference where it comes from in the world, but letting that consumer know where that product came from opens the eyes of the consumer. People expect to see a tomato 52 weeks out of the year, but letting that consumer know where that tomato came from, understanding the locale of the product is so important. And then drawing them close to the farmers, even if the farmer is in California and you’re in New York. Letting that customer know about that farmer, who this collection of farmers is, gains you that support and understanding of the business.
Silbermann: I want to shift gears now towards driving tastes, and I want to come back to Jan for a minute because I know you folks do a lot of work on the culinary side and also with the mommy bloggers… Can you tell us a little bit about the experience the California avocado industry is having using people who are experts with new media to reach consumers and drive consumption?
DeLyser: It’s where we all need to be and we all need to be there yesterday because it’s absolutely incredible the network, the web, that’s out there of people who are engaged in talking about food and the food they eat. If you think about Instagram or Pinterest and the photography that goes on…Think about it—you go to a restaurant and if you go to a restaurant not so much with people of my generation but a little bit younger, everybody’s taking pictures of their food and posting what they’re eating. It doesn’t matter where you are; it could be at home or wherever. But I think the value of engaging with bloggers, whether it’s mommy bloggers or food bloggers or whoever the blogger is and their followers are, they have the respect of their audience, so if you can have them carrying your message further, that just integrates into that web and gets out there. It’s unbelievable…we started on Facebook and were a little bit slow to get into it actually, probably about four years ago. We’re at 150,000 “friends” and the Twitter followers, they carry your message that much further.
Here’s an example; we’re in a grove, we take a picture of an avocado or two on the three, and say, “hey, we’re out in the groves, the crop’s coming along very nicely this year.” And we’ll get like 5,000 comments in no time: “Can’t wait to see the fruit in the stores,” “Can’t wait to eat them,” “Oh, I love avocadoes in my soup”… They just carry it forward; they’re an excellent resource and promotional tool to reach additional consumers.
Silbermann: One East Coast retailer will have photos taken of a shipload of fruit coming from Chile, for example, and then send the information on that by email to their loyalty card shoppers in a particular market and say, “This grower’s fruit from Chile is now on the water and will be in our store in X town in New Jersey in 12 days’ time.” They build the demand in advance. Those are the kinds of things that are happening now to build demand.
Allen, what are you doing with your consumers to engage in their lives? Something you folks are playing with?
Milam: Like Jan, we are kind of new to it. IGA launched a program a while back with Webstop trying to get a professional-looking website for independent retailers…. With that, we’re able to send out communications to our customer base, and as I understand it, our stores have done pretty good with that. But listening to Jan, those are some things we haven’t even tried…that’s why I come to things like this, to get ideas! So when I go back I’ll be energized. We’re going to start a campaign to get those messages out. Because I agree; the more you talk with your consumers, the more your consumer knows you, the better chance I have of that consumer coming back to my store.
Silbermann: Howard, as a marketing professional all your life, what does this say about the way in which we engage consumers in food marketing?
Nager: It’s changed drastically. When you look at Facebook and you look at YouTube; we do a tremendous amount of YouTube videos. These videos are no longer just professionally done; with a smartphone you can go out into the field, you can take a video of a grower and let them speak about how dedicated, how passionate they are. You can post it on YouTube and the customer can go to the store and scan a QR code with that smartphone, and right there in the store they can see that video of that grower who grew this product. That’s really opening the world of food marketing, when you look at these types of things and communicating with consumers, whether it be the mommy bloggers as Jim mentioned. Health influencers are a tremendous opportunity for getting the word out. The dietitian in your store also a tremendous opportunity.
…I was speaking to a person who’s calling herself Produce Mom, this is with Indianapolis Fruit in Indianapolis, and she’s developing quite a following in that area where they do business. She’s a mom with two small children. She blogs about what she’s cooking for dinner. She works, so she doesn’t have a lot of time, so how does she manage that? So everybody that is like her, it’s very easy to follow what it is that she’s doing, the suggestions that she makes. This is not very difficult. I would also consider myself an information immigrant, but it’s becoming a lot easier to manage and market to consumers in this way.
DeLyser: I was just going to add that we just came off an event that everyone is aware of, called the Super Bowl. We have a great example of the ability to partner with an independent grocer—Mollie Stone’s up in the Bay Area. San Francisco’s in the Super Bowl, so they had high interest in promoting avocadoes….we were able to geo-target to our Facebook fans in the Bay Area to tell them that California avocadoes were available in their stores. It was phenomenally successful, so I would just encourage, again, that added level of connectivity. Organizations like the commissions and the commodity boards have websites….we have over 1,000 recipes, so it’s a great resource to tap into.
Bove: I don’t want anyone to underestimate Pinterest; Jan spoke about Pinterest. I will give you a true story.
Back in September, our center store guy came to me and said, “Mike, are you doing something in the bakery with pumpkin?” I said, “Why?” He said, “We sold out of our pumpkin in all the stores and every warehouse.” I said, well, that’s weird…not sure where that’s coming from. I went home that night and my wife made fresh pumpkin bread. I said, what’s with the pumpkin bread? She said, “Oh, I got the recipe off Pinterest. There’s like 50 or 60 recipes on Pinterest that have pumpkin. Just came out this week.”
That’s how in tune the consumer is today. It started with the Food (Network), and it opened up the eyes for everybody, for everybody not to be afraid of cooking and experimenting. That was the biggest trend that came out of the Food (Network).
But now with Pinterest and Instagram…all my kids are in their 20s, and every time they go out to dinner somewhere and they see something exciting they take a picture of that and share it. That really spurs people to go home and try to duplicate what they had at the restaurant. Years ago we had to wait for that restaurant trend—here’s a new plate—it would take six months for that to become a trend in the grocery store. Now it happens in an instant and you have to be ready for that, you have to be in tune to it.
Silbermann: Michael, I want to stay with you because I know from your background—you’ve spent time with H-E-B, certainly one of the best marketers to multi-ethnic community—which ethnic influences do you see in the rise in produce right now in terms of demand? What cuisine do you see up and coming?
Bove: In our marketplace, it really is Hispanic trade that’s moving throughout the North- and Midwest, and that continues to grow. But there are other influences we have now because it really is a global marketplace. In the northwest part of North Dakota, that’s oil fracking up there, and there are people from all over the world now that are up there, and they’re looking for foods that would fill their senses. My wife is a transplant, so she’s looking for products that are familiar to her from Louisiana in Minnesota, so we’re seeing an influence throughout all our marketing area.
Silbermann: When we talk about a multi-ethnic society, I don’t think about South Florida. But tell us what’s happening in your melting pot?
Milam: No question, it’s changed since 1984. All our stores are predominantly Hispanic. But even so, each store is a little bit different, and we have to cater each store to the clientele that’s there. The store I have in Sunny Isles Beach, the clientele has totally changed three times since I bought it in 2000. What started predominantly as a Northeastern/retired Jewish couple went to South American for several years, and today it’s Eastern European…
Silbermann: Howard, we have a question here for you (from an audience email): “My understanding is that there is a shortage of laborers to pick fruit. Is this true and do you see it becoming a long-term problem. Will retailers ultimately have a difficult time getting the quantity of products they need? What’s the situation with farm labor?”
Nager: That’s a big question. Speaking for us (at Domex), there has been a shortage at times. It’s always difficult to get good labor. One of the benefits that we have is trying to keep it continuous, where we’ll have our workers that are harvesting apples will go right into cherry season and right back into the next apple season. So you’re able to employ them and keep them busy year-round.
I think where it’s difficult in our business is just the string, sometimes, of a couple of weeks of bad weather and a crop has been delayed for three weeks or four weeks. Much of this labor is very mobile and they can’t sit around and wait those four weeks, so they get in their car and they drive some other place looking for work.
I think right now the produce industry is doing the best it can to manage that labor process. I think right now we would not expect it to affect the retailer, and we do not expect it to affect the consumer, and we’ll continue to work with the many different programs that are available to us to get that labor to make sure that supply is there, it’s consistent and it’s available.
DeLyser: I think farm labor is on the minds of everyone in agriculture, and I think there’s a lot of effort going towards immigration reform, and the industry is certainly hopeful that there will be some success in that regard. With avocadoes what we’ve seen in California is growers…avocadoes are a fruit that can hang on the tree, they don’t necessarily have to be picked at a certain time, so we’re seeing growers who used to be more prone to wait longer in the season to pick, they’re going ahead and harvesting earlier so they can spread that labor out throughout the year. We went from being the only source of avocadoes other than some Floridian avocadoes until about 25 or 30 years ago and then we compacted our season into say that April through September time frame, and now you’re seeing it broaden back out. That cultural practice has a positive influence on the setting of the next year’s crop. It’s complicated, but the bloom for the following year comes on in March, and if you can get some of that larger fruit off the tree and into the marketplace you actually set a better crop the following year.
As Howard said, we don’t really see it impacting supply; it’s just something that we’re hoping we can see some long-term way to solve it and have it not be a problem.
Silbermann: Here’s an interesting question: “Why don’t we see more tasting and demos in the produce department?”
Bove: That’s key. First, make sure everyone has a produce manager in the department. One of the things we did that was very successful with Central Market and it is still to this day, is everyone carries a knife on the floor. When they see a customer looking at something, they immediately ask that customer if they would like to taste that product, and they will cut and sample the product right there.
You do see demos out there, but with demos they cut up fruit and put it on a tray, leave it and walk away. That’s just terrible. You have to monitor the product when it’s out there. But cutting that product right in front of that consumer and letting them taste the product, educate them about the product—when is it ripe, how to cut the product…We’re just getting into mangoes in the Upper Midwest, and teaching the consumer how to peel a mango and how to slice a mango—that’s something we took for granted in Texas and Louisiana, but up north, it’s a new fruit.
Silbermann: Howard, this question of demos—you’ve approached this from all kinds of different products and perspectives in the past. What can you share?
Nager: Demos are effective, I don’t think anybody would argue with that. There’s nothing better than to see that theater in the produce department and smell the aroma. I have shopped at a number of the club stores, and they do quite an energetic demo. You can walk around that entire club and have an entire dinner…but I think one of the issues is the education. It’s getting that produce clerk who sometimes is high school age, has a lot going on, and educating him about the many different products. It’s getting produce personnel out on the sales floor and not in the back room. It’s getting them focused on engaging with the customer. These are all things that a demo will provide. Typically for anywhere between $150 to maybe $200 for a four-hour demo, it can really move and create a tremendous amount of theater.
Silbermann: Allen, what about in your stores? Is this something you folks do?
Milam: There’s no question the importance of it. Doing demos creates excitement, but as a retailer—don’t throw anything at me—I live in another world. You can’t expect produce clerks to walk around with a knife and say, “here, let me cut you off a slice of an apple.” It hasn’t been processed, hasn’t been cleaned. To set up a demo booth, a retailer views that as an added expense. Again, not thinking of the benefit that’s going to come from it, but just looks at it as an added expense. It is very easy to do this in the deli, for instance. It’s controlled, it’s there; he’s just always handing out samples. In produce it is a lot harder. Yes, we do it, but you have to get past that mindset of “well, I’m paying somebody 10 bucks an hour to stand here and hand out samples.” No, if that’s all they’re doing, that’s wasted money, but if they’re out there selling the product like you’re talking about, educating the consumer, you can sell a lot more product.
Bove: That is the challenge, and that is the economy we face in every one of our departments of the store. Again, I have to look at this as a retailer because we have retail stores. So I understand that challenge. But I think the stores that overcome that—the Whole Foods of the world where you can walk up….I had a produce director at H-E-B that used to yell at me all the time because I would just pick up fruit and eat it and he would say, “you haven’t washed it yet,” and I would say, “Well, that’s why God gave me a tongue.”
But there’s just something about that experience, that one-on-one experience with someone sampling product. If you can do it, that’s great. I understand the drawbacks on that. But it’s taking the time and when you’re going to have the best effect is when I would do it.
Silbermann: Here’s a question for the panel; several people asked questions around the same subject—what challenges do you see trying to provide locally grown produce to a store and still maintain the food safety component, assuring that food is safe coming from a local farmer?
Bove: That’s a big challenge, and I actually have a meeting right after this to have that discussion. If you look at the local farmer, they don’t have the processes in place that you would at a larger farm to protect the food. And that’s always a concern of all retailers. We haven’t cracked the code on that yet, but that is a focus and it’s something we’ll be working on.
Milam: We do require that anybody we buy from has passed a local/state (certification) and they have the certificates, insurance that goes along with it. We don’t just buy from any street vendor or somebody that walks in the door. We do our due diligence, try to minimize that risk and make sure it’s someone who is following the state regulations.
Silbermann: Certainly the whole issue of the exemption of small farmers from the food safety modernization act is something we at PMA spoke strongly against. I think it’s bad policy, I think it’s bad for consumers to have people exempt from that. However, one of the things PMA is doing is in partnership with some of our members, including foodservice distributor Sysco and retailers like Schnucks, Wegmans, Raley’s…we are holding local grower training sessions around the country. We just did one last week in Knoxville, Tenn., where they’ll bring in all of their small growers. We had 75 there in Knoxville last week, and Dr. Bob Whitaker is my chief science officer and he will actually walk them through and put together a food safety program for their operations. Critically important. If anyone is interested in that, especially if you’re on the wholesale side, please talk to me.
Question from audience for growers: With the technology and the platforms and so on, do you see or are you now involved in selling direct to the consumer?
Nager: We have not started that process; the scale that we grow at, we’ve not elected to go that route.
DeLyser: We’ve got 5,000 growers in California of avocadoes alone on about 60,000 acres, and there is a handful of them who have set up consumer-direct programs. They’re basically doing it online, and they’re very active in social media, engaging that way, and that’s how they’re building their following.
What they’re selling for the most part is less what a consumer might buy at the local grocery store and more the different varieties that aren’t commercially available, so that’s a way to get some of the old standbys—the Fuertes, the Reeds, the Pinkertons and that kind of thing—into the system. There are consumers who have one of those as their favorite variety of avocadoes, so it works well.
Silbermann: Let me make some observations about that. Gift boxes of citrus, for example, have typically been mail orders, and that has certainly moved online. Value-added companies like Shari’s Berries do the very high-end product. You see that’s growing. Harry & David, of course, is still around and so forth. But I do believe in the next three to five years you’re going to see far more of that. You are also seeing a lot of connections with community supported agriculture (CSAs) that are growing up all over the place, where you essentially become a subscriber and get a weekly box of whatever it is from a local farmer.
…When I look at some of the CSA trends, they are definitely going direct and using social media to reach consumers.
Question from Geoff Welch, Shelby Publishing Co.: More for the retailer—when you’re considering a single store, a multi-unit independent or a co-op independent—who actually is making the decisions on the produce you buy and when you buy it? Is it the produce manager, the store manager, the cooperative people, or a consensus of everyone?
Bove: When you’re dealing with independents, local store owners and local store groups, they may have some certain needs that they have for their particular stores. When you look at independents, single stores, maybe two stores, they really depend on the infrastructure that we have built within the distribution model to help them. We have buyers, directors, that help select the product for the store. They rely on us for that.
Milam: In our particular case, I give the direction—this is what we want to try to achieve. Then I have people that make those decisions. This is where the relationship comes between the supplier and the retailer. Because the supplier is not necessarily going to be able to carry everything that I want in my four stores because the other 400 stores they service don’t require it. The supplier is wanting me to give him all my business, but it just doesn’t work that way. There are things that we need, there’s a higher standard of quality, more variety of product that I need to present to my customers. But I think it’s important that first we go to our suppliers and say, “This is what we want, can you help us?” Many times, that’s all it is. It’s no different than a customer coming to my store and saying hey, can you get this? Let me look into it, and then we find it. Just because a guy’s a produce buyer doesn’t mean he knows everything about produce or that he knows everything the customers are going to want. Time and time again, because we’ve asked, they’ve brought something in and everybody’s selling it. But it takes a working relationship and a trust factor. There’s a certain lack of trust within our industry. These guys don’t always trust these guys; we never trust these guys (laughter). But the only way we’re going to be successful at this is together.
Silbermann: Howard, as a guy who spent the early part of his career doing so much training at the retail level—what needs to be done to create a greater level of trust across the supply chain, in your opinion?
Nager: Well, communication is key. I think it’s also the people you’re doing business with, that you’re doing business with people that are sustainable, that can provide you the product, that provide you the service, that have the experience—all those things go into building trust in that relationship, which is probably the key factor.
