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Organic Alliance Signs $2.2M Produce Supply Contract

Organic Alliance peppers

Organic Alliance Inc., a California-based global grower and marketer of fresh, organic and Fair Trade fruits and vegetables, has signed an organic produce supply contract—with renewal options—that it expects will generate at least $2.2 million in sales revenue over the next 12 months. This brings to $11.5 million the total value of new supply contracts announced in the past two months, with several more expected to be signed this year.

This contract is yet another example of the company’s investment in growers of top quality produce and with it further deploys Organic Alliance branded labels, bulk and retail packaging. The company has been collaborating with this grower, along with several others, to become Fair Trade certified as the company prepares to launch its Fair Trade produce initiative early in the fourth quarter to the U.S. marketplace.

Separately, Organic Alliance also notes that it is making progress in opening up new customer relationships with U.S. major, regional and specialty grocers, and it is confident it will begin shipping and providing products to those new grocer customer relationships in the fourth quarter.

Parker Booth, Organic Alliance CEO, said, “As our produce volume builds, and we get closer to marketing our own Fair Trade certified produce, we are increasingly well positioned for much higher sales to the largest and most prestigious major, regional and specialty grocers in the U.S.

“We are proud of the growers with whom we invest, and the superior quality of the produce we sell,” he added. “Accordingly, we recently completed a packaging project this summer in which we now source—directly—nearly 100 percent of ‘Organic Alliance’ branded labels, bulk and retail packaging at a competitive unit price to build our brand value.”

The contract announced Thursday is with a Central Mexico-based, family-owned greenhouse grower of fruit and vegetables with more than 10 years of experience growing top quality produce. With the grower’s outstanding produce quality, and reliable year-round supply, the company worked closely to develop and redirect the grower’s production into the U.S. marketplace. All Organic Alliance greenhouse growers utilize advanced agricultural science to grow produce of exceptionally high quality, taste and texture within a carefully controlled environment unaffected by traditional seasonality.

Under the contract terms, the grower will supply the company with a specified weekly, year-round volume of organic colored bell peppers and heirloom tomatoes. Harvesting, packing and shipping of these Organic Alliance branded bulk and retail packages are expected to begin with the start of the October harvest, and will run year round for one year. The name of this grower is not disclosed for competitive reasons, according to Organic Alliance.

Most of the recently announced supply contacts are slated to begin produce delivery in early October and expected to positively impact the company’s revenue starting with the fourth quarter. Similar to the previous supply contracts Organic Alliance has announced in the third quarter, this contract contains renewal provisions that Organic Alliance believes offer strong potential to expand acreage, crop variety and volumes.

Growing, certifying, importing and marketing Fair Trade certified fruits and vegetables is a major component of the company’s business plan and is but one catalyst to drive strong revenue and margin growth, in 2013, in the $1.5 billion U.S. Fair Trade marketplace, according to the company.

 

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