Let’s say you have your labor in line, your margin has been consistent, and your sales have been steady. Now is a good time to review the horizon and set sails for the growth ahead. A couple of areas to consider:
- expanding your locally or regionally grown produce; and
- expanding your packaged produce offering.
We all know that family farms in America are disappearing at an alarming rate. In the last 40 years, the number of farms in the U.S. has declined by over 1.25 million. We also know that much of the fresh organic produce sold in our stores travels upwards of 2,000 miles from farm to warehouse to market. That’s where buying local and regional organic food comes into play.
By supporting local food producers, the sales revenue remains within the local community, benefiting not only the local farmers but also other businesses, like your co-op, that support these farmers with necessary goods and services. It also means our food travels less distance, which ultimately reduces food miles and can lead to a more balanced local food system. Another perk can be a local economic boost from the creation of more local jobs. Other obvious benefits are that farmers stay on the land, assisting farmland preservation and slowing urban sprawl.
Whenever I write an article about supporting a local producer or building a local program in your store, someone writes me and says, “Oh, that’s fine if you live in California or have local farms nearby. But what if you live in area of the country that has very little agriculture, or an area where it’s mostly conventional corn and soybean farmers who have no intention of changing their ways?” It’s a point well taken—but let’s just say things are changing.
In upstate New York, a new distributor, Angello’s, is providing stores with regionally grown organic produce. In the Midwest, Sustain (http://sustainus.org), one of the country’s leading nonprofit organizations working for a healthy environment, sponsors a project called FamilyFarmed.org, which supports the growth of a regional food system by establishing markets for organic and sustainable family farms in Illinois, Indiana, Iowa, Michigan, Minnesota, and Wisconsin. Through this project, Sustain encourages regional family farmers to grow food to meet the increasing local demand, as well as works with businesses and universities to develop a marketing and distribution infrastructure. This infrastructure enables stores the opportunity to provide fresh, healthy, locally grown food to their community.
One of the partners in this endeavor is Goodness Greenness, a Chicago-based produce distributor that has been supporting the effort since it started in 2002. They distribute the FamilyFarmed.org produce regionally and have set up an overwrap program (where you put two cucumbers in a wrapped tray along with a FamilyFarmed.org label) so that more of this produce can make its way into mainstream markets and keep the program growing. They also provide traditional bulk boxes.
Each eligible box of fresh fruits and vegetables is labeled with the FamilyFarmed.org logo. The label tells where it is grown and the name of the farmer or processor who supplied the product. The FamilyFarmed.org label is also designed to send people to the website to explore a deeper connection with the farmer. The website educates consumers about the benefits of buying local food and provides information about producers, including a picture of the farm family or processor and a description of their products and growing methods.
Goodness Greenness is not stopping at packaging and distributing. According to the owner, Bob Scaman, they are helping to develop written standards and specs on post-harvest handling, quality, size, etc. for the growers so they can better compete in the marketplace. They are also working with the farmers to develop crop plans for 2006 so they can expand beyond tomatoes, melons, peppers, and such. Right now, you can ask for five-pound bales of Yukon, red, and russet potatoes for the holidays.
The other area for potential growth is precut and packaged produce. Do you know that the number-one selling organic produce item is packaged salad mix? The packaged salad category is growing at a rate of 4.4 percent annually, but organic salads are doing even better, growing at 6.8 percent. According to Produce Marketing Association, fresh-cut produce sales nationwide increased from $2.6 billion in 1994 to $8.8 billion in 2003 and are expected to hit $10.5 billion in 2005. In the natural foods supermarkets, according to SPINS (a natural products research company), packaged fresh produce sales totaled $171.9 million in 2004, an amazing 35.4 percent increase over 2003.
Where does that leave you? Do you know if your customers are bulkers or baggers? Pickers or packers? Some folks are like me and prefer to choose each and every item, while others just want to grab and go. If you are concerned about the packaging, consider this: If they buy bulk salad, they would put it in a bag anyway. And if you find that your customers like the convenience and selection the packages provide, let your local salad mix grower know—they may increase their sales by offering pre-bagged local mix.
Packaged salad mix can also help you offer some items you don’t otherwise carry. For instance, if you can’t sell radicchio very well, a mix that includes it can be a good compromise.
As for fruit, the smallest segment of fresh-cut sales is fresh-cut fruit, but it is also presently the fastest growing category. Look at any of your supermarket competition: nearly everyone has a fresh-cut fruit section now. Retailers all have shrink fruit, and a lot of times the best, ripest fruit goes uneaten. Why not make some money as well as provide your customers with a service they may be looking for? While pineapple and melons are the most common items sold, there is plenty of opportunity for other items as well.
If you’re worried about packaging, ask your deli manager about getting some of the corn-based biodegradable containers. If you are tight on space or labor, sit down and work out a deal with the prepared foods department to provide the labor until your produce department can grow into it. It may even be worth having it in the grab and go case. If you start a fresh-cut service and can have it consistently, it will grow your other produce sales while allowing the deli the margin on the cut product.
Even if you only do one item but have it well merchandised, it can pay dividends. If you are planning to expand, you should definitely be looking at both of these as areas as part of your new mix. The market is changing, and your new customers want new things. Are you ready to offer it to them and set your sails for a sea of better service and sales?