Produce vendors grow to meet new realities: more players enter the food retail game

DSN Retailing Today, Oct 11, 2004 by Mike Duff

Given the fracturing of food retailing, where newer concept spin offs from the traditional supermarket model have become increasingly prevalent, produce operations are becoming increasingly targeted. Retailers are focusing on specific price, convenience and value-added elements and are asking vendor help to meet particular circumstances as they target better-educated consumers who want help reaching nutritional goals.

Vendors such as Dole are working to respond as they get ready to unveil new products at next week's Produce Marketing Association convention. "Educating the consumer on nutrition and eating healthy to live longer, more vital fives is a priority with Dole," said Freya Maneki, director of corporate communications at the Dole Food Co.

So is getting consumers product that helps them put the information into action. This year, Dole extended its salad blend line into clamshell packing, introducing 10-ounce Angel Hair Cole Slaw and 9-ounce Spinach. New fresh-cut fruit selections include cantaloupe, watermelon, honeydew melon, melon mix and a fruit mix of cantaloupe, honeydew and grapes, all in 12--and 24-ounce sizes, as well as pineapple rings in a 12-ounce size, pineapple chunks in a 16-ounce and cored and peeled pineapple in a 20-ounce size.

"We have seen positive customer response to these offerings, which come in fully recyclable, clear plastic containers," Maneki said. "Consumers are demanding healthy, convenient foods. The growth of value-added salads is an example of this trend."

In another approach to value-added produce, Dole began marketing an organic extra sweet pineapple.

In organics, one key to growth in the market has been adaptation, as new kinds of retailers have started participating in the business, said Barclay Hope, president of Albert's Organics, a division of United Natural Foods. "The industry grew so quickly in the core business--independent natural food stores--the we had to work to keep a handle on that. Then, as it began to flatten out, natural foods retailers like Wild Oats began to make acquisitions. We were loosing business. With consolidation on the retail end, we had to address players out there who were essentially conventional players."

Packaging programs to meet specific criteria is more important for vendors who are working with a wider variety of retailers, Hope said. Whole Foods Markets, for one, wants organic product that is of the very best quality and takes the amount it can get, filling out produce departments with high-grade conventional products as necessary.

Mass retailers approach things differently. Their standards may not be quite as high, but they demand quantity at the quality level set and have less price flexibility than natural foods specialists. "You still sometimes get product that isn't that good and really expensive," Hope said. "The mass-market guys will say, 'Don't bring me that garbage.'"

The expansion of organic produce has presented the organic foods industry with an almost overwhelming set of demands that it is still struggling to meet. One result has been the growth of larger suppliers, such as United, who are finding ways to cope with the volumes moving today. "It's the state of the industry," Hope said. "We're catching up with demand."