Mexico Ups Ante In Organic And Fair Trade

Expanding Mexican production in organic and Fair Trade offers increasing options for marketplace.

By Jodean Robbins

Long a successful player in mainstream produce commodities, Mexico looks to bet its expertise to turn evolving categories of organics and Fair Trade into viable commercial options. “Mexican farmers have been very proactive with fair trade and organic," says Raul Millan, executive vice president for Vision Import Group LLC in River Edge, NJ. "They've recognized the importance and opportunity and have really stepped up."

Mexico’s favorable production climate and culture of farming provide a solid foundation for organic and Fair Trade. “Organic production in Mexico is really looking at the way many crops have been grown for years,” explain ns Mayra Velazquez de Leon, president of Organics Unlimited in San Diego, CA. “With some commodities, such as bananas and coconuts, the farming methods are well established.”

Mexico brings sustainable volume to the organic and Fair Trade tables. “Our numbers are up substantially in organic and conventional Fair Trade packs, as well as the entire organic segment overall,” reports Gil Munguia, division manager for Giumarra Nogales in Nogales, AZ. “Organic growth in Mexico has already impacted the marketplace with reasonably priced, high quality products during our window of production.”

“Mexico’s organic supply is important because it gives the consumer the ability to buy organic all year long,” says Joseph Bunting, business manager of produce for United Supermarkets, LLC. in Lubbock, TX, currently operating 51 stores.

Conventional and organic Fair Trade offerings are also an excellent value. “The price differential is nominal as the grower and Giumarra absorb most of the cost for the program,” explains Munguia. “This allows the consumer an opportunity to spend their hard earned food dollars where they are assured it will further benefit those who grew, harvested and packed it. Better yet, at a price that’s comparable to non-FT certified produce. As I look at our organic growth projections for the next few years, the laws of supply and demand will dictate even better values for the consumer.”

Buyers may find ample opportunity as consumers demand more from their food purchases and back it up with purchasing power. “A growing segment of the consumer population is more socially aware,” states Munguia. “Within this group, it is no longer enough to know where one’s food comes from and that it is safe.”

“According to a 2011 Harvard study, the Fair Trade Certified label alone drove sales of Fair Trade products by up to 13 percent in a major grocery chain,” reports Alexandria Coari, senior manager produce and floral for Fair Trade USA in Oakland, CA. “The same study revealed that consumers were willing to pay up to 8 percent more for Fair Trade items. A second study conducted by a national U.S. retailer found that placing signs about Fair Trade throughout the store led to a sales increase of 40 percent.”

Opportunity In Organics

As consumer demand for organic produce continues to grow, Mexico is responding. “We see organic production from Mexico continuing to increase every year as the demand increases from the American consumer,” says Velazquez de Leon. “This past year, our growth was about 20 percent.”

“Growth of organic farming in Mexico is consistent with overall growth of the category,” reports Jim Guido, vice president of east operations for PDG Produce, based in Rio Rico, AZ. “Estimates have organics growing at a rate of 5 to 12 percent. Mexico is estimated to have more than 100,000 organic farmers the greatest number in any country in the world.”

Giumarra is committed to increasing organic production. “The category has shown our highest percentage of growth for several years in my division, due in part to our Organic Manager, Job Villanueva,” states Mungiua. “He has developed the program from its inception, working with our growers, customers, and marketing team to make us an organic leader in Mexico. Another big contributor to our organic and Fair Trade success, Bob Faulkner, has helped increase our distribution with his many years of experience in the organic arena. Our division will see a 35 to 40 percent production increase this season.”

“Mexico is increasing in organics as more suppliers are going after the organic customer,” says Alfonso Cano, produce director for Northgate Gonzalez Markets, a 38-store chain in Anaheim, CA.

Expanding Organic Options

Mexico’s production helps expand the variety of organic products in the marketplace. “The expansion of interest in organic produce means a growing number of commodities being grown in Mexico,” says Maroka Kawamura, produce director at New Leaf Community Markets in Santa Cruz, CA. “We see more variety yearly, as well as better quality, and longer availability for each product.”

Avocados and bananas top the list of organic from Mexico. “Organic avocado production is increasing in Mexico to meet increasing consumer demand in the U.S. and Canada,” says Gary Caloroso, director of marketing for Giumarra Agricom & Giumarra Borquez in Escondido, CA. “More consumers are adopting a lifestyle featuring organic fruits and vegetables, and we see that continuing for the future.”

“Organic bananas from Mexico means U.S. buyers get the freshest bananas,” says Velazquez de Leon. “They arrive in the States within four days of harvest, and because transportation is not as intensive, the carbon footprint of these bananas is the lowest for the American consumer.”

Organic consumers can have confidence in Mexican supply. “The criteria and inspections to certify organic are the same in Mexico as in the U.S.,” says Velazquez de Leon. “The USDA actually does the certifying through organizations such as Organic Certifiers [the Carpinteria, CA-based certification agency provides guidance and information to companies that aim to be certified organic], so consumers can feel confident in the product.”

“Product sold as certified organic in the U.S. must meet all the requirements of USDA’s National Organic Program, whether grown in the U.S. or Mexico,” says PDG’s Guido. “A standardized certification is in place giving the consumer more confidence to buy organic produce domestic or imported.”

Focus On Fair Trade

No longer second-fiddle to organic, Fair Trade produce-farming programs are growing in Mexico. Fair Trade USA’s Coari explains, “Overall, Fair Trade-Certified produce import volumes to the U.S. were up 58 percent in 2012, helping farmers and workers earn more than $2.8 million in community development premiums. Currently, the largest volume of Fair Trade produce comes from Mexico as new growers earn certification, and existing growers begin to offer more Fair Trade-Certified products.”

Mexico offers a diversity of Fair Trade produce items. “There are a wide variety of Fair Trade-Certified produce items from Mexico,” adds Coari. “Some of these include: asparagus, avocado, banana, cucumber, eggplant, grapes, herbs, mangos, melons, peaches, peppers, winter and summer squash, and tomato varieties. Offerings include an array of both conventional and organic Fair Trade items.”

Giumarra recently announced the expansion of its line of Fair Trade Certified fresh produce with the addition of USDA Certified Organic and conventional acorn, butternut, and spaghetti squash as well as developments in asparagus. “Our grower, Pablo Borquez, became the first asparagus grower in the world to be certified by Fair Trade USA,” says Caloroso. “Since its inception, our Fair Trade asparagus program has grown tremendously, and we look forward to the continued growth and success of the program in 2014.”

Vision Import Group handles Fair Trade limes, mangos, pineapples, lemons, cactus pears, and other seasonal items. “Every one of our growers practice Fair Trade with active certifications,” reports Millan.

Organics Unlimited has a program called GROW with its Cavendish bananas, which provides social programs to the communities where bananas are grown. GROW is a fund that was established to improve the lifestyle of the workers in the areas where the company grows bananas. A surcharge of 60 cents per box is added to bananas that carry the GROW label. “This program, started in 2005, has not only provided over half a million dollars in benefits to the region, but it has been extremely popular with U.S. buyers,” says Velazquez de Leon.

Increasing Consumer Interest

Retailers can reach out to an increasingly Fair Trade-interested consumer. “In July, we surveyed several retailers to gauge awareness and potential demand for expanded offerings of Fair Trade Certified fresh produce,” reports Kellee Harris, Western region business manager and Fair Trade USA liaison for The Giumarra Companies. “We are actively promoting produce alongside other Fair Trade Certified goods such as coffee, tea, chocolate, and flowers.”

“Buyers are beginning to ask for social responsibility,” says Jaime Garza, general manager at Bebo Distributing Company Inc. in Phar, Texas. “It’s not a must, but I think it’s headed that way.”

Giumarra’s Munguia adds, “Fair Trade labeling and point-of-sale information/stories about growers and farm workers truly empower the consumer to impact the lives of the very people who are providing them with fresh, wholesome food.”

Supporting information is critical for sell-through. “Educating customers about Fair Trade, where premiums go, and how these funds are used are major factors in sell-through at retail,” says Harris. “Our marketing department can design custom seasonal point-of-purchase materials to fit the needs and space requirements of retailers year-round.”

GROW offers POP materials to provide information to consumers about what the GROW label means to them. “Being aware of the benefits the program is providing to workers is an important purchase decision factor for U.S. organic buying consumers,” says Velazquez de Leon.

Digital outreach is another effective tool. “Social media can help retailers engage with consumers and increase awareness of their Fair Trade products,” advises Giumarra’s Caloroso. “In-store point-of-sale materials will remind consumers of the Fair Trade program when they enter the produce department.”