Caring For Organics At Retail

Moxxy MarketingPhoto Courtesy of Moxxy Marketing

TLC throughout the supply chain ensures quality for consumers.

Earthbound FarmsOrganic produce sales continue to grow year after year. According to the Organic Trade Association, dollar sales of organic produce are up 5 percent in 2016, and more than 80 percent of families purchase organic produce at least some of the time. Retailers play a vital role in ensuring organic produce is at its best and satisfying for the shopper.

Care In The Field‭‬

Retailers depend on growers and suppliers to uphold quality at the beginning of the supply chain. In theory, organic produce should have similar characteristics and shelf life to conventionally grown produce, notes Terry Feinberg, principal, Moxxy Marketing, a Salinas, CA-based marketing firm for several organic brands. “Maintaining the cold chain is a critical factor in all produce to increase shelf-life and reduce shrink,” he says.

However, field conditions that are out of the retailer’s control can shorten shelf life. “Some organic pesticides are not as effective as conventional,” says Matthew Caito, executive vice president and chief accounting officer, Caito Foods, Indianapolis. “Additionally, smaller organic farms and suppliers may have fewer resources, leading to longer distribution and cooling cycles for their products and therefore shorter shelf life.”

Cold Chain Concerns

Cold chain procedures along the supply chain must consider both temperature control and avoidance of contamination by conventional items. The biggest culprit is melting ice, which can drip or seep from a conventional carton onto an organic one if strict barriers are not maintained, explains Caito.

Retailers should receive produce on a dock or unloading room at 33 to 38 degrees and check temperatures on arrival to determine whether the load was exposed to higher temperatures in transit. “Probe the product with a calibrated thermometer in at least three different locations on the pallet,” advises Samantha Cabaluna, managing director, brand communications, Earthbound Farm, San Juan Bautista, CA. High temperatures reduce quality and shelf life.

Jonathan Steffy, director, sales and retail services, Four Seasons Produce, Ephrata, PA, notes, “Ice will melt when boxes are held at 33 or 34 degrees Fahrenheit in the warehouse, 38 degrees in a tractor-trailer, or 40 degrees in a store’s backroom. To avoid contamination, organic items can be stacked on top of but not underneath conventional.”

Packaging Advantages

Josie's Organics“Pre-packaged organics benefit the wholesaler, retailer, and consumer,” says Caito. “Products arrive at the retailer with the correct barcode, country of origin, and identification. This makes it easier for retailers to separate organics from conventional and lessens front-end shrink from ringing organic as conventional.”

Packaging also protects quality, freshness, and food safety. Earthbound Farms reminds retailers to adjust rock “pushers” to a tension that holds bags or clamshells without damaging them.

Strategies On The Shelf

The National Organic Program (NOP) requires clear separation of organic from conventional products at retail. “They cannot have skin-to-skin contact,” says Steffy. “For example, bulk organic Gala apples sharing a display with their conventional counterparts must be separated by a physical divider, but bags or clamshells of Galas can touch other packages.”

Temperature control continues to be crucial. Cabaluna advises retailers to regularly monitor refrigerators and cold storage units to maintain recommended temperatures.

Stocking For The Season

Suppliers help retailers boost organic sales by matching supply and grower opportunities with consumer demand. “In late summer, when the organic stone fruit season is coming to an end, we trim our offerings and transition retailers to a curated organic apple selection,” says Steffy of Four Seasons. “We help create seasonal excitement by suggesting price, setting up displays, helping write ad circulars, and educating both merchandisers and sales reps.”

“Seasonality overlaps with local,” says Caito. “Retailers can appeal to shoppers with local or even hyperlocal. Local shipping also can mean less wear and tear on products.”

New Kids In The Case

Organic produce is growing in volume and variety, with an increased supply of both commodities and specialty items. Steffy notes many conventional shippers of commodities are adding organic alternatives. “Smaller boutique organic farms have a passion for heirlooms — tomatoes, melons, peppers,” says Steffy. “The season for organic grapes now starts earlier and ends later. Organic hydroponics and greenhouse items are growing. And demand from large retailers such as Costco and Kroger stimulates growth in many organic items.”

“In late summer, when the organic stone fruit season is coming to an end, we trim our offerings and transition retailers to a curated organic apple selection.”

— Jonathan Steffy, Four Seasons Produce

Retailers can expect greater variety as growers respond to demand by planting more organic acres. “There can, however, be a lag in supply as it takes three years for a field that has been planted conventionally to be certified for organic crops,” says Moxxy’s Feinberg.

Value-added organics continue to grow. Caito’s FreshLine/Garden Highway fresh-cut processing operation creates its increasingly popular Garden Highway line. Earthbound Farms recently introduced three new chef-inspired chopped kits. “I think these products will surprise and delight retailers and shoppers with quality and flavor,” says Cabaluna.

Socializing With Shoppers

Social media is a game-changer. Its ability to connect with shoppers in real time frees retailers from the traditional two- or three-week lead time of traditional circulars. As a result, product quality can heighten as growers may be able to allow items to ripen longer before picking, because retailers can turn around quick sales.

“We take advantage of freshness opportunities and help retailers create flash deals to promote via social media,” says Steffy. “For example, when one of our producers had an abundance of Mexican Kent mangos, we notified retailers, they informed customers via Facebook and email blasts.” Four Seasons also publishes a weekly market news flier that is transmitted via email, the company website and social media, as well as traditional hard copy.

In Support Of Higher Prices

To keep products moving, retailers need to educate consumers on why organics almost always command a higher price — crop yield is lower than conventional, consistency differs, and seeds and cultivation of the heirloom and non-GMO varieties desired by shoppers are more expensive. Higher prices also support innovation in areas such as packaging for better breathing and transporting.

Pricing is becoming more stable. “Many growers and distributors now offer contract pricing and will dedicate a certain amount of acreage to a retailer who commits to buying a certain amount of product,” says Feinberg, of Moxxy. “Overall, the price gap between organically and conventionally grown produce is narrowing. At times, organic produce may be price-competitive or even lower priced than conventional crops.”

“Going forward, consistent pricing from a more consistent supply will help grow the industry,” says Caito. “Fluctuations in supply and cost are smoothing out with improvements in infrastructure, acreage, farming techniques, planning and promoting.” Still, organics
are likely to be priced at a premium to

Distributors Offer Guidance

The retailer-distributor relationship can boost sales. The full-service distributor Crosset Company, Independence, KY, procures items from multiple suppliers, including Cal Organic, Dole, Earthbound, and Stemilt. It provides buyers with current information on product availability and quality. The company also handles certification processes, maintains organic standards, and supports retailers with merchandising guidance and training. Its training program manages control points such as: receiving, storage and transportation, pest management and sanitation, record keeping and documentation, and separation of organic from conventional.

Four Seasons specializes in direct store delivery (DSD) throughout the Mid-Atlantic and Northeast to retailers and others, helping them gain access to quality, certified organic produce. Support services include merchandising resets, displays and training; expert sales representatives; custom supply programs; and marketing support with ad writing and merchandising tips.

Because the supplier has access to the best information on product availability, its employees serve as the key link between source and shelf. “We want to give our customer, the independent retailer, the best information possible on how items look when they come in and where they fit into the seasonality for that item,” says Steffy of Four Seasons.

“That is why most members of our sales staff come from a retail or wholesale produce background. Also, Four Seasons ensures our inside sales staff is well-informed about what we have on hand and what is available in the marketplace.”

Four Seasons tailors its deliveries to the storage capabilities of individual stores, some of which can store a large number of pallets and others that have no back room or dock and need frequent deliveries.

“We have a strong commitment to independents, natural food stores, and organic markets that, unlike large chains, typically do not have their own procurement systems or access to planograms,” explains Steffy. “One component of the sales team guides our customers on what to display, trains new staff members, educates on best organic processes and assists with resets.”

Keeping Organic Moving

“Retailers need to break up the ‘sea of sameness’ in the packaged greens section so shoppers find what they’re looking for, discover new items, envision meal possibilities, and, in the end, purchase more,” says Cabaluna. Earthbound Farm recently redesigned its packaging and logo to help the shopper navigate the greens section more efficiently.

“Unplanned purchases offer the greatest opportunity to move organic produce,” advises Moxxy’s Feinberg. “Display location is critical — endcaps, free-standing displays, eye-level in refrigerated cases, displays at store entry, etc. — will increase visibility and stimulate impulse purchases.

“Creating displays with serving suggestions and products that go well together can increase impulse and opportunistic purchases where unplanned items are added to a planned purchase to complete a dish or meal,” says Feinberg. “Point-of-sale materials such as recipe cards, signage, wobblers, and videos can be used to effectively promote products and cater to consumer trends and behavior with messages that include information on local growers, the environmental benefits of organic produce, health benefits of fresh produce, and serving suggestions.”