Organic Berry Sales Take Lead

Strawberry CropPhoto Courtesy of Ed Kelly

The strong and growing category gains mainstream acceptance.

Strawberries in White BowlOrganic berries are a growing component of the overall berry category. The key to future expansion includes solid promotional activity, strong retail merchandising and, perhaps most importantly of all, maintaining consumers’ trust and confidence by sharing a worldview that prizes sustainable, natural living.

According to the United States Department of Agriculture (USDA), consumer demand for organically produced foods continues to show double-digit growth, providing market incentives for U.S. farmers across a broad range of products. Fresh fruits and vegetables continue to be the top-selling category of organically grown food, with 2015 sales of $14.4 billion, up 10.5 percent, according to the Organic Trade Association (OTA), Washington, D.C.

“The biggest trend is organics are becoming mainstream,” says Gary Wishnatzki of Wish Farms in Plant City, FL. “Traditional retailers are merchandising organics alongside conventional fruit, and that is driving sales.”

Indeed, the USDA’s Economic Research Service reports that organic consumers in general are increasingly mainstream. Numerous studies have been conducted on the buying habits and demographics of consumers of organic foods. Results have varied depending on the type of survey, sample size, and geographic coverage.

Brian Bocock, vice president of product management for Naturipe Farms in Kalamazoo, MI, confirms organic berries are trending higher. “Many consumers are paying more attention to not only what they eat, but how healthy products are being produced. As such, ‘organic’ is gaining more momentum,” he says.

Bobock says consumers with incomes of $100,000 and higher are trending toward more organic purchases, while those with less than $100,000 household income are still weighing value versus perceived health gain.

Andy Martin, president of A&A Organic Farms in Watsonville, CA, also finds organic berries are growing in popularity. He points to juice bars, mothers with small children and the foodservice market as the major consumers. His company sells and markets certified organic produce, representing small- to mid-size farms.

A Matter Of Trust

A&A Organic Blueberries

Photo Courtesy of A&A Organic Farms

More than anything else, consumers want to be able to trust their organic berry suppliers. Sun Belle Inc., in Schiller Park, IL, offers organic berries under the Green Belle label. The organic berries are grown on farms inspected and audited by a certifying agent accredited by the USDA.

“Consumers are assured Green Belle berries are produced through approved methods that integrate cultural, biological and mechanical practices that foster the cycling of resources, promote ecological balance and conserve biodiversity as specified by USDA,” he says. “Synthetic fertilizers, irradiation and genetic engineering cannot be used.”

Driscoll’s in Watsonville, CA, employs research and development teams that use natural breeding methods to create patented varieties. The company uses natural breeding methods to create its patented varieties. “We rely on natural cross-pollination techniques to continually improve Driscoll’s berries,” the company says. “We never irradiate or genetically modify our plants. We naturally breed berry plants to be more resistant to diseases and pests while meeting our quality standards for flavor and appearance.”

Naturipe Farms LLC, headquartered in Salinas, CA, markets a full line of organically grown berries. Its organic farms throughout North and South America are independently certified as having met rigorous USDA National Organic Program regulations, demonstrating a commitment to organic growing principles of biodiversity, ecological balance, sustainability, natural plant fertilization, natural pest management and soil integrity.

A major component of marketing organics at retail is connecting with consumers on values. Stories fire consumers’ imaginations. Retailers who relate their stories — and there are plenty — build trust, which in turn helps boost sales. For example, Watsonville, CA-based Well-Pict’s website tells the story of how the company operated some 60 years ago in California’s central coast. The site shares how the company, back in the 1970s, was among the first to adopt integrated pest management (IPM) techniques in its fields and shares information on its family of growers.

According to A&A Organic’s website, retailers can generate greater consumer interest and loyalty by highlighting organic berries’ benefits at the store level. These include:

Protect water quality: The elimination of polluting chemicals and nitrogen leaching, done in combination with soil building, protects and conserves water resources.

Energy savings: Farms have changed drastically in the past three generations from the small family business dependent on human energy to large-scale factory farms highly dependent on fossil fuels. According to the website, more energy is now used to produce synthetic fertilizers than to till, cultivate and harvest all the crops in the United States. Organic farming is still mainly based on labor-extensive practices, such as weeding by hand, and using composting and crop covers rather than synthetic inputs.

Protect farmers’ health: A National Cancer Institute study found that farmers exposed to herbicides were six times more likely to develop cancer than non-farmers. In California, reported pesticide poisonings among farm workers have increased on average 14 percent per year since 1973, and doubled between 1975 and 1985. Pesticides poison an estimated 1 million people annually, says the site.

Help small farmers: Most organic farms are small, independently owned and operated family farms of less than 100 acres. It is estimated the United States has lost more than 650,000 family farms in the past decade. Martin asserts organic farming could become one of the few hopes left for family farms.

Promote biodiversity: Mono cropping is the practice of planting large plots of land with the same crop year in and year out. While this approach tripled farm production between 1950 and 1970, the lack of natural diversity of plant life has left the soil lacking in natural minerals and nutrients. Organic farming encourages food production that nurtures the soil through the absence of pesticides and the presence of rich compost. The inherent commitment of organic farming to crop rotations, living soil, rural enterprise, pure water and sustainable agriculture is a critical step toward protecting the environment and our individual health. In buying organic, Martin says retailers provide a market place for growers who have made the future of our planet a top priority.

Most organic farms are small, independently owned and operated family farms of less than 100 acres. It is estimated the United States has lost more than 650,000 family farms inthe past decade

Organic Knowledge

A&A Organic Raspberries

Photo Courtesy of A&A Organic Farms

Being knowledgeable about the world of organic berries, start to finish, is important. This includes production — knowing how organic berries are produced can help retailers generate greater sales and profits — and acreage.

From the California Strawberry Commission’s perspective, the annual acreage survey shows increases for the past five years, according to Carolyn O’Donnell, the commission’s communications director. There may be several factors contributing to the increased organic strawberry acreage, including:

• New ground (previously not farmed, and able to be certified organic)

• Transitional ground converted to organic

• Strawberries taken over acreage previously used for growing other organic crops

The Commission does not have any data to indicate to what degree these factors may be contributing to the organic acreage growth. However, increasing organic strawberry acreage is seen across the board in all growing regions of the state.

According to O’Donnell, retailers need to know strawberries are grown year-round in California. “With organic acreage increasing throughout the state, this will help support a year-round supply of organic strawberries from California,” she says.

Strawberry pricing is closely related to supply, due to their short shelf life. “Pricing is set in the marketplace based on supply available and demand,” says O’Donnell.

A&A’s Martin says berry acreage in California has decreased recently. Growing areas in the state include the Salinas–Watsonville area, which he says is preferred, and Santa Maria. “In 2016, organic berry quality was weak due to the early weather conditions, so we could not send the berries out of California. That created some low prices here.”

Wish Farms’ Wishnatzki says, “it does not make sense to transition a field to organic. Virtually, all new organic production is coming from new farms rather than converted ones. There are not new areas per se, just new fields.”

Naturipe Farms’ Bocock says all growing areas are looking at producing more organics. “It takes three years to convert conventional production to organic production. It is even more difficult with strawberries, as you cannot grow strawberries year after year on the same ground. You have to rotate crops, which means you need three times the acres of organic ground to have an organic strawberry crop one out of three years.”

Bocock says the big issue with organic berry production is the cost to produce. Higher input cost and lower yields per acre equal higher retail price points. “So, some of the berry industry’s heavy users are trading to organic use. Moderate consumers of berries are still finding the value equation tough to deal with,” he says.

Promoting & Merchandising

How should retailers promote organic berries? Martin prefers more basic product promotions. “For me, just a nice reasonable price for a quality fruit,” he says.

“It takes three years to convert conventional production to organic production. It is even more difficult with strawberries, as you cannot grow strawberries year after year on the same ground. You have to rotate crops, which means you need three times the acres of organic ground to have an organic strawberry crop one out of three years.”

— Brian Bocock, Naturipe Farms

“I don’t know if there is such a thing as a bad berry promotion,” says Bocock. “I think the retailers who do it best are those who have the ability to change store sets and pricing inside of two weeks, as our commodities are affected by weather. Those who can take advantage of short-term production swings do the best.”

Retailers should also consider sampling to increase sales. “Sampling can increase sales by at least 50 percent,” says Wishnatzki. “I believe there is also a residual benefit to sampling.”

Bocock agrees with Wishnatzki. But Martin differs. “Sampling helps drive home the freshness aspect of the fruit. But most folks have had berries; they know what they are buying. Sampling helps so they know the fruit on that day is good.”

Organics are similar to other berries when it comes to shelf life. “However, we are seeing slower turns on inventory in a lot of retailers, based on in-store observations and our consumer feedback,” says Wishnatzki.

“Our traceability system tells us the harvest date, and we are seeing dates that are further out on average. Stores should be cautious to not over-order, and be mindful of the slower turn.”

As for placement, many retailers have had an organic section with small displays. Retailers who are placing organics side-by-side with conventional berries have seen a difference in movement.

“Organic consumers cut across all demographics,” says Wishnatzki, “but the Millennial generation is definitely leading the charge toward more organic demand.”

“We are seeing success with retailers who place them only in organic sections, as well as next to conventional berries,” says Bocock. “All berries, whether conventional or organic, bring a lift to the produce department.”

Location is also important. “Organic berries should always be at the front of the store; right in the consumer’s face. If things are done right with the cold chain, there is little to no difference in shelf life,” says Bocock.

Production & Pricing

In general, 2016 was a good year for the organic berry market, according to Brian Bocock, vice president of product management for Naturipe Farms in Kalamazoo, MI. “Most growers had success financially growing organic berries,” he says. Bocock remains optimistic for 2017. “As more acres come into production, margins may become more difficult; that said, it looks good so far.”

With good Florida growing conditions this season, Gary Wishnatzki of Wish Farms in Plant City, FL, says production is up over 2016. The company anticipates picking through April and expects increases in production and demand.

Pricing between conventional and organic is moving closer, but there is still a big variance. Bocock says pricing remains a function of consumer demand, packaging, flavor, crop size and crop timing.

“Pricing is all supply and demand. In Florida, there is a larger spread required between organic and conventional fruit for profitability in the organics. Yields are much lower,” says Wishnatzki. “The price spread is more of a seasonal difference.

“With strawberries being replanted every year, there is an opportunity to adjust acre annually. In a crop like blueberries, in Florida, you are looking at about a 10-year cycle before growers typically replant.”

As for blueberries and blackberries, Bocock says “because they are grown successfully in so many states, Naturipe Farms will provide more locally grown organic blues and blacks from different states. As it relates to strawberries and raspberries, they will still come primarily from California, Florida and Mexico.

“But there are significant increases coming from all three of those areas in the next five years that will provide a greater available volume.”

In looking ahead, Andy Martin, president of A&A Organic Farms in Watsonville, CA, insists he is always optimistic. “Lots of rain could be awesome, or we could have quality issues from soil diseases from the excess water,” he says. “The bottom line on pricing always remains supply and demand.”