Opportunities For Growers, Wholesalers And Retailers
In Ethnic Produce Items...
Rutgers University’s Dr. Ramu Govindasamy Unveils New Research
Jim Prevor’s Perishable Pundit, October 12, 2011
One of the really wonderful facets of The New York Produce Show and Conference is that we reach out to the great centers of learning in the region and give these institutions an opportunity to reach out to the produce industry.
We host students from the schools, and it is shocking how little some of the students know about job opportunities in the field. We also, however, host faculty presentations and it is shocking how little the industry knows about the research going on at these same institutions. We have already profiled two presentations that faculty members at Cornell will be making at this year’s event:
What’s In A Name? Professor Brad Rickard Of Cornell Produces New Research That Indicates Shakespeare May Have Been In Error… On Apples At Least
Cornell Professors To Present At The New York Produce Show And Conference: New Ways of Thinking About Local: Can The East Coast Develop A Broccoli Industry?
Now we asked Pundit Investigator and Special Projects Editor Mira Slott to speak with a Professor from Rutgers who does work that is tightly targeted to the east coast and who is making his encore presentation at The New York Produce Show and Conference:
Dr. Ramu Govindasamy
Department of Agricultural,
Food and Resource Economics
Associate Director of Research,
Food Policy Institute
Rutgers Cooperative Extension
New Brunswick, New Jersey
Q: Is your latest research a continuation of the series of projects you’ve undertaken through the USDA-funded specialty crops initiative?
A: Yes. This is a new project under the specialty-crops-initiative umbrella. Our research explores developing U.S. markets for new crops and new uses. It is a joint effort between Rutgers University, University of Massachusetts and University of Florida. What we proposed to do was hone in on ethnic greens and herbs in the Eastern U.S. from Maine to Florida, 16 states plus Washington D.C.
Q: What were the objectives?
A: We outlined several goals: to estimate the size of the market and determine the demand for specific specialty items; understand consumer purchasing patterns, interest in and willingness to pay premiums for these high-value, niche-market crops; analyze the supply chain in the ethnic greens and herbs industry and the related market issues; conduct field trials, estimate profitability and recommend best production practices and strategies for optimal supply; and finally to share results with stakeholders.
Q: What methods are you using to tackle these goals?
A: To begin, we did focus groups to formulate questions and construct an extensive consumer survey to collect a range of data from different ethnic groups across the east coast. Due to cost restraints, we used an Internet bulletin-board design, working with experts specializing in these kinds of focus group meetings.
Q: In your earlier research, you segmented Hispanic and Asian markets into subgroups. Did you take a similar approach in this project?
A: Using a random sampling method, we again segregated information into four different consumer groups: Asian Indians, Chinese, Mexicans and Puerto Ricans.
Based on input, we then developed a phone survey with the types of questions that could elicit the most valuable information. The main objective was to document what kinds of greens and herbs these consumers buy right now, and also qualify volume and price.
Q: Could you elaborate on the size and scope of the survey for context and statistical significance.
A: More than 1100 people were interviewed by phone from all four ethnic groups across the 16 east coast states and Washington, D.C. The sampling error is estimated at +/-5 percent with a 90 percent confidence interval.
Q: What were the key findings?
A: We documented among the top 10 crops on the lists we compiled, which ones people were buying most, how frequently, and at what cost.
For the Asian Indian group, the top three were radish greens, then Indian sorrel spinach, followed by fenugreek leaves. To give a little more perspective in terms of quantity and price they paid, for radish greens they bought 1.7 pounds per week and spent $1.66 per pound. For Indian sorrel spinach, they bought 1.63 pounds per week and spent $2.28 per pound, and for fenugreek leaves, 1.17 pounds per week and $2.02 dollars per pound
For the Chinese group, the top three were Shanghai bok choy, Chinese broccoli, and spinach. Also by pounds and dollars, for Shanghai bok choy they bought 2.14 pounds per week and spent $1.44 dollars per pound. For Chinese broccoli 1.71 pounds per week and $1.74 dollars per pound, and for spinach 1.44 pounds per week and $1.96 dollars per pound.
Looking at the Mexican group, the top three were purslane, then roselle, followed by epazote, all leafy greens. For purslane, they bought 2.22 pounds per week, and spent $2.69 per pound; roselle 1.5 pounds per week and $3.38 per pound; and epazote, 1.4 pounds per week and $2.10 dollars per pound.
For Puerto Ricans, the top three were lechuga, then garlic chives, followed by culantro, which has a flavor like cilantro but looks very different. The breakdown for lechuga was 1.8 pounds per week, and $2.13 per pound; garlic chives 1.57 pounds per week, $2.46 per pound, and culantro 1.34 pounds per week, $1.88 per pound.
Q: What can we learn from these numbers in the bigger picture?
A: This is how much they buy on average. Now we have the latest census data on the east coast for the areas covered in our study -- the 16 states and Washington D.C. Breaking out the numbers for the four ethnic groups, there are 1.3 million Asian Indians, 1.2 million Chinese, about 3 million Mexicans, and 3.6 million Puerto Ricans. You can imagine how much they would buy if they buy at these rates. The demand for these crops could be astounding.
Q: How easy is it for these consumers to find these items now?
A: These crops are not commonly available; usually only in niche, specialty, ethnic stores.
The thinking is to make them more available and accessible to these ethnic groups, and they would buy more of them. And to bring them into the mainstream market as well.
Production information on these crops is not accessible, but for some of these highly specialized items, production is very rare, and some are being imported.
Q: So, you see an opening for growers to fill this dearth in supply?
A: An objective of our grant is to research ways to make smaller farms viable on the east coast. Our research shows high demand for specialty greens and herbs, yet it is somewhat low compared to mainstream products like onions and tomatoes.
The volume on these specialty crops is so small for large growers, they are not interested in growing them. This leaves a niche for the small to medium-size farmers to fill.
Basically the opportunity is meant for small and medium-size farms. Ethnic specialty crops margins tend to be higher, especially on these new ethnic greens and herbs, which would help small and medium farms.
Q: Are there challenges or learning curves to growing these crops?
A: We currently are building this information. We set up three sites for production trials in New Jersey, Massachusetts and Florida. We are buying these seeds and doing trials on these sites right now; looking at yields, pest management, disease, harvest maturity, trying to determine which crops grow better, etc., and to train the farmers in production of these new crops.
We just started the trials this past summer in different locations, five or six crops at each site with three replications. After we harvest everything, we conduct twilight meetings, and we bring farmers in to look at these crops and we give them information on how to grow them.
Q: Will you be expanding these trials, and if so, is there a way for interested produce suppliers to become involved?
A: We will have similar trials next summer and the following summer. People who would like to participate can contact me. We targeted three distinct regions because we wanted to look at the impact of varying climates and geographies. Some crops need a lot of heat and do better in Florida than in Massachusetts. Some are seasonal, so in this case we’re trying to see if we can really just grow for the season. We have a big team monitoring the process.
The goal is to document which crops are better for the farmers, and to give recommendations in terms of price and volume. The quality they can grow in their region can fluctuate substantially based on where they produce. We want to advise them on which crops they should target and the potential challenges to grow them. These are unique crops. It won’t be easy to find information on where to buy these seeds. Some they can buy locally, others they can import directly or acquire through intermediaries.
Q: Do you see demand for these specialty greens and herbs skyrocketing down the line? Do you have comparative data on how demand has evolved within the ethnic subgroups?
A: We have not compared our current data to our earlier research; however, I can give you perspective on demand for the subgroups in our study.
Asian Indians spend $112 dollars per month on ethnic greens and herbs; Chinese, $87 per month; Mexicans, $85 dollars per month, and Puerto Ricans $79 per month. Most often 20 percent to 30 percent of vegetable purchases are on these greens and herbs, which is very high.
In terms of demographics, we have data on family size that may be of interest. For Asian Indians, 53 percent of respondents had 4 to 6 people in their household and 44 percent of respondents had 1 to 3 people. For Chinese, 49 percent of respondents had 4 to 6 people in their household and 50 percent had 1 to 3 people.
Mexicans are very different: 67 percent of respondents had 4 to 6 people in their household. Only 20 percent of respondents had 1 to 3. But the most dramatic difference was that 10 percent of respondents had 7 to 9 people in their household. For Puerto Ricans, 30 percent of respondents had 4 to 6 people in their household and 66 percent had 1 to 3.
Linking these to purchases, Mexicans spend more than Puerto Ricans, but Asian Indians spend the most, so I don’t see much of a correlation with family size.
Q: Did you take into account the impact of age, income, education levels, and other factors in purchasing decisions? For example, a more assimilated Asian Indian consumer might buy less unusual specialty greens and more mainstream items compared to a recent immigrant…
A: We have data on ages, income, education, gender, and whether they speak the ethnic language at home. We have not made any definitive assessments based on this information.
For Mexican respondents in the survey, about 49 percent belong to the 21- to 35-age group. When looking at the Chinese respondents, 49 percent are in the 36- to 50-age group; the buyers are a different age group. For Asian Indian respondents, the majority is in the 36 to 50 age range; and Puerto Rican respondents covered a full spectrum of ages.
From 2000 to 2010, the Mexican population really spiked, going up 92 percent, which is an amazing explosion. Many just migrated. Asian Indians are up 66 percent in that time period. The Chinese population is up 40 percent and Puerto Ricans 33 percent. These numbers are really baffling compared to the total U.S. population, which is up 9 percent.
It’s a whole new market. Four years ago, African Americans used to be number two populous, and now number two is Hispanics, including all the Spanish speaking subgroups.
These numbers point to a huge untapped market.
Q: Do you see mainstream retailers availing themselves of this opportunity, or is this geared more to independents and niche chains? Who can take advantage of this opportunity? Who should attend your presentation at the New York Produce Show and Conference?
A: Both producers and marketers could benefit by coming to my presentation. When we talk about mainstream products, many were once niche items. We see many specialty fruits and vegetables making there way on to conventional supermarket shelves. At least the top products will fold into the mainstream. Once consumers are exposed to these items, which are often rich in antioxidants and flavor, these new crops slowly will move into the mass market.
This project is quite astounding, finding consumption of pounds and pounds each week of obscure products not even sold in most conventional supermarkets.
Although the project is focused on finding opportunities for small growers in niche crops, we are not sure that is really the big win for this project at all.
First, our back-of-the-envelope calculations indicate that many large growers could have interest. Large growers grow many items and look to ship mixed trailers. If there are, say, a million Mexican households in just this region each buying 2.2 pounds of purslane a week, that is significant. It is an opportunity for local growers and national producers.
Second, if these products are so popular with various ethnic groups, one has to believe that exposing the broader population to these virtually unknown items could build additional purchases and consumption.
Third, mainstream retailers have every reason to want to carry these products. Just because these consumers enjoy specialty greens does not mean they don’t also buy Oreos – or apples, oranges, grapes, etc.
Identifying opportunities for producers, importers, overseas exporters and wholesalers and retailers – that is what Professor Govindasamy’s research is all about. It is also what the New York Produce Show and Conference is all about.
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