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Pundit’s Mailbag — Fruit Patch Speaks Out

Jim Prevor’s Perishable Pundit, May 22, 2009

Our piece, Special Buys, Wal-Mart And The Meaning Of Loyalty, included a letter from a tree fruit industry participant who took a swipe at the model followed by tree fruit companies that are not, in our letter-writer’s opinion, sufficiently vertically integrated.

Specifically the letter named Ballantine and Fruit Patch.

Ballantine, as we pointed out here, is not in a position to respond, but in the letter below Fruit Patch responds on the record:

Since Fruit Patch’s name was mentioned as somehow having a potential negative influence to tree fruit grower returns, we must put a few points straight to the anonymous contributor from the California tree fruit industry.

First, any reference to ‘the early Wal-Mart days’ (or, for that matter, the early Kroger, Safeway or SuperValu days) is irrelevant. Everything has changed in our industry, especially the last 5 years.

The complexity in how retail forces have realigned in the recent past is all the difference. Safeway is also Von’s in California and Dominick’s in Chicago. Super Valu is also Albertson’s, and Kroger is Ralph’s, Fred Meyer, City Markets and King Soopers, just to name the obvious. Wal-Mart has also evolved, and become the largest retailer in the world, now controlling a great deal of shelf space and traffic flow, which provides the opportunity to move fruit and vegetables as well. All are good companies, competing in the marketplace as they see fit for their shareholders.

Fruit Patch is fortunate to have good commercial relationships with a number of important retail buyers, and each is unique and requires unique attention and service. Fruit Patch works hard to supply the ‘right product, in the right package, at the right time’ to each of them. We have literally, at the very least, ‘one hundred’ varieties of peaches, plums, nectarines, and pluots that are supplied to Fruit Patch by good, resourceful, and knowledgeable family farmers.

Fruit Patch packs the majority of our growers’ fruit in our own state-of-the-art packing facility near Dinuba, California, with orchards on all sides. Our post-harvest capabilities are many and diverse to meet any standard of food safety or security, while providing packing capability to “family farmers” who ‘choose’ to avail themselves of the services we provide and need the advantages our capital resources and post-harvest capabilities provide.

Fruit Patch also markets fruit for other family farmers who pack their own fruit in our company brands to the same characteristics and standards that we require through our own facilities. It is not a ‘bad thing’ to provide valuable services to our producers, just because they are not somehow vertically integrated.

Through our service agreements with our in-house packed fruit, and those who pack their own fruit in our brands, we are able to provide a large volume of tree fruit to a wide range of buyers.

The circumstances concerning Ballantine’s demise has nothing to do with Fruit Patch. To refer to any ‘weakened condition’ at Fruit Patch is not accurate, and borders on scurrilous and rumor-mongering. Fruit Patch is well capitalized and has sufficient resources to do ‘whatever’ it judges is best to support or improve its business structure.

True, Fruit Patch has ‘changed’ and will continue to evolve to become a better service-provider, not only to our committed grower ‘partners’ but with our ‘retail partners’ in a commercially appropriate manner. “Mud Slinging” is irresponsible and potentially damages the reputation of our whole industry.

The tree fruit industry, like the whole world is going through a ‘period of adjustment’. Fruit Patch is also adjusting and expects to continue to have a positive influence for all of our committed suppliers and buyers as well. Rather than spread rumors about others, we all need to continue to find more effective ways to pack the finest fruit and develop programs that provide sustainability for all stakeholders. That is our attitude and goal here at Fruit Patch.

By the way, we wish to extend many thanks to the Pundit for providing a mechanism to ‘shine a light’ on important issues in our industry.

— Rick Eastes
Vice President Sales & Marketing
Fruit Patch Sales
Dinuba, California

This whole situation comes across to us as a matter of those who elected not to align with Wal-Mart 20 years ago now spinning hard to justify a chunk of Wal-Mart business for themselves.

They may get some. Wal-Mart has become so big that it is almost inevitably going to take in some suppliers who weren’t interested in Wal-Mart 20 years ago.

Rick Eastes’ letter is, however, on target in pointing out that it is not just Wal-Mart that has changed. Everything has changed. The players have consolidated; the issues — food safety, sustainability, traceability, etc. — have increased the complexity of the business enormously.

A common comment we hear as we travel the industry and talk to suppliers is this: “We have the best facilities, the best team and are doing the best job we ever have done. Yet I feel less secure than I did 10 years ago.”

We’ve written a lot about aligned supply chains and have generally been favorably disposed to them as mechanisms for enhancing food safety. But an alignment can be arranged without outright ownership.

Besides, demanding complete vertical integration via ownership would basically end the small and midsize family farm. Is that a direction anyone really wants to go?

Many thanks to Rick Eastes and Fruit Patch for having the courage of their convictions and a willingness to speak out. It is only by a willingness to deal with tough issues that the industry can advance.

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