When consumers buy things, they are purchasing more than the item itself. This is why, for example, although Wal-Mart has had many initiatives to sell diamond engagement rings, the initiatives have mostly been without great success.
Wal-Mart could prove that based on all conventional standards, the famous 4Cs – color, clarity, cut and carat weight – it was offering diamonds at a far better deal than one could get from mainstream jewelers.
Yet engagement rings wouldn’t sell. Presumably this is because part of the experience for a man in proposing is being asked, “Where did you get this?” And part of the experience for the woman is her friends and family asking, “Where did he get it?” If announcing the source as Wal-Mart is a downer, then even a better price may not sway consumers.
But do considerations such as food safety also affect value perception? It is a fascinating question and when we learned of some intriguing research going on at the University of Delaware, we fought hard to get a presentation at The New York Produce Show and Conference. We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more.
John Bernard, Ph.D Professor, Applied Economics and Statistics
College of Agriculture & Natural Resources
University of Delaware
Q: We’re excited to welcome you to The New York Produce Show and Conference and to join our unique exchange program where we invite professors from premier universities to reach out and disseminate the results of their research, and their students come to gain contacts and consider careers in the industry.
Your main research areas are in consumer willingness to pay for local and organic products, farmer adoption of new technology and experimental economics. What is the focus of the latest research you’ll be presenting?
A: Organic is a common topic for study and something the Perishable Pundit has covered from many angles. Organic foods can be found from farmers markets to supermarkets, to such disparate outlets as Whole Foods and Wal-Mart. However, little is known about the effect of the retail outlet on consumer perceptions and willingness to pay for organic foods. Also what the influence could be of the Food Safety Modernization Act (FSMA) and its exemptions for smaller farms or farms primarily selling to end consumers.
A: For our study, we decided to take a targeted approach to examine the influence of retail outlet and FSMA information on consumer perceptions of organic grape tomatoes. We conducted field experiments in two states, Delaware and Illinois, to address differences in perceptions based on the outlet that carried the product. And then when consumers received FSMA information.
We looked into what people think about organic and in what conditions are they willing to pay for organic. Do people view organic produce the same when it comes from a Wal-Mart versus a farmer’s market, for instance?
Q: And if their perception of the product is different based on the retailer carrying it, does it impact what they think it is worth?
A: Yes. That’s the goal. All these people are interested in organic food, but are they treating organic as generic and not caring where it comes from. Do they think it’s the same at Whole Foods as at Target?
We conducted field experiments to address differences in perceptions first based on outlet, and second, whether food safety information would alter those perceptions.
We went out in the field and set up booths in parks and other locations, selling organic grape tomatoes. We told people where we bought them, and had them bid on the products to see how much money they were willing to pay based on where they came from. Perceptions and willingness to pay for the tomatoes varied significantly by outlet, with farmers markets receiving the most favorable evaluations and supercenters the least. The product coming from a farmers market generated a much higher price than even a regular supermarket.
Q: Were the organic grape tomatoes you presented as coming from different outlets really all the same?
A: We bought them from the different outlets, but the tomatoes were the exact same brand and packaging. However, we took them out of the clamshells, so participants wouldn’t know this. A student had to drive an hour away to get those tomatoes from a Whole Foods store, and they looked just like the ones from Wal-Mart. My students found it hysterical that the participants thought the Wal-Mart tomatoes were so different and not nearly as good.
Q: Did you also examine the marketing effect different packaging, labels and branding could have on perceptions? For instance, a natural, farm stand-style bag, a fancy colorful clamshell, a no frills, utilitarian container, etc.?
A: No, not for this research. We try to eliminate variables and extract one issue at a time. We had 207 people who we pulled in to participate in the study with us. For these types of field experiments, people have limited time so we need to stay focused. Participants didn’t see the package. We just said, here are pints of organic grape tomatoes, and held an auction, how much are you willing to pay for each.
We’re currently expanding the study, which we already started last month, but that’s still too early to talk about. It’s more about the displays than the packaging, how product is arranged and merchandised. We recently videotaped people at the stores to see how long they spent at the display and their reactions. My students have to go through the videotapes of 150 people we recorded and try to figure everything out.
Q: We’ll have to do a follow up interview on your findings, or perhaps that can be part of your presentation at our next show, something to look forward to...
A: Jim Prevor has been trying to get me to the show for five years, so I’m glad to finally be here, and ready to make up for lost time!
Q: Can you tell us more about the methodology, how the field experiments worked exactly?
A: We set up booths in local parks, and near farmers markets, places where we could grab people as they walked by us, and ask them if they’d like to be a part of our study, it would take five to ten minutes to do. We asked demographic background questions, and said we’re auctioning off a pint of organic grape tomatoes from different locations, and asked how much they would pay for a pint from a farmer’s market, a fresh format such as a Whole Foods Market, a traditional supermarket, and a supercenter like a Wal-Mart or a Target. So they gave us four different bids, one for each of those outlets.
And then, it’s a little complicated to explain… we have an envelope that’s sealed, and the participant gets to open the envelope to see which of those four auctioned items actually count if the auction was real. If people buy lots of tomatoes, they might not care as much after they buy one pint. So the auctioneer says which one of the four options counts, and the one from the farmer’s market is the one we’re actually going to sell to them.
And then they compare their bid to the price on the piece of paper in the envelope. If their bid was higher than the one on the paper, then they get to keep the tomatoes, and if their price was lower, then we just thank them for participating. I’ll be able to show this visually at the show and it will become clearer.
Q: Where did you go from there?
A: We have a second part of the study. We were interested to find out if the FSMA exemptions would change people’s opinions about the different organic tomato options. We provided them information on the FSMA and what it was going to cover, and had them give their four bids again.
Q: Could you clarify what food safety information you described to participants?
A: First we gave them an overview, the prevention plan and responding to outbreaks, but then we told them about the two exemptions, if the farms have sales of less than $25,000 a year, or if their sales are less than $500,000 but most of their products are sold directly to consumers, which would apply to the farmers markets.
Maybe people would think differently of the products sold at farmers markets knowing the products would be exempt from the new food safety rules, whereas the big places like a Wal-Mart supercenter are not going to be exempted and will have to implement these more stringent standards. Maybe they would and feel better about buying products at supercenters than they did before we learned about this.
Q: It is ironic farmers markets may have less stringent food safety requirements but are perceived to be safer. Rick Stein of FMI also points to consumer misperceptions of farmers markets in a pre-show interview piece highlighting his micro-session on FMI’s Power of Produce report on consumer behavior before, during and after purchase.
A: We do ask food safety questions before and after we give participants the FSMA information. How safe do you think product is when coming from a farmer’s market, from a fresh format, a supermarket, and a supercenter? And we ask them how likely you think the products you buy from these outlets would be exempt under the FSMA rules, to see again if they change opinions. We told them about the exemptions and let them interpret those exemptions in their own way.
It changed safety perceptions of farmers markets noticeably. Participants ranked the safety high at farmers market at first before the FSMA information, and much lower after. The perception originally was low for food safety at supercenters before the FSMA information, but after supercenters ranked just as high as farmers markets.
People were telling us they don’t want exceptions; they want the new food safety rules to apply to everybody. That was good news for the big retailers. Supercenters certainly benefit if consumers feel better about the safety of their product.
Q: Did that translate to higher bids for their products too?
A: That’s the bad news. It actually didn’t change so much the amount people were willing to pay for the products.
Q: Did it discourage some people from buying products from farmers markets?
A: We required them to put in a bid, and they couldn’t put 0, but there was a dip in how much they were willing to pay at the farmer’s market, and a little bit more from a supercenter but not a lot; it wasn’t significant enough for me to say there was a difference.
Q: How did bids separate out between the four types of outlets? Were farmers markets and supercenters on the extreme ends of the spectrum? Did the participants tend to rate the farmers markets and fresh formats in the same realm, for instance?
A: We asked them to rate a lot of different things, from the product safety to the quality to the health aspects to the taste based on whether the product was from a farmers market, a fresh format, a supermarket or a supercenter.
We didn’t want to specify a particular store name, so for fresh format, we gave examples of Whole Foods and others in that natural foods store category. Fresh formats and farmers markets in consumers’ eyes are basically in the same category, and anytime there is a difference in ratings, farmers markets win, but usually those two are lumped together. And then there’s a gap and then there’s supermarkets, and there’s another gap before you get down to supercenters, where Wal-Mart and Target as the only two samples we gave for that category.
There’s a pretty big price difference between the supermarkets and the supercenters.
Q: How did you go about getting feedback on the taste rating?
A: Based on perception without tasting, the taste is clearly better in the farmer’s market, hands down number one, followed by the fresh format, which is significantly less than the farmer’s market, and then there’s a giant gap on taste from the fresh format to the regular supermarket, and another huge gap from the supermarket to the supercenter.
Q: Do you then have the participants actually taste the tomatoes to see if their perceptions change?
A: I don’t have them taste the product until the very end, and then I ask them if the taste compared to what they thought it would taste like. I tried to model the difference. The tasting was optional and we don’t have a good complete data set on that. The only way to do that would to have the participants taste all of the options.
It was more for interest, but not statistically valid. We only had 5 to 10 minutes of people’s time, but for those who did taste comparisons at the end, the supermarkets and supercenters tasted a little above what people perceived them to be.
Q: Did you define organic or ask them what it meant?
A: There are many ways to design the study. We told participants all the options were USDA-certified organic, like they would see them labeled in the store or a farmer’s market, whatever their impression of that was. We didn’t want to add any more information. We were catching people as they were walking by to do this, so we tried to make it clean, just what they would see in the store.
Q: When you were asking demographic background information, were you able to get a statistically representative sampling?
A: Some locations were better than others. We had some places that really matched up to the census. Others were near or at least around college towns, so they tended to have slightly higher educations and incomes. We intentionally went to locations to get good racial diversity, and age and gender comes out pretty well correlating to census numbers.
Q: Were there any material differences between the two states, Delaware and Illinois?
A: We controlled for different income levels. We had higher income levels in Delaware than in Illinois. If someone had higher income levels, it did impact answers, as they tended to give higher bids for everything. That’s one of our variables, the amount someone is willing to pay, but controlled for the variances in income levels, so it doesn’t change the rankings.
Q: When you went into this study, did you have preconceived ideas, and did your analysis match up with those?
A: We had our usual inclinations going into the study; this is what we thought, farmers markets would result in better perceptions, and it turned out to be the case, but we were surprised by how far apart the ratings, the degree of difference there. The perceptions of the organic product are really quite a bit lower for supercenters across the board on most of the things we asked about.
For safety, consumers were told all the grape tomatoes offered for auction were USDA-certified organic, but they still thought supercenter tomatoes were less safe. We were suspicious there would be differences, which motivated us to look into this, but why should there be this much difference.
Q: This research is helpful for attendees, both suppliers and retailers, because it highlights some perception image issues they have to deal with. From your perspective, what would you say are the main advantages of people coming to watch your presentation?
A: It would be important to know about these differences, depending on the area you’re looking to market. If you’re a supermarket or supercenter, you can get an idea of what you need to do to strengthen your image and alleviate these misperceptions.
Some people might want to get the word out on the Food Safety Modernization Act rules. In many ways, this looks like a trust issue. What can you do to build up consumer confidence and change the perception, if they go to a supercenter for cheap food, how can it be as good? Some of the differences in perceptions between the outlets were very large. This information can help realign strategies to transform those perceptions.
This study is fascinating, and it is an important point for the industry that consumers change their perception of the product’s source when made aware that some producers are exempt from the Food Safety Modernization ACT (FSMA). Precisely how the industry would market such a matter without hurting itself is most unclear.
At the same time, the study is set up in such a way that supercenters are fighting with one hand tied behind their back.
This is because the researchers removed all branding in this study – but it is precisely branding that is a tool used to persuade consumers that entities without great consumer equity in fresh produce, have great produce. When Bruce Peterson built the Wal-Mart produce department, he specifically made the decision to do things such as carry Chiquita bananas specifically because Wal-Mart had no equity with consumers on selling fresh produce and he wanted to borrow the equity of these brands.
Because this is a tool legitimately available to supercenters and supermarkets, the more interesting question might be if – even when presented with the same brands – consumers will have different perceptions as to taste, quality, safety and sustainability, etc., on produce from different venues.
Whole Foods is working very hard to persuade consumers that product sold at Whole Foods is in some way superior.That everyone may sell certified organic produce, for example, but the fact that the item is in Whole Foods makes it “Organic-Plus.” We pointed out in this piece that, in fact, much of the produce sold in Whole Foods is identical to other stores because it draws mostly on the same supply chain.
We also wonder about the degree to which identifying this as a study to the participants warps the results. These results seem like the “right ones,” meaning the ones that a consumer looking to burnish his reputation would provide. We wonder if the study couldn’t be done at, say, a flea market, with a vendor just selling four types of tomatoes and identifying where they were bought. Indeed, maybe the tomato pricing could be altered to test consumer propensity to purchase at different price levels.
The other question that comes to mind is whether the methodology doesn’t speak to general perceptions of these outlets, rather than specifically to produce at these outlets. It might be useful to segregate what people who primarily buy their food and produce at Wal-Mart say and do on these matters as opposed to people who primarily shop and buy at Whole Foods.
Another tool that this study doesn’t allow for is price. In telling consumers that Sample One is from Whole Foods and Sample Two is from Wal-Mart, one suspects consumers hear that Sample One is expensive and Sample Two is cheap. But in real life, retailers have price points to complicate these perceptions.
What if the consumers were told, “this tomato is from an ‘economy’ selection now being sold at Whole Foods, whereas this other sample is from a new “premium line” being sold at a supermarket? What if packaging was shown that backed up this attempt with the Whole Foods looking generic and the supermarket option looking upscale?
Another question is eating occasion. By making this a “study,” people know they are being watched – isn’t it plausible that people’s willingness to pay depends on circumstances. That if a young bachelor is cooking dinner for a date or his Mom is coming to visit, or a young couple is making Thanksgiving dinner for friends and family for the first time –and in all these eating occasions, the buyers know they will be asked ”where did you get this” – that this might alter willingness to pay than if the buyer will be eating dinner alone that night after work.
As with all good research, this interesting study raises many questions. Come to The New York Produce Show and Conference and engage with Professor Bernard in a discussion of this important study.
You can register for The New York Produce Show and Conference right here.
The Foundational Excellence Program starts Monday, so act on that immediately by letting us know here.
Q: Your presentations are always highly anticipated and well received. This year, I understand you are going to talk about the global reach of the produce industry and some of the effects of imports and opportunities for exports. Could you give us a sneak peak into what we can expect?
A: First, I will talk about trade patterns for fruits and vegetables in the U.S. What are the most important trade partners for imports and exports? Then, after I give this overview on trends in trade, I will talk about specific trade partners and what’s happening in the fruits and vegetable supply chains in some of the main suppliers to the U.S. and some of the major destination markets.
Q: Imports, in particular, have grown fourfold for fresh produce across the board over the past 20 years. Is it primarily an issue of providing the consumer with this year-round availability of all types of produce that they have come to expect?
A: If you compare now to 20 years ago, we saw in the stores seasonal products in terms of fruits and vegetable. Today, the U.S. consumer expects to find in any retail outlet, a restaurant or a supermarket, all products with year-around availability. That has increased trade, but also a huge increase in imports in recent years because of product seasonality in the northern hemisphere. There are many large volumes of product coming from the southern hemisphere, but also from partners nearby, from countries nearby.
That’s one of the big drivers — consumer expectations — but also the produce industry in the U.S. is becoming more and more global. So it’s not a surprise that imports from Mexico have increased by almost 10 percent a year in the past 10 years. Why? Because many investors — produce packers, shippers, growers — have also invested in Mexico. It is becoming more and more global in terms of becoming almost like multi-national companies.
Q: Where, in particular, do you see the most growth in terms of imports? What types of produce and in addition to Mexico, what other areas of the world?
A: The fastest by far is Peru. Peru is still not the biggest importer, but the growth is almost 20 percent per year, and that is much higher than the average eight percent per year that imports are increasing. From Peru, mostly asparagus, grapes, avocadoes, onions and tropical fruits.
The second one is China. Imports from China have increased in the past 10 years at an annual rate of about 14 percent. But these are mostly processed fruits and vegetables and citrus, onions, fruit juice, garlic, mushrooms and stone fruits. So Peru and China, then Mexico.
Then we have Canada and Chile still important and still growing as leading import suppliers to the U.S. From Mexico, we are importing mostly more tomatoes, avocados, peppers, cucumbers, lemons, grapes and berries. The numbers that I’m giving you are not only for fresh, but it is also processed product.
Q: Over 50 percent of fresh fruit consumed in the U.S. is currently imported. Is that a significant increase compared to 10 or 20 years ago?
A: Definitely, it has increased dramatically.
Q: At the same time, we are seeing the movement toward locally grown, and many people are looking for produce grown as close to home as possible. They are also accepting produce that is grown in many different countries around the world. How do the two complement each other, so to speak?
A: That is an excellent point. When you see the buzz about local, particularly fresh fruits and vegetables, you wonder who is hurt? And I think year-round availability of high quality fruits and vegetables is the most important factor driving demand among consumers, so local plays an important role.
But we need to understand the share of local fruits and vegetable is about one percent when you think about the total industry. This is an important segment because consumers want local, particularly during harvest season.
But I think the fact the consumers prefer to have one-stop shopping solutions, where they can get anything they want any time of the year, is by far much more important for consumers than having a local product labeled as local.
Local products are important for a very particular and small segment of the population. When we think about the whole market, local is a very tiny, but growing segment.
Q: What items within the produce category are you not able to offer year-round availability?
A: The items you cannot store. Think about blueberries, broccoli, lettuce, fresh tomatoes. The need to develop supply chain networks that allow you to bring produce from distant regions is key to the success of having more fruits and vegetables consumed in the households. There are some items, notably cherries, that are just not available 365 days a year even with imports.
Q: What are the drivers behind the export market, which I understand has more than doubled?
A: The U.S. has huge opportunities for certain products, where we have a clear advantage and for which consumption is increasing, such as apples, grapes, citrus fruits and berries to Asia and when we think about vegetables, we think about lettuce, tomatoes, potatoes mostly to Canada and Mexico.
Our major export destination is Asia. The most promising market is in Asia. From 2004 to 2014, exports have been growing about five percent per year. When you look at specific countries, you look at China. Our exports to China are increasing at an annual rate of almost 12 percent. These are mostly lemons, cherries, grapes, apples, oranges and pears. These are mostly fresh products.
Another growing market is South Korea, which has about the same growth in the past 10 years as China. It’s cherries, oranges, grapes, grapefruits, and potatoes. Then you also have growing a little bit above average growth with our closest partners, Canada and Mexico. We are exporting more apples, organic apples, for example, pears, grapes, peaches, organic grapes, potatoes, and tomatoes to Mexico.
Exports to Mexico have increased at a rate of about six percent per year the past 10 years. We are increasing our exports to Canada at a rate of about six percent per year. These are mostly lettuce, strawberries, grapes, apples, and we export a lot of orange juice to Canada. Interestingly, a market that has been traditionally attractive, Japan, which is still very big in volume, the growth in the past 10 years has been negative. Our exports to Japan have decreased at a rate of about one percent per year.
Q: Are there a lot of untapped opportunities remaining for exports? How can growers and producers take advantage of those?
A: There are huge opportunities. For example, in China, clearly it’s a growing destination for U.S. fresh fruits and high-quality vegetables. There are initiatives, for example, on promotions, using e-commerce through Tmall. For example, there was a huge marketing activity for cherries online. Cherries export from the U.S. They were sold online to about 100,000 individual shoppers, 168 metric tons, through Tmall in just two weeks.
Tmall is like the Amazon of China, and they are selling fresh fruits and vegetables, and the cherry growers in the northwestern U.S. have entered into an alliance with them to promote cherries. That’s a beautiful example of how market-oriented you have to be to really increase the sales of products in destination markets. The U.S. market has a lot of opportunities because of the quality of the fresh products we are able to produce. They are highly appreciated in emerging markets, in Latin America, Asia, and in Europe, too. Quality is an important feature the U.S. industry is able to offer consistently. That’s a big advantage.
Q: What role have the various trade agreements played in setting the stage for growth in import and export?
A: Definitely, huge. They provide opportunities, which are also threats to industry. You have to be aware that you are competing in a larger market for exports, but also for imports in the domestic market. What NAFTA has demonstrated is that today, the produce industry is extremely integrated in terms of pricing, in terms of flow of product between Canada, Mexico and the U.S.
Canada and Mexico’s exports to the U.S. have increased dramatically. We see the exports of U.S. products to these countries have also increased based on the competitive advantage of each country.
Q: What are some other subjects you plan to address in your presentation?
A: My objective is to open the eyes of the attendees to emphasize that the produce industry is becoming a global industry, even if you are working as a grower, a packer, a shipper or a retailer. Whatever happens elsewhere in the world in terms of production and new developments is likely to affect you here in the U.S. in positive or maybe negative ways.
The objective is to tell the participants to keep an eye on trends in imports and exports, as well as policies. I am going to talk about the newly signed Trans-Pacific Partnership (TPP) agreement because it is going to provide huge opportunities for some of the Asia markets and Pacific markets.
I want to emphasize how we need to be aware, to keep abreast of what’s happening overseas because they represent both opportunities and threats to the domestic industry.
Of course, knowing the trends is important; it’s the factual base that helps to make the decisions, but the discussion afterwards is just as important. What do these trends mean in terms of strategically positioning one’s company to succeed? How does one identify opportunities and obstacles — and how does knowing the facts lead to development of a strategy to overcome or avoid obstacles?
Act now! The program starts Monday morning! If you have less than five years’ experience in the produce industry, please let us know that you would like to attend the Foundational Excellence program right here.
We also have a registration site for the broader New York Produce Show, which you can access here.
E-mail us here to get hotel rooms at the headquarters hotel and take advantage of travel discounts right here.
Rutgers is one of the Charter Members of the University Interchange Program at The New York Produce Show and Conference, so we were especially excited to learn that Rutgers is deeply involved with an initiative designed to boost produce consumption.
Thesis writing supposes summarizing all the information in order to have it briefly enunciated.
We asked Carol Bareuther, contributing editor to sister publication PRODUCE BUSINESS to find out more.
Jennifer Shukaitis, MPH
Senior Program Coordinator
Department of Family and Community Health Services
Rutgers Cooperative Extension
New Brunswick, New Jersey
Co-host Site Supervisor FoodCorps
Q: Could you preview your Micro Session presentation at the New York Produce Show by telling us about FoodCorps?
A: FoodCorps is a national nonprofit that operates in 17 states and Washington, DC. The organization works by putting FoodCorps members into schools to help connect kids from preschool to 12th grade with real food.
There are three pillars of the program. One is knowledge, which is the food education piece. The second is engagement. This involves hands-on gardening and teaching kids where food comes from. Third is access to fresh food, which we do with farm-to-school programs to boost the amount of fresh healthy foods served like fruits and vegetables.
Q: How is your organization, Rutgers University Cooperative Extension, involved?
A: We are a partner with FoodCorps as a state-level host site. Until September, we had another co-host at the state level. This was the New Jersey Farm to School Network. They closed, and now the&nbhead of that program, Beth Feehan, (Editor’s Note: Beth has contributed to the Pundit here, here, and here,) is working for the New Jersey Department of Agriculture’s Farm to School Program as farm-to-school program coordinator. The DOA isn’t officially a co-host yet, but we are optimistic it will go through.
We are unique in that the school lunch program in New Jersey is under the state’s Department of Agriculture. This puts us in a really good position to get more produce into schools.
Q: What is your function as a FoodCorps’ host?
A: One of our roles is to seek out community level partners within the state, such as schools or youth-oriented programs. These sites are where the FoodCorps members will work during their one-year commitment.
We currently have 12 community partners. These range, for example, from the Philip’s Academy Charter School in Newark in the northern part of the state to the Salem County Career and Technical School and AtlantiCare in Atlantic City in the south.
Q: Wow, so these community sites aren’t only schools?
A: No. Like New Jersey, our service sites reflect our state’s diverse geography, culture and resources. Non-school sites include: Isles, Inc., a community development nonprofit headquartered in Trenton; the New Brunswick Community Farmers Market; and the Center for Environmental Transformation in Camden.
Q: What are the ages of the FoodCorps members that teach the kids? What are their qualifications? What training do they have or receive?
A: Most are recent college graduates. Usually 19- to 22-years old. The minimum is age 18. There is one member who has college-age children. We do tend to look for people with experience. For example, a number majored in nutritional sciences or in food systems.
They either want to explore working in this field or are taking a year off. FoodCorps holds a one-week long national orientation each year in August in Portland, Oregon. We also hold a state-level orientation in October. We go more in-depth and cover state-specific topics.
Q: Could you give us some examples of responsibilities the FoodCorps members have at their assigned site?
A: Most of what they do is deliver the knowledge piece by engaging with the students. Schools are especially set up to deliver food and nutrition education in the classroom. We had one school that incorporated a recipe of the month program. One recipe they did was Borscht. The young children took part by helping to put ingredients in the pot, while the older students made the entire recipe.
Then, in history class, they learned about the history of Borscht. Sometimes it could be something simple like learning what foods provide vitamin C and how this nutrient helps us to stay healthy. FoodCorps members work 37 to 40 hours a week and only have one to three sites, so they can go in-depth and really get involved.
Q: So what is the “secret formula” FoodCorps workers use to get kids to eat more fruits and vegetables?
A: Exposure to normalize it for them. Studies show it takes up to 10 exposures before kids will accept a new food. That’s why we do a lot with sampling. It may be something like kohlrabi or celery root that the kids have never seen before. The FoodCorps member will sample it either by itself, or in a recipe, or with a dip — depending on the item. Then, they will work with the cafeteria staff to develop a way to include a particular fruit or vegetable on the menu.
Doing this goes a long way toward building a culture and expectation of “real food.” The norm now is for kids to think of a brownie, or a bag of chips, or something out of the vending machine when they’re hungry. FoodCorps is poised to help make produce a natural part of kids’ culture.
Q: You mentioned engagement and gardening. How do FoodCorps members accomplish this when it’s cold for much of the school year in New Jersey?
A: Hoop houses, container gardens. It doesn’t have to be a big farm.
Q: How can the produce industry help FoodCorps workers?
A: Helping them understand the access points of the industry is key. How produce gets from the field to the kitchen/plate can be the most difficult and even mysterious for some. It’s a big issue to tackle, especially for young college kids right out of school.
So, whatever produce companies and organizations can do to help them crack the code — meaning understand the supply chain and how they can get more produce into schools — would be super helpful.
Q: What is the message you would like those who attend your session or readers here to take home?
A: It’s important to understand that when kids demand something of their parents, it’s a great way for the whole family to change habits — such as increasing produce consumption. In the 1980s, we saw this when kids pressured their parents to stop smoking. It was really effective.
FoodCorps has the potential to get as big. Ingraining in kids’ minds to eat more fruits and vegetables can be a really effective way to help the whole family eat more.
We are always inspired by these efforts to educate and introduce students to fresh produce. Abstractly, it seems like a great thing to get kids introduced to new foods and to understanding, through gardening and what not, where food comes from. Having them understand things such as the nutritional contribution of different foods – this all seems wise.
But does it work? Do adults at 30 eat more produce because at seven they got to work in a school garden? Do 50-year-olds have more diverse diets because at 12, their school had a salad bar program that featured many fruits and vegetables?
The truth is that we don’t really know. This type of research costs a lot of money and takes a long time. So for the moment, we are left relying on the incredible passion of people like Jennifer Shukaitis.
Come to New York and share in the discussion and share in the passion for boosting produce consumption.
It is easy to identify changes in consumer behavior – increased interest in local, smaller households, a segmenting of consumer purchasing into many different shopping venues from drug stores to supercenters, from online to deep discount stores. It is harder to know how these consumer behavioral changes impact the produce supply chain, especially logistics.
When we heard that C.H. Robinson was investing in top-quality research to help clarify these matters, we reached out and asked the company to find someone to present some of this research at The New York Produce Show and Conference.
They agreed, and we asked Carol Bareuther, Contributing Editor at Pundit sister publication, PRODUCE BUSINESS, to find out more.
Manager – Complex Account Group
Souring North Region
Eden Prairie, Minnesota
Q: Could you give us a preview of the key issues you will be discussing at the New York Produce Show’s Global Trade Symposium?
A: I will be discussing the key changes that are impacting today’s global produce and perishable supply chains, how shippers and receivers are adapting to those changes, along with what the industry should be looking at from their transportation providers. Different people are buying different items through different channels, grown in different places, and they are coming to market through evolving cold chains.
The result of these changes is this movement toward smaller orders, delivered more frequently with greater visibility through the supply chain, which is creating demand for innovation for our industry. Shippers and receivers, who are adapting and bringing innovation to their supply chains, are those who are poised for long term success.
Q: Please explain the concept of perishable consolidation and why you say it’s one of the industry’s best kept secrets?
A: Perishable less-than-truckload (“LTL”) orders have been a challenge for the fresh produce industry for years, mostly associated with the lack of a planned environment for those orders. The world is getting smaller, and improvements in global product innovation appear to be optimizing shelf life and shelf space for these emerging categories.
As average order size continues to shrink with multi-channel sales and the consumer focus on freshness, relying upon transactional or ad hoc methods to meet customer and consumer demand becomes increasingly difficult. The creation of a planned environment aids shippers’ growth initiatives, but also drives efficiency through each gate of their supply chains.
Q: What makes the concept of perishable consolidation you mention different than simply consolidating loads of produce we’ve seen for many years?
A: Product-origin locations are changing, which is creating a massive new LTL marketplace. As average order sizes are shrinking in the produce and perishable commodities, traditional rolling consolidation is becoming less effective in our industry. This model still exists and works well for larger LTL orders with longer shelf life, but doesn’t work as well for a commodity that has a short shelf life and smaller order sizes.
This is where adapting your supply chain becomes increasingly important. For those parties who are able to aggregate volume from an origin region into a destination region at truckload equivalent per unit cost basis, they can use a forward-distribution model to service the smaller orders. Then a provider, such as C.H. Robinson or others, can consolidate compatible items for the final mile deliveries from within the destination region.
This is generally performed with LTL pricing and truckload service. In the end, this creates a planned environment for the LTL orders, and the shipper and receiver can focus on what they do best -- selling and innovating their offerings.
Q: I understand C.H. Robinson has done research in worldwide transportation logistics. Could you give us an overview of this research?
A: One example would be where C.H. Robinson worked with Iowa State University researchers as they sought to understand the voice of U.S. truckload carriers and quantitatively measured the effects of “favored shipper” characteristics on transportation costs. Their results determined which characteristics actually make shippers favored in the transportation marketplace.
Q: What prompted this specific research?
A: The characteristics of “favored shippers” — the type that carriers prefer to haul freight for — have been debated for some time. Anecdotal evidence and some qualitative research suggest that favored shippers benefit from better pricing and service. However, no known studies evaluated whether being a favored shipper is actually measurable. Nor did any known research define which characteristics resulted in favored status in the market. Researchers at Iowa State University and C.H. Robinson's transportation division decided to work together to find out.
Q: How was this research conducted?
A: To better understand which shipper characteristics should be included in a quantitative study, the researchers conducted semi-structured interviews with nine truckload carriers of varying sizes in the roles of sales and operations lead. They defined three top issues of concern:
1. Dwell time/asset utilization. Carriers most frequently commented on shipper and consignee dwell time and the influence shippers have on the carrier’s ability to utilize their drivers and assets (trucks and trailers).
2. Contract terms and liability. All carriers mentioned liability concerns including limited liability, but not limited to the freight being moved and the drivers who are on shipper/consignee property.
3. Driver experience. Several carriers mentioned concerns related to the driver’s experience at the shipper and consignee. These ranged from the check-in process and parking, to driver lounges and restrooms.
Q: What were a couple of your chief findings?
A: This research used two models to test the relationship of origin and consignee attributes on a shipper’s favored status in the U.S. truckload transportation market. The first model found that individual shipper attributes offered by the interviewed carriers did not significantly influence price or service.
The second model found that two hours was a reasonable industry standard as maximum dwell time. Shippers and consignees with variable dwell times see higher costs than those with consistent dwell times.
Q: Are there findings from your research that were a surprise to you? If so, how so and why?
A: Although this research did not show a significant relationship between specific shipper and consignee attributes and freight rates, significant and large relationships were found between both origin and destination dwell times and increased freight rates.
Carriers cite many attributes that may result in “shipper of choice” status. However, the research showed that keeping the driver moving and generating income is more important to these carriers than keeping a shipper as a customer.
Q: In a global supply chain era, what new roads will we see transportation logistics headed?
A: There is a continued focus on collaboration across the industry. Shippers, retailers, and transportation providers are collaborating with their business associations more than ever. Much of this has been post-recession activity, where companies understood that collaboration doesn’t necessarily enable their competition, rather collaboration can increase performance to cold chain performance, manage “spend” and improve efficiency.
Q: What should industry professionals consider when looking ahead to the produce supply logistics of the future?
A: The Millennial generation will continue to influence buying decisions. The focus on freshness, brand, and convenience are here to stay, as these are related to corporate social responsibility. Adapting to the changes with how, where, and when goods are purchased in today’s marketplace will provide an advantage in the future. The creation of strong relationships and collaboration allows for engagement with the customer where they want to buy.
We thought this was an import piece of the puzzle for the Global Trade Symposium because too many exporters to North America don’t focus on transportation beyond getting it to the port in America.. Yet success in accessing the American market depends not just on having goods salespeople but on having the infrastructure to serve as a supply chain partner for big buyers.
Getting product where it needs to be, when it needs to be there, in the proper condition, is the key. Without this capability, getting the order may not be meaningful.
It is complex stuff, but the produce industry today is complex in a way it never has been. Those who will succeed in the years to come are those that master these issues. We fortunate to have Steve Gabrick and C.H. Robinson to help us navigate them.
Come and attend The Global Trade Symposium and engage with these issues to position your own company for success. You can register for The Global Trade Symposium and the broader New York Produce Show and Conference right here.
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The University of Gastronomic Sciences has been a member of our University Interchange Program in New York since 2012. The unique perspective of this Italian university’s emphasis has led to some of the most thought-provoking presentations at the events in both New York and London. Its professors have given such luminary presentations as these:
Knowing that Professor Fino was thinking deeply regarding the area of food waste, we were intrigued to have him share his thoughts. We asked Gill McShane from Pundit sister publication PRODUCE BUSINESS UK to find out more:
Q: At this year’s New York Produce Show and Conference you’ll be giving a presentation about the research and innovation projects that the University of Gastronomic Sciences in Pollenzo, Italy, carries out with Italian and International food industries. Can you give us a sneak preview?
A: I’m a legal scholar, not a botanist or philosopher. I’ll be presenting examples of why we think food and fruit systems require a multidisciplinary approach. I will analyse some of the relevant topics, such as the amount of food waste that’s produced in Europe, and try to make people appreciate how we can approach the problem. There are many different points of view to contend with, from the economical to agronomical to philosophical and, ultimately, the legal point of view.
Food waste is a big issue in Europe and it relates to production, and particularly the cosmetic standards imposed on fruits and vegetables, which are not directly linked to safety or sanitary issues but simply marketing. Food waste is a problem that can be fully understood and likely solved only by a multidisciplinary approach.
Q: What research have you carried out on food waste, and what have you found?
A: Currently we produce enough food for the population we expect to live across the world in 2050 (9 billion people). Evidently, we waste a lot. At the moment, almost 40% of food is wasted at the point of production because of marketing and cosmetic standards. Another 20% of food is wasted through domestic consumption. We need to reduce food waste, among other strategies, to cope with the increasing population on the planet.
Under the legal point of view, this calls for two interventions: Firstly, we cannot have purely cosmetic standards regulating the market anymore, and, secondly, we need a serious education on food. If people were better aware of what they are doing when they waste food – in terms of the loss of energy, nutrients, value – we could have long-lasting change, even if it is slow to implement, which could really reduce this problem.
We cannot be that innocent not to think that waste is a part of the market’s economy. It’s a part of the functioning of the market. But if we want to carry on living in this world, we’d like people to appreciate that food is not purely a commodity. Food can be produced from a commodity, of course, but food is more a common good than a commodity because food embeds values, tradition and history.
Food comes at the end of a very complex process and it’s really very dangerous to treat it poorly. Food is not like any other branch of the economy, and waste is harmful for the survival of the planet. If we waste a paper box or some clothes, it’s not the same thing. We are trying with our proposals under the legal framework and our involvement in European Commission activities to bring about this point of view – to think about food in a different way in order to change the system.
Q: What do you propose should be done to tackle food waste?
A: Our proposals are firstly about the evolution of cosmetic standards. Currently, we live by United Nations (UNECE) standards, or market-based (e.g. EUREPGAP) standards, in terms of the dimension, colour, and shape of our fruit and vegetables. And we have large losses. It has nothing to do with the safety or sanitary condition of produce picked from the trees, only the cosmetic aspect.
In my opinion it’s not acceptable that we have cosmetic standards fixed by an intergovernmental agency, like the UN, and it’s important that retailers, as part of their social responsibility efforts, gradually abandon these standards. It’s not possible to programme trees to produce apples of a certain dimension, shape or colour. The seasons change and every year it is different, plus the age of the apple tree changes too. Whether an apple is big or small doesn’t affect its taste. Taste depends mainly on the cultivar, and it is up to the consumer to decide which they prefer.
Q: How can we go about changing these cosmetic standards?
A: We can bring about change in the classroom. We can change the education of people so when they go to a supermarket they express an interest in buying fruit that’s not perfectly shaped or coloured. They will ask for more natural looking produce – fruit that hasn’t been selected or treated to look like the way the traders expect fruit to look like. Then we would see a change in the offer of the supermarkets.
If the majority of consumers want fruit that is safe and they don’t care about the shape, the retailer will change its offer. It’s a normal market reaction – they will adapt to what the consumers want. Take a look at what’s happening currently in the marketing of wines. There has been an explosion in the trend towards natural wines, and this can happen in the fresh fruit market too.
People are more and more interested in buying what they want and not just what is served to them. If we work on education and the true value of fresh fruit, and not just cosmetics, then we would have real change. We can’t just rely on TV programmes or the food will of chefs like Jamie Oliver and his Ministry of Food campaign.
The best way to reduce food waste is to educate children to choose good food and to eat better. Changing daily eating habits is a fantastic way to reduce food waste because all the ingredients and nutrients that we have at our disposal can be consumed and appreciated by people.
Q: Other than education, how else do you propose food waste could be tackled?
A: Every country, like France has recently done, could enforce laws to promote food waste reduction. And by promoting, I don’t mean they should introduce punishments. In our opinion, positive education is more effective and long lasting. Restaurants, distribution chains and any food-related economic sector should all find advantages in taking part in the fight against food waste, such as tax reductions in exchange for food waste reduction policies.
Q: Are there any good examples of reducing waste that could be developed further?
A: An idea that was launched some years ago in the UK is a great way to deal with food waste. It’s called The Pig Idea, and it aims to collect food waste from the kitchens of private citizens to feed to pigs. It’s a campaign that was run in the UK during World War II as a way to not waste any edible food. Tristram Stuart, an environmentalist campaigner, and his companions resurrected that idea and turned it into a modern version based on cooking leftover food to make it safe for pigs and to guarantee the safety of pork meat.
This is fantastic example, but unfortunately more than half of the European Union doesn’t allow the distribution of this example because they do not allow pigs to be fed food waste. But it’s a clear example of what should be done at a legal level to reduce food waste if it was introduced into European law.
Q: How long do you think it might take to bring about change?
A: It depends on the intensity of the effort and the means to enforce educational goals. Evidently, if it’s only a small university in Italy pushing the cause, it will take decades. But if a government took it seriously enough, because it’s economically interesting, we could see real change.
People eating better today means people are less likely to be ill tomorrow. In Europe, especially, this is something the governments should take into consideration. In the US, if you eat bad food you have to pay for your health care, so it’s not so much of a problem for the government. In the UK or Italy, where our health systems tend to be universal, what people eat is a problem of the individual but also the state. We need education in all schools, especially primary schools. It’s absolutely vital and it has to be enforced for the sustainability of our businesses and food production systems tomorrow.
We think everyone has a role to play; everyone is on the same battlefield. Governments should enforce it through public institutions. Celebrity chefs can also promote ways to cook that offer great advantages for your health, your pocket (by spending less on meat), the environment and the planet. People need to appreciate that you can eat well, and also consume refined food, but at the same time save the planet. It’s definitely possible to make changes that are good for you and the planet.
Q: Alongside the WHO’s recent guidelines about processed meat consumption, there has been much press lately about the environmental impact of meat production on the planet. With these key messages circulating, do you think the time has never been more ripe to get more fresh fruits and vegetables on plates?
A: Meat is a big issue but we try to have a balanced opinion. There are many areas on the planet where pretty much only grass can grow, and the most efficient way to transfer that crop (which is not directly edible for humans) into something that’s noble and good for humans is to produce meat. This is a balanced approach to meat that we definitely have to look at, and call for a reduction of meat produced through intensive breeding activities.
What the WHO said a few weeks ago is nothing new. Consuming a high quantity of meat has bad results for our gut and particularly cancer of the gut. On the other hand, meat is not something that’s bad per se. Its effects on the environment and on our health depend on how it’s produced – whether it’s intensive or not intensive – and on the quantity and the regularity of its consumption.
A lot depends on the model of nutrition in to which it is inserted too. The diets of long living people on this planet include meat but in very small quantities. Meat just needs a different balance. We have to treat meat unlike other commodities. We have to reduce meat in favour of a diet with more vegetables, especially fresh rather than processed. This is a big task for the fresh vegetable market. Already, there is big gap between consumption in the north and south of Europe.
For example, in the UK, it’s not acceptable that fresh meat is cheaper than fresh vegetables. But the cost of vegetables can be higher than processed food and meat too. When I say we have to abolish cosmetic standards for produce, this is also what I am referring to. We have to allow people to find fresh vegetables that are available in the quantity and at the price they can afford. Reviewing our consumption of meat is good for our health, the planet and our pockets. It is another example of what we have to do at a global level to improve health.
Q: What do you hope delegates will take away from your presentation in New York? What do you hope to inspire in them?
A different point of view about fresh fruits and vegetables and an opportunity to look at food and land in a different way. I’d like listeners to simply reflect on aspects that they may not have thought about before.
There is little question that when governments intervene in markets to restrict supply, it is often done at the behest of industry members who would like to see prices rise. Those of us old enough to remember these things will recall that it was during the administration of that great free-marketer, Ronald Reagan, that the important national issue of whether California kiwifruit growers should be restricted from selling “Fans” and other misshapen fruit was answered in the affirmative. And, indeed, the very first issue of PRODUCE BUSINESS, over 30 years ago, contained a lengthy debate as to the merits of citrus prorate.
So, we would be inclined to allow the free sale of all produce without regard to cosmetic limitations.
Still, if you read the link to the UN standards for pears contained in the story, it is hard to imagine that these rather loose standards, including three separate grades, are really stopping many pear sales – and they only apply to internationally traded fruit.
Indeed, there is something amiss with the good professor’s statistics. Competent commercial produce growers do not waste 40% of the fruit. We have never seen a good statistic, but if you go to a top notch production site run by, say, Paramount or a top Sunkist grower or any of the big Washington state apple and pear shippers, almost everything seems to be harvested and shipped to market..
The product is grown to fresh standards, but what doesn’t make those standards is quite small and then is often sold for freezing, canning or processing.
So where this 40% number comes from or what it means will be very interesting to learn. It must apply to either very low value crops or crops that are grown very distant from markets so it is only worth shipping them if they are top quality.
When field waste does happen it may not always be right to think of it as waste. If such plants are turned over and left in the soil it can play a part in keeping the soil rich and fertile.
And we confess that we are not quite sure why waste in food is so uniquely bad. If there is waste in packaging and that waste means trees are cut down, isn’t that bad too? If there is waste in clothing so we have to grow more cotton, doesn’t that matter?
Barring government intervention, we are not certain that it makes sense to speak of excessive waste. To avoid waste costs money, and whether it makes sense to invest that money to reduce waste, depends on the economics of the situation.
We have no objection to educational programs to inform people about the value of food apart from appearance. But the appreciation of beauty is acceptable too, and if people wish to buy an apple because it is lovely, that seems quite reasonable.
In addition it seems to us that food waste is just one problem; there are others. We don’t allow animal spinal cords to be fed to cattle, for example, because eating certain parts of animals has been implicated in the spread of mad cow disease. Now there are pros and cons to everything, but these rules were put in place for a reason and can’t be casually dismissed.
Still, we are open to being influenced and to different ways of thinking. Indeed what is fantastic about these live events is the opportunity to engage with people who think differently than you do.
It is a way of becoming more knowledgeable, of thinking more broadly and that expanded thought process can lead to success in business and in life.
So come join the conversation. Come to New York.
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TheIdeation Fresh Foodservice Forumhas become an important part of the New York Produce show and Conference with operators, distributors, producers all joining together to find ways to boost produce consumption and bring us closer to the USDA goal of half the plate being accounted for by fruits and vegetables.
So when we heard that a new hire at Rutgers had brought with her some research tying together produce farmers and independent restaurants we signed her up quick and we asked Carol Bareuther, Contributing Editor at Pundit sister publication PRODUCE BUSINESS to find out more:
A: Now, we’re delighted you’ll be presenting in New York. We’re interested to learn more about your initial research in Alabama, continuing research on the restaurant industry in New Jersey and the possible parallels you might draw.
A: The abstract: health-conscious consumers are leading a growing local food marketing trend in the U.S. This demand for local food has expanded to the restaurant market, and chefs are consistently searching for local products to appeal to consumers and also for product quality and freshness.
However, there are barriers that prevent restaurants from purchasing from small local farmers. The study was done to determine if restaurants in the state are interested in purchasing locally, to identify the barriers preventing them from doing so, and to understand restaurant/chefs’ preferences for purchasing local food.
Q: And you’re looking to expand your Alabama research to New Jersey?
A: Because of the number of small farmers in New Jersey seeking additional intermediate markets (restaurants, grocery stores, etc.), the study will be replicated here in New Jersey. Initial secondary data that will be collected will include the number of independently owned restaurants in the state, an approximate number of these restaurants that are currently purchasing local, and the number of small to medium farms that could benefit from this marketing outlet.
Q: Interest in local is a long established trend at this point. Isn’t it a given that most independently owned restaurant chefs would prefer to use local if available? What are the key barriers?
A: I started the research in Alabama, where I was doing my Ph.D. study at the time, and this was part of my dissertation work, mainly working with small farmers who sold their product at farm stands and farmers markets, where at the end of the season they still had produce left. Those outlets were not enough to sell all their products, so they were looking for additional markets. They did not have enough produce to sell to wholesale markets, where volume was the number one problem, but even if they could supply, price was also an issue.
These farmers wanted to see how they could tap into other retail and foodservice markets, which would require focusing on the smaller grocery stores and restaurants. So we decided to do a study to look into the independently owned restaurants, because they can easily make decisions unlike the chain restaurants, which we know have to go through different management levels to implement change.
We wanted to find out their preferences for different attributes of buying local foods. We asked them first of all, do you currently purchase local foods, and for those who did not purchase, we asked them the reasons why. Then we sought out their interest in purchasing local based on a number of criteria.
Q: What were the reasons why an independent restaurant wouldn’t be buying local foods?
A: One reason would be that they didn’t know where to find the produce. Or it was a supply issue. They would have to buy from too many small farmers to get the quantity they were looking for. Consistent supply was another. And since these were seasonal growers, they weren’t able to supply them the year-round availability they needed.
At certain times of year, they’d still have to go back to buying from those food chain suppliers. Those were the top reasons why they didn’t purchase. However, if they could alleviate their issues of concern, the majority of restaurants in our study were interested in purchasing local foods.
There were a number of important factors we wanted them to rank in terms of influencing local purchase decisions, which I’ll go into in more detail at the Show. We gave them a list… consistent quality, consistent supply, year-round availability, price, food safety issues, delivery, packaging and labeling, processed versus fresh, ease of ordering and paying. We asked them to rate each of those factors from 0 not important to 10 very important.
Q: What factors stood out in the ratings?
A: I do think the ratings correlated with what people in the audience would generally think. Consistent supply, consistent quality, year-round availability and price were top factors in making the decision to purchase local foods, which you’d think would be important.
Q: But local by its nature isn’t going to be available year round.
A: Right, and that’s the dilemma. The restaurant wants the product to be available when they want it, but you’re not always able to get it from the local farmers, which is a major drawback for many of these restaurants.
Q: This does surprise me because overwhelmingly when we interview independent restaurant chefs, they are so excited to bring in local product and are big on promoting seasonal items to their patrons.
A: I will say in our study, 51 percent of participants actually did purchase local, and 49 percent did not. So it was really close.
Q: Could you further describe the independent restaurants in the study? Did you break down different characteristics of those participating? For instance, high end white table cloth restaurants, or ones with a natural foods bent, etc. Did you consider what demographic they were targeting, such as a college town, or elderly community, and perhaps more importantly, whether they were in a more rural area surrounded by farms versus an urban setting, etc.?
A: We surveyed all the independent restaurants given to us from the Alabama Restaurant Association. So this wasn’t from just one area; we got responses from all over the state.
Q: For those unfamiliar with the local produce scene in Alabama, could you give us a picture of the landscape. How would it compare to a state like New Jersey?
A: It’s pretty similar, the only difference is in the South, because of the warmer climate, the season is prolonged so they’ll have local produce a little bit longer in Alabama than here in New Jersey. A lot of people are pushing local and using greenhouses and other growing techniques to extend the season and to have more supply during the winter months. But still it’s not a year-round thing.
Q: Doesn’t it also matter how you define local, since a broader definition will provide extended local options?
A: When we referred to local in our study, there was no real definition. Because there is only the USDA definition of local within 400 miles from its origin, and no standard definition, we didn’t specify to participants, we’re talking 50 miles from your place or just Alabama, or any other limits.
When we do ask them what their definition of local is, most of them say a 50 to 100 mile radius, but it wasn’t something we asked them to consider.
Q: In New Jersey, Jersey Fresh has become an aggressive marketing tool…
Scrolling through our survey, we asked those who purchased local the reasons why, and had them rate the factors, as we did for those who wanted to purchase local but didn’t.
We also asked them background questions like the percentage of local foods delivered to them versus picked up by the restaurant, to see if delivery was a factor.
A big part of the research was the preference part of the study. We used a conjoint analysis.
We gave participants some choices from different attributes: The number of farmers they’d like to work with – three, six, or nine. The reason we came up with those numbers was based on information we learned when we were developing the survey during our visits to local restaurants. We also looked at the producer type -- conventional, natural, or organic, since these are the most popular growing methods. Then we looked at product form — fresh whole from the garden, maybe wash it and that’s it, versus processed, meaning pre chopped or washed or bagged for you. We gave them this information too.
Then we asked them price; what’s your average weekly you’re paying now. Not everyone gave us a price, which we were hoping for, but what’s your average cost you’re buying from the local farmers, and would you be willing to pay 10 percent below or 10 percent above what you’re paying now? Every person who answered the survey whether you purchased locally or not, you still had to answer this part of survey.
Everyone got eight choice sets, and each choice set had three attribute options at different levels. We said go through them, what would be your ideal preference. Participants also were able to opt out of picking a choice in a set because we didn’t want to force them to choose one.
For instance: Let’s say the price is most important to you, option 1 is: you have three conventional farmers giving you fresh whole product, but then the price is 10 percent above, would you still want to pay that price, or would you prefer option 2, buying from six farmers producing naturally at a lower price.
Q: And what did you find out?
A: In terms of the results, I don’t want to give away everything, but overall on average looking at all responses, the ideal bundle of local farmers for independent restaurants is six farmers producing naturally grown food. When their customers come to the restaurant, they don’t care if the product is organic; they want local. Once it’s local, it’s considered healthy and fresh. So the restaurants don’t necessarily want to pay the additional price for organic, but are content with naturally produced food, which is not certified organic.
The restaurant wants to get it fresh whole. Why not processed? It’s because they can use every bit. For example, they can use the bone of the chicken to make soup.
Q: Chef Gerry Ludwig, who will be our keynote speaker at the IDEATION FRESH Foodservice Forum during the New York Produce Show, talks of this trend in produce, celebrating vegetables in their natural state during cooking as well as on the plate -- nubby, misshapen with the stems on.
A: Restaurants are saying give me everything and I’ll figure out how to use it. But when it comes to price, obviously the preference is 10 percent below what they’re currently paying.
Q: To clarify, when you’re saying conventional versus natural, is it assumed it’s local, if it’s natural?
A: No. it’s not assumed. But the chef is thinking when customers come into the restaurant and see on the menu it’s locally grown, they assumes it’s fresher, healthy and natural. If you have locally grown food on the menu, consumers are not thinking about growing methods; they’re just thinking local is better, so the restaurant doesn’t see the need or value in purchasing organic.
We gave participants the definitions of conventional, natural and organic.
Q: How did you define them?
A: So when we say conventional, it means growers use traditional agricultural practices; they rely on traditional pesticides, and synthetic fertilizers. For naturally grown, farms do not use synthetic pesticides or other synthetic chemicals, what some would consider harmful.
And for organic, we say it follows legal guidelines defined by the USDA program, where no GMO’s are permitted and crops are produced without any synthetic pesticides or synthetic fertilizers.
Q: Since fresh fruits and vegetables are GMO-free, are you just asking about local produce, or are you including other local products?
A: The focus is on fruits and vegetables. But on the survey, we just said a basket of goods that are locally grown. We didn’t specify fruits, vegetables, dairy or meats. We just said, in general, across the board.
But then when we followed up, and asked, what are you looking for in local product, most of the responses were fruits and vegetables. Produce clearly was the concentration.
I want to see how this can translate to New Jersey, because the problems are similar here. We have a majority of small farmers, produce specialty crop growers. When I talk to them, they have the same problems. At the end of the day, they have major waste and extra produce because farmers markets or their farm stands are not sufficient. They are looking for additional markets.
Q: How can this study help?
A: We want to say to the farmers, this is what restaurants are looking for. We want to cut out the uncertainties; is it worth your time to connect to these restaurants? We want to go to them, here it is, this is what restaurants want from you, can you supply it?
In the case of the Alabama study, these independent restaurants are looking to buy at the cheaper price. Whatever their average price for a basket of goods, they want 10 percent less. Are you willing to sell your product at a lower price just to tap into these markets? Maybe this is not the market for you. Maybe you should be looking at grocery stores.
Q: But as you point out earlier, if you ask, people are going to want to buy something at 10 percent less… Isn’t there a quality/price value equation?
A: Quality is important too. When we asked the restaurant owners to rate consistent quality, it was a 10 on their ranking scale. Now we can go back to the farmers… if you’re just looking to get rid of products you couldn’t sell, this is not what the restaurants are looking for. Switch it out and give your best quality to the restaurants. Now, of course, some of this depends on what the chef is using it for, if it’s for puree versus a slice of tomato on the plate.
Q: Doesn’t it also depend on type of restaurant? Are these mainly high-end?
A: They had to be independently owned, primarily white table restaurants. We weren’t looking for more mass market or fast food operators because most are not going to pay the price for local for a burger or fried chicken.
Q: You didn’t consider any other outlets, independent grocery stores, which you mentioned as an alternative.
A: We talked about going beyond the independent restaurants and targeting smaller grocery stores and seeing what they’re looking for, but that would be two different audiences, and a different study.
We’re looking to do that down the pipeline. There are not too many middle alternative markets for these small farmers in New Jersey beyond farmers markets, farm stands and pick your own.
You have the wholesale side for the big supermarkets, but it’s a waste of time for these small farmers to go after them because they don’t have the volume and price to go that direction. The opportunities are at the restaurants or smaller grocery stores, or farmers that purchase from other farmers to sell to these wholesale distributors.
Q: I do interviews with larger retail chains, which have developed long-standing arrangements with local farmers at different store locations, highlighting individual growers and the stories of their family farms on signage and farmers’ market-style merchandising, etc.
A: Most of the farmers I talked to about these arrangements are tentative, because they just don’t think they’re going to get the price, or they don’t have the volume, so they’re trying to get top price for their product. So they want this market, but it depends on how much they can get for their product.
We also had the conversation about doing value added product, and then sell to these middle guys. Some do salsas or jams for the supermarkets or restaurants. See if you can get more money selling value-added than you can selling your produce.
Q: Did you also discuss food safety issues?
A: First of all, we asked what they knew about food safety standards, and if this was an important factor to them. We didn’t go into details with food safety. From our study, 83 percent responded they were familiar with food safety standards.
Q: That means 17 percent said they weren’t familiar with food safety standards. That’s a little disturbing…
A: I know. You’d think everyone in the food business would be highly aware.
Q: When you were listing the top attributes restaurants consider when buying local, at first I was surprised food safety wasn’t at the top of the list, but then I figured that was just a given; same as consistent quality, it’s an expected attribute to do business…
A: With some of these smaller players, it can be different. We asked people who bought local what was important to them, and food safety didn’t stand out. However, when we asked people who didn’t buy local what was important to them, food safety was a major priority, which was an interesting finding for us.
I will say, though, from all the factors I mentioned, consistent supply, consistent quality, the price, availability, food safety, the payment, the food processing… every factor was more important to the people who don’t purchase local than they were to the people who do purchase local.
Q: So the people buying local are a little more flexible, or tolerant of these issues.
A: Exactly. These local farmers don’t always have control over a lot of these factors — supply, volume, quality. People not purchasing local are less willing to give up these factors.
This is the very first in-depth conjoint analysis study on restaurant preferences for local foods. We’re in the process of submitting the technical part to a peer-reviewed journal. We want to publish this data to help drive more research in this area and to help small farmers.
Q: Is farming a part of your background?
A: I grew up in Jamaica and my dad was a farmer. He had fruits and vegetables, poultry, and goats. I grew up on the farm with him, and that’s how my passion started for agriculture. I would help him plant. We were literally digging with a machete or hoe, real manual labor!
When we’d water these plants, we would set up our own irrigation system, but also, this was a third world developing country, and we’d have to carry these milk can-style buckets of water, and I’d hand pick the produce. I fell in love with farming.
My dad could grow anything, and it was so good when I tasted it. But he didn’t know anything about the finances and marketing. I went to a university in Jamaica and did my undergraduate degree in accounting to help my dad. Then I had the opportunity to move to the U.S. in 2006, where I pursued my master’s degree at Tuskegee University in Alabama in agricultural economics, focused mainly on the marketing side because I had the finance background.
When I went to Auburn University in 2009, my major professor worked in agricultural extension as well, which was perfect for me. I got to work closely with the farmers on the business side. I did a post doc in extension at Auburn, as an economist for a year. I’m out there with the farmers finding out, what are your financial and marketing issues, and how can we assist you in meeting those challenges. That’s how I got more involved in the local foods movement.
When I got hired here at Rutgers, the department head called in. Because I’m an assistant professor with Rutgers, I’m on a tenure clock, and he said at the time, I think it would be best for you to wait until January, because if you start in November, it means your tenure clock has already started, so you’ll be behind. I know you want to start, and you want the income. And I said this is not why I really want to do extension. It’s not about the income. I just want to get started right away interacting with the farmers.
I absolutely love doing this, and it all started because of growing up on a farm and helping my dad.
What an inspirational story! They better hurry up and give her tenure at Rutgers, schools will be chasing her from all over. And, of course, presenting at The New York Produce Show and Conference perfectly fits in with the requirements for extension appointments to disseminate knowledge.
The idea of tying local food to restaurants is a hot one. A few years ago the Pundit keynoted Sysco’s produce meeting and the whole talk was devoted to the subject.
Yet we think clarity on this issue is better served if we distinguish two issues: The issue of local food and the issue of direct supply.
Every restaurant buys local food – they may get it through a giant, such as Sysco or US Foods, or a massive regional player such as Baldor or Riviera, buy it off the Hunts Point or Philly markets or get it from a small purveyor who splits cases and provides credit – but even the local hamburger or chicken joint buys local tomatoes or cabbage to make coleslaw or potato salad or other products when they are the mainstream items in the region.
That statistic that 49% of the restaurants do not purchase local must mean something else – like they don’t specify local.
The issue of volume is a red herring. Wegmans has local farmers who grow two or three acres of berries. When the Pundit worked on Hunts Point we helped out plenty of Amish growers who came in with a pickup truck filled with musk melons.
And the issue of price is one that must be looked at closely.
Without a doubt growers that can get white table cloth restaurants to buy direct can get higher prices for their produce – but most white table cloth restaurants buy very low volumes. To sell that one pickup truck of produce they dropped off at Hunts Point could take days of driving, especially in a place like Alabama!
In fact the “higher prices” that most growers get selling direct to restaurants would only be more profitable if their labor was valued at nothing.
Yes in the San Francisco Bay Area and in New York’s Hudson Valley you have a few operators that have direct relationships with top chefs. At our first everFoodservice Forumour keynote speaker was Farmer Lee Jones, who has a special farm in Ohio (Link) that Fedex’s to chefs all over the country.
But these are wild exceptions.
One thing worth doing would be to quantify the market,... the white tablecloth segment is typically estimated at only 1% of the foodservice segment so it is not clear it is a very large market.
In addition to the concerns for growers killing their time direct selling, delivering, collecting from restaurants, it is also a big pain for restaurants to have all these people delivering at all different times, all different bills coming in, etc.
The food safety issue also needs to be emphasized. These restaurants are not Sysco, they have no ability to vet all these farmers for food safety. They can’t handle the bookkeeping in terms of keeping track of certifications and insurance, they also don’t have the expertise to evaluate the farms. It would be irresponsible to promote an initiative to direct sell from farm to restaurants if this problem is not resolved.
Come join in this discussion of how to connect produce growers with the foodservice
Now we invited him back for Round Two, and we asked Tommy Leighton, the Managing Director for the Pundit’s sister company in the UK, to find out more:
Diogo Monjardino de Souza Monteiro, Director of Newcastle University’s agribusiness programme, will be talking at The New York Produce Show about a project he is leading, aimed at matching skill-sets of students with the management requirements of businesses in the fresh produce industry.
Diogo Monjardino de Souza Monteiro
Director of Newcastle University’s
Newcastle upon Tyne, UK
Q: What led you to set up this project?
A: My contact with various organisations over recent times has clearly revealed the hunger for recruitment into the produce business but also a perceived lack of talent in the potential employee market. I had a meeting in September with a CEO and other executives of a major farming organisation in England, and they are very keen to work with us because, after doing the rounds of colleges, they felt that the students they had met had not impressed in terms of having the potential to move the company’s business forward. It’s obviously a clear problem, and one that I wanted to address as the director of an agribusiness programme at one of the country’s leading universities.
Q: How did you set about the task?
A: I effectively became a broker between the two markets, on the one hand the students and on the other the produce industry. I wanted to ask students what they knew of the industry, what skills they felt businesses need, what functions they believe there are to fulfill, what sort of working conditions would they expect; and at the same time I wanted to find out from business organisations exactly what they require from student recruits, what part do they think universities can play in preparing young people to enter their industry and how they feel graduates can play a part in growing their businesses. So, with the help of students in my university, I put together a survey that will hopefully provide enough data to help create a pathway for graduates to move into and then make an impact in the agribusiness industry.
Q: What results have you had from the survey?
A: The survey questionnaire has only just been finalised, so at the New York Show I will be reporting on the preliminary results of the exercise. The survey has gone out to not only the student body in my own university but also to another 10 in the north and midlands of England, using not only student unions but also social media to promote the survey, and I’m confident that we will get a good enough response to provide some very useful data. On the business side of the exercise, it has been sent to around 600 organisations across the UK.
Q: What are your hopes and aspirations for the effects of the survey?
A: I hope that it will help to successfully bridge the gap between a student’s university education and training and the world of business, constantly building relationships between the two markets. As a university and a student body, we need to know what we are relating to, and vice-versa with the business community.
We need to think about people – at the end of the day businesses exist for people, and I believe that we’ve lost sight of that a little bit because of the ever-increasing focus on technology.
Q: How might those aims work in practice?
A: What we are already putting in place at Newcastle University is a way for businesses to scout students, to identify their talents early on and to have the chance to mold them into the sort of graduate employees they are looking for.
We are encouraging companies to come in and organise sessions to not only represent their businesses but also to provide students with slots of time for one-to-one discussions about possible internships or year-placements. This is giving the students an in-depth idea of how their career paths might evolve, while giving companies an idea of what kind of person is coming down from university, and what kind of person they can look to attract into their organisations.
It’s in my interest, of course, to help students find good jobs; but the interests of the produce industry in terms of the jobs market can also be helped with the sort of co-operation that I’m hoping our survey will encourage.
All the industry is concerned with the next generation of employees. Where will they come from? Will they be equipped to the job required? Is the produce industry positioned to keep these employees and tend to their professional development?
In the UK, we’ve launched The Fresh Careers Fair to help facilitate the match between university students and the industry.
But the industry needs many more such efforts, and this study may be a foundation for a new generation of efforts.
Come to The New York Produce Show and Conference, and let’s discuss how to deal with the trade’s needs to attract and retain great people.
Each year, we also like to give a special hat tip to those who have agreed to help educate and inspire the young people who make up the future of the industry.
We have a special culinary program that is mentored by professional chefs at both Le Cordon Blue of Chicago and Johnson & Wales.
Plus we have two additional programs that reach out to students and young professionals. Our University Interchange Program introduces the produce industry to students and faculty at Cornell University, Rutgers University St. Joseph’s University, University of Connecticut, University of Delaware, Newcastle University from the UK and the University of Gastronomic Sciences from Italy.
New this year is the Foundational Excellence program, which helps people of any age with less than five years’ experience in the produce industry.
Both programs contain special industry panels, and we would like to salute the people who are making this all happen:
2015 NEW YORK PRODUCE SHOW UNIVERSITY INTERCHANGE PANEL
John W. "Jack" Allen
Michigan State Professor Emeritus
International Marketing Consultant
PANELISTS AND MENTORS IN ALPHA ORDER
Long Island City, New York
Vice President of Produce
Group Managing Director
Capespan Group Limited
North Belville, South Africa
Reggie Griffin Strategies
Hilton Head, South Carolina
S. Katzman Produce
Bronx, New York
Sales and Purchase Manager
Spezzano Consulting Service, Inc.
Long Island City, New York
Many thanks to these industry members who give so generously of their time to help support the future of the industry.