When Mayda Sotomayor-Kirk was appointed CEO of SealdSweet, we introduced her in this way:
She started in the produce industry as a receptionist, working her way through college. Then she fell in love… with an industry. And now Mayda Sotomayor has become the CEO of one of the most venerable names in the business
That was over a decade ago. Now, she is a global icon of the industry.
Many can talk about international trade, but few can tie it in with a personal story of redemption like Mayda.
We asked Matthew Ogg, Contributing Editor to Pundit sister publication, PRODUCE BUSINESS, to see what Mayda has in store for attendees at the Global Trade Symposium co-located with The New York Produce Show and Conference.
Seald Sweet/Greenyard USA
Vero Beach, FL
Q: So I understand you are in Arizona, how is everything going for you on your visit to Nogales?
A: Nogales is great. We’re inaugurating our offices here and the warehouse.
Q: So that’s a pretty substantial development I suppose?
A: I’m very happy. We had a strategic plan to grow our business out of Mexico, and we’re restructuring, hiring and growing our operations here. It’s exciting – I hadn’t been to the new offices until now. I’d seen them being built, but I hadn’t seen the finished offices yet. So I figured I better come out here before it got too late.
Q: Fantastic. Before we discuss developments like this one, I’d like to jump right in with some broader questions. With both early and later fruit, we are seeing a growing overlap from California with commodities you import like citrus and grapes. How is that changing the way you do business?
A: Good question. It definitely changes from product to product, and it’s true — there are new varieties, and there are technologies like Apeel that are extending the shelf life of products, and that’s definitely a concern. But one aspect of my talk at the New York Produce Show will be forecasts for growth out to 2030, and the extent that imported product will continue to increase even with those situations because the reality is that land in California continues to be expensive, with water shortages on the rise.
There are climate changes that are happening all over the world. California has a large basket of produce, but it cannot be sustained to feed the world, or to feed even the U.S. Product has to be imported in the counter-season into the U.S.
And there are products we can’t source domestically. I’m going to use the example of pineapples, because that’s the easiest one. 100% of pineapples are imported and that’s never going to change. It’s a high consumption product.
There have been significant changes before. For example, Spain used to export 50 million cartons of citrus into the U.S., but now California is producing them. So that completely changed the face of a whole industry, yet Spain’s industry hasn’t crumbled. In fact, they have increased the volume of this commodity to other countries.
Q: Would you be able to elaborate on the growth you’re forecasting and the factors driving it?
A: In this case, a lot of the growth revolves around the fact that trends for fruits and vegetables are around healthful living and convenience, not to mention population growth. The world is becoming international, and there are more fruits and vegetables that will be consumed in the future.
In 2002, there was $6 billion in imports, and in 15 years that grew to $21 billion in 2017. We have no reason to believe that growth will not continue.
Today consumption is flatter than the levels that are recommended. If we can only increase consumption per capita, and with the increase in global population and in the U.S. population — especially with the ethnic diversity the U.S. is going to be having — we can only expect that imports are going to increase.
In 2017, 55% of the fruit that was consumed in the United States was imported and 32% of the vegetables were imported. So that gives you an indication that more than half of the fresh fruit and almost a third of the fresh vegetables the U.S. consumed are imported today.
Q: That’s incredible.
A: It is. And as land values continue to increase and as populations continue to increase, and the demand increases for people to have year-round supply, we don’t have any reason to believe this trend will not continue to increase.
Q: And how do protocols play into that?
A: Protocols are set in place in order to protect local production and protect it from any unwanted pest or disease to come into the United States. It makes it difficult to import product, and growers must do more things to get their product delivered in the correct condition for the United States.
I think many international growers understand the protocols are in place, but it does in some cases limit the amount of product that can come into the United States. For example, if you have lemons and they have to go through a cold treatment protocol, even if they are admissible, lemons do not do well in a cold treatment environment at a certain temperature. Because the protocol exists, the growers, of course, choose to go to other places rather than come to the United States.
Q: So it’s about protecting U.S. crops from phytosanitary threats but also finding protocols — systems-based in an ideal scenario — so that you don’t need to do hot vapor treatment or cold treatment.
A: Or fumigation. One of the worst protocols that exists today is fumigation — it limits the shelf life of the commodity, and you’re putting methyl bromide onto a product so it creates the inability to import that product in an organic way. There goes any type of organic commodity.
The systems approach for sure is the best way to go both for the consumer and for the availability of these products in the United States, so long as it’s science-based. We definitely don’t want in any way to have any pest that comes into the United States that can hurt domestic production. We are a domestic grower and we definitely don’t want to see that.
Q: And now you’re setting up this office now in Nogales aimed at bringing in more produce from Mexico. How do you feel about the protocols for Mexican fresh produce?
A: NAFTA (North American Free Trade Agreement) has been very good for produce out of Mexico. NAFTA has for sure helped the production and not only economically, but also there are very limited protocols that are needed. For our protocols, you have to pass inspections, but the vegetables that come in from Mexico are either with a systems approach or free entry.
Mexico really is our backyard in a way, and we look at Mexico for growth in really producing not only the wide fruit basket but also the vegetable basket that we need. I’m sitting in Nogales, and I can see vegetables across the street. There’s proximity to the United States and the ability for Mexican growers to produce to a higher standard and in a sustainable way.
One of the best things that happened was when the LA Times did a news story a few years ago on child labor and the way things were grown. What it did was even though it brought attention to these issues, it also meant that a lot of growers who were already doing things in the correct way actually became stronger because they were in a position of having all the ethical practices in place. They had the certifications and they came out stronger.
Q: You’ve spoken about the increased diversity in the United States. Setting up the new office in Nogales, do you think that you’ll be expanding from your core product lines into more fruits and vegetables aimed at the Hispanic market?
A: Yes. We’ve just gone through a strategic plan, and one of our goals is to have a wider basket of commodities, and second is to get as close as possible to our retailers; to have an intimate relationship with our retailers. And that could potentially be changing.
Now we’re going into a whole other world where we feel the future of the commercial side of this business is to be more open, transparent and as business is very complex - the business in the very near future, if it’s not already changing, is where an importer needs to be more than just an importer.
Our goal is to be more of a liaison, a connector of sorts, trying to be the bridge between the grower and the retailer, and to add value but try to have that be a much more direct and transparent relationship.
It’s not a relationship of us importing and us selling it, but for the retailer to have more of a direct relationship with the farm and for us to be more of the bridge that unifies it together. That’s what we’re doing, and that’s how our business has grown in Europe.
We have examples where this type of value-added solution has worked, and we have many examples where our retailers are flourishing, our growers are flourishing, and we do more of that connection. We want to bring that type of value-added commercial-providing into the United States. That could be a whole presentation in itself.
Q: It certainly gives a lot of context about your business and where it’s heading. Seald Sweet is a major importer in certain commodities, but no importer can afford to be a monolith and stand still. You need to keep moving and changing and stay up to pace with the times.
A: One of the things I feel is just being an importer and selling to a retailer — while it is and has been an important aspect of our business — is not sustainable. It’s not a sustainable practice.
We feel that the world is getting smaller with communications and technology; we need to solve the problems of the retailers, and solve the problems of the grower, and try to connect them as directly as possible and as transparently as possible.
That’s the only way that the grower is going to know what the market is doing, to understand and know what the consumers want, and the retailers are going to have the assurance that the product is being grown for them under the right conditions in the right way with sustainable practices.
Logistically we have knowledge of world markets, and we have knowledge of business and governments, so if we can combine these three pillars of knowledge and we each play our role well, we feel, and have seen successfully in Europe, how this actually does work. It creates prosperity.
Our goal is that little by little we want to introduce this. We have a saying in our company, and I think this is really an important one that was brought to us by our founder and CEO Heinz Deprez, who says, “We need to provide our retailers with product as close as possible and as far away as necessary.”
So, we provide them with product sustainably as close as possible to them, and as far away as necessary so as to not have a break in supply. That can be done with a partnership between the three different pillars.
Q: Your presentation in New York is going to touch on your experience over the years, and looking back 36 years ago when you started in the fresh produce trade, could you have ever imagined the sorts of changes that are taking place?
A: It’s very interesting. When I was preparing for the presentation, I looked back at pictures and I saw some of the packinghouses that I visited, and I was flabbergasted. Now knowing the technology and the resources and what growers internationally are doing, it’s really breathtaking to see how this business has advanced and grown. Never would I have thought the traditional way of doing business was ever going to change, and this was just the way it was.
In reality, growers are becoming more and more technology-savvy; they’re understanding more and needing to be more part of the market, and retailers are consolidating while becoming more knowledgeable of what’s happening in the market. And with 55% of fruits consumed by imports and 32% of vegetables, this is becoming a much more sophisticated industry.
With that, we also have to think differently. The traditional way of doing business is changing. Never would I have thought that today we would be sitting around a table with a grower and a retailer and planning six months ahead of time, looking at new varieties and consumer trends, and what can be planted and when and the timing, and just be so transparent and so open.
It's very gratifying to see how this industry has evolved. I’ve been very fortunate to be a part of it and to have seen such differences throughout the years.
Q: You’ve visited so many countries in the process and had adventures along the way, and in our chat when we were arranging the interview, you mentioned how you’d even needed to travel by camel at one point. Is there anything that comes to mind that shows how much the industry has changed?
A: I don’t think there has been a bottle of wine that I have not had a glass in every country I have been in. There have been endless dinners and people who I’ve known all over the world, and my best friends are people I’ve met in the industry. I have growers who are lifelong friends and will always be friends; I had situations where women weren’t allowed to eat with the men, yet I have a picture of me eating with them because I’d had to ask for permission.
That was another thing. You have to remember 36 years ago, women were not the norm in this industry, so whether I was a trendsetter or just crazy, I got involved and luckily so. I visited more countries than I ever thought I would have done, I’ve had more passports because I’ve run out of space; not because they expired. And I’ve kept them all.
I have seen things and lived the most incredible human experience of seeing people — the workers, the laborers, the farmers, and the commitment they’ve had.
I’ve lived the Cinderella life, and it has been due to this industry. My degree was going to be in law. I had a scholarship to go to Law School; I cannot imagine me being a lawyer. I can’t imagine myself being anything else than what I am.
Q: And your life began in Havana, Cuba. What was your story of building a life in the United States?
A: In 1967 Fidel [Castro] had what was called the Freedom Flights, so people who did not want to be part of the new regime or revolution could leave. My mother, my brother and I left. My father wasn’t able to leave yet, and we got on a plane — my mother for the first time; she had $50 in her pocket, and we came to this country.
Luckily, we were received and my aunt was here. We lived with her, and my parents made a life. My father came later on and he really didn’t think we were going to stay here very long. He didn’t think that the revolution was going to last. My mother and father unfortunately passed away without ever seeing Cuba again.
But my parents did succeed. My parents created their business here and unfortunately never got to see me become CEO of a company, but I know they would have been very proud of me living the true American Dream.
They always instilled in us that incredible sense of gratitude to the United States — we would have had to stay in a Communist country that we did not believe in. My parents didn’t get the chance to go back, but because they did what they did, it gave my brother and me the opportunity to live in a free country, and their sacrifice is today what we live.
Just recently we produced The Amsterdam Produce Summit, and we featured Maarten van Hamburg, general manager of Bakker Barendrecht, a sister Greenyard subsidiary. We did a piece on the system that Greenyard has in the Netherlands as the sole supplier of most produce to Ahold in the Netherlands. You can see that piece here.
We share in Mayda’s voice the idea that American industry might move in this European direction.
One advantage of working for a global giant such as Greenyard is that it opens your eyes to different ways of doing things.
I think we can count on Mayda to open all our eyes to a future yet unknown.
You can register right here.
Look at the website here.
Let us know if you need a hotel here and ask any questions right here.
Mayda’s life, from refugee of Communist Cuba to the pinnacle of the produce industry today, is an inspiration. Come SOAR with her, and all of us at The New York Produce Show and Conference, into a brighter tomorrow.
There is no question that innovations such as “Wonky Fruit” are excellent for getting publicity; whether anyone actually makes money on these programs is subject to debate. The problem is a disconnect between consumer expectations and the realities of the produce business. The actual produce in the field is a very small part of the produce value chain. By far more money is spent on harvesting, cooling, packing, transportation, distribution, marketing and retailing than is spent in the produce in the field.
Consumers are typically aware of this and so expect dramatically different prices between “perfect” and “wonky” produce. So, as a result, most of these efforts are introduced with great fanfare only to disappear quietly.
Even successful innovations, like organics, struggle sometimes because industry realities make transitional product a big financial loser – and many aimers to go organic can’t take the losses.
Now, however, there is innovation from Germany that addresses both of these challenges. Stephen Weist of Rewe in Germany is doing double duty, both presenting at The Global Trade Symposium on Tuesday, along with Patricia Brunn of Rewe’s wholly owned subsidiary, Penny Market (in Austria, it is known as Penny Markt), and Stephan will also serve on the Perishable Pundit Thought-Leader Panel on Wednesday.
We asked Matt Ogg, Contributing Editor to Pundit sister Publication PRODUCE BUSINESS, to get us a sneak preview of what lies in store:
Director Category Management:
Fruit, Vegetables, Flowers & Plants
Fruit and Vegetables
Flowers & Plants at Penny
Q: At the New York Produce Show, you and Patricia Brunn of Penny Market will be discussing ‘misfits’, which I am guessing fits with the whole wonky fruit trend. What has been the growth in this area in Germany, and how is REWE responding with its approach and activities?
A: We will expand on this in New York. The original “wonky” fruit gets a lot of media attention. Nonetheless, our approach is a bit different. Penny’s “Naturgut Bio-Helden” (organic heroes) and “Junior-Helden” have been developed in intensive interchange with farmers.
“Bio-Helden” are a solution in times when nature has not helped production to perform to their standards, producing fruit or vegetables that were traditionally not marketable. So it’s about pragmatic wonkiness instead of show wonkiness.
“Junior-Helden” is a brilliant idea from my Penny colleagues. This concept allows the marketing of products in their transformation period to organic, when our farmers usually have much lower yields and therefore higher cost but are by EU food regulations not allowed to be marketed as organic. Penny communicated this to the consumer and helps our growers through the tough transition period.
Q: Is this concept for partner farmers globally, or just from within Germany or Europe?
A: Obviously we started in Germany with growers who are just around the corner, and maybe a bit closer to the heart of the consumer, but by now we have already expanded to Europe.
Q: This strategy focuses on wonky organic produce, but what about conventionally-produced fruits and vegetables? These crops too are subject to challenges with the weather and biological diversity.
A: We have not developed a brand for the challenges but we meet them. Every year we sit together with our growers and we do discuss abnormalities. This year, for example, Germany has had a terrible drought, so vegetables in particular have suffered. If we take a product like onions, we have accepted much smaller sorting. So instead of accepting only 40mm, we start with 25mm. On potatoes, we accept more scuffing, and last year we had hail-hit apples. We do that on occasion, but not as a branded concept.
Q: Another aspect of the presentation you’ll be doing with Patricia Brunn is regionality. Could you please tell us more about that?
A: This has been the big thing of the last decade in Germany. With “REWE Regional” we have developed a strong and trusted brand, and we have strengthened regional production structures. In times of globalization, we give production a “face” again.
The consumer loves it, and it is a big success. In 2017, we reached over 10% of produce turnover with regional products, and during the German season, it was more than 20%.
Q: How has that percentage of German produce on the shelves compared to say, five years ago?
A: Five years ago, when we started, after the first year we were at around 2%, so it’s grown five-fold in just five years.
Q: And what are the implications of this trend for overseas suppliers to the German market? Do they need to change their strategy?
A: I do not really see collision between our overseas suppliers and their product base, and regionality. Regionality in the majority is vegetables, and in fruit we have a seasonal differentiation between the Southern Hemisphere and German or European production. But in terms of regionality of course, only Germany is relevant.
Q: It’s a very competitive space you’re in. Germany is renowned as the home of discounters like Aldi and Lidl that are taking the global supermarket trade by storm. What does it take for a supermarket to stay ahead in the heartland of this heavy discounting phenomenon, particularly in the fresh produce department?
A: Indeed, we see hard discount stores growing in many markets in Europe. In Germany, we have seen their business model losing a bit of market share to full service retail over the last years.
However, they are remaining on a very high level. What is essential right now is to understand the consumer and constantly adjust the assortment accordingly. Fresh produce has been one of the differentiating drivers of our latest growth.
The hard discounters have understood and are expanding their assortment and raising qualities as well. Therefore, we are trying to find and develop new differentiators to meet these challenges.
Q: Amazon Fresh has also made headway in Germany, but your company has made moves to compete in the online space through the launch of your Online Marktplatz. Could you please discuss your online strategy and what it means for the produce department?
A: We believe in omni-channel retailing. Germany has a very dense supermarket infrastructure, and we believe that the consumer wants to choose his own mix; where some — maybe more emotional — products like fresh produce will be preferably bought live; others online.
Nevertheless, everybody has his own score set for what product group is emotional. We provide the ingredients for everybody’s mix by offering our assortments both in store and online and by making purchases as convenient as possible with many other services.
Q: There is also the Food Fulfillment Center 2.0 that has been built in Cologne to boost capacity. How has that helped your omni-channel retailing? One common challenge for e-commerce is often finding a cost-effective way to deliver products ordered online to consumers, and with perishables, the task is harder due to handling and temperature issues.
A: Yes indeed, the last mile and the handling in the last DC (distribution center) is a big challenge, particularly in food online retailing. Therefore, we have built this warehouse. It is a little bit early to judge but so far, we are exactly on, and in some elements actually beyond our business plan.
Q: Are there any other major facility developments in the pipeline? For example, ripening centers to foster development of particular produce commodities like avocados, kiwifruit or mangoes?
A: We are in constant fine-tuning based on our consumer insights. Ripe products are only one of many developments over the past years. There is not “the big REWE produce thing” but rather a big array of little, but important, things. That said, we have just recently invested in five regional “head DCs”, dedicated fruit DCs, which help us to gain more control over our supply stream, bundle volumes and increase freshness.
Each rising category has different challenges. There is ripening for avocados and taste differentiation such as origin or the time of the season for tomatoes or blueberries, and these are only a few examples.
An overall challenge is the homogeneity in produce, both in quality and quantity. The massive and increasing global climatic changes of the last decade make predictability particularly challenging. Investment in technology to limit volatility is unavoidable, but also the spread of geographical risks.
Another major challenge is packaging — how to communicate differentiation at the Point of Purchase, when packaging, particularly plastic, becomes increasingly outlawed.
Plastic and global warming are the two subjects that worry German consumers the most. For global warming, we all have it in our own hands, be it by personal action or voting. Plastic is something that we will have to speed up on reducing, replacing and avoiding.
Q: What actions is REWE taking to cut down on plastics use or adopt recyclable or more sustainable packaging?
A: Here we have done so many things that I’m sure I will forget even some important ones in this interview. We started by reducing plastic already five years ago. We were the first that doesn’t have a single banana wrapped in plastic, and that I think is for three years now.
We have started to have a reasonable net, so people do not take the little plastic bags if they have loose products to take them home. We have replaced almost all our plastic punnets in, for example, products like apples and tomatoes with paper or cardboard punnets.
We have started to laser-brand organic sweet potatoes and avocados, so we could spare the packaging completely and still differentiate the product at the checkout so that the person at the cashier sees that the product is indeed organic.
We were one of the first to use cardboard where the material is not made of wood but of grass, so replacing wood with grass. But there are many more things that we have done and will continue to do.
Q: But do you find the cost of alternative materials are still too expensive? How do you see that aspect developing?
A: Yes, alternative materials are still fairly expensive. I mentioned grass paper, for example, where we had thought it could end up in the same price level.
So far, it’s a bit higher, but we are fairly certain that with the scaling effects and as more people participate, or we ourselves expand to more and more products, we will definitely be able to see these costs going down.
Possibly we’ll be able to get them to the levels we are at today or find other ways; we are always curious, so any good idea, call me.
One of the reasons for creating The New York Produce Show and Conference was to encourage an exchange between thought- and practice-leaders in the produce industry. By sharing best practices and innovations, we could help individuals succeed, help companies prosper and help the industry increase consumption and so grow and prosper.
Having leaders such as Stephen Weist and Patricia Brunn in New York is a perfect example of succeeding in this goal.
Come to the Global Trade Symposium and hear this presentation, come to the Perishable Pundit Thought-Leader Breakfast and hear the exchange of ideas of thought- and practice-leaders from around the world. Come to the whole event and learn to SOAR!
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We look forward to seeing you in New York!
The issue of “food deserts” has a bit of chicken-and-the-egg dynamic to it. Certain neighborhoods do not offer great selection when it comes to fresh fruits and vegetables. This puts up a barrier to consumption as what is available is limited in variety, often not the best in quality and tends to be expensive.
Of course, we do have a very aggressive retail sector, and the reason there is not a broader assortment available is because there is not sufficient demand. Price is often a factor, but prices are heavily influenced by things like the cost of rent, security, insurance, labor etc., that are not in the control of the produce industry.
Brighter Bites is a nonprofit that both delivers fresh produce into the hands of needy children and families while also educating the families on how to utilize the fresh produce and do it all in a fun way that avoids the nannyisms that turn off everyone. And they try and do it in a consistent way that can actually lead to behavioral change.
Perhaps most importantly, they have done this in a controlled way that is put under the scrutiny of real peer reviewed research.
There is a lot more to do, of course… we want research compelling enough to move private foundations, the government and other non-produce entities to endorse these efforts. We would like demand to be so robust that everyone will gladly pay for their fruits and vegetables. But the journey of a thousand miles begins with a single step, and this just might be the start of an incredible journey for the produce industry and the future of lots of children.
This year, Brighter Bites is holding its board meeting in conjunction with The New York Produce Show and Conference, so we knew that the founders of the program will be there. We were thrilled that they were willing to explain the Brighter Bites initiative to attendees during one of the Educational Micro-sessions on the Show Floor on Wednesday afternoon.
We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:
Q: I could talk with you for hours about your intriguing presentation surrounding the Brighter Bites program model, and the scientific peer-reviewed research measuring its impacts, both short-term and longer-term. This opens a floodgate of questions, but I know this is just a preview! There are two standout important elements I’m hoping we can focus on:
FIRST: Free or subsidized fresh fruit and vegetable programs at schools often bring wonderful vignettes of success, both in increasing produce consumption, and the ensuing health and wellness benefits, from curbing childhood obesity to disenfranchised students being more energized and getting better test scores, etc.
However, what’s been more problematic, costly and subsequently rarer to find is scientifically-based research and hard evidence, especially to prove sustained success after the free produce programs end, as opposed to anecdotal, subjective stories, and one’s instincts.
There are many different variables influencing outcomes to consider and isolate out; cause and effect are not always what they seem. Further, it can be difficult to track the same children over extended periods of time, and compare them to a control group, etc.
Sometimes with surveys, what people say or believe they’re doing may not actually parallel their actions, when monitoring their produce intake accurately. Changing eating behaviors is challenging... [Editor’s note: we’ve covered this topic extensively here, here and here.]
SECOND: The Brighter Bites’ model integrates and hinges on a three-pronged formula: 1) produce distribution (50 servings per week); 2) nutrition education (school & home), and 3) a fun food experience (recipe tastings). Does the research support this multi-faceted approach?
LISA: We are very proud of our research. I say this as the non-researcher in the partnership, and we are happy to talk about that because measuring outcomes to determine impact is a critical component. It validates the Brighter Bites program and the demand we’re building for your industry.
SHREELA: I could talk data for five days, no problem! Our team of researchers at UTHealth School of Public Health conducted a two-year case study evaluating the impact of Brighter Bites on 760 students and their families at nine schools in Houston during the 2013-15 school years. Results from this study have been published in a scientific peer-reviewed journal Preventive Medicine. The purpose was to evaluate the effectiveness of this new school-based food co-op program, Brighter Bites, to increase fruit and vegetable intake, and home nutrition environment among low-income first graders and their parents. [Editor’s note: you can read the full study here]
Q: What were the scientific parameters, and how did you collect data?
SHREELA: This was a non-randomized controlled comparative effectiveness trial. Six schools received Brighter Bites and six comparison schools implemented a coordinated school health program. Brighter Bites is a 16-week school-based food co-op comprising weekly distribution of fresh product (50 servings/week), nutrition education in schools and for parents, and weekly recipe tastings.
Measurements included parent-reported home nutrition environmental surveys and food frequency questionnaires for parent and child. Intervention effects were examined using multivariate analyses. At baseline, the sample was 71 percent Hispanic, 24 percent African American; 42 percent of first graders were overweight or obese.
Q: Did your study glean meaningful findings?
SHEELA: Children receiving Brighter Bites had significant increases in intake of fruit servings, vegetable servings and decreased intake of added sugars. Further, among parents, there were significant increases in fruit consumed, vegetable intake increased baseline to midpoint but not post-intervention. Among Brighter Bite families, there were significant improvements in the home environment including understanding and usage of nutrition facts labels to make food purchases, frequency of cooking, rules and practices regarding eating family meals, serving fruits and vegetables at meals, and limiting portion sizes.
Our study shows promising results in improving dietary habits and home nutrition environment among low-income families.
Q: For perspective, could you brief us on Brighter Bites’ evolution, and then we can delve further into the science behind it and potential impacts going forward...
LISA: I participated in a fruit and vegetable co-op with my children, and I watched their eating habits dramatically change when having access to fresh produce. We got a box of produce every week, and my boys, who at the time were three and six, went from asking for bagels for breakfast to eating apples and pears and oranges, and wanting fresh vegetables at night. Then at a birthday party, a critical moment for me occurred. My older son called me over and said, “Do I have to eat this Mommy? It’s too sweet, I would rather have fruit.” I looked down at his plate. It was cake. I was dumbfounded by this response from a six-year-old.
I was working at a major children’s hospital as an attorney, not in the field of nutrition, but I was noticing prevention was largely missing from the hospital’s food offerings. I thought, if I can have this success in my house... understanding food is a large contributor to our health, and that access to fresh food is lacking in low-income areas, and diabetes and high blood pressure and health epidemics are high… I came up with this formula —produce distribution, nutrition education, and a sensory experience, making eating produce fun, I believed would change behavior.
I immediately looked for partnerships to pursue my mission, and that’s when I joined forces with the Houston Foodbank, and the president became my partner and advocate, and I met Shreela. I wanted to find someone to research this to determine the impact.
Q: Can you elaborate on why you thought it was important to have the research element?
LISA: There were two reasons: One, because I was doing this in my spare time and I had no benefit to gain personally. I wasn’t going to be paid for this; I was doing this because I believed in the mission of creating health for people through fresh food, produce specifically, and if it wasn’t working, then why would we do this?
This is about how eating produce impacts societal health, and I wanted to know this model was effective and the strategy was working. Then if it was working, and we got to the point where we are today, I wanted to show our partners and donors with evidence we were making an impact and give them tangible results, because I don’t think we should move forward unless we can show value.
Shreela is a nationally-recognized epidemiologist in childhood obesity at one of largest research medical facilities in the country. I was introduced to her as one of the best and brightest in the field. Shreela told me at the time the Institute of Medicine had just come out and said if we want to curb childhood obesity and work on prevention, we not only need to teach kids literacy, we also need to combine with food access, so she was excited about the program.
No one was doing food delivery, and that’s what we realized six years into this program, we are one of the only non-profits that gets the product into the home, and it goes the last mile, we like to say. That’s not only trying to change the children’s behavior but also the parents, who are the buyers of the product, and the influencers.
We believe that the kids cross-pollinate with the parents and cross influence their behavior, and that’s why it becomes sustainable longer term, and Shreela can show this more through her data, but that’s the secret sauce of our program, attaching it to the whole family, and those holding the money to purchase the produce.
SHREELA: The other side of the program is how the research is anchored. When people think about research, most think it’s about collecting data on existing programs. Ours is different in that regard. Not only are we collecting data on Brighter Bites, but our formula is anchored in what we know is true in science and nutrition, so our research team anchored the idea inside scientific evidence, and the program was formalized with nutrition-based evidence that has proven obesity reduction effects on children.
This gives you an idea of the other part of what makes Brighter Bites different. That the program itself is anchored and developed in scientific evidence, which is critical for research, because then you know what you are evaluating, and the program can become streamlined and effective, otherwise you might be measuring the wrong things or going down the wrong path.
Lisa’s idea of bringing in the academic institution to anchor the research really was critical to ultimately developing the evidence. The other thing that’s important...one of the pitfalls of a program, if you’re not collecting data, you could be doing something wrong, and you could be doing the wrong thing for many years. Anchoring the program with data allows us to learn what’s working and what’s not working.
Q: Could you point to instances where this played out in your research?
SHREELA: A great example is mushrooms that first year. We collected qualitative data from focus groups and found they were bringing home the mushrooms but didn’t know what to do with them. It seems like if you give the families food, they’d know what to do to prepare it. Through our data, we learned about the issues families had with different kinds of food items, and to go above and beyond what the families focused on.
Q: You mentioned your expertise in childhood obesity and its connection to produce intake, and I was curious to know if this was part of your research with the Brighter Bites program. For instance, did you monitor the kids’ weight and/or body fat and compare with the control group, short-term and long-term?
SHREELA: We had done some research studies where we monitored kids weight. One of the things we found was the maintenance effect of body weight. For the rest of the country, you know there’s an upward trajectory, and in implementing Brighter Bites, we have seen weight maintenance. We haven’t see weight loss, but our research shows it’s pretty normal for the kids to be eating more fruits and vegetables and eating less added sugar. This is what you want — that substitution effect. So eventually over a period of time that substitution effect could affect their weight loss trajectory.
At the same time, I’d say we’re not a weight loss program. We think healthy not skinny, and in terms of weight maintenance. We want children to grow into their weight. They are still growing so we want to cultivate healthy eating habits, and that they’re eating more of the fresh fruits and vegetables. And that’s what our data has been showing as well.
Q: So, just to clarify, the Brighter Bites case study results showed an increase in produce intake and reduction of sugary foods, and kids maintained their weight but did not lose weight...yet they were healthier? I assume you didn’t do blood tests, or physical exams...or ask about physical activity?
LISA: No, but from the research, we know they are building and sustaining healthier eating habits, which are tied to a healthier lifestyle and healthier lives, less sugar intake, more family meal time, parents reading nutrition labels, more servings of fruits and vegetables for snacks instead of processed food. So, we have all of these markers that are scientifically relevant, and I can let Shreela speak more to this.
SHREELA: That’s what we’re tying together — all these scientifically significant changes in behavior patterns that lead to health. There are anecdotes from the parents and their children about their health, the way they feel, and less doctor visits, but we don’t use this as our specific data; it just guides how we’re doing things.
Having worked in the obesity field — my research book is on childhood obesity, you should not expect a drastic reduction in weight in growing children in one or two years in their lifestyle. What we’re trying to do is a holistic approach in improving fruit and vegetable intake and to see that the kids are experiencing a healthier home environment and school environment, but this is not a weight loss program.
So, we’ve been very careful in couching that.
Q: It sounds like this is an important point in the Brighter Bites approach...
SHREELA: There’s a lot of literature on childhood obesity and you have to be very cautious in approach. There are school-based programs out there that are doing weight-loss intervention. That’s not what we’re doing. I did not actually recommend that approach. It can be detrimental to the health of the children.
Brighter Bites is very positive. It empowers the families. It’s a co-op concept where the families can participate in the bagging and distribution of the produce. Lisa can share more. Parents can come to the schools now. They don’t need to know computers or a language; they come in and they volunteer and enjoy the experience of participation.
Q: The program triggers more parental involvement...
Shreela: Yes. This wasn’t happening before. There are low literacy rates in these schools of the parents. There are low education levels, and the parents don’t think they are of value in the school and don’t participate in their children’s education because they are largely intimidated by the school environment.
In these lower income neighborhoods, it hurts the children not to have their parents engaged in their education.
I know from my own experiences, being so engaged with my own children, and through the stories I hear from a lot of public school educators that it’s very hard for the parents to engage. I’ve had school counselors, literally in multiple cities, say they’ve never experienced parental engagement like this with the Brighter Bites program. Not only are they volunteering, one of the pillars of the program is parent involvement. We make them come into the school to pick up the product. We want to create this fun environment. But we want it to be dignified and caring and thoughtful, so we do make meaningful change.
It can be difficult. Some parents are walking into the school for the very first time. Not to be cliché, but this “carrot” of free food, on average, saves them $35 a week. But it’s a way to encourage engagement. We demystify the school environment. We demystify fresh food. All these things can change the fabric of their lives.
LISA: Furthering Sheela’s point about not focusing on obesity, and more on healthier behavior, this is a fun program.
Q: That’s an ongoing discussion in the industry on how to market fresh produce to increase consumption...
LISA: Nobody eats more produce just because it’s good for you. We want to highlight the fun in eating produce and also that it tastes good.
Shreela and I were talking to a child and asked him, what is your favorite fruit. He took an orange out of the Brighter Bites bag, and said, “I’ve never had one before.” As he tried it, he exclaimed, “It’s so juicy!” It was so great. Houston, Texas, a major city in America… Can you imagine? This was not a kiwi or a pomegranate. We actually have to show people and teach people this product is good.
Q: In an effort to get children to eat more produce, sometimes produce items are supplemented with other products to sweeten or disguise the true flavor; such as a package of sliced apples with a side of caramel for dipping, maybe celery with peanut butter or cream cheese, or broccoli with cheese sauce. What’s your view on this strategy? Have you done research on this technique?
SHREELA: It’s funny. There is no literature to support any of those views that you need to put apples with caramel, or cereal with more milk... It’s the same philosophy -- that products are created to sell more of another product. It’s sustained by companies as a method to sell more products.
What we do know is that kids need more exposure, and continued exposure to healthy food, and it has to be tasty, which is why we don’t just give families product, but we show them how to use it and include recipes. We give them a tasty, healthy treat when they pick up their bags of produce, and it may be an item they haven’t tried before, and they see their child trying a new food item.
A true story: When Lisa and I first started the program, Lisa would bring the Vitamix every week to the school, and we would make the smoothies there for the kids. She’d mix this signature kale concoction, that looked as green as the Hulk and the kids would grimace, and the parents would be even worse, but the kids tried it… kids are more adventurous than parents, and they loved it to the point where they were craving more, and now there are smoothies in the cafeteria.
LISA: No sugar, and no milk. Kale, strawberry, apple, banana, and water. It’s delicious.
I have a great example of the behavior change that is relevant for our New York Produce Show audience that I can share. We have a produce supplier that helps us in every market, and in New York City, it’s D’Arrigo Bros. of New York. Jim Prevor helped us with the introduction, along with Rich Dachman at Sysco.
D’Arrigo supplies us with many extra items that the City Harvest Foodbank doesn’t, so we have a lot of unique and different items. So, our director of New York operations, Melanie Button, asked the students at one of the schools to write notes to the D’Arrigo family during the Thanksgiving holiday to say thank you.
To show you how much the program matters to the children, I sent you one of the notes that caught my attention.
That’s it in a nutshell. We changed her perspective on eating produce. We have many more letters like that, but to me, that’s the quintessential example.
Q: Quite refreshing, albeit not in the scientific research realm...
LISA: Based on our studies in Houston and Dallas, we know if we send broccoli home, the children are more likely to eat broccoli slaw on their lunch tray and not throw it away. We know we have less plate waste when we introduce Brighter Bites, and it’s making eating produce part of the fabric of their lives.
Q: How do you measure that?
SHREELA: We just finished a plate waste study to see how many fruits and vegetables kids were wasting on their school lunches. I had my data collectors actually weigh the kids’ plates after they were done eating. We compared the kids participating in Brighter Bites to the control group that was not. We saw that the kids in the Brighter Bites program wasted less produce in their school lunch at the end of the program compared to kids that did not participate in Brighter Bites.
Even more interesting, this was tied into the produce we were giving in the bags, and the number of times they received that produce. So, for example, they got broccoli five times, and peaches maybe two times, and they wasted less broccoli at their school lunch because of the added exposure. And we found that’s actually the truth, which was surprising to me.
This correlated with our hypothesis that the 16 weeks matter when we developed the formula. Replication is important. (The process repeats for 8 weeks during the fall, 8 weeks during the spring, and 8 weeks during the summer). We knew that kids need about a dozen times exposure to a new fruit or vegetable to really develop the taste. I wanted to test this hypothesis and find out if it holds true to the specific produce piece, and we found that it actually did. We’re about to publish those findings as well. So, exposure matters is the headline.
Q: Attendees will be interested to read your latest research... In addition to repeated exposure, does it matter what age the child starts on the program? We’ve interviewed researchers on this topic advocating that taste receptors can be influenced when the baby is in the womb! Is it better to catch children earlier before their eating habits are formulated...?
SHREELA: We found kids are an easier sell when they’re younger and parents are an easier sell when their kids are younger as well. A lot depends on the parents and the family structure. We find the parents are much more likely to offer new foods to their child when he or she is younger, believing that eating habits are already established once their child is in elementary school.
We know from research, introduction to new foods drastically goes down as the child gets older and the child tends to only eat foods that are familiar; i.e., “my child only wants to eat chicken nuggets and mac and cheese.”
In our study, the kids were first graders when we started, and the program ended when they were in fourth grade — 42 percent of the first graders in our study sample of 760 kids were overweight or obese.
Q: Did you monitor the children’s eating behavior and that of their families once the Brighter Bites program concluded? Isn’t that a true indicator of the program’s impact, but also a challenge to prove...
A: Yes. One of the data points from a sustainability perspective is we found long term impact of Brighter Bites, where two years later after the program ended, we followed the same families we had done the study on, and saw the effects maintained; not only was produce consumption maintained, in some cases effects were enhanced, cooking produce had become part of their routine, and some families were eating 19 additional servings of fruits and vegetables a week compared to when they started the program.
We started the study in 2013 and followed the same families again in 2017, and asked the same questions of produce intake in their home environment, and found the effect had sustained… they continued to eat more fruits and vegetables.
LISA: These were the same families, and they are now buying more produce on their own.
Q: That’s a big takeaway... Are there other areas of research you’re looking to explore, or points you’ve honed for extended analysis?
A: Yes, some of the biometrics we want to get into. For example, we’re finding children are prediabetic at a very young age in Texas, and around the country, and diabetes is a major public health issue right now, so we want to start getting into tracking some of these biometrics.
Another piece we want to get into… we want to check on teachers’ wellness, specifically with teachers on the program. We just finished a survey with about 700 teachers and found Brighter Bites was effective in improving their own eating habits, so we’re digging deeper into that as well.
Q: I wanted to talk with you more about the logistics side. How are you getting the food and distributing it? You have partnerships with food banks as well as with suppliers and retailers too? How does the system work?
LISA: Fresh fruits and vegetables are sourced from produce suppliers and retailers through donations and purchases, delivered to our partner foodbanks and distributors, and each week our team chooses 8 to 12 different types of produce from the huge warehouse coolers, and the food is specially tagged for Brighter Bites.
Pallets of bags and cases of fresh produce for Brighter Bites are loaded by food bank staff into trucks for delivery to different sites, such as a school gym or cafeteria. Then Brighter Bites staff, parents, and community volunteers unpack and divide the produce into bags. Also added into the bags are nutrition handbooks, tip sheets, and recipes that incorporate that week’s fresh produce.
In addition, educational materials are linked to children’s in-class nutrition lessons from CATCH and other evidence-based, coordinated school health programs we help implement.
In every city where we operate, except Austin where we just partner with for-profit suppliers, we have a food bank partner as well as a for-profit supplier.
Q: What cities do you cover now, and where are you headed next?
LISA: We’re at over 125 sites across Houston, Dallas, Austin, New York City, The Washington, D.C. area and Southwest Florida, with consistent growth since we started in 2012. In 2018/2019, we will launch in our seventh city and estimate serving nearly 24,000 individual families.
Q: How does that translate in number of produce servings?
LISA: Since 2012, Brighter Bites has provided families with more than 18 million pounds of produce, to more than 265,000 individuals (representing 53,000 cumulative families).
For instance, Sysco is a big supplier. Rich Dachman, as you know, is on our board, and one of our main advocates, and then in New York, we have D’Arrigo Bros. In Washington, DC, we have The Coastal Companies Foundation, in Florida, we have Lipman; in Dallas we have Taylor Farms.
In some cases, we have competitors all partnering together to make this happen.
We basically depend on the food banks as the main source of the produce. They’re the aggregators of the donated produce, and we partner in many other ways.
For-profit suppliers and farms donate to us as well to create unique items and variety in the bag. For example, we partner with Houston Foodbank, let’s say they provide five items that week, Sysco comes in and goes to Taylor Farms or Mann Packing or Church Brothers, and says, “Hi, I’m here to pick up for my restaurant customer a foodservice order, and I’m getting five pallets of snap peas this week. Can you give me an extra pallet for Brighter Bites?”
They’ll pay the freight to bring it back to Texas and you’ll get a donation for your produce. So that’s how we have everybody from suppliers to distributors to non-profits involved. Everybody’s working together to make this happen.
Q: How can people who are excited about this program get involved?
A: On the produce side, we have a sourcing manager Jennifer Boone (firstname.lastname@example.org), and she will be with us at the New York Produce Show. She is the one managing all the produce donations from the industry for us. That’s on the product side. And of course, we’re also accepting financial donations. But the real big goal of ours is to receive more product.
As I explained earlier, in every market we have a distributor that can pay the freight, and we’re looking for actual product from the farm, and we would love to partner with them.
The only way this program is successful is if we have product. What’s interesting to add is that it doesn’t have to be kohlrabi; it could be kale, spinach, mushrooms, berries, things we see as normal but may not be normal to the families we serve.
So we’re really grateful for any product we receive to create variety and interest, but the key to sustain the program long term is this industry’s direct involvement by giving us product.
Q: Are you building partnerships with retailers?
LISA: HEB is very, very supportive and engaged, and also Target and Walmart are very involved, and strong financial donors.
Q: One other question. When you’re doing your analysis of how much produce you’re providing, if it’s coming from food banks, do you consider the overlap that the food would be distributed through other means besides Brighter Bites...
LISA: The difference we say with food banks and Brighter Bites is that food banks distribute food as their mission and that’s awesome, but what we’re doing is taking the food they would distribute and, instead of just feeding, we’re feeding with impact, taking that same food with programming to create behavior change.
Q: As we conclude this fascinating preview, what are the key takeaways you’ll want attendees to glean from your presentation?
LISA: We want to be the produce industry’s best friend. We want to build demand because we know your products are the key to better health. We can’t build Brighter Bites without produce. Together we can create market sustainability. It’s a win-win.
Well, we can all use a best friend. In addition to what promises to be a fascinating presentation on Wednesday, for those interested and willing to volunteer, we are offering a great opportunity on Thursday.
We have a 35-seat bus leaving the Headquarters Hotel, the New York Hilton Midtown, and heading out to Jackson Heights, Queens, to give people an opportunity to experience being part of a bagging and prep crew getting produce ready for distribution to the schools and, ultimately, the homes.
The bus leaves at 7:15 AM and should return before noon. If you would like to be part of the experience, please email us here.
You can register for the whole event, including the Brighter Bites presentation, at this link.
If you need a hotel room, just let us know here.
Come be a part of the Brighter Bites program and help it spread across the land and come to The New York Produce Show And Conference where great ideas help you, your company and the industry SOAR.
It might not seem that a 686,000-square-foot facility located in the fifth largest city in the U.S. is a ‘hidden’ gem. However, this is an apt adjective to describe the Philadelphia Wholesale Produce Market (PWPM), according to John Vena, third generation family owner and operator of John Vena, Inc., one of 22 merchants on the market.
Vena certainly knows a thing or two about fresh produce in the City of Brotherly Love and its environs. His grandfather started the namesake company in 1919 in the city’s original colonial market on Dock Street, in what is now the Old City in historic downtown. In 1959, the company proudly moved into one unit at the newly opened Food Distribution Center in South Philadelphia.
Most recently, when the ribbon was cut on the state-of-the-art PWPM in 2011, the now four-generation-run company moved into four units. It wasn’t long until Vena, who has been at the reins since 1976, expanded into eight units, two of which have been customized into ripening and repacking facilities with SQF and organic certification.
Located less than a two hour drive south of New York City and five miles north of the Philadelphia International Airport, many people don’t realize that the PWPM is the largest fully enclosed, fully refrigerated wholesale produce terminals in the world. That’s what makes it a ‘hidden’ gem and a must-do NYPS bus tour.
Carol M. Bareuther, Contributing Editor of sister publication, PRODUCE BUSINESS, spoke with Vena about what attendees can expect to see and experience.
John Vena Inc.
Philadelphia Wholesale Produce Market
Q: Let’s start with some scene-setting background. How have you seen the produce industry in the Philadelphia market develop into what it is today?
A: The produce industry here has evolved in the same way most metro markets have. In the retail world, what used to be a market dominated by mom-and-pop shops has become a segmented hodge-podge of huge mega-corporations, well-established regional chains that have managed to maintain a foothold, and some intrepid start-ups.
There is still a strong independent faction of retailers, mostly serving urban and ethnically diverse communities. In foodservice, we’ve seen less consolidation with a diverse lot of local and regional distributors still sharing the market. Our business has certainly evolved to reflect this. We’ve found our niche in flexible service, which allows us to serve a wide range of markets at once.
We have reps that dedicate themselves to supporting everything from two-person jobber operations to buyers and supply chain managers for multi-billion-dollar companies. It’s a high-touch strategy, but it aligns with our values and has made us a stronger, better team.
Q: What would you say are the three biggest highlights of the PWPM and how this helps the industry meet 21st century demand?
A: The cold chain on this market is impenetrable – it’s truly industry leading. The flexible infrastructure in the building has allowed us to create multi-use spaces for ripening, repacking, and other value-added services, bringing another level of value to the market. Plus, this modern facility allowed us to build a robust food safety program. Without it, we would never have been able to accomplish an SQF Level II certification.
Q: That is certainly impressive. However, for anyone still on the fence about which NYPS bus tour to take, why do you recommend a visit to the PWPM?
A: Not only is our market the most innovative in the country — a fact worth the visit alone — it is a strategic place to do business. The facility is located literally right at the junction of I-95 and I-76, less than two hours from New York, and less than three from Washington DC, with easy access to the entire state of New Jersey where a large number of processing and cold-storage facilities are located.
Added to this is the nearby Philadelphia port facilities, so this makes the PWPM one of the most direct sources of imported fruit in the country. Whether buyers have an interest in FOB purchases or not, the market has something for them. At our company, for instance, we offer custom work beyond wholesale sales, including contract ripening and custom repacking like private label — and we deliver to boot.
Q: Could you give readers a sneak peek of what they will see on a tour of the PWPM?
A: The market itself is almost 700,000-square-feet of fresh produce wholesale. We provide an unbroken cold chain for customer’s dock level trucks with 228 doors. You will walk the Main Concourse, a naturally-lit, customer-friendly corridor providing access to each merchant. There are 10 towers providing ramp access to covered loading areas on either side of the market for customers loading vans and pickup trucks. Each of those towers also contains offices for the many brokers, customers, and transportation firms that work out of the market.
All traffic inside the market travels in clearly defined lanes, including pedestrian traffic, which has designated pathways. The market also boasts an award-winning waste sorting and recycling program housed in a 20,000 square foot facility just outside the main building.
Q: Finally, what is your advice as to what tour attendees should look for when they visit the PWPM, whether they are coming from the Northeast, rest of the U.S. or internationally?
A: The 22 merchants of the market are regularly trading with customers throughout the entire Northeast and mid-Atlantic regions as well as eastern Canada. We receive product literally from every production area in the world. The opportunities provided by the PWPM will be of interest to anyone in the industry from any region or country.
Many people have been attending The New York Produce Show and Conference for nine years now –it’s not a bad idea to spread one’s regional knowledge by taking a trip down to Philly!
You can register right here
Ask us about a hotel room here
See the website at this link.
And let us know if you have questions here.
Come to The New York Produce Show and Conference and SOAR all the way to Philadelphia.
Miguel Gómez has been wowing the produce industry since the very launch of The New York Produce Show and Conference. He has been on stage with us in New York, London and Amsterdam, with topics we chronicled in pieces such as these:
Cornell Professor Miguel Gómez Reveals How Omni-Channel Retailing Creates Challenges And Opportunities For The Produce Supply Chain. Exclusive Presentation At The Amsterdam Produce Summit This November
Veteran Speaker At The New York Produce Show, Cornell’s Professor Miguel Gómez Speaks On The Promise Of Cold-Climate/Controlled Environment Agriculture
Cornell’s Miguel Gómez Goes Double Duty At New York Produce Show: Gives Micro-Session On Northeast Greenhouse Potential And Teaches Foundational Excellence ‘Students’ About Global Trade
How New Trade Agreements May Set The Stage For A Produce Industry Boom, But Will The People And The Politicians Let It Happen?
Miguel Gómez Of Cornell To Present The Facts And Moderate The Discussion At The London Produce Show And Conference
How To Capitalize On An Age Of Global Trade: Miguel Gómez Of Cornell University At The Foundational Excellence Program
UNIVERSITY HEAVYWEIGHT PUTS SCIENCE BEHIND OPTIMIZED GLEANING SCHEDULES: Cornell’s Miguel Gómez Talks About How The Produce Industry Can Put Itself On The Side Of The Angels By Reducing Food Waste While Helping The Hungry
The Renaissance Of The Wholesale Sector — Why Those Who Support 'Locally Grown' Should Support Investment In Market Intermediaries. Cornell University Professor Miguel Gómez Reveals Research Findings At The London Produce Show And Conference
A New Hypothesis On Local: To Boost Sales, Sell It Through Supermarkets … Cornell’s Miguel Gómez Previews His Upcoming Talk At The New York Produce Show And Conference
Cornell Professors To Present At The New York Produce Show And Conference: New Ways of Thinking About Local: Can The East Coast Develop A Broccoli Industry?
Cornell Professor Miguel Gómez To Speak At New York Produce Show And Conference On Fruit & Vegetable Dispute Resolution Corporation
Professor Miguel Gómez Returns To The New York Produce Show And Conference To Unveil A New Study That Points Out A Path For Getting More Produce Into Hospitals
We asked Pundit Investigator and Special Projects Editor Mira Slott to find out what he has in store for the Global Trade Symposium this year:
Charles H. Dyson School of Applied Economics and Management
Ithaca, New York
David R. Atkinson Center for a Sustainable Future
Cornell University Affiliate Faculty
School of Management Universidad de Los Andes, Bogota
Q: Coming off your powerful, thought-provoking talk about Omni-Channel Retailing at the Amsterdam Produce Summit, what do you have in store for us at the New York Produce Show’s Global Trade Symposium?
A: I’m planning to discuss key drivers and trends of international trade of fruits and vegetables and how these affect the U.S produce industry, present and future. I’ll focus on the role of future global demand, import and export flows, trade agreements, as well as tariffs and non-tariff trade regulations, in shaping an increasingly globalized industry. In addition, I’ll discuss actions that businesses should consider to benefit from participation in the global produce industry.
Q: So, you’ll be tackling some volatile, controversial trade agreements and tariffs, such as the U.S. China trade war impacts. That should be challenging considering developments are in flux and creating uncertainty as we speak.
A: I’ll be spending a portion of my presentation talking about the U.S. China trade situation, from the U.S. produce industry perspective, what are some of our strengths and weaknesses, our opportunities and challenges.
Q: Where should be we begin? Since you’ll be covering such a wide scope of issues, perhaps the best approach is to walk us through the presentation segments...
A: Let’s start with Part I, and what I’m planning to emphasize. The agenda is to talk about three topics: 1) Drivers and trends of international trade of fresh fruits and vegetables, 2) then looking at the U.S. trade situation, what do we import and export the most, and from where, and 3) an update on trade agreements, and then other factors affecting U.S produce trade. And a big one will be that China situation. Another will be Brexit.
Q: Essentially, on those two, you could be changing your presentation analysis by the minute.
A: Exactly. It’s crazy. There is a lot of uncertainty. China and the UK are huge trade partners with the U.S., not only for fresh produce but for many things, so with the uncertainty, it’s difficult to make predictions.
I’ll guide you through the presentation and highlight what’s important.
In my review of the economics, you’ll see factors influencing trade involve supply, demand and institutions, but in looking at global drivers and trends, more important is understanding world population. I chart growth by region in 2017 and projections for 2050.
For example, the African nation is where demand is going to be growing fast. If you look at Europe, Latin America and North America, they are only a very small share of the total world population, and also growth is very slow. Even in Europe, the population is expected to decrease (742 million down to 716 million), Latin America to increase a tiny bit (646 million to 780 million), and North America a little bit (361 million to 435 million).
In Africa, we are going to add around 1.3 billion new people between 2017 and 2050 (from 1.256 billion to 2.528 billion). That’s like adding one complete China to the world.
Q: That puts things in perspective...
A: Yes. It will be a very important driver of demand for produce. Not only that the African nation is growing, but also there are going to be increases in income. So, people in Africa are likely to have more purchasing power and will consume more things such as fruits and vegetables. I think that will be a continent the U.S. produce industry has to focus on, not only as a potential export market, but many companies are procuring from Africa, and there is going to be more and more competition because of more domestic demand.
Q: What about Asia?
A: Asia will also be an important market. Asia is expected to add around 800 million more people, which is not a small amount. It is estimated to grow from 4.504 billion people in 2017 to 5.257 billion in 2050. It is already the largest, more than half the world population lives in Asia today, and it will still add more; 800 million people is almost the whole population of Latin America, and more than two times the North American population.
We need to think about that — there is going to be a bigger source of demand in those two areas.
Q: You mentioned purchasing power, how does that play out?
A: If you look at per capital GDP growth by region, pretty much everywhere per capita GDP will grow, but very fast in South Asia, and East Asia, so most of the growth is happening in Asia. We can see also that Africa, North Africa and sub-Saharan Africa will grow, albeit slower, but they will be growing. So, these two regions, Asia and Africa, are not only growing very fast in terms of the population but also, particularly Asia, in terms of per capita GDP is growing very fast. I will show a chart to demonstrate this in more detail.
By the way, do you know how much 20 cherries are paid in retail in China?
Q: I do not, but I imagine it’s quite high...
A: $22 dollars, or 168 yen! Isn’t that amazing.
Q: I hope at least they were special cherries, maybe larger, a unique variety, fancy packaging...
A: Not at all.
Q: Where are these growing populations with increased purchasing power concentrated?
A: What I can say is most of the growth is going to happen in cities. Statistics from a study done by McKinsey Global Institute are revealing. This is the age of urbanization, cities are adding 65 million people every year. Countries are just becoming more urban everywhere, with emerging markets taking the lead — 440 cities in emerging markets will account for nearly half of global GDP growth by 2025. An estimated 2.5 billion people will live in Asian cities by 2025 — that’s half of all urbanites in the world.
Q: How does this compare to developed countries?
A: Emerging economies are becoming major forces. By 2025, emerging economies are predicted to grow 75 percent faster than developed nations. In addition, we see growth of the urban consumer class with 150 percent increase in annual consumption in emerging markets estimated between 2010 to 2030 (from $12 trillion to $30 trillion). Another interesting statistic… 620 million people exited poverty in the last 20 years.
Q: You mentioned the willingness of consumers to pay high prices for cherries in China. Does all this global growth in emerging economies translate to increased produce purchases?
A: When you look at per capita consumption globally, it’s not only in the U.S., but around the world; we see people are not consuming more vegetables or fruits on a per capita basis -- it’s rather flat and sometimes decreasing. If you look at our estimates, they’re not perfect, but it’s the best we can do, per capital vegetable consumption in kilograms per year, you see that no country has been experiencing very fast growth. You see that South Korea per capital consumption is higher than the rest, but you see most of the other countries, Canada, the U.S., Hong Kong, Japan and China is pretty much flat, and not growing. Even in Mexico, you see it’s flat but also lower.
Q: Why is that?
A: It’s a conundrum. I’m afraid we don’t have a good answer to that, because even though the produce industry is making lots of efforts to promote produce, and even governments to promote consumption of fresh fruits and vegetables to improve health outcomes, we see per capita consumption is flat.
I don’t know exactly why this has been the case. These are the most recent figures we were able to get, from 2000 to 2013 which is a little outdated. We tried to update numbers, and I checked about six months ago, but they were not available. However, we don’t believe things have changed that much with recent data.
The other thing I want to talk about is the state of the organic fresh produce industry. Organic is growing very, very fast in many countries. It outperformed conventional counterparts in every core market in 2016, according to Euromonitor. Developed regions experienced steady growth and developing regions fast growth. China increased by 30 percent in 2016, South Africa increased by 16 percent in 2016. There is more and more demand for organic.
Q: Still as a percentage of total produce sales, could you provide some perspective?
A: It’s interesting to look at the breakdown by different produce categories. Organic Produce Network/Nielsen did a 2017 Organic Fresh Produce Sales Recap of different produce categories. It looked at the category, the 2017 dollar share of organic produce compared to the 2016 dollar share of organic; and what the percentage change was in dollars and in volume. I’ll provide more detail during my talk. But to give you an idea, for packaged salads, organic was about 18.6 percent in terms of dollar share in 2017, but it varied. In berries it was 12.1 percent, in apples 6.1 percent, bananas 5.4 percent, so it’s still not very big. Tomatoes were 3.1 percent. But the category is important.
Q: To clarify, these numbers are just for the U.S.
A: Yes. That’s right, but what happens in the U.S. usually follows in other countries. The U.S. is always at the forefront of these trends in different consumer segments.
So, in the U.S. in 2017, share of organic fresh produce was $5 billion, up 8 percent in sales and up 10 percent in volume. It’s much more in fruits than in vegetables; in fresh vegetables it was $2.4 billion, up 4 percent in sales and up 6 percent in volume. The number one produce item in organic is packaged salads with $1 billion in sales, up 2.3 percent (lower than average). In fresh fruits, organic accounted for $1.6 billion, up 12.6 percent in sales and volume. Organic berries were up 23 percent, apples up 11 percent and bananas up 17.5 percent. Potatoes, grapes and citrus exhibit lowest growth in organic sales.
One of the things I want to emphasize… I’m trying to go through the main areas and condense all my information, because there is so much to cover for one presentation...
Q: This is quite a substantial endeavor you’re undertaking. The good news there will be ample time throughout the Show to connect with attendees to discuss these topics in more depth... What area would you like to broach next?
A: I want to talk about the remarkable growth of global exports. Between 2001 and 2016, global exports have jumped from $35 billion to more than $110 billion. That’s almost triple in a period of 15 years. This is an indication that the industry is becoming more global and is going to continue to become a more globalized industry. I can chart those numbers for fruits and vegetables by countries. I also have data for imports, but let’s skip over that.
More important, I want to point out what ‘s happening in growth of regional trade agreements (RTAs), and how many agreements the U.S. is participating in. Trade agreements are growing around the world, but the U.S. lags. It has been slow to develop regional trade agreements to expand the reach of the produce industry. U.S. trade agreements have been flat for the past 7 years. In the meantime, other countries are rushing to sign regional trade agreements.
Q: And this is problematic for the U.S.?
A: I strongly believe that. My conclusion is that trade agreements are good for the produce industry, for both exporters and importers. We have been a little slow in signing agreements as a country compared to other countries. The economy is telling us more trade is good for business, and good for people.
Q: Is this slowdown in trade agreements mainly due to (or perpetuated by) President Trump, and things will change with another election or is it more complicated than that, with other factors involved... Could you address the argument that certain trade agreements must be cancelled or renegotiated to be balanced and fair?
A: These trade agreements depend on the administration mostly, the current administration. and Congress as well. I think different trade agreements have their own context to consider. Trade agreements are very successful when the countries have different competitive advantages; they can import things they are not good at producing, and export products they’re very good at producing and that other countries aren’t and that consumers want.
Now I’ll dive into the U.S. fruit and vegetable trade situation.
Q: Is this where NAFTA comes in?
A: I want to talk about U.S. ag exports to Canada, Mexico and China, as an example of how good it has been for the U.S. to participate in trade agreements, in particular NAFTA. I look at the data from 1990 to 2017.
When NAFTA was signed in 1995, exports to Canada and exports to Mexico takeoff. Before 1995, exports were very small and not growing very fast. Just after signing NAFTA, and especially in the 2000’s trade grew, exports increased fourfold from $5 billion to more than $20 billion to Canada, and similar to Mexico. With China and the WTO trade accession in the early 2000’s, right away exports of our ag products to China went up. This is just to show that trade agreements help exports to grow.
I’ll show how U.S. exports have grown when we have preferential free trade agreements, documenting the changes with Peru, with Chile, with Colombia, with Australia, with Central America and Dominican Republic, and with South Korea. Pre-NAFTA trade was much slower.
Basically, the message is trade agreements allow us to export much more. At the same time, very briefly I want to mention this: in U.S. produce trade, we are exporting much less than we are importing. Our trade deficit in 2017 was minus almost $20 billion dollars in fruit and vegetable trade.
Q: What should we make of that? What is your analysis?
A: My analysis is we are going to continue having trade deficits. But I don’t think this should be a problem for the fresh produce industry because this sector is globalized, so U.S. businesses have investments elsewhere, and these businesses outside of the country export products to the U.S., so this shouldn’t be viewed as a negative sign.
At the end of the day, we import more than we export because consumers want the imports, which is the main message of this part of my presentation — when we have more trade, the main benefit is for consumers. Consumers have more variety, better prices, availability year-round, especially in fresh produce, better quality whenever they want it. So, I think this is an interesting graph to show.
Q: It’s interesting that many people look at these deficits as problematic, but in fact, according to your assessment, this is not a negative at all...
A: Exactly, in general people see these deficits and think there is something wrong. There is not. Another note… if we separate fresh fruits from fresh vegetables, we see the net trade trends are similar.
I have data on our main partners in terms of imports. Most of our imports are from Mexico, not a surprise, but the trade is growing, 33 percent over the last five years (from $7.84 billion in 2013 to $11.66 billion in 2017).
Peru is another country to watch. U.S. imports from Peru are growing very fast and will continue to grow — a 51 percent rise in the past five years (from $.54 billion in 2013, to $1.10 billion in 2017).
Because of seasonality and production variances, there will always be the possibility of bringing in fresh fruits and vegetables. These trends will continue.
Q: Could you talk more about potential impacts of a renegotiated NAFTA?
A: A trade renegotiation of NAFTA is an important issue. We think if nothing changes, we will continue to see the trends continue, but if NAFTA is renegotiated, it’s hard to predict.
Mexico is our Number One supplier of fruits and vegetables; imports from Mexico account for 40 percent of the total, a sevenfold increase from 1993 to 2017. It is important for many products. Main items are fresh tomato, peppers, cucumbers, avocados, guava and mangoes.
Q: And if nothing materially changes with NAFTA what is the outlook?
A: Fresh produce imports from Mexico will continue growing at historic rates, contributing to widen the trade gap due to a comparative and/or seasonal advantage.
With NAFTA renegotiations, it’s interesting to look at the Mexican perspective and potential impacts. Mexican farmers face uncertainty, not just for produce, and are seeking other markets — Argentina, Brazil, the EU, and New Zealand. Soybean, corn, chicken exports dropped for the first time in 2017 since NAFTA was signed. And there are unstable exchange rates with respect to the U.S. dollar and concerns about seasonal tariffs in NAFTA 2.0. There is so much uncertainty about what will happen.
Q: If you were an advisor in the room during NAFTA talks, what guidance would you provide?
A: To continue NAFTA and even make it even more free. The U.S. and Canada are completely integrated, and Mexico has wonderful integration with its supply chains from farm to retailer, and NAFTA has been just fantastic for firms in produce. The market is bigger and there is more opportunity for doing business, to expand where and what to produce and have a large consumer base. The NAFTA agreement, in particular for fresh produce has been a poster child of success in regional trade agreements.
I also want to focus on Peru, which is becoming a very important supplier to the U.S. market. This is facilitated through our trade agreement with Peru, since the U.S.-Peru Trade Promotion Agreement (TPA) was signed in 2009. We’ve seen 17.6 percent annual growth rate in the past decade. We predict it will triple its fresh fruit and vegetable production in the next five years. In 2017, production expanded 2.6 percent for avocados, 3.4 percent for asparagus, 4.5 percent for bananas, and 2.9 percent for tangerines.
Q: Should we turn to the export side now, and how trade deals could be affected here... especially in relation to China?
A: That’s a good idea. When we examine leading fresh fruit and vegetable export destinations, we see approximately one-half of U.S. exports go to Canada, 10 percent go to Mexico, and we have other main partners in Asia. Here we see a mixed bag of trends: Exports to Canada and Mexico are slowing down a bit; yet exports are growing very fast to South Korea and China. That’s why I want to talk about China-U.S. relations in detail.
The fluctuation in part relates to population declining in Japan, and in Canada and Mexico because of the exchange rate appreciation to the U.S. dollar. And South Korea and China love U.S. produce.
Hong Kong is somewhat of an anomaly when analyzing these numbers, somewhat like the Netherlands, because they don’t produce for consumption — they export to other countries...
Let’s focus on China now, a fast-growing export destination.
China and Hong Kong represent 18 percent of U.S. agricultural exports to the world. The U.S. is China’s leading fruit supplier. U.S. fruit has 7 percent market share of the total Chinese fruit market.
Q: That’s fascinating. What are the reasons for that?
A: The U.S. produce has very good branding and recognition. It’s very strong. It adds value to have the U.S. brand. Chinese consumers prefer U.S. produce.
As I mentioned before, there are challenges and opportunities. The challenges include potential new trade policies on ag products, China’s slowing economy, and other competing countries (e.g., Canada). The opportunities are China’s growing demand, and constraints to increase its own production.
China is a growing outlet for U.S. fresh produce via ecommerce. What’s happening there with the use of information technology and the fresh produce trade is unbelievable, as we discussed in Amsterdam.
To give you an example: There is a promotion partnership between the USDA/FAS Office in Shanghai and Tmall.com. In 2014, sales of U.S. cherries reached 168 metric tons to 84,000 individual shoppers through Tmall.com in just two weeks.
Q: Help us understand the magnitude of that number...
A: This is equivalent to nine years’ worth of cherry sales at a medium-sized supermarket.
The most important point here… if you look before 2012, there were very minimum U.S. exports of cherries to China. In 2017, U.S. cherry exports reached $121 million, triple the amount from 2012.
Q: Can you clarify the reason for that...
A: I think because Northwest cherries are really good quality, and the Chinese consumer really appreciates cherries. We have a window of opportunity at retail in China, which I’m going to show in Part 2 of my presentation. Cherries are by far the biggest produce commodity we export to China.
During my presentation, I’ll show examples of Chinese online promotion and strong U.S. branding.
Just to tell you how important ecommerce is in China, one only needs to compare Alibaba’s Single’s Day sale [Singles Day is a Chinese holiday popular with young people held on November 11] to U.S. ecommerce sales on Thanksgiving weekend. In 2017, Thanksgiving Day plus Black Friday ecommerce sales were $7.98 billion plus another $6.59 billion if you include Cyber Monday. In comparison, Alibaba’s Singles Day sales were $25.3 billion in just one day.
This highlights how big the market is in China and the tremendous opportunities because the Chinese consumer is very willing to buy on line, much more than the U.S. consumer.
Q: How can U.S. companies enter the Chinese market online?
A: I will discuss several examples. Tmall Global, launched in 2014, is looking at international brands to test the Chinese market. There is a Chinese government program that grants preferential status on certain goods without having a license to operate in the country. On Single’s Day in 2017, Tmall sold 1 million pounds of Mexican avocados, and 40,000 New Zealand kiwis in 10 hours, everything online.
Q: Incredible. How challenging is it to penetrate that system?
A: It’s not easy to get into the system. You have to make a deal with Tmall or Alibaba. There are some requirements and it entails effort, the right volume, the right branding, etc. It’s quite an opportunity but it’s not easy.
Alibaba’s Mr. Freshis an online platform that helps international produce companies to get into a B2C market. It provides consumer information, and after a brand becomes mature, it could launch a store at Tmall to operate.
I’ll show a graph of China total fresh fruit exports, which I think is important because we are exporting mostly cherries and oranges, and to some extent grapes, and apples and apricots. Apricots actually are a new category and it’s growing. This is just to give you an idea. Essentially there are no exports of vegetables; the only vegetable we export is onions and very little. I think it will continue to be mostly fruit.
I think the most important part of this presentation is China trade, and the U.S. China trade war impacts on fresh produce.
Q: What are the key aspects that attendees should know?
A: If you look at U.S. imports from China, tariffs already applied in 2018 were $53 billion. Tariffs that took effect on Sept. 24, 2018 were $200 billion, and threatened additional tariffs are $267 billion.
In 2017, total import of goods from China (the most recent annual figure) were $506 billion.
So, about half of our imports from China already had a tariff before.
On the other side, Chinese imports from the U.S., tariffs already applied in 2018 were $50 billion, with $60 billion in tariffs that took effect on Sept. 24, 2018. In 2017 total import of goods (the most recent annual figure) were $130 billion. Practically all our exports to China have tariffs now.
Q: This is in general for all products. Can you pinpoint where fresh produce is impacted?
A: Yes. This is a summary. I’m going to provide a timeline of events because everything is so recent. For example, on April 2, 2018, impacting the fresh produce industry, China imposed tariffs (ranging 15-25 percent) on 128 products including fruit, wine, seamless steel pipes, pork and recycled aluminum in retaliation.
On May 20, 2018, the U.S. and China agreed to put the trade war on hold after China reportedly agreed to buy more U.S. goods.
On July 6, the U.S. implemented the first China-specific tariffs, and things began to escalate...
By August 3, China announced a second round of tariffs on U.S. products (25 percent of agricultural, food products).
On August 7, a second round of tariffs was finalized and released (25 percent tariff on $16 billion Chinese goods import)...
Aug. 23, U.S. and China implemented a second round of tariffs;
Sept. 17, U.S. finalized tariffs on U.S.$200 billion of Chinese goods:
Sept. 18, China announced retaliation for U.S. tariffs;
Sept. 24, U.S. and China implemented a third round of tariffs;
Nov. 9, U.S. and China resumed trade talks;
Dec. 2, U.S. and China agreed to halt new tariffs for a 90 days at the G-20 Buenos Aires Summit, but the uncertainty continues...It’s very difficult to predict.
But what I can tell you is the impact of this trade war. I’ll provide a chart of the top fresh produce categories exported to China over the past five years; you can see the evolution from 2013 to 2017. And then you see specific changes from Jan-Sept 2017 compared to Jan-Sept 2018.
For cherries, the value in thousands of dollars from Jan-Sept. 2017 was $121,477, compared to a value of $80,600 in Jan-Sept. 2018, a period percentage change in value of negative 34 percent.
You see the drop because of the trade wars. You see the decline across almost all the produce categories exported to China in that time period just to show you the environment of trade conflict is affecting produce directly and indirectly, we don’t know the extent.
By comparing U.S. cherry exports to other countries during these same time periods, we are able to further demonstrate a direct correlation of the impacts of the U.S. China trade war.
China increased the cherry tariffs from 10 percent to 50 percent in April and July. What’s important to consider is cherry entry into China in different seasons. What’s happening is we are missing opportunities in the market. We have to take into account the seasonal production of cherries.
There is a huge demand and huge purchasing power. If you look at the pie chart, most of consumption of cherries is in November, December, January and February. They are coming mostly from Chile, but the U.S. is the second country of origin. The concern is the trade war will affect our share of the pie in the future.
Q: Can you elaborate on how the trade war could create longer term impacts, using cherries as an example? Could there be a domino effect of sorts?
A: These are the threats:
-Other cherry suppliers are eager to get into the Chinese market.
-Canada exports increased by 82 percent by volume, and 152 percent by value.
-Turkish exporters have exported 76,000 tons of products for an export revenue of $161 million USD so far in 2018.
-Chile is continuing increases in its Chinese focus.
-China’s domestic brand is becoming stronger, with technology upgrades, more acreage, and a focus on quality and targeting the high-end market.
Q: This sounds discouraging. Is there a silver lining anywhere?
A: The hope is other suppliers cannot meet the high demand of the China market. Canada does not have sufficient supply, and central Asia’s later season and unstable quality relative to the U.S.
The rising middle class in China demands more high-quality U.S. fruits and vegetables.
As far as the outlook, we’re in a period of uncertainty. The situation could be worse in 2019. In 2018, China importers still imported a sustainable amount of cherries from China as most purchase contracts had been signed before the trade war and temporary relief around May 20. However, if the trade war continues, I predict China will turn to Turkey and Central Asia for cherries, and France, New Zealand and Australia for apples.
The fear is that even if the tariff returns to pre-war levels, it might be difficult to regain the pre-war market share.
Discussing international trade makes me take pity on economists. Sure, some of the international trade issues are economic, but there is wide consensus that free markets lead to faster economic growth.
But, in many cases that is not the issue. Polls have shown that many Englishmen who support Brexit would do so even if they knew it would reduce economic growth. To them, the issue is about culture and sovereignty, not really things economists can put into an equation.
In other cases, people fear that China is going to use its newfound wealth to develop more weapons, which might lead to our spending more to defend our position in the world or, even, our being attacked. Again, this is hard to put into an equation.
And, of course, with a President whose most famous work is a book called, The Art of the Deal, who evaluates the situation whether a tariff is a tool to drive countries to negotiate.
Even the actual impact of a tariff can be hard to measure as sometimes tariffs redirect product movement rather than reduce it.
We had tried to wrestle with some of these issues in a piece titled, Understanding the Economics of Trump’s Trade War, which we wrote for the Weekly Standard.
Now Miguel Gómez has done a deep dive into these subjects, and we appreciate his willingness to share this scope of work with the industry.
We urge you, if at all possible, to be there for this presentation that speaks to the complexity of the world in which we trade.
You can register here.
Take a look at the website here.
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Ask any questions here.
With this presentation, we can SOAR across the world!
One of the highlights of each year’s Global Trade Symposium is the panel focusing on the opportunities and challenges of trade with Latin America. Organized by Gustavo Yentzen, who is the General Manager of FreshFruitPortal.com and its Spanish Language sister PortalFruticola.com, and who manages our Latin American operations out of Santiago, Chile, the panel this year consists of five produce industry rock stars:
Juan Camilo Barrera, Agribusiness Executive Director, ProColombia USA
Jerald Down, President, Berry People
Jorge Echenique, General Manager, Last Land Farms
Andrew Schwartz, Founder, JAL Agro
William Weyland, Vice President of Imports, 7 Seas Fruit
Because Colombia has been the focus of a lot of attention as a new supply source for avocados, we asked Matthew Ogg, Contributing Editor for pundit sister publication PRODUCE BUSINESS, to get a little preview of the kinds of issues Juan Camilo Barrera will be discussing in New York:
Juan Camilo Barrera
Agribusiness Executive Director
Q: You have had a new government now in Colombia since August with Iván Duque as president. As far as agriculture is concerned, this comes off the back of a series of protocol developments and breakthroughs, including most notably U.S. market access for Colombian avocados. What are your expectations for the new government in power in terms of investments and development for the agricultural sector, and what have you seen so far?
A: Thank you very much for the question. The new government of Colombia has been very vocal regarding its interest in the agricultural sector. So far in a short period of time, they have already proposed a bill to congress that is seeking, among other things, to reduce income taxes for foreign direct investment into the agricultural sector in Colombia.
This is in mind to keep the projection of Colombia’s continuous growth in the fruit industry in general, which has grown by 30% in the past five years, not including bananas. So, for the new government I would say it’s still a key issue.
They have been vocal about bringing in foreign direct investment and making it easier for foreign investors to look into Colombia as a potential place to grow their operations, both to produce and export in Colombia but also to serve as a hub for the region.
Q: What have been some hurdles in general that have hindered investment to date?
A: The thing is for the agricultural sector, as Colombia is strategically located, it is a very big interest. That being said, Colombia’s geography is particularly complex. As you know the Andes mountains break into three in Colombia, so it makes it a little bit of a challenge depending on what you’re looking for in the agricultural sector to get product from the middle of the country to the coast.
That is why a few years ago, the earlier government, the [Juan Manuel] Santos government, had started a project in which investments already started for the development for new ports and roads in Colombia. The current president will continue to work in this, and they have expressed their interest in fortifying the current road infrastructure, which is probably one of the main topics when we talk about Colombian products.
Besides all the investments currently being made, we also have a wide availability of air and sea transportation options. Harnessing these is the last step toward our full potential. Earlier administrations and now President Duque have been giving high priority to it. An example of that is the roads in the western part of the country, as well as the new port in UraIbá.
There is also a lot of land availability in the coastal regions… it is important to remember that the availability of land now that FARC (Revolutionary Armed Forces of Colombia) has closed its operations in most of the country with the peace treaty, this has opened a lot of opportunities for rural areas that earlier were considered conflict zones, but nowadays would be available for different sorts of crops to be grown in the country.
Also, because of the Andes breaking into three, this means you can pretty much produce any type of product year-round because you would get stable climate conditions, depending on what you need, in different areas of the country.
Q: And what are the latest updates for getting new market access arrangements in the U.S. for Colombian fruits and vegetables?
A: For the U.S. in particular, we recently were able to gain access for the avocados in the U.S. We are currently working on avocados for other countries such as China, and also for the U.S., for example, we’re working on bell peppers. There are some other products in the works, but we’re also trying to gain access for other products that are a little bit more exotic.
Colombia has increased year-over-year its production of passiflora (passion fruit, granadilla), in particular the purple passion fruit that in Spanish we call Gulupa. It is one that has grown significantly. It’s now one of our top three if we take bananas aside; the top three exports in 2017 were avos, the goldenberry or cape gooseberry, and the purple passion fruit.
Q: The goldenberry is another success story that’s worth touching on. Following the lead of a boom in Europe, the product has increased its presence in the U.S. Has that plateaued now or do you see continued growth?
A: I do see continuous growth. There are major brands that have looked into the product; one of them is actually bringing it. Definitely the goldenberry’s top three markets right now are in Europe — I’m talking about the Netherlands, Germany and the U.K. as the top three markets for that product being exported from Colombia.
I guess from the U.S., it’s a matter of time and getting the consumer to know the product and its versatility. For me, it’s probably one of the most versatile fruits there is, because of the amount of things you can do with it.
It is growing year-after-year, and we are very hopeful that exports to the U.S. will continue to grow as consumers realize what the product is and what its benefits are.
And now the restrictions have eased for what we need to comply, because of the systems approach we worked on with APHIS (Animal and Plant Health Inspection Service) and ICA (Colombian Agricultural Institute) to bring it without cold treatment from a specific region in Colombia. In that case, that’s really facilitated creating that sense because it makes it more available at a better price for the end consumer.
The growth in production continues in Cundinamarca and Boyacá in Colombia, and the exporters themselves are growing and complying with what’s being asked for. Business is growing as consumption grows as well.
Q: You mentioned discussions for bell peppers and passion fruit. What are the protocols being contemplated there and what timelines are you looking at potentially to get access in the States?
A: It’s hard to say with timelines when it comes to access, but we’re hoping that for bell peppers we will gain access sometime maybe in 2019 – we are in the final stages with bell peppers, so we’re very interested in that and think Colombia might be a very attractive partner for the U.S.
Regarding the passion fruit, the purple passion fruit in particular, we are working on irradiation. They most likely will have the regular treatment, but irradiation is something we’ve been working on somewhere in the order of two years with APHIS and ICA to get a protocol up and running to be able to irradiate products here in the U.S. before they enter the market.
This will apply initially for products we already have access for, so products such as pitahaya or dragon fruit -- yellow dragon fruit in particular.
Products such as papaya out of Colombia will be able to enter the U.S. market once we have irradiation, because they are currently authorized but we don’t have the treatment facilities for them in Colombia authorized for the U.S. market.
In the case of pitahaya, there’s hot vapor treatment which needs to be made. We do have the facilities, but they are not authorized for the U.S.; they are mainly used for eastern Asian countries. We are working with irradiation facilities here in the U.S. so that can be an option.
To be able to do that, it’s about working on the trade routes themselves. Recently there’s a new flight that will come into play between Medellin and Gulfport, Mississippi, where there’s an irradiation facility. Because of the floral industry, there is a lot of flights and availability via air to bring in some of these exotics where some of them are already brought by air, such as goldenberry, for example.
Q: The yellow pitahaya was something of a taste sensation in the U.S. when Ecuador entered with that fruit. Does that serve as an inspiration for your country of what’s possible in the market?
A: Colombia is definitely on the lookout for things that we can work on. You mentioned Ecuador, but it’s important to remember that we have been selling pitahaya to other countries for a long time. For us our main markets for the yellow dragon fruit are Japan and South Korea, the reason being because the price of the market over there is very attractive for the current supply that we have. As that supply grows, availability will grow and we’ll be able to sell to other markets as well.
It’s very similar to what’s happening to avocados out of Colombia. Currently most of our avocados are being sold to the European market, and as we have more availability of the product as our crops cross that three-year threshold, we see more and more exports being prepared for the U.S. market.
It’s the same with the yellow pitahaya; the crops are growing, so once we’ve sold the volume Japan and Korea are interested in, we will jump to other markets. We will fortify our presence in Europe, and we hope to have irradiation authorized and that will allow us to come to the U.S. market with the product.
Q: Speaking of the Colombian avocados entering the U.S. market, that was a big news item toward the end of last year with a lot of hype surrounding the entry with large multinational companies bringing that fruit in and introducing Colombia as a new source of origin. Next year the World Avocado Congress is happening in your country, and the season is underway now I believe, so what is your outlook for avos and how they can grow? What sort of feedback are you getting?
A: The crop is definitely growing. Since we started growing Hass avocados in Colombia, the crops were mainly focused on the coffee triangle region, so Medellin and that area of Antioquia, as well as the other coffee triangle states, or departments as we call them.
But more recently, there are new crops being worked on. About one or two years ago, we started working on other areas such as Tolima and Huila. We are definitely growing on the production side more and more, and as that product becomes available for Europe and we feel we need to go into other markets, we will have the ability to go into the U.S.
Hand-in-hand we are working with our regulations agency ICA to have different areas of the country come into the work plan that allows these farms to export to the U.S., and we saw more growers in Colombia applying for permits to use their areas to sell avocados into the U.S.
It is picking up the speed that we projected as more of these farmers are looking into what the requirements are and the systems they need to have in place. Regarding the packing facilities, the ones that are currently authorized are very much ready to send to the U.S. and have experience exporting to other parts of the world.
And as you mentioned, some have partnered with major companies in the U.S. — some of these major companies have invested in partnerships with Colombian companies to help them grow in technology and understanding the U.S. market, and they definitely have imported already, at least their trials.
Something interesting will happen around the Super Bowl actually, which I’m not at liberty to disclose right now but something will happen that is interesting with the product being shipped to the U.S.
Q: But you can mention publicly that something is happening?
A: Yes, it’s nothing spectacular, but one of the major players will start bringing on a more regular basis Colombian avos, starting around the Super Bowl. We expect that will keep on a steadier pace now that they have partnered with this Colombian company.
You mentioned the World Avocado Congress, which we also appreciate and we’d like to use the opportunity to invite everybody at the New York Produce Show who is interested in the industry to come to Medellin in September of 2019, where we will hold the World Avocado Congress. We hope for it to be one of the best, if not the best, there has been so far.
Q: Well, I wish you all the best in that and at the New York Produce Show as well.
A: Thank you.
So many opportunities that are not to be missed. That is why we do the Global Trade Symposium and The New York Produce Show and Conference.
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With the Romaine Crisis just now receding, issues of the role packaging could play in enhancing produce safety is top of mind. Although in a piece we wrote for the Wall Street Journal, we put in perspective how safe produce is, even infinitesimal odds still mean that people get sick. It is also likely that government and media will not do a good job of placing this in perspective, so as an industry we need to find ways to make produce even safer.
Professor Paul Takhistov of Rutgers University’s Food Science Department, one of this Wednesday's Educational Micro-session speakers at The New York Produce Show and Conference, will explain the concept of intelligent packaging — along with his Rutgers colleague, Kit Yam.
Takhistov will speak about the development of better technology functions to improve the microbial safety and quality of fresh and fresh‐cut produce. He will provide critical information for all levels of the produce industry about the technological changes that can be expected in the next few years. Although he says there is still a long way to go, Tahkistov believes the future will bring a new level of food-product safety and quality.
We asked Linda Brockman, Contributing Editor to Pundit sister publication, PRODUCE BUSINESS, to look deeper into this new technology and get a sneak preview of what Professor Takhistoy will present:
Paul Takhistov, PhD
Director of Professional Master (MBS)
Program in Food Science
Department of Food Science
Rutgers, the State University of New Jersey
New Brunswick, New Jersey
Q: What are the big themes in intelligent packaging that are driving this discussion?
A: Packaging is an integral part of the food supply chain. There are few commercial food products without consumer packaging. Packaging performs several important functions, such as physical separation from other products, protection from the environment, shelf-life extension and communication with consumers. The produce department is increasingly filled with packaging.
Environmental factors in the supply chain, such as temperature, are critical for product safety and quality. Intelligent packaging is a relatively new concept that combines the packaging, the product, and information about the supply chain environment, into an integrated cyber-physical system. This new approach will allow us to build a new decision-support system capable of monitoring and preventing any situations that might lead to loss of a food product quality or to a food safety concern. This new technology requires truly interdisciplinary approach, with contributions from the food science, computer science, and supply chain management analysis.
Q: What will you be discussing when you present your micro-session on Dec. 12?
A: I will present the conceptual framework for Intelligent Packaging and discuss functions of constituent parts of the system such as product, packaging, sensing, communication, and predictive models. We use spinach and lettuce as model foods to test this concept. I will show how we can successfully predict product shelf-life based on non-destructive measurements using out-of-shelf inexpensive sensing devices. Our next step will involve testing the developed system using cloud-based data analysis and expanding our study to the real-life produce delivery with our industrial partners.
Q: Do you have a vision of what the future of food safety will look like? How can the industry be proactive instead of reactive?
A: We are living in an open and global world. Our food-supply chain is part of this globally changing environment. It is ever more dynamic, fast and agile. It requires more transparency, traceability and control. On the other hand, there is a growing demand for fresh, low-processed foods.
Changing demographics and population eating habits result in a rapidly changing food market and demand for different food products. Traditional food safety systems are based on the HACCP approach, which is suitable for a food processing environment but is hardly applicable to a flexible and dynamic product supply. Our food safety system, now based on the reactive approach, is moving toward proactive, preventive, risk-based methods.
New capabilities in big-data analysis will allow us to determine patterns and occurrences of the bottlenecks in the supply chain that are responsible for reduced product quality and safety. Future food safety systems should be based on a deep scientific understanding of the post-harvest physiology of produce, should be technically capable to respond to changes in the supply-chain environment, and obtain comprehensive real-time information about the status of produce that can be used by cloud-based analytics, and provide a science-based decision tool.
We envision the food safety system of the future as an all-encompassing tool that creates a transparent environment for the free flow of information about product origin, history, and current status based on the information from all supply-chain players and ubiquitous population of the sensing devices (Internet-of-Things) that provide real-time unbiased information about food product status, location, and expected safety and quality parameters. Such an approach will allow early detection, prevention, and elimination of the potential safety hazards at any location for every food product and any delivery mode.
Q: Can you estimate how much money these new developments will save the produce industry?
A: The economics of food safety is a gray area. We know that every year, our economy loses $15.6 billion due to foodborne pathogens. Every major food recall costs at least $25 million for the food manufacturer.
Implementation of the new technology is always associated with an initial investment into the new equipment, new modes of business operation, and personnel training. However, the ability to deliver quality products with verifiable and transparent history will provide strong market advantages and overall cost-savings due to reduced product loss, higher product quality, and greater consumer satisfaction. This is why, in our research, we focus on the low-cost sensing and communication devices to add value to the product without significant increase of the product cost.
Q: How are the new innovations and technologies helping to deliver safer perishable food products? What are the challenges?
A: Intelligent packaging as a system that combines real-time monitoring (sensors) and product protection (packaging) is the most suitable for perishable products. Short shelf-life and long delivery time make delivery of perishable food products one of the most challenging tasks for the food supply chain. However, putting sensors on the packaging would not solve the issues of product loss and safety.
There is a significant gap in knowledge regarding how various produce types respond to changes in the storage and transportation conditions. There is no reliable low-cost sensing system capable of real-time data transfer and suitable for food packaging applications. Additionally, current mathematical models, such as predictive microbiology (USDA) and risk analysis (FDA) are not suitable for the analysis of real-time data.
Additional barriers include a lack of trained food safety professionals capable of working with big data in the cloud environment. There are some gaps on the regulatory side.
Q: What do you think attendees of your presentation will learn?
A: The topic that I will discuss is not amenable to a simple technological solution. I will present a new concept that could bring food safety and quality control of perishable food delivery to the next level. The new technology will link together food producers, processors, logistics professionals, and retailers.
Receiving an overview of this new approach will provide critical information for all levels of the produce industry about the technological changes they should expect in the next few years. Implementation of such technological approach is coherent with blockchain technology used by Walmart, and the new HARCP (Hazard Analysis and Risk-Based Preventive Controls) system mandated by FSMA. This information will be useful for the food safety and quality assurance specialists, and all levels of management as well.
Q: What is Rutgers’ role in training the next generation of produce industry professionals to practice better safety techniques?
A: Rutgers University is among the leading institutions in the field of food and agriculture science. We offer a full-spectrum education, ranging from short courses to doctorate-level professional degrees. Rapid changes in the agriculture and the food industry result in the growing demand for practical, industry-oriented education.
Specifically, our master’s degree program in science and business trains new professionals by providing a comprehensive set of business and technical skills. Our new program in master’s-level global food technology and innovation is particularly oriented for the produce industry, including courses in produce shelf-life, supply-chain quality management, agriculture, business analytics and data analysis, and others.
This program is offered online and is oriented toward working professionals looking for career advancement in the produce industry. We work closely with the industry and take the feedback from it into account when designing our programs.
There is literally nobody in the industry who shouldn’t be thinking about how packaging could revolutionize the field.
Right now, public health authorities are asking for location descriptors on romaine, and the idea that technology can make produce safer is enormously appealing. It also is a reminder that safety is not all about the field -- there is a question of whether the cold chain is being maintained in transit, at a warehouse, at retail and at home.
Come to The New York Produce Show and Conference and be a part of reimagining the role of produce packaging as technology advances.
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Perhaps it is on a unique package that the industry will SOAR!
The Pundit had an opportunity to put the Romaine Crisis in perspective and to challenge a flawed understanding of risk by penning an essay for the Wall Street Journal.
Many saw it in the physical newspaper, and it is available for those who have subscriptions on the Wall Street Journal website right here
Through special arrangement with the Wall Street Journal, we’ve been able to arrange for anyone to read the essay, even without a subscription, here on the Pundit website:
Read the complete article here.