Fruits of Thought
The Great Disconnect
With efforts to establish a national generic promotion order for produce set aside right now, this leaves open the question of how the industry can increase sales volumes. Since population growth in the United States is modest, this is really the same question as asking how the industry can boost consumption.
Clearly much of the burden will fall on the initiatives of individual companies. Last year, we had high profile efforts by Dole to re-imagine the bagged salad category and Del Monte Fresh to expand the availability of fresh produce in vending machines. These efforts, of course, were just the proverbial tip of the iceberg as countless produce industry participants tried all kinds of efforts to increase their own sales.
It also would be wrong to count out generic promotion, but the most likely form such promotion would take would be commodity-specific promotion typically incorporating both domestic and imported product from all regions — roughly along the lines of the National Watermelon Promotion Board or the National Mango Board. In truth, any multi-product national board would have quickly found itself under pressure to make certain that each commodity got promoted in proportion to the financial contribution of its supply chain. So an increase in the number of commodity-specific generic promotion boards might result in an effort not completely dissimilar to what would have come out of a national total industry effort. One wonders if the efforts of the leafy greens industry to nationalize its food safety standards won’t lead to such a promotional group.
It is also possible that changes in technology are opening up new ways of communication that may make traditional models less important or even obsolete. The fact that commodity promotion groups that are established these days are likely to be national rather than state-based and include imports is itself a hat tip to the internationalization of commerce.
The suite of so-called social media — everything from Facebook to Twitter and beyond — has also altered the range of possibilities for companies and farmers to promote themselves and in a way is very much in line with trends toward local production. Even some of the traceability technology, such as YottaMark’s program that gives consumers the power to trace back their produce, could also be used as a marketing tool. If a consumer enters a code on a package and gets a field number and location, why not also a Website with a video of the farmer explaining his care and devotion?
Yet, in the end, produce promotion is hindered by a great disconnect between the producers and the consumers. That space is filled by retailers, and retailers have the real power to increase produce consumption.
Going back to the launch of the 5-a-Day program in California, it was recognized that retail support would be key. The focus, though, was on promotion, and the extent of retail support was tallied in “impressions” on things such as signs, bags, twist-ties and in best-food-day ads.
This promotion has real value but what the production side of the produce industry really needs from the retail segment is a different kind of support. They need a vow to always have in stock the items consumers want — say bananas at different stages of ripeness. They need a commitment to nurture new products. New varieties and fresh-cut items... even extensions into more prepared items require time for consumers to become familiar with the products, to acquire new habits, etc.
The problem with all this is that retail top executives don’t really care if they sell produce as opposed to something else, and this is becoming increasingly true. Traditionally, although a retail CEO might not care if the chain sold more deli and less produce, the produce team did — and not just because of that year’s bonus. They cared because they were produce people, not retail people, and their next job was more likely to be with a shipper or consulting in the produce trade than in retail selling lawn mowers.
Today, though, younger produce executives, especially at places such as Wal-Mart, are more likely to have a skill set applicable to retailing than produce, and their next job is more likely to be retailing a different category than working for a produce shipper.
So as we enter the second decade of the 21st century, the challenge for the industry is clear: We are constrained in our ability to market direct to consumers so we rely on retailers to function as the “front end” of the produce marketing chain. Yet these retailers do not have the same commitment to the category that produce vendors do, so the question we confront is how do we, as an industry, incentivize and inspire retailers to commit to produce? pb