Opportunities In Unusual Places

By Jim Prevor, Editor-in-Chief, Produce Business

It is an optimistic and earnest attitude toward business and life to go out and survey those active in the trade, find out what the obstacles are to doing business, then solve those problems and thus see business flourish and prosperity expand. It is beautiful, yet raises its own questions.

If, in fact, retailers are unable to secure the products they want in the quantity they desire, they would normally bid up the price. This high price would present a substantial profit opportunity and would cause the rest of the supply chain to fall in line to increase supply. Importers would seek out overseas production, distributors would bid up the prices for domestic production, farmers would plant more; in time, price would come down as supply increased.

This project seems to focus on an abnormality of sorts that the researchers believe exists in the marketplace. Where this abnormality exists is not 100 percent clear.

Perhaps because these products are not native to the United States, domestic farmers don’t have the technical knowledge of how to grow them. Perhaps the small volume in which these products are so far consumed has not attracted the interest of commercial seed companies. Because the predominant sources of overseas production are in developing countries that have not yet cleared phytosanitary standards, importing the product is very difficult.

If so, focused intervention by our land grant colleges might well serve to “break the dam” on some of these ethnic specialties and allow for their swift entry into the mainstream, while also creating a profitable market opportunity for small eastern growers.

It is, of course, also possible that the market is telling us something else — perhaps that these particular products are not in such demand that people are willing to pay higher prices for them and thus pull through the production. Perhaps, sentiment aside, the consumers are willing to trade off and give up their sentimental favorites in exchange for less expensive lettuces and vegetables that are produced on a mass scale.

One bit of wisdom that is undeniable that the project presents is that members of the trade would be wise to look for opportunities in unusual places.

The produce industry is highly fragmented. Typically, industry firms are small, so niche opportunities can be substantial when viewed from the prospective of an individual company.

In addition, such opportunities are more likely to be overlooked or disregarded by the “big boys,” and so the competition is less stiff.

Another advantage this research suggests is that of focusing one’s business on growing sectors. Then, not only can a trade member have a profitable niche, but also it can grow with the market.

These markets, though small, are complex because they are like a four-legged table: First, you have the first generation immigrants, for whom these are staple items. Second, you have later generations of immigrants for whom these are often nostalgic specialties. Third, you have those who happen to see the displays placed out to entice ethnic buyers and who find themselves willing to experiment. Then you have foodie aficionados who want these specialty items to try favored cuisines or to add variety and health to their diets.

Another issue is how to keep the business as the market grows. Many specialty distributors gain fame for introducing new items, but ultimately stop carrying the item as mainstream shippers can work on lower margins and mainstream growers often sell direct.

One wonders if small growers actually realize what a friend they have in the nation’s ag schools. Here is a project where the researchers start by identifying a market — ethnic produce, especially Indian items — go on to research the obstacles to getting it to market and then even develop and test various varieties and how they will grow in different places. It is really quite a contribution and quite extraordinary.

Yet there is still the gnawing question of supply and demand. If demand is growing so dramatically, and this project proves through field trials that these products can be grown profitably to serve this fast growing market, isn’t it likely that the giants in Salinas and Yuma will catch on?

Perhaps more than focusing on specifics of this project, the project teaches smaller growers, distributors and specialized retailers that they need always be alert to special opportunities. They can’t be big, so they must be facile. They are not the most efficient, so they must be the most innovative.

The opportunity is not so much ethnic produce or serving the Indian immigrant community; it is being smart and quick and flexible. It is learning to turn on a dime and live in the space between the giants.

That is a pretty substantial lesson to gain from an ag research collaborative.