A Q&A With Isaac Vellangany, Ph.D., Professor, Department Of Environment & Business
Economics, Rutgers University, New Brunswick, NJ, Conducted By Mira Slott
Produce Business: At The New York Produce Show and Conference, which took place December 4-6, 2012, you presented an analysis of your study, Ethnic Produce Marketing: Perspectives of Intermediaries, a collaborative effort with Dr. Ramu Govindasamy, Professor of Marketing in the Department of Agricultural, Food and Resource Economics, at Rutgers University and Dr. Kathy Kelley, Associate Professor of Horticultural Marketing and Business Management at Penn State. What led you to this most recent research?
Isaac Vellangany: This is the third project in a series of ethnic produce research through USDA’s Specialty Crops Initiative, covered consecutively at the prior two New York Produce Shows. The first two were mainly concerned with demography and ethnic populations, and related characteristics. This project looks at the intermediaries. It covers a wide area from Maine to Washington, D.C.
PB: What was the key purpose of the study? Did you have a hypothesis? What did you hope to achieve?
IV: The main objective was to survey the intermediaries, wholesalers, retailers, and distributors to find out what are some of the bottlenecks they face sourcing, selling, packaging, advertising, and marketing; what difficulties they face and how different institutions can be of help to them. The main goal was to help the economics of small and medium farmers.
PB: How has the farm sector changed? Could you describe industry dynamics and the impact on small and medium farmers?
IV: As the farm sector in the U.S. has become much more consolidated and the land for agriculture has been diversified in developments, it has had severe impacts on small and medium farmers and the need to find niche markets for ethnic populations.
PB: Is purchasing potential related more to income levels or to diet?
IV: The Indian population is the highest spending because their diets depend a lot on produce compared to Chinese and Mexicans. The majority of the Indian population happens to be vegetarian, which is why Indian and Asian stores sell a lot of lettuces, vegetables, and herbs.
PB: What is the availability of top ethnic items at retail? Are there gaps that need to be filled?
IV: Our research showed a big problem. Eighty-eight percent of managers said they experience difficulties in finding ethnic greens and herbs. There is no availability. To determine this, we conducted a study involving a series of questions. There was a focus group meeting, which leads to more specific surveys. We contacted retailers, broker, and distributors and had 51 participants: 18 retailers, 16 wholesalers, 17 distributors, and brokers.
In addition to data collection, we developed 25 open-ended questions; more probing, so that managers could give us a better idea of their issues.
We also collected data on pre-selected items, recoding volumes and prices. When the data collector goes to the store, he physically sees the produce of the presorted selection, how much quantity, the prices, and gets an indication of how fast the produce moves through the store, to validate what the manager says, if it’s fresh, etc., and to get an accurate assessment, even if the manager is not giving the right information.
PB: With ethnic population growth rates rising, won’t availability issues just get worse?
IV: There is huge demand for these products, not just from ethnic groups, but other people want them because they are tired of the same foods, and greens are healthy and nutritious. There is a growing awareness of obesity problems and desire to change eating habits and increase produce consumption.
The supply chain is finding it very hard to source them. The supply constraint is problematic. If companies try to import, they have transportation costs and safety issues.
PB: What actions can be taken to increase availability of ethnic crops?
IV: Our research not only set out to find out the difficulties people face and to understand constraints. It was also to remedy the situation. So this also becomes beneficial to small and medium farmers in the U.S., who can grow and supply these products. Trust issues are less of a problem if product is domestically grown because it has to go through all the safety routes. Therefore, people will have much more confidence and increase demand, and in turn, this will result in growers increasing their production. Then instead of niche, it begins moving in the mainstream.
PB: Where do you see the best production opportunity for these specialty crops? Haven’t you begun trials in different states? What is the status of this work?
IV: The emphasis is on the East Coast. Experimental plots are underway. There is one in Florida, two in New Jersey and one in Massachusetts. We selected 10 herbs and vegetables already on trial for production. These trials have been viewed as successful.
The other part of this discussion is the difficulty retailers are having in meeting demands. The major problem is in sourcing. At the same time, trials are ongoing to determine which of these products can be grown domestically by small and medium farmers. There is huge potential for your readers. If they haven’t looked at the ethnic market, it is time.
PB: What is the next stage in this on-going project? For those attendees whose interest has been sparked, what is in the pipeline?
IV: The field trials have been very successful. As for our time frame, pilots have already been harvested and product has been sent for all forms of testing; analyzing attributes, quality, taste, nutritional content, texture…Biological testing is being done for the first two trials. We want to determine what contributed to the results. Is it because of climate or nutrients provided or pesticides used, etc.? When the product meets all the requirements, then we will contact the farmers and they can start to cultivate.
The Department of Agricultural, Food, and Resource Economics (DAFRE) at Rutgers University supports society’s agricultural, agribusiness, food, environmental, and natural resource needs for economic analysis through an integrated program of teaching, research, and outreach activities designed to improve the quality of public and private decisions.