OGS grower roundtable discusses the current state of organic growing and the challenges faced

Dave Puglia, president and CEO of Western Growers, moderated a grower keynote roundtable that discussed the state of organic growing with panelists Brie Reiter Smith, vice president of product leadership for Driscoll’s, Michael DuPuis, quality assurance and public relations coordinator for Divine Flavor, and Tom Nunes V, president of The Nunes Co.

The thought-provoking keynote roundtable explored the perspectives of these purveyors of organic production on topics such as supply chain issues, inflation, labor, new innovations and technologies.

While addressing the unique differences and challenges faced by conventional and organics, Nunes said, “We try to look at everything equally by the commodity and try to streamline the most efficient and economically highest-quality product.”

Speaking on the current climate surrounding labor, DuPuis said, “It’s important to double-down on social responsibility programs. Making sure that we not only offer above-average paying wages but also maintain retention within the workforce.”

Regarding the efficiency of organic production, Smith noted that, “We’ve seen within organic production and the efficiency of resources required for berries, at least, not being as efficient. Organic strawberries compared to conventional for instance, per pound, use more water and generate less revenue per man hour,” Smith said. “We are starting to see the premium consumers are willing to spend on organics slightly diminish relative to conventional. We are noticing value placed on things other than organics, currently.”

Puglia asked Smith, with the continuing increase in most commodities in the organic fresh produce sector, what are some of the barriers that hold Driscoll’s from transitioning more acres and more commodities to organic?

Smith said, “We look at price regressions to look at what the total amount is that we reach with organics when there isn’t a price premium. Which is somewhere between 20 and 25 percent.” With the vast majority of consumers who prefer organics, “Most only prefer organic if it’s like quality with conventional or a close enough price.” For instance, she added, “Driscoll’s conventional, high flavor variety is selling at two times the organic price. Most value and price is being seen in the flavorful conventional product.”

“With high expectations, the foodservice sector wants the quality to be as good as conventional and the price points to be as close as possible," said Nunes. "And there are times where you have excess product and the marketplace doesn’t move as fast. The foodservice side is willing to pay premiums if there is a shortage to maintain their menus compared to retailers, who will take things completely off of their shelves.”

DuPuis gave great advice to small organic producers: “With the correct mindset, make sure you have the proper infrastructure in place and are up to date with the upcoming changes and regulations, regardless of scale.”

Smith doesn’t see “any additional hurdles that inhibit smaller growers from entering organics or being as successful as a larger grower.” Especially with programs available where smaller producers can supply larger growers.

Puglia asked the panel how the conversation goes between retailers and suppliers.

Smith asserted that organic demand has grown the fastest in terns of category size in the last decade over conventional. “We see for us, within the berry category, a very good opportunity. Which is very exciting,” she said.

“The retailers typically ask how they can provide more quality volume, more consistently throughout the year,” said Smith.

Smith suggested a major opportunity, for example, if retailers could start merchandising the entire berry offer together. When referencing a retailer’s case study with carrots, Smith said, “When they placed all of the carrots together, as opposed to organics as a separate product, it actually drove more sales for the whole category because consumers had more choices and maybe purchased more products they normally wouldn’t have due to the vast amount of choices.”

“Retailers want to see a consistent pipeline of supply and reliable pricing throughout the year,” said Nunes.

Puglia touched upon the recent proposal by California's Gov. Newsom to convert a percentage of farmland to organic by a designated time period.

Smith thought it could be an exciting opportunity to, “Convert an entire geography to an organic ecosystem.” But also showed reluctancy to a state-mandated order for organic conversion.

Lastly, on a 15-year projection of organics in California, Puglia asked the panelists if they were bullish or bearish on their outlook. All panelists agreed on a bullish outlook but touched upon the effect of inflation and noted consumers have been resilient in the last year or so with their spending.