IN THE TRENCHES: Do we know what we're doing with organic produce?
IN THE TRENCHES: Do we know what we're doing with organic produce?
No matter where you turn today, someone is talking about organic produce. It could be in a meeting or on a street corner.
The industry practices of handling organically grown fresh fruits and vegetables are many: It should be packaged. It should be loose. It should be segregated. It should be integrated. It should be branded. It should not be branded. It should have special colored stickers. It should not have any stickers. It should be priced higher. It should be priced the same. And the beat goes on.
I don't know about you, but all the varied philosophies of marketing and merchandising organically grown produce are making me dizzy. It seems that in spite of this category's growth, it continues to be in a perpetual spinning mode. Perhaps we should call it "organic mania."
Why can't easier ways of selling this product make it work for everyone? When will the industry come together and just agree on simply promoting this category instead of having all those competitive bureaucratic debates that really solve nothing in the end?
As an industry consultant, I have had more questions asked about how to handle organic produce than any other product. "Should we put it in a section by itself or should it be mixed in with the regular product? asked an independent store owner. "Is it better to package it or sell it bulk? asked another.
Shouldn't we have the organic produce category figured out by now? Aren't the experimental days over yet? Certainly, we should have learned just about all we need to know after tossing organic produce around for the past several years.
In spite of the fact that organics have been put through so many hoops, the category's growth has been phenomenal. Organic produce continues to grow at a very fast pace. It is now over $5 billion in annual sales and represents 4.5 percent of total produce department sales.
We've had packaging vs. bulk challenges with conventional produce long before organic produce entered the present-day scene. Now, the question comes to the table again. Should we sell organic produce packaged or bulk?
Robert Schueller, director of public relations for Melissa's/World Variety Produce Inc. in Los Angeles, responded, "Retailers like packaging, which has UPC labels on them and prevents problems at the front checkout counters. At Meliss's, we offer both packaging and bulk to our customers. Organic consumers are environmentally conscious and prefer recyclable containers.
"Both packages and bulk are growing at the same speed, said Rick Feighery, director of sales for Procacci Bros. Sales Corp. in Philadelphia. "Each store is different. It's hard to say that packages or bulk should go one way or the other across the board. We see huge increases both ways. It depends on the store. We handle over 200 bulk and packaged organic produce items. Whatever our customers want, we have it for them.
Dave Lively, marketing director for Organically Grown Co. in Eugene, OR, said, "The western U.S. prefers bulk organic produce and the East seems to prefer packaging. There is a diverse clientele at this point. The sophisticated clientele does not like packaging. The main thing is that most consumers want organic for health and environmental reasons. The organic trade is going to try to move toward recyclable packaging material in order to avoid having it thrown into the dumps.
Let's be realistic about this packaging and not beat around the bush. Most produce executives prefer organic produce to be packaged in order for it to be properly identified and correctly rung up at the register to protect the gross margin.
What about display merchandising? Can we put this one to bed anytime soon? Should it be segregated or integrated? This subject has been beat to a pulp and still lingers on. This decision should be left up to individual retailers according to what works best for their stores.
Mr. Schueller added, "The majority prefer to segregate organics into its own section. The top 10 retailers have our product segregated.
One retailer who requested anonymity told me, "Our management can't seem to make up their minds. We started out in an organic section. Then we changed to mingling it in with the regular produce. Now we're back to a separate display. Personally, I'm confused.
Then there is the pricing strategy of organic produce: there isn't any! Retailers price organic vs. conventional produce arbitrarily.
I made a random check of organic and conventional prices at some major supermarket chains, taking comparable items into consideration. The price ranges were far off and way out of line.
One chain priced conventional cabbage at 59 cents per pound and organic at $2.69 per pound. Another had conventional celery at 99 cents and $2.49 on the organic. I found two-packed organic red peppers priced at a whopping $9.99, while the conventional red peppers were being sold for just 89 cents each or $1.79 for two peppers.
We desperately need to conclude how we should be selling and pricing organic produce once and for all. Right now, it's a vicious cycle of organic mania. Many industry people have a far-reaching vision of this category growing to a double-digit percentage of total produce sales. Only the smartest and most innovative companies will make it work.
(Ron Pelger is the owner of RONPROCON, a consulting firm for the produce industry. He can be reached by phone at 775/853-7056, by e-mail at [email protected], or check his web site at www.power-produce.com.)
The industry practices of handling organically grown fresh fruits and vegetables are many: It should be packaged. It should be loose. It should be segregated. It should be integrated. It should be branded. It should not be branded. It should have special colored stickers. It should not have any stickers. It should be priced higher. It should be priced the same. And the beat goes on.
I don't know about you, but all the varied philosophies of marketing and merchandising organically grown produce are making me dizzy. It seems that in spite of this category's growth, it continues to be in a perpetual spinning mode. Perhaps we should call it "organic mania."
Why can't easier ways of selling this product make it work for everyone? When will the industry come together and just agree on simply promoting this category instead of having all those competitive bureaucratic debates that really solve nothing in the end?
As an industry consultant, I have had more questions asked about how to handle organic produce than any other product. "Should we put it in a section by itself or should it be mixed in with the regular product? asked an independent store owner. "Is it better to package it or sell it bulk? asked another.
Shouldn't we have the organic produce category figured out by now? Aren't the experimental days over yet? Certainly, we should have learned just about all we need to know after tossing organic produce around for the past several years.
In spite of the fact that organics have been put through so many hoops, the category's growth has been phenomenal. Organic produce continues to grow at a very fast pace. It is now over $5 billion in annual sales and represents 4.5 percent of total produce department sales.
We've had packaging vs. bulk challenges with conventional produce long before organic produce entered the present-day scene. Now, the question comes to the table again. Should we sell organic produce packaged or bulk?
Robert Schueller, director of public relations for Melissa's/World Variety Produce Inc. in Los Angeles, responded, "Retailers like packaging, which has UPC labels on them and prevents problems at the front checkout counters. At Meliss's, we offer both packaging and bulk to our customers. Organic consumers are environmentally conscious and prefer recyclable containers.
"Both packages and bulk are growing at the same speed, said Rick Feighery, director of sales for Procacci Bros. Sales Corp. in Philadelphia. "Each store is different. It's hard to say that packages or bulk should go one way or the other across the board. We see huge increases both ways. It depends on the store. We handle over 200 bulk and packaged organic produce items. Whatever our customers want, we have it for them.
Dave Lively, marketing director for Organically Grown Co. in Eugene, OR, said, "The western U.S. prefers bulk organic produce and the East seems to prefer packaging. There is a diverse clientele at this point. The sophisticated clientele does not like packaging. The main thing is that most consumers want organic for health and environmental reasons. The organic trade is going to try to move toward recyclable packaging material in order to avoid having it thrown into the dumps.
Let's be realistic about this packaging and not beat around the bush. Most produce executives prefer organic produce to be packaged in order for it to be properly identified and correctly rung up at the register to protect the gross margin.
What about display merchandising? Can we put this one to bed anytime soon? Should it be segregated or integrated? This subject has been beat to a pulp and still lingers on. This decision should be left up to individual retailers according to what works best for their stores.
Mr. Schueller added, "The majority prefer to segregate organics into its own section. The top 10 retailers have our product segregated.
One retailer who requested anonymity told me, "Our management can't seem to make up their minds. We started out in an organic section. Then we changed to mingling it in with the regular produce. Now we're back to a separate display. Personally, I'm confused.
Then there is the pricing strategy of organic produce: there isn't any! Retailers price organic vs. conventional produce arbitrarily.
I made a random check of organic and conventional prices at some major supermarket chains, taking comparable items into consideration. The price ranges were far off and way out of line.
One chain priced conventional cabbage at 59 cents per pound and organic at $2.69 per pound. Another had conventional celery at 99 cents and $2.49 on the organic. I found two-packed organic red peppers priced at a whopping $9.99, while the conventional red peppers were being sold for just 89 cents each or $1.79 for two peppers.
We desperately need to conclude how we should be selling and pricing organic produce once and for all. Right now, it's a vicious cycle of organic mania. Many industry people have a far-reaching vision of this category growing to a double-digit percentage of total produce sales. Only the smartest and most innovative companies will make it work.
(Ron Pelger is the owner of RONPROCON, a consulting firm for the produce industry. He can be reached by phone at 775/853-7056, by e-mail at [email protected], or check his web site at www.power-produce.com.)
