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The
Fruits of Consolidation in Chicago
Fresh Cut
January 2001
FRANKLIN PARK, Ill. — "There’s a sea change going on in
this business in terms of consolidation," asserts Carey Cooper, president
and CEO of Redi-Cut Foods Inc. "I think there will always be a place
for small, niche processors, but large customers want state-of-the-art
facilities and food systems, cutting-edge research and development, a
broad line of products, cost-efficient operations and broad distribution
areas."
That’s a tall order, but Cooper wants to fill it
and he came a step closer recently when Performance Food Group of Richmond,
Virginia, agreed to purchase Redi-Cut for about $130 million. The resulting
business unit will be capable of supplying nearly the entire eastern half
of the United States with fresh-cut fruits and vegetables.
"We’re excited about it," Cooper continues.
"We think we’re going to have a lot of success taking our brand
name and our reputation for quality and food safety to a much broader
geographic area."
Last September, Redi-Cut opened a new 55,000-square-foot
processing plant in Kansas City, Missouri. The company also recently opened
a new 36,000-square-foot plant immediately behind its main processing
plant in the Chicago area. Coupled with other plants owned by Performance
in Georgia and Texas, the company can now serve every area east of the
Mississippi River except the Northeast.
"This is our oldest plant and it’s only six
years old," Cooper says, referring to the 120,000-square-foot plant
housing his office. "We have a modern, state-of-the-art asset base
and that allows our customers peace of mind in buying our products. Our
size also allows them to take advantage of leverage. We think we can translate
that to lower costs for them."
Fruit Star Rising
Since the company was founded in 1978, Redi-Cut has traditionally
targeted foodservice clients, currently boasting about 500 line items.
After opening a fresh-cut fruit processing plant about five years ago,
however, the company has also made inroads into retail. The new plant
in Franklin Park will be dedicated mainly to processing fresh-cut fruit
but also will include a line for fresh-cut tomatoes and a newly developed
pico de gallo that has found early success in retail deli sections.
"We’re tremendously excited about fruit,"
Cooper reports. "We have a pretty good formula. Fruit is never going
to be a 12-day-shelf-life product you can ship from the coast and we don’t
want it to be. We want to offer a fresh product. To do that, you have
to be close to the customer. You have to have outstanding distribution
networks, which we believe we have."
Hired about two years ago, Redi-Cut’s "fruit
man," Austin Hough, was charged with boosting fruit sales companywide.
Thanks to help from Dr. Margaret Barth, vice president of quality, research
and development, Hough reports sales of fresh-cut fruit have nearly doubled
in the past year and don’t show any signs of slowing.
The "Adolescent Teenager"
A former chef, Hough sells both fruits and vegetables
to retail and foodservice accounts at Redi-Cut, but says he devotes about
80 percent of his time to his "adolescent teenager" — fresh-cut
fruit.
Food safety is a key ingredient in Redi-Cut’s fruit
program, according to Hough. He says the company’s retail program
got a big boost when a major customer no longer wanted the liability of
cutting fruit in-house.
"In the litigious society we live in, you have to
be very careful and it’s better to be safe than sorry," the
fruit man explains. "The people who say, ‘No, I’d rather
do it at the store level,’ have a misconception of what fresh-cut
is as opposed to ‘fresh-ly cut.’
"What I do is fresh-cut. I have a HACCP plan. I have
temperature controls. ‘Freshly cut’ simply means it was cut
just now or a short time ago at the store. It doesn’t mean there
were temperature controls in place. It doesn’t mean someone was wearing
a hair net or gloves or was using a sanitized knife."
The Right Package
Finding the right packaging system for fresh-cut fruit
has also been a key to unlocking the sales potential of these sweet, colorful
products, according to Hough.
"Packaging has been our biggest thing," the
sales executive declares. "We changed the packaging, gaining longer
shelf-life and it contributed greatly to the success of our program. It
was just a matter of somebody dedicating time to doing it."
Redi-Cut helped pioneer rigid fruit packaging with a "juice
catcher" feature that has become an industry standard, according
to Hough. Today’s packaging still features reservoirs that prevent
fruit pieces from sitting in their own juices, but more recently, Redi-Cut
has seen the wisdom in separating different fruits into individual compartments
to keep juices and flavors from mingling.
"The key was if you put cantaloupe and honeydew together,
it’s going to be okay, but if you start mixing in other fruits like
pineapple or watermelon, the dominant fruit is going to take over,"
Hough explains. "We compartmentalized everything. They all still
drain properly because they have drainage on the bottom. And they all
keep their own flavor. Everything retains its proper shelf life, too.
That was the key for us."
Redi-Cut offers fruit in several sizes of bulk rigid trays,
lidded bowls or party trays. Hough says the variety of packaging helps
retailers and foodservice operators select quantities and presentations
that work best for them.
Options for the Trade
"Some grocery stores will take my bulk trays and make big party trays
with them for the weekends," he points out. "By doing that,
they’re eliminating the cutting and the worry about chilling it down.
All they have to do is open it up and, with clean hands, put it in a clean
tray. Other grocery stores like to get their party trays already made
and some like to buy a combination of both.
"They may take these little one-pound bowls of cantaloupe
or honeydew and just put them out on the shelf. But they may also take
5-pound trays of honeydew, cantaloupes and watermelon and mix them all
up and maybe throw in some kiwi slices they make themselves. It gives
them options. The bottom line is, my job is to give people options."
Thanks again to perseverance and R&D support, Hough
says Redi-Cut was recently able to extend the shelf life of its watermelon
packs, turning watermelon into another viable leg of its fruit program.
"Watermelon has been unbelievable for us this year,"
he continues. "We weren’t able to sell watermelon before and
get a good shelf life. It took us a long time to figure out how to package
watermelon the right way and it’s just selling by the ton now.
Juicy, Red Success
"By adding watermelon, we were able to increase our fruit program
dramatically. If you can go out to a customer and say, ‘Hey, I can
do watermelon,’ and you prove it to them, you’re a shining star."
Once the new fruit plant in Franklin Park is online, Hough
says Redi-Cut will also add apple slices and citrus segments to its product
line. The company has procured an Atlas-Pacific apple coring and slicing
machine, a unit usually found in canning or freezing facilities.
"All we’re looking to do is basically wedged
apples for retail," Hough adds. "If we get residual business
from foodservice companies that want whole peeled Granny Smith apples
for baking or if there are some manufacturers out there we could sell
apples to, that’s great. But the main goal was for fresh-cut apples
at retail and we’re really excited about that."
Looking ahead to the melding of Redi-Cut with Performance
Food Group and its processing company Fresh Advantage, Carey Cooper says
Redi-Cut not only wants to be the "Rolls Royce of the pre-cut vegetable
processing business," but also brings expertise in fresh-cut fruit
to the table.
"We’ve respected Fresh Advantage for a long
time," Cooper says about the pending marriage. "We are excited
about the fact that they have some of the same types of customers we have
in different areas. We’ve felt the cultures are a good mesh.
Commitment to Quality
"What sets us apart is our undying commitment to provide a top quality
product. They have a culture that is quality-oriented, too. They also
had some gaps in their management team that would utilize our management
team. They don’t have someone who does fruit and we do.
"Austin is going to be responsible for taking fruit
and rolling it out into a larger geographic area. We intend to increase
and broaden the number of products we’re offering. We’re going
to do apples. We’re going to do citrus. We think our fruit offerings
are just going to be great. And we’ll take the knowledge we learned
here and try to translate that to the Southwest and the Southeast.
"We believe our customers, the major retail chains,
are not buying a particular brand name. They want to know their fruit
is processed locally and that it’s fresh. Fresh Advantage wants to
be a national player. This is a way we can get bigger very quickly. There’s
certainly not a national player in fruit right now and we want to compete
in that market. I think we’re nicely positioned to do it."
Hough agrees, "I think fruit is going to be the next
big thing. It’s starting to grow for us. Everybody is comfortable
now with fresh-cut vegetables. What else is there? It’s fruit. And
I know we can do a good job with it."
© 2003 Columbia Publishing
Applied
Research Improves Products
Fresh Cut
January 2001
FRANKLIN PARK, Ill. — A GC-Mass Spectrometer isn’t exactly standard
equipment for fresh-cut processors, but Dr. Margaret Barth’s department
at Redi-Cut Foods, Inc. recently had one delivered for in-house research.
"GC mass spectroscopy, along with sensory panel evaluation,
allows us to identify flavor components that are critical for a number
of our customers," reports Dr. Barth, a former University of Kentucky
researcher who now uses science and technology to solve real-world problems
for both Redi-Cut and its customers.
Nearly four years ago, Dr. Barth left her teaching and
research position at the university to become head of research and development
at Redi-Cut. Now, instead of comparing vitamin C content in packaged fresh-cut
broccoli to that of whole broccoli, she’s applying her knowledge
and training to such practical matters as sanitizing wash water, improving
product flavor and extending the shelf life of fresh-cut watermelon.
"Meg Barth helped figure out our system for watermelon,"
says Austin Hough, who heads up fresh-cut fruit sales for Redi-Cut. "We
really feel we can get a 10-day shelf life on watermelon, but a seven-day
shelf life is what we can guarantee. Before that, we couldn’t sell
watermelon and get a good shelf life."
Finding a Better Way
Fine-tuning the company’s fruit process with a focus on watermelon
is just one of the many technical projects heaped high on Dr. Barth’s
plate. Since President and CEO Carey Cooper hired her, he has promoted
her to vice president for quality, research and development and she has
added former student, Hong Zhuang, and food technologist Olusola Ishola
to her department to help carry the load.
One exciting area of focus for the team of researchers
has been wash water systems, according to Dr. Barth. Redi-Cut employs
several wash systems in its plant and has worked with an outside firm
to commercialize a containerized system that used ozone as its oxidizing
agent. She says the ozone system will be installed and operating by January
2001 and could revolutionize water sanitation and quality retention in
the company’s process.
On her office wall, Dr. Barth has a quote from Thomas
Edison that reads, "There’s a way to do it better. Find it,"
but she and her department are not just focusing on a single procedure
or process. They are attacking a number of challenges at once. Here is
a partial list of the projects currently underway:
Sliced tomatoes: The group is looking at cultivars, color,
stage of ripeness, pre-storage temperature, cutting equipment, packaging,
pre-rinses and other factors that influence the quality of sliced tomatoes
Redi-Cut is able to deliver to customers. The company is currently producing
sliced tomatoes and looking at ways to automate the process to provide
higher volume.
Flavor: Products may have 12 days of shelf life, but do they lose flavor
or other sensory qualities before their time? Dr. Barth and her colleagues
have formed a trained sensory panel by providing 12 members of Redi-Cut’s
staff with universal reference training in evaluating sweetness, texture
and other quality parameters. The panel has evaluated lettuce flavor,
aroma and other parameters over time to determine if there is a "drop-off"
in sensory quality prior to shelf life expiration. The group also developed
a flavor scorecard for specific company products.
Varietal testing: Redi-Cut is comparing vegetable varieties as they are
grown in different regions in order to provide consistent flavor, color
and other qualities in the products they sell their customers.
Oxygen transmission rates: Are packaging materials right for the products
they protect? Dr. Barth’s team is validating the OTR of major products
to be sure packaging systems are doing the best possible job in assuring
the proper shelf life over region and season.
Optimizing processes: Redi-Cut’s research arm is closely examining
every step of its processes to identify key areas where intervention or
changes could help improve quality and yield of its products. "We
examine the efficacy of our current system," explains Hong Zhuang.
"We also work on finding new methods to control microbe populations
in finished product." Food technologist Olusola Ishola agrees, "We
do a lot of what I call trouble shooting, trying to find key indicators,
if we have problems, and what could be the causes."
Microbial assessments: "We take steps at regular intervals to verify
the capability of our process to provide a wholesome and high-quality
product for the customer," Dr. Barth explains. "We’re also
doing shelf life validation work to determine how raw materials from different
regions perform on both shelf life and market quality."
Statistical process control: This relatively new product is aimed at improving
the company’s efficiency in assuring product safety and quality.
Working in the private sector to develop new technologies and systems
has opened up wider opportunities for collaborating with others, according
to Dr. Barth.
"At the university, we were involved with technology
groups, looking at application of their treatments, whether it was packaging
or a processing aid," she explains. "A group that we may have
worked with at the university we now may be working with in collaboration
with one of our customers or one of our suppliers. Now it’s not so
much like a grant, but that someone says, ‘Would you study this and
find the best packaging?’
From the Ground Up
"We’re actually working all the way from raw material and environmental
and postharvest handling of that material, through to the finished product
at the store level.
"At the university, we’re working more on an
isolated issue to look for an application or a comparative difference,
using one treatment versus another. We still use that approach here, but
we’re now working very closely with our raw material suppliers, with
postharvest handling practices. Here we’re doing more commercial-scale
trials."
Customers frequently instigate the projects Barth’s
department addresses, often because there are questions about such factors
as packaging, shelf life or flavor issues and whether or not these affect
quality to the customer at the restaurant level.
"If a customer is getting complaints about flavor,
for example, we may go back and look to see if it’s a raw material
issue, a process issue, a handling issue at the restaurant level or something
else," Dr. Barth says. "So we look at thresholds of chlorine
or whatever we’re using in the flume. We may look at different packaging
applications to see if they are contributing to the development of flavors
on the finished product. Temperature affects things like that, too.
"For example, we may work on a sensory evaluation
project at the restaurant level to determine the threshold conditions
for specific quality attributes. It’s much more of a real-world application,
looking for much more immediate kinds of quick wins for the customer."
© 2003 Columbia Publishing
Partners
Were Experts Almost Overnight
Fresh Cut
January 2001
They started in a converted garage, using coin-op clothes dryers to remove
excess water from their product, but within a few months, Phil Cooper
and Les Frankel were considered onion processing experts by their major
customer.
"It sort of took off from there," recalls Cooper,
who is still active in Redi-Cut Foods, Inc. 23 years after launching a
potato processing business with Frankel. "We originally started in
the fresh-cut potato business. Doing salads and onions was the last thing
on our mind."
Selling fresh-cut french fries and other potato products
to hot dog stands, small restaurants and distributors, the two men were
frequently seen making deliveries in their station wagons on South Water
and Randolph Streets.
Potatoes weren’t bringing the fledgling company enough
income, however, and the two entrepreneurs soon decided they needed a
major account. Cooper had a connection at a fast food chain and was surprised
to learn the company was "looking for somebody to run onions for
them."
The two had started their business in December 1977 and
by April of the next year they were running onions for their new client,
religiously putting quarters in two dryers they purchased for $50 and
$25, respectively.
A Prototype Processor
"Actually, maybe three months after we started with them, we were
kind of the prototype onion processor in the country," Cooper recalls.
"They brought in all the people throughout the country who were making
onions for them to show them how we were doing it. Nobody else was actually
doing them very well at the time."
Cooper and Frankel continued processing in their 15,000-square-foot
converted garage in Evanston, Illinois, for about four years, then leased
a 30,000-square-foot building in Rosemont which they later expanded to
50,000 square feet.
Just three years after launching their business, the two
added lettuce to their line of products and "just kept expanding
the business," Cooper recalls. In 1993, the company completed a modern
90,000-square-foot processing plant in Franklin Park and, by 1996, they
added another 30,000 square feet to that facility. In 1995, Redi-Cut purchased
Kansas City Salad Co. and recently completed a new facility for that arm
of their business. Most recently, the company is replacing a 12,000-square-foot
fruit processing plant with a new 36,000-square-foot plant to be dedicated
to fruit, tomatoes and pico de gallo, according to Cooper.
When asked the secret to Redi-Cut’s success, Cooper
says simply, "We always tried to be a very high quality company.
That’s basically what we sell is quality."
© 2003 Columbia Publishing
Researchers
Say, "Eat Your Medicine"
Fresh Cut
January 2001
A few years ago, the California Carrot Advisory Board and the American
Cancer Society published a poster featuring three beautiful carrots and
the phrase, "Mother Was Right."
As it turns out, Mom was right about more than just carrots.
Research continues to bear out her maternal instinct, demonstrating that
eating 5 A Day really does promote good health.
According to a recent study, diets rich in fruits and
vegetables and low in meat and sugar not only help lower blood pressure
but also reduce levels of homocysteine, a harmful amino acid linked to
heart disease. Funded by the National Heart, Lung and Blood Institute,
the study placed 118 subjects on a high fruit and vegetable diet, known
as Dietary Approaches to Stop Hypertension (DASH). Subjects on the diet
eat only low-fat dairy foods and reduce meat and sugar consumption.
Researchers conducted this follow-up study to determine
the effects of the DASH diet on homocysteine and found homocysteine levels
can be reduced through intake of folate, a B vitamin found in leafy green
vegetables and whole grains.
Scientists with USDA's Agricultural Research Service (ARS)
have found orange and other citrus juices contain bioflavonoids that can
help the body fight off cancer-causing substances. Bioflavonoids give
flavor to citrus and also are strong antioxidants.
Inhibiting Carcinogens
The scientists have identified several citrus bioflavonoids that inhibit
certain cytochrome P450 enzymes, know for turning cigarette smoke, pesticides,
and other substances, called procarcinogens, into carcinogens. One enzyme
of particular concern is P450 1B1. It not only turns cigarette smoke and
pesticides into carcinogens but also is present at high levels in breast
and prostate cancer cells.
The scientists discovered hesperetin, the most abundant
bioflavonoid in orange juice, inhibits P450 1B1 enzymes from metabolizing
procarcinogens, reducing the likelihood that the body will turn them into
carcinogens. Armed with a knowledge of hesperetin’s activity, scientists
may be able to develop alternatives to traditional cancer chemotherapy
treatments that affect both healthy and diseased cells.
Mom may not have been as insistent about onions as she
was about carrots and orange juice, but recent research at the University
of Wisconsin has shown onions inhibit platelet aggregation in human blood
and may promote improved cardiovascular health.
Reporting at the National Onion Association’s Summer
Regional Convention last July in Madison, Wisconsin, Dr. Irwin Goldman,
a UW associate professor of horticulture, said onion juice has shown promise
as a blood thinner for dogs. If the same result can be achieved with humans,
it may be possible to reduce the risk of blood clot formation and related
heart attacks and strokes.
Foods as Medicine
While the "crowning achievement" of modern medical science in
the western world has been the development of synthetic drugs, foods are
used as medications in much of the rest of the world and have been for
thousands of years, according to Goldman.
"Hippocrates said, ‘Let your food be your medicine
and your medicine be your food," Goldman said. He also quoted a Chinese
biologist who said recently, "Food and medicine are from the same
source, based on the same theories and have the same uses."
Bulb onions have been cultivated around the world for
thousands of years for flavor and also as a plant that promotes human
health, according to Goldman.
Onions contain a suite of compounds called thiosulfinates,
that give flavor both to them and to garlic. These substances are partially
responsible for some medicinal properties of onions and may play an important
role in human cardiovascular health.
"Somewhere very early in our development, we all
begin an atherosclerotic process, where plaque gradually builds up in
our coronary and other arteries," Goldman said. "If the plaque
gets to be too much and occludes the coronary artery, that can lead to
a heart attack or a stroke because enough blood is not flowing through.
If a piece of plaque ruptures, breaks off and blocks blood flow, we can
also have a situation that leads to heart attacks or strokes."
Onions Instead of Aspirin
Maintaining blood flow through coronary arteries is important. As plaque
develops and eventually ruptures, platelets begin to adhere to artery
surfaces and begin to aggregate and form clots. Many people now take aspirin
to inhibit platelet aggregation, but science is showing whole foods like
onions may accomplish the same thing, Goldman pointed out.
Along with Drs. Michael J. Havey, Kirk Parkin and John
D. Folts, Goldman is now looking into such possibilities.
"We began our work six or seven years ago by taking
blood from ourselves and the members of our laboratory," Goldman
explained. "Using a machine in our laboratory, our focus was on identifying
the onion properties inhibiting platelet aggregation. Thus far, we’ve
found pungent onions have a stronger anti-platelet activity than mild
onions. We’ve also discovered storing onion bulbs increases their
anti-platelet properties. We’re turning up many interesting facts,
including which of the thiosulfinates are important in inhibiting platelet
aggregation."
The researchers have also tested dogs, measuring the ability
of onions to inhibit platelet aggregation in coronary arteries.
Positive Health Benefits
"The bottom line is there appears to be a very positive health benefit,"
Goldman told the group. "The results are encouraging, but we still
have a number of significant questions to answer, including what happens
to the cooked onion that has become so popular in our marketplace? Preliminary
studies, using our model, suggest there is little or no value."
Dr. John D. Folts, Goldman’s colleague and a fellow
of the American College of Cardiology, professor of medicine and director
of the Coronary Thrombosis Research and Prevention Laboratory at the UW
Medical School, said a number of "functional foods" have shown
health benefits for humans.
"I am interested in functional foods we eat not only
for their protein and carbohydrates, fat content and other nutritious
things, but also for the micronutrients they contain," he said. "They
may be organic sulfur compounds. They may be flavonoids.
"We would like to have something in our diet that
would turn down platelet activity, so they are less likely to cause trouble."
Folts also addressed the role free radicals play in disease.
"They are found in both healthy and sick cells," he said. "Smoking
cigarettes increases free radicals in your body. It is now believed free
radicals contribute to arteriosclerosis and other degenerative diseases.
Hence, extra antioxidants in our blood or from our diet would be helpful."
Fighting Clogged Arteries
Altogether, overactive platelets, high cholesterol and free radicals can
lead to clogged arteries, and to clots that kill, Folts said. The number
one cause of death for men and women in most of the western world is heart
attack initiated by clots.
"We’re trying to do something about that,"
the researcher said. "There is much interest in polyphenolic compounds,
including flavonoids and organo-sulfurs found in plant-derived foods such
as onions, garlic and other vegetables, fruits, and fruit beverages such
as red wine and purple grape juice."
Vegetarians show much lower incidence of heart attacks,
strokes, cancers, diabetes and debilitating diseases, partly because they
eat more flavonoids, organo-sulfur compounds and other materials that
help provide anti-platelet and anti-oxidant activities. He said the French
have one-third the heart attack rate of Americans, possibly because they
drink red wine with their meals and eat more fruits and vegetables.
Red wine contains flavonoids and micronutrients from grape
seeds and skin. Remove the alcohol and the benefit remains. The key is
having enough residues from grape seeds and skin in wine or grape juice
for a long enough period.
"What may be just as important is the fact that the
French consume large quantities of onions, fruits and vegetables in their
diet on a regular basis, giving them micronutrients that also are helpful,"
Folts added.
In animal studies, Folts administered purple grape juice,
both intravenously and orally, to test its effect on blood clots. Both
methods worked. Taken orally, 10 to 12 ounces for an average man, purple
grape juice flavonoids are absorbed in the intestine, end up in the blood
stream, and "do something good." Clotting is inhibited and goes
away.
© 2003 Columbia Publishing
GMO
Debate and Product Liability
Fresh Cut
January 2001
MONTEREY, Calif. — Like it or not, genetic engineering has changed
food forever and could eventually turn the world of product liability
upside down, making even producers of non-engineered crops potentially
liable for damages.
That was the assessment of Thomas P. Redick, an attorney
with Chapin Shea McNitt & Carter of San Diego, California, a speaker
at a technical seminar held in early October by the International Fresh-cut
Produce Association entitled "Biotechnology: Friend or Foe?"
"As technology has evolved, so has the law imposing
liability and requiring compensation for those whom a jury considers to
have suffered harm," Redick wrote in a draft paper he supplied to
Fresh Cut magazine. "Strict product liability has been applied to
foods that cause foreseeably harmful, if natural, effects on consumers."
Ironically, producers of foods that have not been genetically
modified could be held liable because their "natural" products
may be unsafe or harmful in some way, according to Redick.
"The rDNA (recombinant DNA technology used in genetic
engineering) process enters the 21st Century facing a world ready to hold
it — and the foods it creates — liable for personal injury or
property damage linked to its use. The world may also use the rDNA process
to define the standard of care for non-GMO (genetically modified organism)
food. Negligence in creating food that has known or knowable risks is
generally actionable for a failure to use all available knowledge in designing
food or warning of its risks.
Using the Best Technology
"Whatever one’s perspective may be on genetic engineering, it
is clear product liability prevention requires the use of the best available
technology to prevent risks to man and his environment. If the rDNA process
were to set the standard of care for food safety in some crop varieties,
the rDNA process would increasingly be required to prevent product liability.
While the GMO frying pay may grow increasingly hot for U.S. food producers
whose products ‘may contain’ GMOs, the liability risks associated
with non-GMO varieties may actually mandate the use of certain GMOs in
certain situations."
Redick outlined two fallacies underlying the emerging
"non-GMO" marketplace and the rush to impose a "precautionary
approach" to the use of the rDNA process.
"The first fallacy lies in assuming that the non-GMO
marketplace will provide a haven for U.S. food producers from the negative
publicity campaigns of anti-corporate activists," he wrote. "Unfortunately,
the ‘non-GMO’ label of a multinational food producer may be
a virtual homing beacon for the genetic testing programs of activists.
"These activists will set their own arbitrary standards
for genetically improved crop content (a mix-in ‘tolerance’)
that may be impossible for large operations to consistently achieve. Companies
will have to look before they leap into the non-GMO marketplace.
Managing Risks
"The second fallacy is assuming that the genetically improved and
non-GMO options provide equal levels of consumer protection for known
health risks. The ‘precautionary approach’ to genetically improved
crops that is spreading around the world is driven by fear of unknown
food safety risks (e.g. hidden allergens).
"Applying the ‘precautionary approach’
evenhandedly to all foods bred by man, as product liability prevention
would require, we may find that the risks of many GMO foods are more effectively
managed than the risks posed by traditional plant breeding."
Redick went on to reason that food producers in the new
millennium will face a "bewildering array of legal barriers and documentation
requirements as the world’s food supply divides into non-GMO and
GMO chains of commerce.
"Segregation of GMOs will be imposed both by regulatory
requirements (in particular, the ‘zero tolerance’ standard for
varieties not yet approved overseas), and by the marketplace in its search
for certifiably ‘non-GMO’ supplies," he wrote.
People around the world are increasingly taking the "precautionary
approach" to GMO foods created by the rDNA process, according to
Redick. For example, he cited the European Union and many "like-minded
countries" that have protectionist tendencies.
Biotechnology concerns are forcing genetically modified
U.S. corn and soybeans to be marketed only on domestic soil thanks to
Europe’s precautionary approach.
Diverging World Opinion
While other countries are practically in a state of panic, the U.S. Food
& Drug Administration "does not consider the use of the rDNA
process sufficiently ‘material’ or ‘important’ to
U.S. consumers to require mandatory GMO labeling. Many trading partners
of the United States, however, including the E.U. and Japan, are increasingly
opting for mandatory GMO labeling, he noted.
"Anti-GMO activists have urged the world to adopt
the ‘precautionary principle’ to guide governments in setting
regulatory standards for approving genetically improved crops," Redick
reported. "This ill-defined principle could reverse the burden of
proof for regulators considering approval of genetically improved crops.
The rDNA process would be guilty until proven innocent, leaving other
more risky technologies innocent until proven guilty. This could create
the incredibly incongruous and perhaps unprecedented situation of having
regulators ban a technology on food safety grounds when that technology
may one day define the standard of care for avoiding certain food hazards.
"One expert has suggested the rDNA process could
provide the tools necessary to detect any allergy (using databases of
gene sequences) and create hypoallergenic varieties of rice and other
common crops (by deleting the allergen-producing gene sequences)."
Mothers in the 21st Century "will increasingly rely
upon the expertise of food companies to manage food safety risks,"
Redick continued. "Food producers contemplating a non-GMO option
should ensure that any products marketed to children are carefully screened
for mycotoxin, allergy, microbial and other known risks.
Second-guessing Perceptions
If today’s children file personal injury claims in the future, a
food producer will not have much hope of defending safety decisions that
were driven by perception of consumer perceptions (i.e. by assuming activists
successfully instilled irrational fear in parents about the ‘unknown’
risks of GMOs). Food producers should use the best science available to
protect children’s health.
"The simple truth, given the scrutiny directed at
GMO products prior to marketing is that certainly genetically improved
crops may pose fewer known risks than their non-GMO counterparts.
"In assessing the liability risks associated with
genetically improved and non-‘GMO product lines, companies have no
choice but to rely upon the truth as it is defined by scientific evidence—not
simply react to perceived consumer perceptions. Those customers, should
they be injured or misled, will rely upon scientific evidence if they
ever file suit for fraud or personal injury. The ‘Biotech Century’
could bring a tidal wave of genetic information that irrevocably alters
the landscape for food liability."
© 2003 Columbia Publishing
>>
Return to top
Meeting
Nationwide Demand for Herbs & Specialties
Fresh Cut
February 2001
SOUTH SAN FRANCISCO - For the founders of AgriVentures USA, Inc., it came
down to this: Either take the necessary steps for growth or scale back
and focus mainly on California.
Steven Hurwitz, Jay Fishman and George Gilman wanted to
grow, but they knew they would need capital to help their major customers
replace costly air shipments with just-in-time local deliveries.
"We looked at our customers and their needs and realized,
without substantial resources, we were just going to be a mid-level company,"
recalls Hurwitz, who served as president of the company. "That just
wasn’t going to cut it."
The AgriVentures trio changed their company name from
HerbThyme Farms last April to better reflect their business plan. They
will continue to use HerbThyme as a brand, but chose AgriVentures to unify
current companies under their umbrella as well as subsequent acquisitions.
During the name change, the partners attracted the attention
of Catalyst Equity Partners, an investment firm whose principals saw promise
in the AgriVentures/HerbThyme business plan. The three founders were already
operating herb and specialty produce distribution facilities on both the
Los Angeles and San Francisco terminal markets while managing their South
San Francisco production facility. They had plans in the works for further
acquisitions to expand service in key markets.
New Equity Partner
Less than a year later, AgriVentures announced a $10 million equity investment
from Catalyst that will help accelerate the eight-year-old firm’s
nationwide acquisition strategy. The company will establish a network
of regional distribution facilities in the Southeast, the Southwest, the
Midwest and the Northeast to expand customer service capability. There
is also another acquisition in the wings to broaden the company’s
product line and customer base. Hurwitz says the company will explore
ways to work with other regional herb suppliers to solidify consistent
supplies for its growing clientele.
Along with the investment, Catalyst is also providing
savvy business leadership in the form of Jerry Halamuda, who will serve
as CEO. He guided the success of Color Spot Nurseries, a $250 million
company with locations around the nation. Michael Vukelich, chairman of
the new company, also worked with Color Spot and has extensive experience
in building businesses and facilitating acquisitions. His primary focus
will be overseeing the company’s acquisition strategy.
"This is a historic day that will transform the company
into a powerful, nationwide marketing and distributing network that further
streamlines the procurement process for customers," asserts Hurwitz,
formerly president of the company.
"Jerry Halamuda is a world-class executive who has
a demonstrated track record of success. And with Catalyst Equity Partners,
we now have the financial resources and expertise to expand our distribution
network and product lines, strengthen our technology infrastructure, and
roll out national marketing programs to better serve our customers’
needs."
Hurwitz will head up sales and marketing for the new company
and partner and co-founder Jay Fishman, formerly CEO, will be president
of the fresh division. The third member of the founding trio, George Gilman,
will be vice president of growing and procurement and a fourth partner,
Charles Dible, will continue as controller.
Coast-to-Coast Network
While AgriVentures/HerbThyme has already established a network of regional
distribution centers, the company and its new management team are planning
to build a coast-to-coast network through acquisitions that will also
enhance retail service and significantly boost volume.
"When we were approached by our equity partner, the
light bulb came on because what we want to do is create a destination
in the retail produce department." Hurwitz explains. "And we
want to have the distribution network around the country to back it up.
Additionally, we want this retail center to tie in with foodservice to
give everyone a lift."
Everything the AgriVentures/HerbThyme team is doing is
customer-driven, according to Hurwitz. Sales in the newly configured company
will be split about 50 percent retail and 50 percent foodservice and he
expects demand to continue its current exciting growth rate. With growth,
however, comes an increasing need for more intensive customer service.
"We’ve had lots of customers over the years
ask us to put in distribution points near their hubs," the company
co-founder explains. "What they’re asking us to do is provide
them with more local/regional distribution. They want to eliminate the
freight, because air freight is very expensive, but they also want a just-in-time
ordering approach. It keeps their shelves cleaner and fresher and allows
the local distributor, who represents our product line, to merchandise
more, work the shelves, and help with education."
The timing is right for AgriVentures to expand its operations,
according to Hurwitz. Several factors are driving growth in what he calls
the "exciting niche" of fresh herbs and specialty produce.
Customer-driven Strategy
"Convenience, health and taste are driving everything," he reasons.
"People have a really good feeling eating these products and using
them in food preparation. And what we’re doing with our products
is appealing to all of those needs in the marketplace.
"No one wants to buy a product that requires a tremendous
amount of cutting, chopping or cleaning. If you provide it in a retail
or foodservice package, though, consumers save both labor and time. We’re
selling a lot more packaged items. We’re working more and more with
technology to enhance shelf life and to offer more processed items. Finally,
we are putting together programs that work for the customer."
Thanks to modern processing techniques and state-of-the-art
packaging, specialty greens and fresh herbs once reserved for pricey gourmet
restaurants are now more widely available, not only for foodservice but
also for consumers who want to add a touch of class to meals without excessive
cost or preparation time.
Once a high-priced specialty item, mesclun mixes have
become more commonplace, but Hurwitz says AgriVentures continues to grow
its specialty niche by providing custom salad mixes for chefs at white
tablecloth restaurants who are always looking for ways to delight customers
with new ideas.
"There’s been a void for these chefs who want
something different than what’s readily available at the supermarket,"
he explains. "They’ve asked us to create specialized custom
mixes. Some of the common ones we’re doing are micro-green salads,
Asian salads or perhaps herb salads that have herbs with the greens.
Demand for Convenience
"All of these might be enhanced with edible flowers. They continue
showing growth because they’re such an easy thing for a chef or a
consumer to use and make a difference in his or her presentation at a
very minimal cost."
In spite of the fact that fewer people are finding time
to cook in the new millennium, herbs and specialty salad mixes are showing
excellent growth at retail as well as in foodservice, Hurwitz points out.
"There’s a time and a place for everything,"
he continues. "When people come home and have time, they want to
be creative. That’s when the cooking process becomes fun. Another
situation might be that they’re running late and just want a quick,
healthy meal for their family. That’s where foodservice comes in!"
In addition to culinary herbs, medicinal herbs are big
business in pill form and Hurwitz says many customers are using them fresh
in teas or as ingredients in specialty salads.
"People are experimenting with fresh medicinal herbs,"
he says. "Why shouldn’t they be even more appealing when they’re
fresh? We’re also selling a lot more exotic or specialty herbs, things
like variegated sage or chocolate mint. Some of those items were slow
movers a couple of years ago, but they’ve picked up in volume. Basil,
rosemary and chives, just like the mesclun salad mixes, are becoming more
common and consumers are looking for something new and different, something
exciting."
Growing Ethnic Market
While typical American consumers may try something exotic at white tablecloth
restaurants and want to duplicate the dish at home with herbs, greens
and specialty produce, America’s burgeoning ethnic population is
also a factor in driving sustained growth at AgriVentures/HerbThyme, according
to Hurwitz.
"There’s an acceptance and a celebration of
diversity in this country that’s giving retailers the green light
to appeal to these ethnic groups," he asserts. "Where it may
have been a fringe trend in the past, diversity is now openly celebrated
and acknowledged.
"The various ethnic groups all have their special
selection of herbs. We talk about chain stores, but there’s a huge
amount of shopping going on in small corner ethnic stores. It’s really
common to see a Latino or an Asian market that’s maybe 600 to 800
square feet that reminds the first or even the second generation of immigrants
of home. That’s another level where we’re attempting to market
our products. It’s a very large, but untracked market.
"It’s important to remember the kitchen and
meal time are a much more important part of the family structure for these
ethnic groups. That’s the center. That’s where they meet. As
we get on in our generations, we’re more on the go and rushing around
and there’s less importance in that area. The ethnic groups, though,
still emphasize the meal at home with the family and the extended family.
Meals are a lot more celebratory."
Providing Demographics, Too
AgriVentures/HerbThyme provides retailers with demographic information
to help them stock the right items in their stores to satisfy local ethnic
demands in the right neighborhoods.
"It hurts these specialty programs when you put the
wrong ethnic mix with the wrong demographic group," he explains.
"For example, cilantro is an herb that’s used in a lot of traditional
Hispanic cooking. You don’t want to put things like lemon grass in
that store. So you’ve got to do your homework.
"One of our bigger chain stores actually asked us
to put together a demographic merchandising guide. It’s about 50
pages already. When you look at culture plus ethnicity and then mix that
with the holidays for each culture, you have three levels of permutation.
What’s exciting is the cross-merchandising potential in a grocery
store. It’s infinite.
"I would be so bold to say that herbs and spices
are the future of cooking because they connect the whole store together.
They are the spices, the flavors and additives. They’re so healthful.
They are in many respects, the literal meaning of ‘spice of life.’"
© 2003 Columbia Publishing
Consumers
Speak Their Minds...
Fresh Cut
February 2001
ANAHEIM, Calif. — If honesty was what the produce trade wanted during
a PMA workshop entitled "Focus on the Consumer," they got their
wish as seven carefully selected consumers shared their perceptions about
everything from produce quality to online shopping.
"They’re going to be honest with me," consumer
researcher Dr. Laura Pelegrin told the workshop audience October 31 at
the Anaheim Convention Center. "I’ve asked them to share their
real feelings and opinions and, in the kind of work we do, that is the
truth."
Her company, Pelegrin Research Group, of Glendale, California,
conducts research projects for such companies as McDonalds, Ford Motor
Credit Company, Universal Studios and Holland-American Cruise Lines, uncovering
the hard, cold truth about how consumers really perceive specific products
and services.
"You’re industry experts," Pelegrin told
the audience preparing them to listen with open minds to the panel’s
feedback. "These people are not. They are a small representative
group of the kinds of people who are in stores every day buying produce.
What they think and feel—what you hear today—is reality, even
if you believe it to be different—even if you have facts that say
it’s different from what they say."
Perceptions about Quality
When asked how she determines whether a particular grocer cares about
produce quality, Debi, a 45-year-old secretary, said she looks at how
fresh fruits and vegetables are displayed and how the produce department
is kept up. If she sees insects or damaged fruit, she perceives a lack
of concern.
Responding to the same question, Elizabeth, a 25-year-old
single mother and full-time student, said she also looks for cleanliness
when judging the quality of a produce department, noting she is concerned
about pesticides.
"The produce department is the important part of
the supermarket, I believe," she asserted. "The food is exposed
to open air. It’s natural. Constantly it’s being sprayed with
pesticides. I just look for the bugs. I look for bruises."
Scott, a 40-year-old financial services salesman who works
out of his home and does some of the family shopping, said the size of
the produce department helps him determine whether a grocer puts sufficient
emphasis on fruits and vegetables. If there is fruit on the floor, he
said his opinion of produce quality and overall cleanliness of the department
is diminished.
The other man on the panel, 27-year-old Matt, agreed that,
for him, appearance is tantamount to quality in the produce department.
Appearance Matters
"The appearance would translate into how much they care about their
produce," he reasoned. "Even things like the appearance of the
floor would be really important to me. If you have fruit that’s been
squashed and spilled on the floor and the floor is sticky, it gets dirty
and you can tell. If it’s clean and the produce looks clean and it’s
organized well, you would get the impression that the produce people at
that store care about it and about keeping it in order."
Another panelist, Debra, a 43-year-old Orange County employee,
said she buys "a lot of produce" and her children’s take
fresh fruits and vegetables for their lunches. "That the first area
I shop in," she said about the produce department. "I look for
size, color and variety. If the produce has good size and color, it means
whoever is doing the purchasing cares about what the consumer is looking
for. You want the best products at the best price and so you look for
that."
None of the panelists had anything good to say about stickers
on produce items. They complained that peeling them off usually damages
the product.
Most had heard of 5 A Day, but thought it was something
they grew up with instead of a program that was initiated in the early
‘90s. All, however, were concerned about feeding their children healthful
foods and agreed fresh fruits and vegetables play an important role in
health.
Concerns about Nutrition
"I just feel the need to make sure my kids eat well and are raised
with an attitude of eating well," said Matt. "I know personally
I wasn’t and have regretted that. If you raise your kids eating fruits,
they’re going to like fruits. If you raise them eating candy, they’re
going to like candy."
Cheryl, a licensed child-care operator with three children
of her own, agreed nutrition is an important consideration when she shops.
"I use a lot of vegetables and fruit for my kids and they still like
candy bars," she said. "But I think [produce] is very convenient.
I think it’s very healthy."
The response by Philamena, a 56-year-old mother and grandmother,
indicated that some parents need the message of 5 A Day and good nutrition.
Indirectly, she said she is learning more about it through the schools.
"I wasn’t as health-conscious with my son as I am with my grandchild,"
she explained. "I think the school put that in her mind. She goes
to pre-school and they force nutrition on you. No cookies and cake, only
fruits and vegetables. It’s a good thing and they didn’t do
it when I had my son going to school."
For some consumers, pesticides are still an issue, though
most panelists said washing their produce gives them assurance that produce
is safe to consume.
Elizabeth noted she buys organic produce because of her
concerns about pesticides, chemicals and wax coatings, especially those
used on apples.
Queasy about Pesticides
"Natural is better," she explained about her frequent purchases
of organic items. "It’s more wholesome. Just knowing that makes
me feel healthy overall, eating a natural piece of food with no junk on
it."
Elizabeth said she washes her produce with hot water and
antibacterial soap, then rinses it quickly in cold water. Debi said she
creates her own produce with bleach, mild soap and water, while other
panelists said cold water suffices for washing their fruits and vegetables.
None mentioned commercial produce washes available on the market.
The need for additional consumer education became apparent
when Dr. Pelegrin asked, "What are we concerned about with pesticide
residue?"
"I don’t really know, to be honest, but I know
that it sounds ugly," responded Cheryl. "I mean, I wouldn’t
put [a household insecticide] in my mouth. So I want to wash it off, whatever’s
on there. But I don’t use bleach either. If I felt it was dangerous
or I could smell something on it, I wouldn’t eat it."
On the subject of genetic engineering, Matt, who is majoring
in chemistry at college, had some knowledge about the subject and had
some favorable and some unfavorable opinions.
Mixed Response to GMOs
"I think that it’s not necessarily a bad thing," he said,
responding to a question about genetically modified organisms (GMOs).
"I think it’s just something that needs to be tried and tested.
But it’s like that recent story with the taco shells and the genetically
altered corn. Somebody messed up on that, but that doesn’t necessarily
mean it’s bad."
Debra, however, expressed "fear of somebody messing
up again. Anytime that man has some input, there’s potential for
a problem and if somebody is disgruntled about the whole idea of something
that happened to them, then they’re going to just mess it up for
everybody else. I wouldn’t be open to it. I want to go to the farmer’s
market and try to find the closest to the earth."
When Dr. Pelegrin mentioned the potential for genetic
engineering to enhance the nutritional value of fruits and vegetables,
consumers on the panel had mixed responses.
"If you had some broccoli there that had extra vitamins
and minerals in it and some broccoli that didn’t, the regular stuff,
what would you choose?" Pelegrin asked the panel.
"I would probably go to the regular broccoli because
I’m too old to change," Philamena responded. Cheryl answered
she would try it if the genetic modifications did not alter the flavor
and other quality components.
"Natural Is Better"
Elizabeth, who buys organic produce, responded, "Natural is better.
It depends on how it is grown and the soil you put it into."
Scott’s response was similar to Elizabeth’s:
"No, I think I’ll take God’s design a little bit over man’s
design. Just going back to this mistakes of this corn ending up in our
food, I’m sure that ear of corn looks identical to the ear of corn
I could put on my table for my family. That and cloning, I’m not
ready for yet."
With regard to the acceptability of online grocery shopping,
all panelists responded favorably, though not all had experienced ordering
fruits and vegetables on the Internet.
"It’s great," said Matt, one panelist who
has tried homegrocer.com. "You get online. You make your order. I
work in the computer industry, so I’m constantly online and it’s
a convenient thing for me to use. You can put your order in as late as
11:00 at night and have your order at your house the next afternoon."
Matt said the produce he ordered was fresh. The one time
an item was not acceptable, it was replaced immediately by the delivery
service.
Other panelists said they had either tried online shopping
or had neighbors who tried it and raved about their experiences. No one
expressed hesitation about ordering fruits and vegetables over the Internet.
In fact, Matt said he likes the idea better than making his own selections.
"I’m sort of a convenience person," he
noted. "I would take less care in selecting than my wife would."
© 2003 Columbia Publishing
...And Produce Experts Listen
Fresh Cut
February 2001
ANAHEIM, Calif. — "It was interesting to find out what quality
meant to the consumer," said Dean Fahselt of Natural Selection Foods.
"All they talked about was the store. They talked about the floor.
They talked about the sprinkler system.
"As a shipper, you work very hard to put out a quality
pack, but if they walk into the store and they see something on the floor,
they’re going to have this overall blanket perception that you don’t
have quality."
Fahselt made his remarks while participating in the PMA
workshop entitled "Focus on the Consumer," in the Anaheim Convention
Center October 31.
Moderated by Jan Delyser of the California Avocado Commission,
the workshop opened with comments from a seven-member consumer panel and
concluded with reactions from an industry panel including Fahselt, Roger
Schroeder of Stater Bros. Markets, Jeff Patterson of BI-LO, Inc., and
Dr. Laura Pelegrin of Pelegrin Research Group.
"I was interested to find that organics, in most
of their minds, meant better quality," said Patterson, responding
to consumer comments. "As a retailer, I don’t know that we necessarily
agree with that. I’m also surprised they all know somebody who’s
doing online shopping and only one of them is doing it. It looks like
that’s a direction they’re all going to go somewhere down the
road."
While consumer panelists focused on what produce quality
means to them, there was absolutely no mention of brands or particular
brand names, a fact that caught the attention of Roger Schroeder.
"I think a lot of suppliers out there are trying
to work on brand names to come up with a quality statement, yet I didn’t
hear anybody mention any brand names and say, ‘I’m confident
that’s always a quality product,’" Schroeder mused. "And
in the area of food safety, it is very apparent we have a long way to
go in issues of pesticides and educating consumers."
Another surprise for the produce experts was the willingness
of consumers on the panel to let other people select fresh produce for
them.
"I know several years ago when Peapod [Peapod.com,
an online grocery service] first got involved in it, they found out that
a lot of consumers don’t really know how to pick their produce,"
Fahselt asserted. "Also one of the gentlemen [on the panel], Matt,
mentioned he’s usually in such a hurry he doesn’t have time
to go through and really select his produce. So I think what you’re
finding is that a lot of people would trust other people that they perceive
as a produce expert to pick that produce out for them. And I think that
if you’re selling e-commerce and you develop a credibility for good
produce, they’ll eventually just turn that over to you and let you
pick out the produce."
While Schroeder argued consumers are probably more informed
than many experts think, he agreed they probably want help selecting certain
produce items that pose a challenge.
"Probably the area they most would like help in is
in selecting certain fruit items," the retailer continued. "Typically,
those are melons and things like that they don’t quite know when
the product is ripe, when it’s ready to eat, how to store it and
when to buy it if they want to eat it three days from now. That’s
probably where we have the most questions."
Another topic that generated discussion was produce pricing.
While consumers on the panel didn’t seem to indicate that price is
an issue, particularly for organic produce, when they purchase fruits
and vegetables, Schroeder insisted price becomes a problem when organics
are prices dramatically higher than conventional produce.
"When you’re standing in front of the display
and nobody’s looking and you’re reaching in your pocket for
the money and broccoli is 79 cents a pound for conventional and $2.40
a pound for organic — and the spread can get that big — it doesn’t
happen," Schroeder said.
"I would say the most successful organic item I have
is packaged salads because the spread is only 20 cents difference between
an organic package and a conventionally-grown package. The sales are very
good, but price does have an effect.
"If you look at the beach community in the high income
areas, you will find most of your organic sales there. I work for a company
that has stores in the Inland Empire or the heartland of California with
not quite as high an income level. Organic sales are very poor in that
area. Yet when you go into south Orange County and the beach communities
where you have a higher income level, organic sales go up. So obviously,
money does have something to do with it and it does have an influence
on the consumer."
Fahselt noted that educational level is also correlated
with organic sales. Demographic information points to the fact that college
educated people, students, high-income households and households with
children are the profile of the typical organic consumer. Price, however,
still plays a role.
"We see with organic sales that if you start getting
above 20 to 25 percent over the cost of conventional products, then it
becomes price prohibitive to consumers to start making that choice,"
he explained.
A question from the audience about why consumers seem
to believe produce from farm stands is pesticide-free prompted a discussion
of consumer perceptions and merchandising among the panel of experts.
"I think a lot of people feel that, for instance,
if you’re driving and there’s a little stand over there selling
oranges, that they came off that orange tree right behind the building
and they just picked it and put it in the box and nothing happened to
it," Schroeder surmised. "Never mind that there are boxes stacked
up behind the building and the fruit came from a wholesale market. I think
there’s a perception that the quality’s better. It’s fresher
and they’ve handpicked it. They’ve done a better job of selecting
it and maybe not used as many pesticides. I think it’s just that
perception that the local little farmers don’t use pesticides. It’s
big conglomerates that use them."
Based on her experience as a consumer researcher, Dr.
Pelegrin agreed, "One of the themes we heard was about simplicity
and back to basics. And I think it is a perception that that if it’s
a little stand, that’s as simple as it can get and they’re not
going to do anything bad to their produce."
Patterson added, "I think the trust in the farm market
is evident in the merchandising that a lot of retailers have been putting
in place in their supermarkets for years. We’re going after that
same trust factor and trying to convince the consumer that our product
is just as field fresh as what they perceive it to be."
Since cleanliness was an issue with the consumer panel,
the question arose about whether consumers purchase packaged produce because
they perceive it a cleaner, safer product.
"I quite frankly don’t think many people buy
packaged produce because they think somebody hasn’t touched it,"
Schroeder responded. "If it’s precut, I think most consumers
buy it for convenience. If it’s bagged potatoes or apples or oranges,
they buy it because it’s a better value.
Dr. Pelegrin noted this group of consumers is typical
of those found around the nation, although they were selected because
they are "sort of heavy users of produce, people who are in the produce
department at least once a week."
The question also arose about how to get the 5 A Day message
out more effectively and Pelegrin noted her market research has revealed
that tying produce in with its cancer-reducing and other health benefits
should help boost consumption.
Schroeder offered the solution to use repetition in the
media to "drill it down into their heads," and Fahselt recommended
targeting children.
"I think it’s kids, kids, kids," he argued.
"Let’s focus on those children and their eating habits and create
future generations. Let’s get that message out to the school systems.
Let’s get that message out to parents. I think we need to focus on
their children."
© 2003 Columbia Publishing
>>
Return to top
Processor
Rings up Retail Fruit Sales
Fresh Cut
March 2001
HOUSTON—No matter what time of year Sam Petro’s cell phone rings
it always plays "Jingle Bells." The reason, he says, is simple.
Since he and Bryan Herr launched their fresh-cut fruit and vegetable business,
every day has been like Christmas.
A 35-year produce veteran, Petro joined Herr in mid-1999
after the latter had been supplying fresh-cut fruits and vegetables to
The Kroger Co. for about a year. Herr originally launched Country Fresh
Products, Inc. to do sprouts, then evolved into specialty produce and,
later, organic produce.
"Kroger prompted me to get into the fresh-cut business,"
Herr recalls. "They were my largest account in Houston and they came
to me and said, ‘Hey, we want to take cutting out of our stores.’
"At the time I was wholesaling specialty items and
organic produce, but wasn’t processing at all. I took Reggie Griffin
[of Kroger] to a friend’s plant in San Antonio and they said, ‘If
you can do it the same way, then we’ll support you on it.’"
About a year later, Petro, who operated a separate produce
wholesale business and had considerable fresh-cut experience, consulted
with Herr and the two decided to take their processing and marketing skills
to Orlando to service another potential buyer.
Joint Venture
While they still own separate businesses in Houston, the men have formed
Country Fresh, Inc. as a joint venture and are pursuing an aggressive
expansion plan to serve customers at multiple locations. While Herr is
in charge of production, Petro handles sales and marketing for the relatively
young company.
"Kroger got me into the business, then Sam came along,"
Herr explains. "He had a pretty good background doing fresh-cut and
it was the perfect match."
Petro remembers, "A customer who had experience with
both our companies asked us if we would consider doing something to get
him product in Orlando. After Bryan took a couple trips to Orlando, we
decided we would do that and we began looking for about 8,000 square feet
to get started.
"At first we couldn’t find anything suitable,
but then a really good situation came up with a building of about 19,000
square feet we thought was going to be about half ghost town. We really
didn’t know what we were going to do with all that space, but we
took it anyway.
"Within six months, we were pretty much bulging at
the seams in that building. Right now that location is about 300 percent
over what we projected it would ever be. It just took off like wildfire
and we've had tremendous support from our customers. It’s currently
doing more than a million and a half pounds of produce a month. It’s
gone from zero to a million pounds a month in just a year. Right now we
have plans on the drawing board to replace that building with a larger
one because we’ve outgrown it."
Rapid-fire Growth
If Petro and Herr aren’t outgrowing facilities, they’re opening
new ones—and they’re doing it in rapid-fire succession. The
Orlando facility went online in October 1999. Just four months later in
January of 2000, the entrepreneurs opened a third plant in Dallas. Less
than a year later, they opened a fourth facility near Greenville, South
Carolina, to serve retail distribution centers farther up the East Coast.
Prior to the recent opening of the South Carolina facility,
Country Fresh was serving customers in 12 states. The new plant extends
their coverage to 16 states and the partners plan to continue marching
north along the Atlantic seaboard to reach more customer distribution
centers.
Today Country Fresh, Inc. does about 4 million to 4.5
million pounds of packaged fresh-cut fruits and vegetable party platters
a month and Petro says he sees no end to the potential for continued growth.
"The customers have let us know what they want,"
he explains. "We’ve been able to deal with some really visionary
people in the industry who have helped us with their ideas and what they
expected for presentations in the future. They’re sending other customers
to us. We’re getting calls from other retailers."
When asked the secret to their incredible growth, Petro
and Herr sum it up in three words: quality, quality and quality.
Quality’s the Answer
"Quality is the only answer to every question in our industry,"
says Sam. "If we let down on quality, we’re going to hear about
it the minute we do."
The formula may sound simple, but quality is more than
skin deep, according to Bryan.
"Quality is probably the main focus we have,"
he says. "It all boils down to, number one, using the best quality
product we can find; number two, having controls in place to keep bacterial
counts low; and, number three, keeping the cold chain as intact as possible."
In order to start with the best fruit possible, veteran
produce buyer Todd Mudger procures nothing less than U.S. No. 1 fruit
for processing, but seeks to exceed the top grade in sugar content when
he can, according to Herr.
"There are a lot of things that go into U.S. No.
1 fruit other than sugar," Herr explains. "There’s overall
firmness. There’s texture. What we try to do is narrow it down to
what we want on sugar, texture, firmness, moisture content and so forth
so we’re consistent each time. I try to hit 12 percent sugar. It’s
not always obtainable, but that’s what we want. We’ve taken
a dedicated approach to incoming fruit to be sure we get a good end product."
The Cool Factor
Removing field heat from melons immediately after harvest is critical
to ensuring quality fresh-cut fruit in the grocer’s cold case, according
to Herr. All melons are chilled when they arrive at Country Fresh processing
plants and they are sanitized and scrubbed by hand before processing.
All product is kept cold until it reaches the retail distribution center.
Once melons are clean, plant workers take elaborate precautions
to make sure they remain clean and free from contamination during hand
cutting and packaging. Processing personnel wear standard sanitary clothing,
including hairnets and gloves. Employees must wash their hands and pass
through sanitizing dip stations to enter the processing area.
Bathrooms are cleaned and sanitized hourly and every two
hours, the entire processing area is washed down thoroughly to remove
any potential sources of contamination. Herr even tests the air circulated
in the processing area for potential sources of contamination.
"We’re AIB inspected," Herr reports. "We
have designed our own HACCP plan. We test product continuously through
all stages of production from start to finish. I switch back and forth
from end-test results on bacterial to total plate counts just to see where
a problem might exist in the line. The information you get from a lab
is very useful. It’s very expensive, too. Companywide, we spend a
tremendous amount of money every month just on lab work."
Standard Product Line
Currently, Country Fresh carries a standard line of fruits, including
cantaloupe, honeydew, grapes, pineapple and watermelon, as well as two
sizes of vegetable trays, according to Herr.
"We recently added a line that does peeled and sectioned
citrus fruit," Petro adds. "It’s a beautiful package. We
also incorporate citrus into various medleys with other fruit. It’s
been received extremely well."
"We have really been overwhelmed with the amount
of business involved in just taking care of the core items," Herr
elaborates. "We haven’t really pushed any new items yet, but
we have several new items we want to offer. We can foresee that we’ll
have 40 to 50 SKUs in a couple years.
"Retailers are saying they want it. They see the
potential and that’s how we measure our success, with satisfied customers.
Money is not the gauge. It’s what the customer thinks."
Petro agrees, "One measure of customer acceptance
is that when we start doing business with one distribution center for
a chain, they have inevitably recommended we go to their other distribution
centers. They’ll tell them what a good job we’ve been doing
for them.
"One of our major accounts called recently and said,
‘I’m in one of our stores in Alabama and I just wanted to tell
you I know your fruit has been beat up. It’s probably been abused
by either our distribution center or the trucking company, but here it
is on the shelf and it just looks great.’ He took the time to pick
up the phone and call me."
Processing with Pride
Both Petro and Herr are quick to point out the importance of good people
in their organization. They mention specifically, Joe D’Ottavio,
who took over from a former manager in Orlando and was "absolutely
besieged with business" from the outset, saying he "has performed
magic." In Dallas, Tommy Crochet "has been extremely steady"
in turning out quality products, while Glenn Nowak, manager at the new
South Carolina facility is facing the challenges of a plant startup.
"The driving force behind our company is pride,"
says Petro. "If you don’t give your customer a reason to leave,
he won’t. Customers don’t leave you because you’re doing
a really good job and they just want to try somebody else. They don’t
have time to test the water. So if you don’t give them a reason to
complain and if you don’t give them a product they’re not happy
with, you’re going to continue building that relationship."
The key to Country Fresh’s strong early growth is
that Petro and Herr are providing quality products for retailers while
also shouldering their food safety concerns.
"We’re talking about huge retailers now buying
from us instead of cutting in their stores," Petro reasons. "They
realize they cannot do the HACCP programs. They cannot follow GMPs. They
cannot do the things that need to be done on a store level to maintain
customer confidence that products are being done the way they should."
Enforcing Food Safety
Herr concurs, "It’s hard enough for us to train and keep tabs
on 100 or so employees. When you take a chain store that has 500 stores,
they can have four people per store cutting. That makes 2,000 people.
How are you going to maintain control over that many people when they
may be part-time or full-time and may not come in every day?"
"In their back rooms, retailers may not have chlorine
accessible," Petro adds. "A lot of times they don’t have
hot water at the temperatures they need to wash knives or cutting tables.
They may not have hairnets or other safety factors. And their back room
is probably 65 or 70 degrees. Since they don’t cut fruit in their
cooler, it won’t be as cold as it should be."
Both partners see a bright future ahead for fresh-cut
fruit. So far, Petro says, he sees no limit to the burgeoning business.
"This is almost becoming a cliché, but over
the last couple years in this business, cut fruit is about where packaged
salads were 10 years ago," Petro concludes. "You walked into
the stores then and you said, ‘Packaged salads are never going to
make it.’ I think cut fruit in the very near future will surpass
salads in sales because fruit has such a tremendous appeal to so many
people."
© 2003 Columbia Publishing
Functional
Food Potato Varieties on the Way
Fresh Cut
March 2001
If Dr. Chuck Brown, research geneticist, USDA/ARS, Prosser, Wash., has
his way, people everywhere will soon be looking at potatoes as more than
a vegetable available at the grocery store. They will be looking at them
as functional foods, or foods that can be eaten to achieve certain health
goals.
Part of Brown’s current potato breeding program emphasis
is to come up with just such potatoes — new varieties, for example,
that may be high in antioxidants and, hence, help control the free radicals
that contribute to the development of arteriosclerosis and other degenerative
diseases.
Speaking during the recent Washington Potato Conference
in Moses Lake, Brown showed slides of some of the early potato varieties
he is working with from South America. They come in all colors, sizes
and shapes. He is looking at various lines in hopes of coming up with
new potato varieties with special health benefits.
"In our crosses we have been able to identify potatoes
with various densities of red flesh, and even purple pigmentation,"
Brown said, asking the question, "Are these just curiosities or is
there any value?"
Measuring the antioxidant potential of several pigmented
lines, he said several were much higher in antioxidant content than white-fleshed
varieties, such as Norkotah. One purple variety, for example, had 330
percent higher content; a red variety, 270 percent. Garlic is ranked No.
1 in fruits and vegetables, with 625 percent.
"Purple potatoes have great potential as antioxidants,"
Brown said.
What Types of Products
Using such varieties, what kind of products could be marketed?
Brown showed samples of several types of products, from
red-fleshed potato fries to patterned potato chips, ranging in color from
red to blue, purple and orange.
Yellow-fleshed potatoes are commonly eaten in the Andies,
he said. In one taste test, orange-fleshed potato chips were "very
appealing" in appearance and scored very in taste.
Potatoes also have potential to become a cheaper source
of anythocyanin, the soluble glycoside pigments producing blue to red
coloring in flowers and plants, he said. This opens a whole new realm
of possibilities, from uses as functional foods, snack foods, dietary
supplements and natural colorants.
More research is planned.
© 2003 Columbia Publishing
The
Fresh-cut Clery Specialists
Fresh Cut
March 2001
OXNARD, Calif. — It was a natural for A. Duda & Sons Inc. to
take up processing fresh-cut celery. More than 80 years ago, Andrew Duda
Sr. started learning how to grow it and the family has made remarkable
progress since then.
In 1926, Duda planted his first commercial celery crop,
founding the business in Oviedo, Florida, with his three sons. In the
1950s, the family incorporated A. Duda & Sons and today, it is the
world’s foremost celery producer. This year, fourth-generation family
members will be among those celebrating the company’s 75th anniversary.
"We selected celery for processing because it is
the one commodity for which Duda is best known," says Bob Gray, president
of Duda California/Gene Jackson Farms Inc. in Salinas, a wholly-owned
subsidiary of the parent company. "We’ve got a very long association
with the crop. We’ve had a formalized research and development effort
focused on celery plant variety improvement since World War II, so we’ve
spanned more than 50 years of variety research and plant breeding.
"We own the world’s largest collection of germ
plasm, including varieties called processor types. They grow taller and
have longer petioles than other varieties. They provide greater yield
to someone who is trying to retrieve sticks and other products out of
a stalk of celery. We’ve also developed varieties specifically for
their flavor. We’re after the color, the shape and the flavor that
will give us a superior product. We have several lines that show the most
promise and we expect to have some of them available in the spring of
2001."
Duda has been processing fresh-cut celery for about three
years, according to Gray. The company was supplying celery sticks to a
large customer for use as an ingredient, but wanted to offer the vegetable
to foodservice and retail users as well. In 1997, they built a plant in
Oxnard with an expanded product line in mind and installed equipment that
would lend itself to providing cuts for the ingredient business as well
as other foodservice and retail uses.
Knowing the importance of food safety and sanitation at
the outset, Duda built it’s Oxnard plant with cleanliness in mind,
calling in a consultant early in the process, then seeking a third-party
inspection from the American Institute of Baking. Within a year, the new
processing plant had earned a superior rating from AIB and has maintained
that status consistently.
"We immediately adopted what we considered to be
the highest and best standards," Gray points out. "The consultant
helped us prepare to meet those standards. We were happy to get a superior
rating within our first year of operation."
Growth has been "steady" since completion of
the plant, according to Gray. Duda has remodeled and expanded the plant
once and plans a third phase of equipment modification and remodeling
in the spring of 2001.
"We don’t expect value-added celery to rival
the volume or popularity of the packaged leafy salad business, but it’s
enjoying steady growth," he explains. "It’s benefiting
from the general trend in the industry for ready-to-use, convenient products
that save preparation time and reduce waste.
"There’s a lot of waste involved in preparing
a product like celery. There are parts of the plant that are not usable,
the leaves and, of course, the root end which is a big part of the weight
of the plant. There’s a significant yield loss to any user, as well
as the prep time involved."
Because Duda plants, grows, harvests, cools, processes
and packages its celery, controlling the process from seed to sale, Gray
says delivering excellent quality product is the company’s strength.
"We converted a raw product customer into a finished
product customer and have since been able to maintain 100 percent satisfaction
with the product we deliver to them because we studied the processing
and invested a lot of time into the technology involved with doing a superior
job," he reports. "We took a page out of the salad industry’s
book by experimenting with the various laminated films to give us superior
appearance and shelf life with the appropriate respiration rates and oxygen
and carbon dioxide ratios."
Choosing Oxnard as the processing site was an important
step in creating a quality product, according to Gray. Because celery
is available from the area eight months of the year, it can be delivered
to the plant within minutes after harvest, providing the freshest possible
product for cutting and packaging. During the rest of the year, Duda trucks
celery from the Salinas area, keeping delivery time to only a few hours.
The result is a fresher, more flavorful product with better shelf life
than if celery had been trucked in cartons for several days before processing.
Currently Duda produces celery sticks for both retail
and foodservice. In the retail arena, sticks are usually four inches long
and are available either under the company’s own label or as a private
label product. Sliced and diced celery, however, is mainly a foodservice
product.
"We basically offer anything a customer wants to
do with celery," according to Sam Duda, who also works in the Salinas
operation. "We can grow all kinds of different celery in the field
that lends itself to different types of packs and we feel we have a unique
advantage to offer. We annually screen about 600 varieties. Most of those
in commercial production are patented. We have variety trials and evaluate
them for size, size of the petiole, color to the heart, how much you cut
it and what yield you get in the end.
"We can select a flavor customers would like better.
Or we can select celery for juice content. Certain varieties have higher
water content and lend themselves better to juicing. Some we select because
they cut better for processing. The deeper the vascular bundles are in
the celery stalk, the better it cuts. Typical celery is very stringy and
it’s hard to get a straight cut. We’re evaluating varieties
when they’re cut. You want celery that is all the same color, not
green on the outside of the stalk and lighter on the inside of the stalk."
Duda also produces fresh-cut celery as well as frozen
and canned product in Florida, supplying fresh sticks for its major ingredient
customer as well as fresh sliced and diced for foodservice users. Fresh
celery is processed at the company’s Belle Glade farm while frozen
and canned product is made at a plant at Lake Gem.
In order to keep pace with growing demand, the company
plans to build a facility in Florida similar to the Oxnard plant for fresh-cut
celery products. The freezing and canning operation will be relocated
farther north.
"Celery is labor intensive and also penalizes the
preparer with yield loss," Gray concludes. "So if we can deal
with a product that is difficult to process and save our customers the
headache and cost of labor and the penalty of yield loss, then we will
have created some real value for our customers. That’s what we’re
trying to do: take what otherwise might be a product that’s a nuisance
to handle and process and make it something that is attractive, painless,
cost effective and delicious. If we can do that, then I think we’ve
accomplished our mission of trying to create value for our customer base."
© 2003 Columbia Publishing
Economic
Boom Crives Irish Fresh-cuts
Fresh Cut
March 2001
DROGHEDA, County Louth, Ireland — Like many fresh-cut processors
in the United States, Paddy Callaghan started Nature’s Best Limited
on a small scale and then watched a booming economy fuel his company’s
impressive growth.
"We got into this business growing bean sprouts in
the garage attached to the family home back in 1985 and that took us into
stir fries," Callaghan recalled during a visit to the PMA show last
fall in Anaheim, California. "One product led to another and we’ve
got a very wide product range now.
"In addition to leafy salads and stir fries, we do
lots of things like wet salads or dressed salads with mayonnaise. We do
various configurations of cole slaws, tuna salad, egg salad, and we do
lots of salads with protein. We do a range of fresh sandwiches under our
own label and under private label for one of the Irish supermarket chains.
"We do a range of chilled pizzas, as well, for two
of the other Irish supermarket chains and we do some cook/chill vegetable
products. We’ve got about 210 people employed at the moment. Fortunately
the Irish economy is booming and that’s helped us a lot."
Callaghan built his first processing plant in 1987, adding
additional space on several occasions for a total of 18,000 square feet.
In retrospect, he attributed being able to employ 200 people in that small
facility to the fact that the workday included multiple shifts.
New, Larger Plant
"In 1998, we built our new, state-of-the-art plant. It is about 55,000
square feet," he reported. "It was laid out specifically with
this type of business in mind. It gives us much better efficiencies and
complies with all the hygiene and HACCP requirements that are in place
in Europe."
While Nature’s Best boasts a product line of about
170 items, fresh-cut fruit is not part of the mix, according to Callaghan.
He said different fresh chilled products are popular at different times
of the year.
"Obviously in the summer, there’s a stronger
focus on the salad products, the ones that are eaten cold," he explained.
"When we get into winter, there’s a bigger focus on the products
to be cooked and eaten hot, like stir fries, soup mixes, stew mixes and
pizzas.
"Everything we do is produced fresh to order every
day. We don’t produce anything for stock. We have our own refrigerated
distribution throughout the country."
Handling fresh vegetables as well as breads, dressings
and meats, the Nature’s Best facility is obliged to maintain a strict
HACCP program, according to Callaghan. The company employs a "very
strong technical team" of experienced people and the plant is fully
HACCP-coordinated and broken down into low-care and high-care areas.
In-house Laboratory
"We go out and audit our suppliers," he noted. "We’ve
got our own in-company Camden-accredited microbiological laboratory. Chipping
Camden is one of the foremost United Kingdom-based verification or auditing
authorities. They are highly regarded and widely respected in this type
of business. Their accreditation gives us the authority to do our own
in-house testing, which is then recognized by our supermarket customers.
"We’ve also been involved in a number of European-funded
research programs looking at various ways and means of extending the shelf
life and quality of chilled convenience products. That has given us contacts
with various other research institutes and organizations in Holland, France,
Greece, Italy and the UK. We export some of our products, but our main
market is the 32-county Irish market. We supply all the supermarket chains
there."
Nature’s Best focuses entirely on retail, according
to Callaghan. Foodservice is a limited market in Ireland thanks to a paucity
of restaurants that, for the most part, cut their own produce in-house.
"Mind you, that stands to change because of the labor
shortage we’re experiencing in Ireland," Callaghan pointed out,
referring to the Emerald Isle’s booming economy. "One of our
biggest problems has been getting staff. At the moment there’s practically
zero unemployment in the country. We’ve had to go abroad and take
in a number of foreign staff members in the last 12 months.
Reversal of Fortunes
"That’s very much a reversal of what happened in Ireland 20
or 30 years ago. If you go back to that time, Ireland was exporting workers.
There simply weren’t enough jobs in the home economy to employ everybody.
So now it’s gone full circle."
Ireland’s boom times have been driven mainly by foreign
investors, typically U.S. companies that have taken advantage of the country’s
tax climate and other factors to build plants that give them a distribution
point for the European market.
"Right beside our plant, just several hundred yards
down the road, we have a Coca Cola concentrate manufacturing plant that
makes concentrates for various Coke bottling plants in Europe, Eastern
Europe, Africa and the Middle East," he added. "One of the senior
people there told me recently that something like 5 percent, or one-in-20
of all soft drinks sold in the world originate at this plant."
Some of the other big names that have taken up residence
in Ireland include Intel, Hewlett-Packard, Dell, Gateway and Microsoft,
according to Callaghan, who also pointed out a "vast number"
of American health care companies have set up manufacturing sites on Irish
turf to serve Europe.
"Tiger Economy"
"It’s the place to be," he explained. "Ireland has
represented some very good tax breaks. We obviously speak English or a
variation of it. And we’ve also got a very highly educated work force.
The economy has absolutely been booming for the last four or five years.
It’s been growing at about 6 percent a year. We call it the ‘Tiger
Economy.’"
Ireland’s population is about 4.25 million people,
according to Callaghan. A million of those live in Dublin where Nature’s
Best has found fertile ground for its products among retailers.
"We’re experiencing a lot of new business, a
lot of growth," he elaborated. "We’ve been growing an average
of 15 to 20 percent per year. We just moved into our brand new factory
18 months ago and that was quite a step for us. All the predictions are
that the economy will continue to boom for years to come.
"We’ve built up good relationships with all
of our supermarket chains and supply them with both branded product and
private label."
While the economy is driving healthy demand for fresh-cut
produce and other convenience foods in Ireland, Callaghan said he also
attributes changing attitudes about eating for at least a portion of his
company’s growth.
Eating More Fresh
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