Ken Green's retail perspective on greenhouse produce
by Christina DiMartino | February 11, 2010
Ken Green, executive vice president of sales and marketing for Westmoreland Sales in Leamington, ON, joined the company in April 2009. Now on the supply side of the industry, the majority of his career has been spent in retail. He started with A&P when he was 16 and remained employed throughout high school and college.
"Then I went through a variety of buying and merchandising with A&P, with the exception of one year when I worked for the Department of Defense," said Mr. Green. "After A&P, I was the vice president of J&D Produce in Texas for three years. In April 2009, I joined Westmoreland Sales."
Mr. Green's extensive retail background instilled in him deep insight into how retailers view the greenhouse category. "Greenhouse-grown products are generally excellent quality with great taste," said Mr. Green. "The goal [of retailers] is always consumer satisfaction, and that comes from the eating experience. When that is achieved, it generates repeat sales and, in turn, profits. The connectivity to superior-tasting produce in a particular store is what defines the market leaders."
He added that greenhouse products are successful because of taste and consistency. The generally predictable supply of greenhouse products allows for category development through planning and execution on an annual basis.
When retailers merchandise greenhouse produce, Mr. Green said, the basics apply. "Family grouping of items support the consumer and contributes to when and how they make their purchase decisions," he said. "In the short term, space allocation sometimes gets out of proportion, but it returns to proper spacing when true category development principles are applied. Space is valuable and needs to be allocated based on the sales and profit of the category, and then within the category to the individual items that generate sales and profits."
Mr. Green said that he has seen a lot of assortment rationalization and space realignment lately. Changing consumer buying patterns and retailers doing some hard assortment rationalization have driven this. As systems improve, it is much easier for retailers to understand the true sales and profitability of each item, including shrink.
"Greenhouse commodities are gaining more shelf space," he added. "That is driven by consumer demand. When managed properly, space is allocated to the commodities and items that generate sales and profits. It's the basics of listening to what consumers want. The greenhouse categories have become the primary category drivers, and therefore are capturing more space."
Items that did not sell just a few years ago are now earning their shelf space. Mr. Green said a perfect example is the mini cucumber.
The multiple greenhouse line extensions and specifically expanded retail pack options are good for the retailers and growers. These, Mr. Green said, are improving the sales and profits of the total category and department.
"Greenhouse products have evolved into one of the most profitable categories in the produce department when measured in sales, profit per pound and profit dollars by category and item," said Mr. Green. "Greenhouse items have become the category drivers in tomatoes, cucumbers and peppers. Line extensions have further driven the sales and profit of each category, the retail packs are doing excellent and the demand is growing fast."
He added that tomatoes on-the-vine are relatively new and are growing at a very fast pace. But it is not at the expense of Beefsteak tomatoes, which are also gaining market share.
"The cucumber mix has changed dramatically and will continue to change as seedless and mini cucumbers add to the overall growth of the category," Mr. Green added. "Greenhouse-grown cocktail and grape tomatoes have contributed to the overall growth of the tomato category, but in most markets, it is still dominated by Beefsteak, TOVs and field-grown grape tomatoes."
Pepper sales and the product mix have been greatly enhanced by strong, superior, thick-walled greenhouse product. Mr. Green added, "In the past, some retailers lumped colored field-grown and greenhouse-grown [peppers] together, but they are two different items and most of the time they attract two different customers. The retail packs of rainbow, stoplights and straight red packs in a multitude of sizes have grown the overall category."
He said that the many retail packs now available present an excellent opportunity for store branding. "I predict this will grow substantially industry wide over the next few years," Mr. Green said. "Greenhouse growing is productive, efficient and will continue evolving as we go forward. I believe more and more crops will be grown in protected environment in the years to come."
(For more on greenhouse produce, see the Feb. 15, 2010, issue of The Produce News.)