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Buyers shed light on many issues for WGA meeting participants

by Tim Linden | November 01, 2011

One of the nation’s larger foodservice operators and a regional retail player had many similar answers from a bevy of supplier-type questions despite their size difference during a workshop session at the Western Growers Association’s Nov. 8 Annual Meeting in San Diego.

Richard Dachman, vice president of produce for Sysco Corp., oversees more than 100 distribution centers, and on any given day, those facilities have 9,000 produce trucks on the road. He shared the stage at the meeting with Greg Corrigan, senior director of produce and floral for Raley’s Supermarkets, a very well-respected Northern California chain of 132 stores with one distribution center.

Despite the size differential, each mirrored the other’s remarks on the Produce Traceability Initiative, harmonization of audits, food safety, generic produce promotions and the effects of television food shows. Of course they did have some differences — most specifically dealing with organics and the local-food movement. These and several other topics were discussed during a 90-minute session that was moderated by Tom Deardorff, president of Deardorff Family Farms in Oxnard, CA.

Regarding PTI, both the Sysco representative and the Raley’s representative acknowledged that their firms are not going to be in compliance with the end-of-2011 milestone that calls for receivers to be able to track inbound cartons at their warehouses. Mr. Dachman said that Sysco supports the initiative, but it will be difficult to implement and very costly. Mr. Corrigan said that the allocation of resources is also holding Raley’s back. He said that the company has had other priorities that have pushed PTI implementation down the road.

From the audience, John D’Arrigo of D’Arrigo Bros. Co. of California, said that the responses of the two companies’ representatives is typical of other D’Arrigo customers. He is afraid D’Arrigo will spend $2 million unnecessarily implementing a program that will never become the industry standard. “We are behind the idea, but we can [achieve traceability] for much cheaper than PTI if the receiver community isn’t going to do it.”

Both buyer representatives agreed that third-party audits are the cost of doing business with their companies, and each endorsed the idea of audit harmonization. Mr. Dachman took a shot at the regulation in the Food Modernization Act that exempts small companies from having to comply with all food-safety regulations. He said facetiously that it is acceptable to kill a few people from a small farm, just not a lot of people from a large farm. However, because of the size of the Sysco operation and the need to have uniform product in many different locations at the same time, Mr. Dachman said that it is difficult for the company to be involved in the local-food movement. However, he said that the industry should not be afraid of the movement because he believes it increases exposure for fresh produce. But the larger commercial producers that do feed the nation and the world will fill any increase in demand.

Mr. Corrigan said that Raley’s requires all its suppliers to follow the same rules, but he added that the local movement is very significant for his firm. In fact, he said that he recently walked around a local farmers market looking for potential suppliers.

Mr. Corrigan said that the growth of organic produce is also significant at his stores but said that it does not add much to the profit and loss statement. In fact, because of shrink, he said that the P&L statement can take a hit when customers transition into organic from conventional produce. However, he said that many of his customers demand organic produce, and Raley’s will continue to meet that demand.

Mr. Dachman indicated that organic produce represents an insignificant percentage of Sysco’s produce sales.

Regarding generic promotion, Mr. Dachman endorsed the concept and said that he would like to see some type of industrywide program to help drive increased consumption of fresh produce. He is the current chairman of the Produce Marketing Association, and though he said that organization would not serve as the collection agent for any program, he expressed a personal interest in PMA serving as a catalyst for the concept. Several years ago, the Produce for Better Health Foundation made a run at an industrywide generic promotion program for fruits and vegetables. The idea did gather some momentum, but it also had its detractors. Mr. Dachman said that something has to be done to move the per-capita consumption rate higher. He pointed to the work done by the avocado industry as an example of what can be achieved by generic promotion.

Mr. Corrigan agreed and said that Raley’s is always looking for promotional help — be it point-of-sale materials or incentives to run promotions.

Food television shows, both men agreed, do have a significant impact. “It’s amazing,” said Mr. Corrigan. “Sometimes you will get a run on a particular product” and learn it was featured on a recent television food show.

Mr. Dachman said that television food shows, like the restaurants that food-show chefs operate, do drive experimentation at home. He said that people tend to try things first at a restaurant and then go buy those same products at the supermarket to replicate the dish at home.