The Dec. 17 announcement of a restoration of full diplomatic relations between the United States and Cuba has some produce industry members intrigued with the prospect of future trade with Cuba.
Robert Colescott, president and chief executive officer of Southern Specialties, headquartered in Pompano Beach, FL, said, “As Cuba begins to open for commerce with the U.S. the opportunity will favor the U.S. Exporters supplying Cuba with grains [will] potentially open doors for ports in Louisiana and Houston. I would expect tourism to begin making an impact that will improve the economy and, eventually, create demand for more specialty produce and other traditional fruits and vegetables. It will take several years before we see Cuba become a significant agriculture producer and exporter. Lots of work is necessary on their infrastructure including significant investments in logistics.”
Geno Valdes, vice president of sales and marketing for Southern Specialties, and a second-generation Cuban-American, said, “Fresh produce opportunities will be very exciting if relations with Cuba are truly a reality. Cuban people will want to eat produce they know, such as tomatoes, avocados, mangos and other tropical items.
“Due to its strategic location and rich soil many crops currently grown in Costa Rica and other Central American countries can be grown there,” Valdes continued. “Cuba has experienced farmers, lots of farm land and abundant water. The fact that Cuba has a high literacy rate is also an asset. The port of Miami, currently undergoing a massive drayage and expansion project, is the natural port of entry for Cuban produce. As a company with lots of experience growing and supporting farms in Latin America, Southern Specialties will examine opportunities in Cuba.”
“With both governments now in consideration to open new opportunities for trade, it only makes sense to look at the entire portfolio of products offered,” Craig Uchizono, vice president of Southern Hemisphere for the Giumarra Cos., said.“Everyone will be interested to learn as much as possible for all fresh fruit, vegetable and tropical commodities both countries have to offer.”
Raul Millan, executive vice president and partner of Vision Import Group, headquartered in Los Angeles and a first-generation Cuban-American, said that as a son of Cuban parents, produce trade with Cuba has always been on his mind since beginning his produce career.
“Cuba's proximity to the U.S. offers an opportunity that cannot be ignored, both in freight savings and transit time,” said Millan. “Cuban farmers have lacked resources for so long that I can only imagine most fruit and vegetable exports will take longer than most want.
“Politics aside, I for one, am looking forward to do business in a country where I will be able to relate so well to the language, culture, food and, of course, the people,” he added.
Jim DiMenna, president of Red Sun Farms a hydroponic vegetable grower and distributor with greenhouses in Canada, Mexico and Dublin, VA, said that true to his and his company’s nature, he looks at all opportunities when it comes to business, adding that as a Canadian, he has always has the freedom to look at Cuba with a keen business eye because the U.S. embargo did not involve Canada.
“Although Canada has always had the opportunity to do business with Cuba, transportation has been a key problem in the past,” DiMenna said. “But if that issue goes away and we can move a ship 90 miles across the Atlantic Ocean, things may change.
“But we also have to do our due diligence,” he added. “Does Cuba have the proper elevation for a highly technical greenhouse facility? Does it have the altitude that will affect crops in any way? We have to assess and analyze all aspects of doing business there. It’s not something we’ll do overnight.”
DiMenna stressed that Red Sun is a progressive company that is cautiously optimistic.
“We continually look for options for developing business,” he added. “But our stringent rules and regulations would apply to doing business with Cuba the same as they do with our business partners in Canada, the U.S. and Mexico. Everything that we do we do to a stringent stet of standards.
“I am glad, however, that after more than 50 years everyone in North American will be building a relationship with Cuba and its people,” he added.
Charlie Eagle, vice president of business development for Southern Specialties, added, “The thought of having a potential new client and supplier-base located only hours from our facility is quite exciting. But we need to keep in mind we are in very early stages of opening any real relationships with Cuba. The average yearly income for the 11 million Cubans of $6,000 does not make for a strong customer base for every product. Large international companies like Coca-Cola will make initial investments. The Cuban government has made tourism, from countries other than the U.S., its biggest profit center. Opening Cuba to American tourism would be huge and we could expect a large influx of money into the Communist government. It will be interesting to watch this relationship unfold. Perhaps, ultimately, Southern Specialties may play a part in Cuba by expanding its core competencies of growing, importing and processing vegetables grown in Latin America, the U.S., Mexico and Canada.”
Avocados from Mexico will extend its Guac Fiesta campaign to reach the Hispanic trade in key markets. The program is designed to drive consumption of Avocados From Mexico through aggressive retail promotion in key Hispanic markets during prime football season and the Super Bowl.
The Guac Fiesta Hispanic program will run Jan. 1 to Feb. 1 in California, Arizona, Texas, Chicago, New York and Miami, targeting 1,000 Hispanic chain stores and independents. The program will feature a mobile sweepstakes and an AFM coupon offer that also gives shoppers a fun new recipe to try. Additionally, the campaign will include digital and social media, merchandising, and trade and consumer public relations efforts.
“Guac Fiesta is a great way to reach the bicultural Hispanic who loves American football,” Stephanie Bazan, AFM’s Hispanic marketing director, said in a press release. “Last year was the first year the Big Game was broadcast in Spanish and the sport is a great way to engage Hispanics during the top U.S. occasion in which guacamole is consumed. American Football season is a fun time when families and friends come together to experience the game and that is no different for the Hispanic fan base. Adding avocados to a favorite dish is a great way to add some flavor to the fiesta.”
The campaign is intended to build excitement with shoppers through a text-to-win campaign where they will have a chance to win a big-screen television for football viewing parties. Retailers will also receive support to promote the product, such as tear pad coupons and in-store purchase coupons for shoppers.
According to Experien Simmons data, the interest in NFL football and college football among Hispanics has increased between the years of 2010 and 2014. While the amount of Spanish-speaking Hispanics that watch the NFL has increased, the majority of Hispanics who watch the NFL are bi-cultural and Engish speaking according to Nielsen.
For more information about Avocados from Mexico or to learn more about the Guac Fiesta Hispanic campaign, visit www.theamazingavocado.com.
Along with other sectors of the national potato industry, Red River Valley grower-shippers will benefit from the U.S. Senate passing the $1.1 trillion Consolidated & Further Continuing Appropriations Act, which is part of the 2015 spending bill.
Ted Kreis, marketing director of the Northern Plains Potato Growers Association, credits the lobbying work of the National Potato Council staff in Washington, DC, for encouraging these Federal changes. Kreis particularly cited the work of John Keeling, the council’s executive vice president.
“There are two provisions in the legislation that are totally unrelated, but both very important to the potato industry,” Kreis wrote. “One offers some temporary regulatory relief to the trucking industry while another provision brings some common sense into the WIC program.”
The latter case means that fresh potatoes have been added to the WIC program for the first time. “Under current law, all fresh fruits and vegetables except white potatoes are eligible for purchase in the USDA's Women, Infants and Children (WIC) program," he said. "That is about to change.”
He also noted that “’white potatoes’ refers to all fresh potatoes regardless of skin color. The term 'white' is used to differentiate potatoes from sweet potatoes.”
The new spending omnibus has a provision that would make fresh white potatoes eligible for purchase with WIC vouchers — available to low-income women and children at critical stages of development — just like all other fresh fruits and vegetables.
At least a temporary trucking fix
Kreis said the Congressional roll-back of limited daily hours of driving for the nation’s truckers will be at least a “temporary fix” to ease a scarcity of truckers.
Kreis and others in the Red River Valley indicate a driver shortage is causing significant damage to their businesses.
“A provision in the spending bill also calls for a detailed study of the effect of the regulations on truck crashes,” Kreis indicated in his release. “The measure will roll back the restrictive new rules governing hours of service until next October, when both sides are expected to resume their arguments.
“The truck shortage is a tremendous problem for the whole country,” Kreis told The Produce News.
Because of a shortage of truckers, Kreis said his members “have lost some business. We’ve got to find a way to get it moved. It’s a challenge, but it has eased up a bit since Thanksgiving. After deer hunting season” in the Red River Valley truckers return to the road “it’s usually a little better. And it has been.”
Kreis said there is significant usage of rail service, but trucks remain the preferred mode of transportation.
Albertsons and Safeway Inc. have entered into agreements, subject to approval by the Federal Trade Commission, to sell 168 stores across eight states to four buyers: Associated Food Stores, Associated Wholesale Grocers, SuperValu and Haggen.
Associated Food Stores will purchase eight stores in Montana and Wyoming; Associated Wholesale Grocers/Minyards will purchase 12 stores in Texas; SuperValu will purchase two stores in Washington; and Haggen will purchase 146 stores across Arizona, California, Nevada, Oregon and Washington.
Divestiture of these stores is being undertaken in order to secure FTC clearance of the companies’ proposed merger, which was announced in March and is expected to close in January 2015. The purchase agreements with the four buyers are all subject to approval by the FTC.
Under the terms of the purchase agreements, the buyers will acquire the stores, equipment and inventory, and they intend to hire most, if not all, of the store employees upon the closing of the purchase of the stores.
“We’re pleased to have found strong buyers for these stores and to have completed this important step toward combining Albertsons and Safeway,” said Safeway President and Chief Executive Officer Robert Edwards, who will serve as the combined company’s president and CEO. “We look forward now to the transaction’s close, so we can begin working together to enhance the loyalty of grocery shoppers by delivering high-quality products, great service and lower prices to become the favorite local supermarket in every neighborhood we serve.”
With this acquisition, Haggen will expand from 18 stores to 164 stores; from 2,000 employees to more than 10,000 employees; and from a Pacific Northwest company with locations in Oregon and Washington to a major regional grocery chain.
“With this pivotal acquisition, we will have the opportunity to introduce many more customers to the Haggen experience," John Caple, chairman of the Haggen board of directors and partner at Comvest Partners, a private investment firm that owns the majority of shares of Haggen, said in a press release. "Our Pacific Northwest grocery store chain has been committed to local sourcing, investing in the communities we serve, and providing genuine service and homemade quality since it was founded in 1933. We will continue our focus on sourcing and investing locally even with this exciting expansion.”
In its Dec. 9 edition, The Wall Street Journal reported that the U.S. Department of Agriculture is having difficulty monitoring the more than 25,000 farms and other organizations that sell organic crops and livestock because of the tripling in the size of that sector over the past decade.
WSJ noted that there are currently 81 accredited agents or groups that can certify food as organic under the USDA’s National Organic Program. But the newspaper reported that “of the 37 that had a complete review this year, 23 were cited for failing to correctly enforce certification requirements on farms in audits, according to an internal Agriculture Department report.”
WSJ added that the USDA report found that the 23 firms “didn’t properly conduct onsite inspections or correctly review applications for certifications....”
In a separate Wall Street Journal investigation of USDA inspection records, WSJ found that since 2005 “38 of the 81 certifying agents failed on at least one occasion to uphold basic Agriculture Department standards.”
Laura Batcha, executive director of the Organic Trade Association, headquartered in Washington, DC, didn’t dispute the findings of the audits, but does not believe they are cause for concern.
She told The Produce News that by their very nature, third-party audits are designed to find inconsistencies and correct them. With regard to the NOP audits, Batcha said one major goal is to make sure all certifying agents are performing their duties in a consistent manner and members of the organic community are being judged by the same standards no matter where the certification is taking place.
Batcha has reviewed the information that the WSJ story was based on and said in some cases it was data more than five years old. And in many instances the failures were administrative in nature.
She believes that no time in the history of the National Organic Program has the USDA been in a better position to provide oversight of the certifying agents. The organic industry, she said, has successfully lobbied for increased funding to both certify and audit the certifiers as the industry has grown.
Of more concern, Batcha said, would be a third-party audit that found no areas that need correcting. She said there have been significant changes to the NOP over the years and it is understandable that many certifiers would have deficient areas discovered during an audit.
Batcha said trust in the USDA’s stamp of organic certification is essential and she does not believe that trust has been compromised or misplaced. She indicated that, by and large, the certifying agents are doing a great job and applying the standards uniformly across the country.
She called the WSJ story and the information that it was based on a “snapshot in time” that in some cases reflected information that was five years old, and reiterated that she has no doubt that product being sold across the country with the USDA organic certification meets the standards of the National Organic Program.
The WSJ story did quote the USDA as making the same points as the OTA executive. The story stated that the “USDA said it requires certifiers to comply with numerous requirements, and the problems found by the Journal and the agency’s internal report reflected ‘a very rigorous accreditation process that requires full compliance and correction of identified issues.’ Those that fall out of compliance, like the 23 cited this year, get the opportunity to correct the problem, but are at risk of being removed from the certification program if the problem isn’t fixed.”
WSJ noted that the USDA said its certifiers were in compliance with 97 percent of its regulations.