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Getting to the Source

Over the years, produce departments have become the star attraction for grocers, especially for those of us in the natural foods business. Designers strategically place produce so it is the first department a consumer sees when entering a store. The array of shapes, sizes, colors, and scents stimulate the shopper’s senses, and encourages purchases. Consumers make presumptions about the remainder of the store based on this first impression: if the produce looks fabulous, well then, the rest of the store mustbe, too! And, in all my years as a consumer, I’d say that presumption pretty much holds true.

This is the challenge we are faced with every day—making the produce department beautiful. Unlike the days of old, today’s consumers have similar expectations for organically grown produce compared to conventional produce, and they should. Organic growing methods are continuously being improved, production is increasing, there’s a good infrastructure to support worldwide distribution, and as consumers, we generally pay a higher price for organics. High expectations, I feel, are justified.

Creating a beautiful produce aisle starts with beautiful produce. Currently, we are working with three USDA certified produce distributors—one out of Chicago, and two out of Minneapolis. There are several local growers we work with year round, and in the summer months, we add another twenty or so. At times, sourcing can be like putting together a giant puzzle, sometimes doing your best to make the pieces fit!

Regional sourcing

At this time of the year, we rely heavily on our regional distributors. Their buyers source product either directly from farms, or through independent brokers. Generally, trucks from California, Florida, and Mexico arrive at their docks twice a week full of fresh fruits and vegetables ready for distribution to retailers around the Midwest. Although the distributors we work with may carry different brands, they all offer the same products! So how do choose what we are buying from whom?

Sourcing is one of the most difficult jobs in the Produce department. There are several factors buyers are trained to consider when entering into the decision making process. Their goals are to maintain an inventory level of high quality product that will support and encourage sales and minimize losses! Here is what they are looking at.

  • How many deliveries is the distributor providing per week?
  • Are they consistently on time?
  • Is invoicing accurate?
  • Are they picking up returns from the previous delivery?
  • Are they providing credit memos in a timely manner?
  • Has the quality of their product been consistently good or bad?
  • Are they filling our orders?
  • Are they communicating out-of-stocks so we can source elsewhere and avoid having an empty display?
  • Is their pricing competitive?
  • Is the product domestic, and if not, where is it from?

Given that many of these factors are constants, buyers can focus on the variables: pricing, product origin, and quality. Fortunately for me, we have a couple of seasoned buyers. They are familiar with the different brands available, seasonal quality trends, and they know what questions to ask our sales reps to get the product we want. If we returned product on Monday, they know to ask for a new lot, a different label, or to look elsewhere. They know what counts sell best, and communicate to preferred distributors what we want. Because of the high volume we do on certain products combined with limited storage, we’re also considering how many deliveries the distributor is providing. If we need 50 cases of navel oranges a week, we’re definitely looking at the distributor providing five deliveries per week as our preferred supplier, even if the happens to be a bit more expensive. Congestion in our backstock creates inefficiencies.

At the beginning of each week, we receive product lists from each of our distributors. From these lists, we pick our products, and the vendor(s) we want to purchase them from. It’s a lot of looking at really fine print and doing a bunch of data entry. Not one of our favorite tasks, but perhaps one of the most essential to our success.

As we move into February, things get trickier, especially in the veggie section. Most leafy greens and lettuces are coming out the desert region of Southern California, where days are warm, and nights are unpredictable. These desert regions are supplying the better part of fresh vegetablesto the entire country. It’s the only area large enough and warm enough to support production and demand. Prices tend to be higher in February than any other time of the year, and both quality and price fluctuate depending on the weather. If there’s a night of hard frost in the desert, prices can jump 40 percent overnight. When this happens, buyers are pretty much looking for the best price, especially when we know quality is down everywhere! Because prices fluctuate so frequently on certain products, short lists are sent out from distributors with the most recent pricing, sometimes on a daily basis. It’s a buyer’s nightmare! Late winter and early spring are by far the most difficult times to source quality product. Fortunately, when things are at their worst, we have the local season just around the corner to look forward to!

Local sourcing

As I mentioned in December’s Reader article, with increased demand and pressure from competition, sourcing locally is becoming more difficult than it has been in the past. Currently, we’re looking at making some minor changes to our systems to better support our sales. If in the future there is a second Willy Street Co-op location, recent changes to our current systems would enable us to provide a higher level of support to the local farmers we choose to work with.

When sourcing product locally, we use the same criteria as we would if sourcing from our regional vendors. In addition, we also aim to source from a local supplier who can supply us with a product consistently throughout its season. Unfortunately, for the really small growers, this does not fit into their systems. We often receive calls inquiring if we’d like to purchase some “extras from the garden” or “a case of leftovers” from the one of the local farmers’ markets. The administrative costs of processing a $20.00 invoice are 75 percent of the invoice total! Financially, it is an unsound purchase. Not to mention, sourcing small amounts of product from dozens of farms would drive our buyers crazy, back up the loading dock, and probably not make most of the farmers very happy either.

Good planning is the key to sourcing locally. Each year, well before the season starts, we plan with each of the farmers what we’d like and how much we’d like. Like I said earlier, there are a lot of veteran farmers on the list, and this makes the process that much easier. They know their limitations, and they have excellent production systems in place for what they know they can do. Pricing for the local season is generally much more stable than pricing on the national market, which makes our jobs easier. Prices are estimated during the planning process, and sealed prior to the first delivery. Even in the recent flood years, pricing has been stable!

Good communication is the best tool

As with anything, most problems can be avoided through good communication. When sourcing from either regional distributors or local farmers, we’re really looking to work with folks who understand the importance of good communication. I encourage the buyers to give both positive and constructive feedback to the farmers and sales representatives we work with. Communication is a two-way street, and if there’s a problem with communication, it’s going to lead to bigger problems. Of all the things we do in the Produce department, from sourcing to stocking, good communication is the best tool we can use.

We’re already looking forward to longer days and warmer temperatures! In the meantime, enjoy the remainder of winter, and stop in and source yourself some good eats!