Smith said she was “definitely bullish” and approached the question from a consumer standpoint rather than the produce marketer she is. When in a grocery store, she said if the quality between conventional and organic is equivalent, she will choose organic.
OGS Grower Roundtable Bullish on Organic Growth
A group of executives representing three very large organic grower-shippers openly discussed the challenges involved in growing and selling organic produce—but all said they were “bullish” on the future growth of the category.
Dave Puglia, CEO and President of Western Growers moderated the discussion that included Brie Reiter Smith of Driscoll’s, Michael DuPuis of Divine Flavor, and Tom Nunes V of The Nunes Company. All three companies produce both conventional and organic crops. Driscoll’s specializes in berries, while Nunes focuses on vegetables, and Divine Flavor produces a variety of crops topped by table grapes and peppers on its farms, which are mostly in Mexico.
Smith revealed that Driscoll’s experimented with organic berries 30 years ago but made a full commitment to the category about two decades ago. She said that the well-known berry company has a 60 percent market share in the organic berry category in the US, and the category accounts for about 25 percent of their revenues. She said that over the past decade organic berry sales have grown at a faster clip than conventional sales.
The Nunes Company also began growing organic vegetable crops in a dedicated way over the last 30 years, with over 30 veg crops on its organic sales list. Nunes said it was market demand that has driven the company’s increases in the organic sector.
DuPuis said it was necessity that caused the owners of the Divine Flavor brand, Grupo Alta, to turn to organic production on the dry, hard farmland in the Sonoran Desert. In the early years, he indicated the ground was unsuitable for farming, and the growers had to improve the soil by producing crops organically.
Discussing some of the challenges and barriers facing organic production, the three company representatives were not short on topics to explore.
Smith said organic production is not as efficient as conventional farming. Driscoll's gets less yield per acre, and it takes more water per acre to produce that lower amount of organic fruit. In addition, more labor is needed to produce a load of organic berries than a load of conventional berries.
Organics often offer a marketing challenge, Nunes said, as they are typically limited to the retail buyer because few foodservice operators are willing to pay the organic premium. As there are limited marketing opportunities, Nunes said the organic market can become oversupplied fairly easily, and producers need to find the sweet spot between supply and demand to make it work.
DuPuis agreed that there are times that the organic market becomes oversupplied, and Divine Flavor must market its organic grapes under a conventional label. The majority of the company’s production is organic, and sometimes you just have to be flexible, he said.
The biggest difficulty in convincing growers to transition to organic production, DuPuis said, is tied to the mindset of growers because going organic requires a greater commitment and more paperwork. The need for commitment has made Grupo Alta successful as the family-owned company is passionate about producing organic crops. That same passion extends to the workforce as the company “double downs” on the social responsibility piece to give Divine Flavor a leg up when retaining and attracting workers.
“That has paved the way for our longevity,” DuPuis said. “Everything has to start with the workers.”
Another major challenge the panelists explored is what can be called the consumer’s lack of commitment to the organic category. Driscoll’s Smith said research has shown that 75 percent of the company’s organic consumers will buy conventional product if it looks better. This is an area where the company has to do more inward reflection, she said, admitting that sometimes the quality of berry that goes into an organic pack would not qualify for Driscoll’s conventional pack.
Nunes agreed that most consumers want the quality of organic items to be just as good as the conventional product and said consumers will not purchase an inferior head of organic romaine lettuce.
Even with all the challenges and barriers that were articulated, each participant said they were “bullish” about the future of organics.
Nunes said he was “bullish,” opining that organics are a permanent part of the market and a growing segment. DuPuis echoed that sentiment, noting that while high prices in the most recent past have caused some consumers to shy away from organics, for the most part the organic consumer is resilient, and he expects sales to rise again.