Who Does #2 Work For?

The current rage over less-than-perfect-produce seems to be resonating well with customers. However, there is a limited supply of product that fits the bill and there is no benefit for growers to produce more product which will be sold at low prices.

Producers have toiled for decades to get a higher yield of picture-perfect fruits and vegetables out of each acre. They have invested in the latest equipment and best technology to maximize income on every seed planted. While they definitely must sell all of the product that is harvested, the current marketing effort to brand number two grade product with cute names and catchy tag lines will help drive income in the short term.

The issue is that once customers get accustomed to buying that product at a discount, they will want it all the time. When it is peak season and almost every piece of produce harvested is number one grade what happens? The tendency is to substitute number one product to fill the number two order. That is where the problems start. The grower receives less than the expected return on the harvest and the customer gets conditioned to buy a better grade at a lower price. Do you see the vicious circle that is created?

We have seen this happen in the tomato industry. In an effort to move off-grade fruit, the sellers sought out buyers for ‘random’ or ‘cafe’ tomatoes. That was successful until the buyers wanted contracts on guaranteed supplies of number two product. Not wanting to pass up on an order, the sellers took those contracts only to run out of low grade fruit when the crops were abundant. They substituted with number one product “because the market is cheap”. The customers then saw bountiful yields and spectacular quality at discount prices – no surprise they wanted that grade on every order (no matter what the contract said about lower quality).

Growers wake up every day to produce the best produce possible. Sometimes Mother Nature delivers a few obstacles and the growers have number two product to sell. But they still toil to overcome those obstacles and deliver number one product at a fair price. Let’s insure that they stay profitable and remain a healthy a part of our supply chain.