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PMA’s Silbermann: Produce is Profitable but Daunting



{mosimage}Consequently, advises Bryan Silbermann, president of the Produce Marketing Association, Newark, DE, distributors should not undertake half-hearted, impromptu steps to market fresh produce to their operator-customers, thinking that the strength of its popularity among consumers will carry the day.

Silbermann, who spoke with ID Access on the eve of the PMA Fresh Summit Convention and Exposition, noted that the horror stories that abound among those who have failed with this category are the result of a lack of commitment by the firm's top management.

"There is a learning opportunity for distributors who aren't involved in produce," Silbermann said. "Produce is a highly profitable item as well as a daunting one."

The first demonstration of management's commitment to produce is to hire people who understand the category, he emphasized.

"You can't take people who have no experience with produce and make experts out of them overnight," Silbermann cautioned.

Distributors can't treat produce like a can of tomato soup.
While fresh produce, vegetables and fruit offer distributors bottom-line advantages, their inherent peculiarities can be challenging for many distributors, he continued. Logistics, handling, delivery, food safety, education/training and taste are a few of the issues that need to be addressed by all segments of the supply chain, including growers, associations, distributors and marketing groups.

However, on the bright side, the consumer's quest for healthy menu options, among which fresh vegetables and fruit standout, has been driving the segment's growth. Distributor executives, in numerous interviews with ID Access, have said that produce is their next target of expansion.

Silbermann said in the past decade the vegetable category has seen a 3% increase in consumption while the fruit category has remained flat. Value-added produce that has benefited from some processing and pre-packaging has witnessed double-digit growth, he said, and organics have shown strong growth in the past two to three years, spurred by an improvement in their availability.

Specifically, Silbermann elaborated, the produce innovations in the QSR operator segment has made everyone stand up and take notice.

"Two of the most obvious ones are McDonald's with its salads, and Wendy's with its fruit salads," he said, noting that their successes demonstrate the degree to which operators will strive to satisfy consumers' demand for healthier fare.

"It's not going to replace hamburgers at the top of the list but it's still a very healthy slice of the business. It helps position those companies more favorably with consumers and it helps to avoid the so-called veto vote when groups go out to eat," he said.

CHAINS DEMONSTRATE CREATIVE SIDE OF MENUING PRODUCE With restaurant patrons more often pointing to produce on the menu, another national chain, Applebee's, has also increased the number of salads in its line up.

"The ability of the chain to consistently deliver a produce product that is convenient, great tasting and nutritious will go a long way in showing consumers that they can get healthy food that tastes good. That's why there is an up tick in consumer demand for produce," Silbermann said.

While using chains and their system distributor partners as examples, Silbermann added that regional distributors and independent operators should not stand on the sidelines of this trend.

"Produce is clearly a profitable item once distributors get the kinks sorted out. It's a unique position for those distributors who can handle the product well," he said.

One of the kinks is the lack of drivers qualified to handle produce on the receiving and delivery ends of the supply chain. As a result, the PMA created a Transportation Taskforce to look into this issue and come up with wide-ranging solutions that would benefit the entire distribution stream from field to restaurant. (See Sept. 16 edition of ID Report for story on this PMA initiative.)

Silbermann said a number of transportation associations, after learning of this taskforce, have contacted the PMA with offers of assistance and participation.

An industry-wide effort is needed to overcome the shortage of drivers, one that should feature training and education at the top of the list, he stipulated.

"Drivers should be treated as integral partners in the way we get produce from field to restaurant," he said. "We haven't done a good job of educating drivers to help improve the flow of products."

Transportation will be a central issue of the PMA Fresh Summit that will be held in Atlanta, Nov. 4-8, where Silbermann will deliver the keynote state of the industry address.

GOOD-TASTING PRODUCE SELECTIONS KEEP PATRONS INTERESTED A recent menu development that hastened consumer interest in produce has been the prevalence of good-tasting selections. As simple as it sounds, Silbermann noted that as consumers have been looking for healthy or nutritious menu operations, their search was doubly rewarded by good tasting produce, thereby endearing them more to the category.

"Until now, the industry hasn't done a really good job in providing consumers with great taste and convenience in produce selections," he said.

He suggested that distributors who have corporate chefs on their staffs could provide their operator-customers with creative, tasty menu suggestions for their menus in addition to boxes of produce through the back door.

"Distributors should put themselves in the shoes of their customers and ask themselves, 'If I could solve this produce-sourcing problem for my top 10 accounts, how valuable would I become for them,'" he opined.

Along these lines, Silbermann said that he would announce at the summit the establishment of a new partnership between the PMA and the culinary side of the industry that would bring the issue of taste to the forefront.

"It's an area of huge potential. Distributors have focused on getting produce to their customers, but now they will also be able to deliver great ideas and produce applications, just like chicken and beef suppliers have been doing," he said. "This will be a very good way of capitalizing on the popularity of produce. However, distributors should remember that they can't treat produce like a can of tomato soup."

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