Marketing Specialty Products
Time to Call a
Wholesaler-Distributor?
A Farmer's Story
Rich Collins uses a produce wholesaler-distributor
these
days. He used to sell his Belgian endive himself--to restaurants,
hotels,
and banquet halls. But he decided the time involved in delivery could
be
better spent at his farm. He considers the 20 percent he pays for the
service
well spent.
Collins described his farming operation and
distribution
methods at a recent marketing seminar in Sacramento, co-sponsored by
the
Small Farm Center. Before going to a distributor he found his own
buyers--chefs
who specialize in food that is fresh, light, and prepared simply. He
talked
to them, demonstrated his product, gave away samples, took orders,
established
price, payment, and delivery schedules. He was consistent with quality,
quantity, and delivery times. The chefs trusted him to do what he said
he would do when he said he would do it. Another seminar speaker, Tom
Chan
of General Produce, commented, "nobody loves your product more than
you do. You planted the seed, you nurtured it, you know more about it
than
anyone else ever will, and that is communicated when you sell directly
to restaurants."
When Collins hired a distributor, he was able to
hand
over a list of his buyers, the schedule they had established, and the
quantities
they expected. The distributor added Collins' customers to his list of
clients and deliveries proceeded without a ripple. Look under "fruits
and vegetable wholesalers" in the telephone book yellow pages for
wholesaler-distributors, or ask farmer neighbors for recommendations.
A Wholesaler-Distributor's Story
Tom Chan and George Poulus of General Produce in
Sacramento
explained how produce distributors work. General Produce sells and
delivers
all kinds of fresh fruits and vegetables. Chefs usually do not have
time
to seek out farmers. They rely on distributors to find products and
deliver
them. Modern distribution means a product can be picked, cleaned,
processed,
loaded, unloaded, to the consumer, and on the table in less than 24
hours.
Distributors communicate with their producers and
customers
by telephone. This involves a tremendous amount of trust on all sides.
The customers rely on the distributor to tell them what they have for
sale,
the quality and quantity of it, just as the distributor depends on the
farmer to deliver what is promised. It is important that the
relationship
is fair and that everybody wins. If the grower doesn't feel it is
advantageous
to sell a product through a distributor, the relationship will fail.
George Poulus told the attendees: "We are on your
side. We are part of the process to get your product from the ground to
the consumer, whether it be food service or a retail outlet. You are
important
to us. Without you we don't exist. The competition is intense. When you
come to visit us, bring your product with you. Let us get it out to the
public. Let us show them how to use it. Educate us with what you have.
We need to know what it is--variety, type, where it is from, how it can
be used by the consumer. We need to know when we can get it, how long
we
can have it. We emphasize consistency. Make an appointment to visit the
warehouse, see how products are packaged and handled, how you need to
present
it to the wholesaler and to the general public."
Financial Arrangements
Some distributors pay more quickly than restaurants
do.
General Produce pays within 14 days. Small business people have cash
flow
problems, so it helps to have a guaranteed payment on a regular basis.
They buy at a specific price, which they can help establish because
they
deal with a large number of sellers. If the grower has a price in mind,
the distributor will tell him what other people are selling the same
product
for. For organic produce, people will pay 20 to 30 percent more, but
the
price difference cannot be too extreme. Few organic growers sell all
their
produce at the organic premium price.
Packaging
Packaging is important. Bob Cummins of the
California
Department of Food and Agriculture (CDFA) explained, "Fresh fruit,
nuts, and vegetables sold in the channels of trade are subject to
regulations
established in the California Code of Regulations. Size, count, and
containers
are specified for numerous products; i.e., standard stock sizes are
established
for asparagus; standard containers and counts with corresponding
minimum
average diameter are established for oranges, grapefruits, and lemons."
The box needs to be strong, perhaps waxed. Organic produce must be
registered
and certified. UPC codes help at the retail level. It is ideal to have
the product come in a saleable package, because less handling means
better
shelf life. George Poulus advises, "People want to know how to cook
it, how to handle it, how to store it. People have a romantic idea of
what
a small grower is. They think of the white house and the picket fence
and
the generations of family and the children being raised to be workers
and
so on. Emphasize that." David Visher, of the Small Farm Center, added,
"Point of purchase information cards are also a good marketing tool."
Volume
Chan and Poulus will work with small volumes of a
product
("five cases may be okay") because they feel that "small
gets larger."
More information
Small Farm Center
"Marketing through Wholesalers and Shippers"
and "Selling to Restaurants."
Federal-State Market News
Federal-State Market News is a
compilation
of market prices, supply, demand, quality, etc., collected from major
terminals
and other handlers. Subscriptions are available for daily, weekly and
monthly
issues. Market information can also be obtained by telephone. For
information
or to subscribe, write: Federal-State Market News Service, 1220 N
Street,
Room 216, P.O. Box 942871, Sacramento, CA 94271-0001.
Fruit, Vegetable, and Egg Quality Control--Standardization
CDFA sells the publication listing container
regulations.
Contact them at: 1220 N Street, P. O. Box 942871, Sacramento, CA
94271-0001,
(916) 654-0919.
Sell What You Sow: A Guide to Successful Produce Marketing
By Eric Gibson, New World Publishing, 3701 Clair
Dr.,
Carmichael, CA 95608.
The Packer
The Packer is a
newspaper
for the produce industry. It lists current prices of produce, buying
trends
expected, and has related articles and advertisements. An annual
produce
and availability merchandising guide shows buyers by commodity and
their
states and cities. Available by subscription from: The Packer,
attention:
Circulation Dept., P.O. Box 2939, Overland Park, KS 66210; (800)
255-5113.
