NEWARK, Del. -- Now that the conflict with United has been resolved, officers of the Produce Marketing Association, based here, are able to turn their attention to other pressing matters.
g of this year I though '96 was going to be the year of precut fruit," PMA President Brian Silberman told SN.
"A lot of people were saying that there was going to be an explosion in the category.
"Frankly, it hasn't happened."
Silberman, who took over from Bob Carey this year, explored some of the major challenges facing PMA members as they prepare to convene at the PMA annual conference next month.
Besides the enigma of precut fruit, the industry is buzzing about issues that range from how to address home meal replacement in produce, to the roles of suppliers and retailers in food safety, to the optimal application of technology at the retail level.
The following are highlights from SN's interview with Silberman.
SN: What do you see as the biggest concern of retailers going into 1997?
SILBERMAN: It's difficult to say what one key issue might come up. Certainly a continuing emphasis on food safety and microbiological contamination issues. Another big issue within [retail] companies is how to organize HMR -- where does produce fit into that puzzle.
Refrigeration continues to be a big issue, particularly in regard to handling all the new fresh cut items. Especially as more cut fruit starts to make its presence felt in the market, more accurate temperature control at shelf level as well as in the back room and distribution channel is going to be critical.
To some extent that ties into the food safety equation but it's much more structural: how do you fit more properly refrigerated shelf space into your current limits of the produce department?
Also, there's a drive toward efficiency, toward more accurate tracking of sales data through price look-up codes. Parallel with that is category management build-up, and looking beyond 1997, case coding, pallet coding and electronic data interchange are two or three years down the road.
SN: Do you think that retailers will be looking to suppliers for solutions to the HMR question in produce?
SILBERMAN: Solutions are not going to come too much from suppliers in the produce industry. What I hear in talking to retailers is that a lot of the focus for HMR is tending to be in deli departments, and that's where the responsibility is flowing.
If you've got an HMR center in your deli, where do you put the new chicken Caesar salad in a bag -- does it go in produce, does it go in HMR or does it go in both?
SN: Is there a general consensus?
SILBERMAN: I think the jury's still out on that. I think different stores will find different solutions -- I don't think any cookie-cutter approach is going to determine it.
It has to have very good refrigeration, and they have to have much better control and monitoring of temperature in cases. For the most part we don't do a very good job with that right now.
Until such time as produce has better equipment, I wouldn't be surprised to see more temperature-sensitive items being sold elsewhere in the store rather than in produce.
But some of it just comes down to culture and discipline in produce. It's a mentality change, and all the good equipment in the world isn't going to help you until you train your people to realize that a bag of salad is a processed product that requires care and refrigeration in just the same way that milk does.
SN: To what do you attribute the fact that precut fruit has not made a bigger splash this year?
Silberman: It hasn't happened for several reasons; for one, technology in terms of packaging and controlling cut fruit has just been slower -- and also controlling the microbiological contamination issues.
The shelf life hasn't been there, and people say you can get it there but it's very expensive, the end price is a price point that most consumers probably wouldn't pay for.
So it seems to me that we're at the same point with cut fruit that we were with vegetables in the late 1980s: there's a tremendous demand but the technology, production and distribution haven't got up to that point yet. And I think also the refrigeration at retail is not up to that point yet.
The big difference with cut fruit as opposed to salads and cut vegetables is going to be where the processing is done. There are still some companies who are doing primarily source-processed salads, and I don't expect that to be the direction that fresh cut fruit takes. The shelf life on fresh cut fruit is just never going to be what it is on vegetables.
SN: Where do you see the processing moving -- in store at the retail level?
Silberman: I don't think it's going to happen at retail, I think it's going to happen at regional processors. I think you're going to see that more and more people who are citywide or statewide or who serve a couple of states are going to be doing the processing for that fairly compact market segment, rather than sitting on the West Coast or in Miami.
The key issue with cut fruit is that quality control is critical. It's much more difficult to see when cut fruit has gone bad than it is to see when cut vegetables have gone bad, so the processor has to take on a lot more responsibility.
The availability of raw material for fresh cut fruit is still an issue year-round -- in other words, what do you do when California melons are out of season.
SN: What's the prognosis for the meat and produce products, such as the chicken Caesar salad you mentioned?
Silberman: It's too early to tell. I think there's a lot of potential -- companies who are doing it have invested a lot of money and research into this and I doubt they would have done it if they didn't have a real strong indication that they could be successful.
I still think the biggest area of concern is, what is the market for this and what are people willing to pay for it? And the jury's still out on that.
SN: Are we going to see anything happening with biotechnology that is going to make a difference to retailers? Is it the perception of PMA that retailers even want this?
Silberman: I think you're going to see incremental changes. The biggest advances are going to be in taste, because that's what retailers are clamoring for.
This is going to play into fresh cut fruit as well, because retailers are looking for developments on better tasting melon product and tree-fruit product that both hold up in processing and have a high sugar content.
If you take something like berries where the taste is everything, once taste can be developed through genetic engineering, that's when retailers are going to sit up and take notice.
SN: How would you characterize the status and future of Hazard Analysis Critical Control Points in the produce industry?
Silberman: Clearly, the importance of HACCP has increased when you look at the processing side of the business, and that's where most of the focus has been until now.
There certainly has to be an HACCP approach to meat and produce salads -- for people producing those products, HACCP is an everyday part of their business.
Then you have to ask, what does it mean for the raw commodity business of produce? I think what is happening is a greater awareness of just about everybody in industry, that even if you don't have as rigorous an HACCP approach as you might have in manufactured food products, you have to at least have a systematic approach to safety in your operation.
You have to realize that there are relationships between what you might do in production and distribution and what quality of product ends up on a consumer's table.
I think we still have a way to go yet but I certainly think the industry has responded well.
SN: What is the status on the use of PLU stickers at retail? Are retailers maximizing their potential at this point?
Silberman: We did a survey at the beginning of the year, and found that more than 12,000 stores in North America are now using standard PLUs as of about February this year. Those 12,000 are by far the highest volume stores in North America.
Very clearly, the market leaders are using standard PLUs and they're gaining acceptance every day. Are they using them to the full extent that they could? I wish I could answer that question.
I would say that the enabling technology is there -- more and more retailers are starting to use data they've got, but some of them are far ahead of others.
And you're looking at some interesting partnerships starting to develop with suppliers; the foremost example is what Chiquita is doing with Wal-Mart supercenters, with the banana program. I would expect to see more of that down the road, and you can't do any of that without PLU codes.
One thing that is often overlooked is that [PLU codes] enable suppliers to have more variety sold in the supermarket at the same time. When you talk to retailers about how they track different varieties in, say, the apple category, they will tell you that standard codes have enabled them to carry a greater number of stockkeeping units, with some degree of confidence that it will be rung up correctly at the front end.
That's going to make it a lot easier for the produce manager to say, OK, I'll carry this different variety of mango or papaya or melon, when I can price it according to what I'm paying for it and not just cost-average it because I can't differentiate it at checkout.