Transporting perishables quickly through the supply chain to maintain product quality at the shelf and cut costs in the pipeline may be the single most important issue facing retailers and wholesalers today. As supermarkets delve deeper into the fresh-foods arena in a bid to capture a greater portion of the burgeoning -- and profitable -- perishables market, the issue of how best to distribute deli, bakery, meat, seafood, produce and other key product categories is moving to the forefront of industry attention.
Wholesalers and retailers are addressing this concern through a variety of measures, such as implementing advanced buying and forecasting software systems and stepping up manual handling practices, to improve perishables quality.
"We are now using a warehouse control system to manage our perishables inventories. It essentially ensures first-in, first-out [processing] and strict date rotation," said Mark Stewart, vice president of warehouse and distribution, Kash 'n Karry Food Stores, Tampa, Fla.
"In conjunction with that system, the company's procurement system accurately forecasts item demand. This software was just implemented over the past 12 months and has resulted in better control in forecasting and inventory accuracy for perishables, including frozens, by a minimum of 5%," he added. For example, produce and fresh meat typically ship out within a day or two of receipt.
Delchamps, Mobile, Ala., also installed a new buying system, about a year ago. The system was implemented initially in grocery, but this year will be expanded to the perishables area, including meat, produce, dairy, deli and frozen foods, said Ken Easton, director of distribution.
The system will substantially improve forecasting, and thus distribution efficiencies, throughout the perishables areas, he said.
Jeff Cummings, director of distribution at Raley's Supermarkets, West Sacramento, Calif., said the chain has a computerized system primarily to enhance the buying process and track meat and produce inventory.
The system has resulted in a product movement from warehouse receipt to stores that is almost as fast as a cross-docking operation, he said.
"How do we have such a good handle on perishables? Good buyers. All we do is receive it and ship it out to stores. The key is buying," he said.
Cummings described how perishables are now handled. "We rack the items and select them at night; the stores order them, and the product goes out the next day. I don't think any produce items stay in this facility for more than two days.
Archie Hollins, vice president of support systems for Eagle Food Centers, Milan, Ill., said the company will be implementing a system this May to improve perishables forecasting and enable the company to react better to market demands.
One of the biggest problems retailers have in the perishables arena is orders coming in that are either more or less than what was requested.
New systems for perishables, he explained, would require less lead time for ordering from retailers, thus allowing the buyer to place orders that more closely match what stores actually want and order.
"Once you can get the stores to order on yesterday's sales, you will be able to buy from your various vendors' inventory at levels that are more conducive to what the store's real needs are. If you can do that, you will improve shrink -- guaranteed," Hollins added.
While improved forecasting and buying systems are crucial for enhancing how perishables are managed, sources also stressed that improvements must be made in how employees handle the product.
"We have almost a 15-hour turn from ordering, processing and pooling to loading and delivering, which is pretty good," said Bob Kane, director of transportation for Yosemite Wholesale, Merced, Calif., a division of Save Mart Supermarkets, Modesto, Calif.
"This ensures freshness and quick delivery to stores. This is something we're continually working on," he said. "Sometimes we'll make route changes to get perishables out to the stores quicker. For example, with produce, if a store orders by 3 p.m., they could get it 10 hours later."
Yosemite also monitors dock temperatures and its refrigeration systems every few hours to ensure freshness of perishables.
Delchamps has similar measures in place to handle and transport perishables.
The company, for example, does not allow inbound freight refrigeration units to be shut off during the unloading process to ensure trucks maintain the proper temperature. It also has a meat and produce inspector charged with monitoring product quality, as well as refrigeration temperatures.
Marty Baker, director of warehousing at Hy-Vee Food Stores, West Des Moines, Iowa, which maintains a produce, frozens and dairy/cheese warehouse, similarly stressed the importance of closely inspecting perishables as product enters the warehouse. "What we're doing to ensure that our perishables are fresh and in good shape at the store level is conducting an inspection upon arrival at our facility," Baker said.
"We have dedicated people who do nothing but inspect perishables as they come in," he added. "We're very particular about what comes in. Then once it's in we turn it as quickly as possible."
Price Chopper Supermarkets, Schenectady, N.Y., opened a warehouse two years ago that allows the chain to store perishables at precise temperature and humidity levels, said Renato Cellupica, vice president of distribution and transportation.
For example, leafy produce may require storage at the same 34 to 36 degree temperature as fruit, but need 100% humidity. "It's literally wet in this room. This is what leafy produce requires to maintain quality and freshness, as well as to extend its life. Before we didn't have this capability." The new facility also handles meat, deli and dairy, with the capacity to meet separate temperature requirements.
Temperature is also a critical component in the delivery process for perishables.
"The obvious challenge in perishables and multiple commodities is temperature," said Pete Lima, manager of transportation and fleet maintenance, Spartan Stores, Grand Rapids, Mich.
Late last year, Spartan Stores began sending one consolidated truckload of multiple perishables daily to its retailers, replacing multiple daily deliveries of perishables. Many of Spartan's customers had been receiving four to five less-than-truckload perishables shipments daily.
