STANDARD PLU CODES GAIN IN BULK PRODUCE

LOUISE KRAMER

SAN ANTONIO -- The pace is picking up on the adoption of standardized codes for bulk produce at supermarkets across the country.

A&P, Montvale, N.J.; Schnuck Markets, St. Louis; Fry's Food & Drug Stores, Phoenix, and Kroger Co., Cincinnati, are just some of the retailers who have recently given up their various internal and labor-intensive systems for coding produce in favor of standard national numbers.

The codes, called Price Look Ups, were assigned to the produce industry and published by the Uniform Code Council in late 1990 as a way to compensate for the fact that Mother Nature neglected to provide bar codes on fresh fruits and vegetables. It is only now that they are coming into wider use, in part because of the search by upper management for new efficiencies in every area of the store, including the produce department.

These four-digit numbers were a major topic at the annual convention of the Produce Marketing Association held here late last month. Bryan Silbermann, executive vice president of the Newark, Del.-based trade group, said that 2,000 stores were using the codes at the end of last year. By the end of this year, some 5,000 will be on-line. By the year 2000, PLUs could be the only codes in use if advocates of the coding get their way.

While produce identification has traditionally been done by the retailer, the standardized PLU system places the burden on grower-shippers for affixing labels bearing the codes on the produce items. According to Silbermann,

it is by far more efficient to have the labels applied mechanically at the packing house than manually at retail. "People are looking at produce operations and saying why are you so darn inefficient," Silbermann said.

The problem is, the road toward using these numbers is proving to be slightly bumpy.

Beyond what one grower-shipper called the "nightmare" logistics of applying the labels is the complaint that some retailers now insist their produce be delivered with PLUs, and some insist it be delivered without them.

For the first time, warehouses are refusing shipments not because of poor quality but because a perfectly good box of fruit doesn't have a proper label.

Mike Hambelton, director of marketing for Stemilt Growers, Wenatchee, Wash., an apple company, said he is getting these mixed messages. During a standing-room-only seminar on PLUs at the convention, Hambelton said one customer, Meijer Inc., Grand Rapids, Mich., wrote him that it wouldn't accept shipments without PLUs. Then he heard from another retailer: "If you send us fruit with PLU stickers, we won't take it off the truck."

"In most cases, we don't know where the carton is going to go. We have a real problem with that retailer who doesn't want the PLU," Hambelton said.

"We had to make a decision that we were either going to be PLU or we would not be PLU. We made the decision we were going to be PLU," he said.

Grower-shippers at the convention said they, too, want to run their businesses more efficiently, and like retailers want to be able to better track their sales. But they don't want to be stuck bearing all the costs of getting on-line.

"Those who are asking for the PLUs have been happy to share in the costs," Hambelton said. "Those who are not using them in their stores want to know why they should pay for the system.

"PLUs are here to stay and they're going to be in much higher demand on a monthly basis, not a yearly basis," he said. "Rather than fight it, let's learn how to use the systems, learn what are the benefits from it and let's not only get the United States into conformity but let's get the world into conformity," he said, referring to the fact that other countries use other identification systems.

Robert DiPiazza, vice president of produce for Dominick's Finer Foods, Northlake, Ill., who spoke from the audience at the PLU session, urged retailers to sign on for the PLU program, even if it will require abandoning existing programs and pushing for top management to accept it. "As produce people, we have to fight for what we need in the produce divisions of our companies, whether it be for the right refrigeration or the right systems," he said. "You have to go in there and fight for what you need. It's time to play with the big guys. And it's time to be able to measure market share, and it's time to be able to measure your performance against your competitors and to be able to analyze your business."

In produce, retailers have been able to track products at the warehouse level through regular movement reports. But tracking them at store level has been an inexact science at best because cashiers sometimes cannot properly identify an item and thus ring it up at the wrong, and usually lower, price. A Granny Smith, for example, might be rung up as a cheaper golden delicious apple.

"There is a lot of slippage at the front end," said Richard Spezzano, vice president of produce and floral for Vons Cos., Arcadia, Calif., who has been pushing for retailers to adopt standardized codes for several years. "You ended up with a deskful of information you couldn't use."

With standardized numbers affixed directly to the produce items, cashiers can read the number and punch it in. "It has allowed us to read the numbers and come up with attack plans," Spezzano said. "Product is being rung up correctly. You have more confidence as you put more items in."

DiPiazza, and others at the session, acknowledged that implementing the system is creating challenges for retailers and grower-shippers. But he said they can be overcome.

"I don't care if it's a single store or a big operation. If we can all move forward and get on this system, we won't be driving our grower-shipper partners crazy and we realize we are right now," he said. George Yoskovitch, director of produce and floral operations for Fry's Food & Drug Stores, Phoenix, who spoke at the session, said he converted his company to the standard PLUs in August.

"As a retailer with this whole big new program, it was very intimidating," he said. "I felt like this was a very big move for my company. The comforting thing to know was that it really wasn't that bad."

Echoing accounts from other retailers who have converted to the standard coding system over the past year or so, Yoskovitch said it took about two weeks for cashiers to be working at full speed again at the front end.

"Going live with the PLUs was the biggest hangup," he said. But it turned out to be rather easy, Yoskovitch said.

Yoskovtich and others, including Silbermann, said there are some problems with the PLU system that still need to be ironed out.

For one, the Universal Code Commission assigned a limited amount of numbers to the industry, ranging from 4011 to 4959, which is a problem as new varieties come into the market.

Also, the labels being applied to produce are in some cases difficult to read.

For grower-shippers, a major problem is moving toward efficient, computerized labeling systems at the packing-house level.

Silbermann, a member of the industry board created in the 1980s to combat the coding problem, the Produce Electronic Identification Board, which PMA administers, said not all problems will be solved by the new system. "We tried to find a national standard and flexibility for the greatest number of people," he said. convention attendees.