PRECUT FUTURE DEBATED: CONVENIENCE VS. TASTE

TONY SPLEEN

SAN DIEGO -- Precut produce was the big topic at the annual convention of the United Fresh Fruit and Vegetable Association here earlier this month, where industry leaders were decidedly split on the category's projected growth.

Some see precut's higher prices and what a few called less-than-perfect taste as major barriers to growth. Others believe that the convenience offered with precut produce is so important to consumers that it will outweigh the taste and cost issues.

As more companies get into the production of precut produce, at least one executive from a major company predicted, there will be a "bloodbath" for those that jump too fast onto the bandwagon.

Some fear that inexperienced companies that don't know enough about food safety and maintaining quality could mar the industry's reputation. (See related story, Page 30.) In a panel discussion titled "Produce Outlook '94" industry leaders focused primarily on the topic of precuts and offered their predictions -- controversial at times -- about the category's future.

"We still have a long way to go in regards to that horrible plastic smell and taste when we open a bag of [prepackaged] salad," said Karen Caplan, president and chief executive officer of Frieda's Inc., Los Angeles, a major distributor of more than 300 specialty produce items.

She made her comments to a packed ballroom of produce executives who applauded in agreement.

"Taste is everything," she said. "No matter how plentiful your product is or how cheap you can sell it, if the taste is not good, you will not succeed in the long run." Other panelists agreed that taste as well as safety are important issues and that good production practices are needed to ensure quality, good taste and success in the fresh-cut arena.

"Production of these products is dramatically different from what we're used to," said Ernie Townsend, president of Dole Food Co. North America, Westlake Village, Calif., a producer of a variety of packaged salad mixes and value-added produce items.

Citing a product recall of one of Dole's value-added items last year, Townsend cautioned the audience to learn the complexities of handling precuts.

"We have to deal with [the United States Department of Agriculture] and [the Food and Drug Administration], and we need to understand good manufacturing practices," he said.

"For the health of our industry we must master these skills."

Even if processors master production skills, several convention attendees weren't convinced consumers can take the sting of precut's premium prices.

Commenting after a workshop on fresh cuts, for example, Vince Terry, director of produce for Harp's Food Stores, Springdale, Ark., pointed out that following a period of growth for salad mixes, recently he has seen a drop in sales. "Leaf lettuce sales have started to rebound," he said, as customers discover they can save money by purchasing the ingredients in a mix and preparing it themselves.

Still others voiced strong belief that precuts play a key role in the expanding convenience wave, despite higher prices. "Customers in our area have accepted the value and convenience of items like salad mixes," said Jim Richter, director of produce merchandising for Marsh Supermarkets, Indianapolis, and a panelist at the "Produce Outlook" session. "Today's consumers are in a time crunch. They find precut, convenience salad mixes and the other items we handle as a godsend because they make their lives easier and help them reach their goal of eating five a day.

"Certainly as the technology improves and some of the other issues are worked out," he continued, "this category will grow and be a shining star in our industry."

Consistent pricing combined with convenience is more important to consumers than simply lower prices, said another panelist, Robert Castellini, president and CEO of Castellini Co., Cincinnati, a major wholesale distributor of fresh produce.

"The value-added process combined with the contractual procurement techniques that this small, yet burgeoning, fresh-cut industry has just begun to master will eventually take most of the commodity characteristics and their negative perceptions out of play," he said. Those characteristics, he said, include occasional unavailability, price fluctuations and poor quality.

"Fresh cuts will soon be able to reliably market themselves to the health-conscious and convenience-oriented 21st century lifestyle that our industry is so near yet so far from effectively doing in its entirety," he said.

But even if pricing, availability and quality can be stabilized, most convention participants concluded that precuts need to taste good in order to be successful.

"Our customers will pay a premium for better flavor and taste," said Marsh's Richter, who predicted that precuts at his company will top 25% of produce sales by the year 2000.

But not all consumers will pay a premium, noted one convention speaker, who suggested that a large percentage of consumers value convenience far and above taste.

In addition to the panelists already mentioned, the "Produce Outlook" panel included three other executives: Lenny Pippin, CEO of Albert Fisher North America; Thomas Churchwell, president and CEO for Calgene Fresh, and Tom Stenzel, president and CEO of UFFVA.