PMA'S TOUR OF RETAILERS FINDS ORGANIC IS BLOOMING

LIZA B. ZIMMERMAN

A greater variety of organic produce, a larger selection of prewashed salads in bags and creative new cross-merchandising techniques were among produce department trends noted by a group of industry professionals on the Newark, Del.-based Produce Marketing Association's Retail Operations Tour of produce in Pacific Northwest supermarkets from Seattle to Vancouver from Aug. 3 to 6.

"The thing that stands out most was the quality and abundance of the organics," noted Robin Sprague, the manager of marketing and media relations at Brooks Tropicals, in Homestead, Fla., about the wide range of organic produce displayed in many of the stores the group visited.

"People are becoming more acquainted with bags of salads,"said Craig Jackson, a wholesale account manager at Try-Foods International, Apopka, Fla., about the prewashed salad trend.

"The displays are out of this world," added Dean King, the commodity packaging manager at the Mann Packing Co., Salinas, Calif., about the creative merchandising approaches of many of the produce departments that the group had visited.

Try-Food's Jackson concurred that he had seen "some very good merchandising techniques in terms of color flow and making departments look exciting. You literally see green, red, yellow and back to a purple."

The first day of the tour kicked off with a visit to Associated Grocers' Seattle warehouse, where produce director Ed Laster walked the group through Associated's facilities while explaining that his one-company, full-service facility supplies 315 stores primarily in Washington, Oregon and Alaska.

The next stop was the Queen Anne Thriftway in Tacoma, Wash., where a major peach promotion was under way. Crates of peaches, shaded by umbrellas, beckoned customers outside while stacks of organic peaches, piled on wood barrels, continued the theme inside. "We are doing a ton of peach demos," said Seth Stutzman, the produce manager at Queen Anne Thriftway, "so they can taste it."

Kelly Heinzinger, the store director, added that Queen Anne Thriftway was in the second week of the promotion at its three locations and was only 15,000 pounds short of its goal of selling 100,000 pounds.

Heinzinger said the peach promotion was also being cross marketed in other departments. "We are doing peach chutney, yogurt and the seafood department does a peach salsa over halibut."

Central Market, the Poulsbo, Wa., location of six-store chain Town & Country Market, was the next stop on the tour. Organics were a focal point at this store, where 8% to 9% of the produce the store carries, according to assistant produce manager Dan Perez, is organic. "All of our fresh unpackaged herbs and bunch items -- like mustard greens, Swiss chard, kale and bunch beets -- are organic," explained Perez. "The supply of organics has increased with people's knowledge."

An organic mango promotion was under way when the PMA Tour visited the store, and Perez estimated that they had sold 80 to 90 cases of mangoes. "Last week we had 16 hours of demos that probably tripled sales."

The Town & Country Thriftway, just down the road on Bainbridge Island across the Puget Sound from Seattle, offered an even larger selection of organic produce much of which was marked with pink signs indicating that the product was certified organic .

Marcy Trueman, the manager of bulk foods at Town & Country Thriftway, said that organics account for about half the department's sales. "10.5% of the store dollar is conventional produce and 4% is organic," she explained.

Bob Luttrell, the manager of organic produce at the unit, said that 80% of the department's produce is organic. "Just about every item that regular produce has [also comes in] organic. It's rare when we don't have [the organic version of] an item."

He said he thought that organics sold well at this particular store because of its location on an island where many people who have relocated look for a simpler rural lifestyle in which they believe organic produce plays a part.

Another important focus of the produce department at the Town & Country Thriftway is on local products. Luttrell noted that "if you put 'Grown on Bainbridge' on it, it's gone."

Back in downtown Seattle the day's last stop was made at the Seattle Center location of the five-store operation Larry's Market, where plastic cups of colorful edible flowers were being cross merchandised in the produce department.

The second day of the tour started off with a visit to the Quality Food Centers unit in University Village -- part of the Bellevue, Wash.-based QFC operation, which has 90 stores in the state.

Rows of baby squash, artichokes and carrots -- which vice president of produce operations Bob Alfano said that QFC had been carrying for years -- lined the shelves.

Five shelves along the wall were dedicated to a large assortment of prewashed salads alongside a wide variety of bagged washed broccoli, cauliflower and cabbage.

Mann Packing's King called the coolers the salads were displayed in the major obstacle to the freshness of these salads. He added that although he noted that some of his company's product was out of date in some stores in Seattle, most of the coolers he had seen during the trip had been at the correct temperature.

North of Seattle, a Safeway unit in Redmond offered an electronic recipe center, which featured a touch screen and doled out a variety of produce-packed recipes like Seattle Salmon Hash with onions and peppers and a tortilla salad with shrimp.

The next stop was Haggen Foods in Bellingham, Wash., up by the Canadian border, which offered a huge assortment of fruit and vegetables. Signs hung throughout the department boasted that Haggens stocks up to 330 different kinds of produce. Art Albery, the produce manager, said the signs underestimated the variety, "we are closer to 400."

Organics are not major sellers in Haggen Foods' produce department. "I would say not even 1% is organic," said Albery. "It's not a big mover."

A home economist is in residence next to the produce department. "I help people with catering and food, and coordinate things they need so they can come to one person," explained Sue Bessinger, the home economist on duty, "I also do a nutrition information and food demonstration program."

Try-Foods' Jackson called the presence of a home economist at Haggens "a treasure trove if used properly," although he expressed a general dissatisfaction at the amount of consumer information available elsewhere. In many of the other stores he said he "was surprised there wasn't any consumer information," he noted.

"If they are going to be that advanced and use proper marketing [materials] then they need to put out point-of-sale material," Jackson added. "I was surprised by the lack of 5 a Day materials, and especially in organics which is a place that needs more customer information."

Despite the absence of POS materials in many stores, many attendees were still impressed with other elements of the produce departments they visited.

"I think Seattle people are more in tune with San Francisco and Los Angeles and more wired into produce than in the Midwest," noted Art Bruno, the president of the Maui Produce Exchange -- a grower, shipper and distributor of Hawaiian produce -- based in Pleasant Hill, Calif.

"There's a lot more variety in the Seattle market than in other ones I have seen. They had everything from organic mangoes to peaches," noted Brooks Tropical's Sprague.

Many of the produce department associates that the group encountered also got favorable reviews.

"I was amazed at the amount of service in most stores in Seattle," said Tim Cunniff, the director of marketing at Del Monte Fresh Produce in Coral Gables, Fla.

Although service was seen as a strong point in Seattle-area stores, some attendees criticized what they saw as a lack of merchandising creativity on the part of participating retailers.

Brooks Tropicals' Sprague lamented that "You think of Seattle as being progressive, but I don't think there was that much innovation."

"One of the things I was surprised at was there wasn't a lot of direct cross marketing on tables besides some peripheral stuff," said Try-Foods' Jackson. "There's no reason they couldn't have a ribbon of salad dressing right in the produce case."

The first stop of the Canadian leg of the trip was at the IGA Marketplace, in the Vancouver suburb of Langley, where old-fashioned blackboards and wicker baskets hang over the produce department.

Colorful displays of green and yellow Bartlett pears and ruby red grapefruit were positioned near cans of whole dates and packs of dried peaches.

An island case of blueberries, strawberries and raspberries was being cross marketed with circular sponge cake dessert cups, packets of fruit glaze and cans of whipped cream. Piles of bananas were placed beside servings of banana drink mix.

Try-Foods' Jackson said he thought that "the European tables were being used well. They are putting in the right items, mixing in bananas for 99 cents a pound next to kiwi, which is a higher-priced item."

The Canada Safeway, in the Port Coquitlam suburb of Vancouver, also offered a variety of innovative cross-promotional ideas in its produce department. Cans of caramel dip for sliced apples flanked the apples on an island case and packets of seasoned salad toppings hung next to the broccoli in the wall case.

The second day's last stop was at the Save-On -- which is part of the Overwaitea Food Group -- in the Vancouver suburb of Coquitlam.

Cross-promotional suggestions littered the produce department. Orange and strawberry drink mix packets hung on the rack next to the oranges and sponge cake dessert cups were tucked under the plums.

Cans of minced and pureed garlic lined a shelf extending from an island case full of garlic, shallots and onions stacked in wood baskets. Packets of potato dressings were placed near the potato island.

The last day of the tour the group visited the Produce Terminal, a Vancouver-based wholesaler that directly supplies 45 IGAs and 20 independent retailers, according to Jordan Lew, the company's director of purchasing.

As Lew walked the group through the warehouse he explained that one of the most popular kinds of produce in Vancouver was the navel orange. "Citrus is very dominant in this market and that goes with Asian diets," he explained.

"In Vancouver you have a 40% Asian population in a municipality of 265,000 people," Doug MacKenzie, marketing manager at the Vancouver-based David Oppenheimer Group, a global importer and marketer of produce that sells to wholesalers. "Stores have to set up differently."

In MacKenzie's opinion "the main difference between the Seattle and Vancouver market is the ethnic groups. We have a considerably larger Asian population."

The different dietary preferences of Vancouver's unique ethnic mix, according to MacKenzie, can be seen in the abundance of such ingredients as ginger, garlic and bok choy on the market.

Maui Produce's Bruno concurred that in Vancouver he had "noticed that people know how to handle ginger."

The next stop on the tour, at T & T Supermarket in the Vancouver suburb of Burnaby, showed the richness of Vancouver's Asian specialty produce.

Tall glass containers of medicinal herbs flank the entrance to T & T as a prelude of the specialty produce to come. Bunches of net-wrapped longan berries rest on square wood crates and wrapped packs of baby bok choy line the walls. Long rounds of bumpy dark-green bitter melon share shelf space with brown pointy durian fruit.

Joseph Hsieh, the store manager, estimated that 75% of T & T's shoppers are Asian. He pointed out that many Western stores probably wouldn't carry items like Taiwan leeks and Chinese celery and noted that organics were not a significant factor in his store.

The last stop on the trip was at Capers in the heart of downtown Vancouver. Organic and locally grown produce are a priority here and blackboards hanging above the produce section list them at the top of what it refers to as the store's "produce buying hierarchy."

Ceramic plates overflow with mushrooms and tomatillos and burlap bags of potatoes rest on the floor next to one of the island cases.

"Seventy percent of the produce is organic now," according to Bill Kelly, an assistant produce manager. "That number can go as low as 60% and as high as 80%," he added.

"In the summertime the produce is close to 70% local and in the winter it will go down to less than half," said Kelly.

He noted that the farmers were an active presence in the store and came to do demos. They were slated to set up a market shortly in the parking lot for six weeks. The store also puts information up about the farmers it buys from on black and white placards that hang over the produce islands.

When comparing the Seattle and Vancouver markets, Mann Packing's King noted that "in Seattle the produce managers seemed to be more into their jobs and more enthusiastic."

The overall quality of both markets, according to Try-Foods' Jackson, "has been great. I haven't seen a whole lot of duds."

Lisa McCave, the PMA's retail coordinator, said that the tour had been a benefit to both attendees and retailers alike in that it afforded them the opportunity to meet and talk directly.

"What's important is to see something different, like these Asian demographics, every year," added McCave who said that Dallas, Austin, Texas; and Ft. Worth, Texas, were under consideration as possible markets for next year's tour.