Del-Monte’s new fresh-cut facility in Greensboro, N.C., could open up regional opportunities for local growers, Jef Avlia, Del Monte Fresh Produce N.A. Inc.’s director of marketing told a group at the Southeast Vegetable and Fruit Expo recently.
In the same session, Charles Freeman, a Wal-Mart regional produce buyer based in South Carolina, gave growers a rundown of the operation and the criteria for being a supplier to its stores.
Avlia said Del Monte is looking to expand its tomato repacking presence on the East Coast. He pointed to the North Carolina Department of Agriculture’s "Goodness Grows in North Carolina" as one way to enhance the marketing of North Carolina produce.
He said it’s key for suppliers to meet Del Monte’s strict standards for quality, safety and supply.
Avlia points to Del Monte’s fresh-cut packaging of Athena melons as a success story. "The idea is to create a local superstar and a perfect example is Vidalia onions," he says. "It was a grower-driven success story. Currently at its 45,000 square-foot facility in Greensboro, Del Monte packages fresh-cut fruit. It opened in June 2003 with 25 employees. There are plans to package fresh-cut vegetables in the future. The facility is in keeping with increased vertical integration, Avlia says, "to either own the fields or have a strong relationship with growers. The goal is to provide tighter control to mitigate effects of adverse conditions and provide an unbroken cold chain to delivery of top-quality, just-in-time products.
"Our goal is to be a provider of the freshest fresh-cut," Avlia says.
Fresh-cut is a growing trend among consumers. About 38 percent of households are buying fresh-cut and packaged products at least once per week. The category grew 8 percent last year to $12 billion. Forecasts indicate the fresh-cut category will maintain growth of 20 percent to 30 percent through 2008.
Del Monte is putting a lot of effort behind developing new products. One example is the next generation of its Gold Pineapple.
Avlia told the growers that health concerns are helping consumption of fruits. Del Monte recently partnered with Wendy’s to introduce a fruit cup at the fast-food chain.
"Del Monte is taking steps to increase our health messaging to consumers," Avlia says. "We’re getting out in front of the customer to point out the benefits of fruits." Del Monte has gotten its message out with Disney and the Five-A-Day Program.
Through its Super Centers, Sam’s Club and Neighborhood Markets, Wal-Mart has more than 138 million customers weekly. They supply those stores through 108 distribution centers. "We like to have it grown fresh and local," says Charles Freeman, a regional produce buyer based in South Carolina.
To do business with Wal-Mart, a supplier or farmer must have an executive summary that provides the numbers for each category of produce. "The executive summary is a condition of doing business with Wal-Mart," Freeman says.
Volume is one of the main reasons a grower might want to do business with Wal-Mart, Freeman says. But there are opportunities for those who want to supply six to 10 stores with items that are specific to a certain area. "The farmers deliver to individual stores," Freeman says. Cantaloupe is as an example of an item that Wal-Mart might purchase from an individual grower. "It allows stores to be regionally correct."
Supplying a Distribution Center with produce requires a vendor agreement. Working with a certain number of stores requires a supplier agreement.