(March 24) Dean Fahselt has been in the produce industry for 13 years, a short time by some standards. But in that time he has seen the industry from a variety of vantage points.
He spent 10 years as a sales team leader for Melissa’s/World Variety Produce, Los Angeles, where he sold a variety of specialty, ethnic, tropical and organic produce.
From there he went to Natural Selection Foods LLC, San Juan Bautista, Calif., where he served as vice president of sales and development for that company’s line of organic produce.
And last year he joined Scientific Certification Systems, Emeryville, Calif., as vice president of sales and marketing. Now, instead of selling produce, he sells third-party certification services for retailers, wholesalers, growers and shippers.
During all those years, he still found time to serve with various industry organizations, including being a member of the Produce for Better Health Foundation’s board of directors and the foundation’s executive committee. He also has served as a member of the Produce Marketing Association’s Retail Board of Directors.
Q: What is it like to step back from a leadership role in those industry groups?
A: I’m still involved in all those organizations. I still am involved as much as possible with the PMA. I’m keeping track and keeping the pulse of those organizations, so I don’t see it as a loss. It’s something that I can always participate in and be a part of. Those relationships and contacts and education that I gained from those organizations are only going to benefit me no matter what I do in the produce industry.
Q: What has the transition from selling produce to selling certification been like?
A: Even when I was selling a product it was the programs that helped merchandise and market that product that made those organizations unique, and it’s the same at SCS. We market some consumer-level programs — some marketing programs. The difference is that we work with hundreds of growers. We’ve also developed marketing programs for the grower-shipper community like our Certi-Clean Program. So although we have services, we really are also trying to package these as programs to the industry.
Q: Has there been a growth in retail demand for certification services?
A: What I see at the retail level is a greater demand for programs that are going to differentiate the retailer in its marketplace — we call it sustained differentiation. As retailers are getting larger and larger due to consolidation, it’s becoming more difficult for them to be unique in a different marketplace. Many retailers are looking for ways that they can differentiate themselves, particularly when you’re dealing with someone like Wal-Mart, where you can’t compete with them on price. We feel that that’s what the NutriClean program is all about. We have a licensing agreement with retailers and we give them an exclusive territory so no other retailer within that territory can have that program. We’re still seeing tremendous growth in organics. There’s a lot of consumer demand. With retailers, it’s easy to go from one store to another and duplicate the organic programs that they have. One of the reasons consumers buy organic foods is because they are concerned about having pesticides fertilizers and chemicals in them. The NutriClean pesticide residue-free program can accomplish the same outcome from the consumer.
Q: What’s the difference between pesticide residue-free and organic?
A: Organic is basically a growing practice where you certify that they followed the NOP (National Organic Program) guidelines in how the food was grown and transported to the retail store. For pesticide residue-free, we test each field — we don’t tell our clients that they can’t use synthetic pesticides, but what we say is that produce must degrade off the product before it reaches the consumer. We’re basically using more of a science-based approach to accomplish the same thing in terms of producing a product with no residues on it.
Q: Are there any organic or specialty areas that you see as underdeveloped?
A: I still see there is tremendous growth potential within organic foods. There’s a great deal of land that’s currently under transition. I think farmers are learning every day how to grow organically and increase productivity. I think everybody within the organic industry is struggling to produce the volume and the consistency that retailers are going to require. There are still logistics issues, too. Most retailers that carry organic foods are double slotting the item — with both a conventional product and an organic product. In the long term, it’s going to be more productive — if organics become more cost effective — for the retailer to carry just one item.
Q: How have U.S. Department of Agriculture requirements for organics changed the category?
A: I know one of the changes that has taken place with a number of retailers is that — because of the obligations to prevent co-mingling of organic and nonorganic products — some of them have gone back to organic sections. I know from my background in marketing and selling organic products, that retail organic sections weren’t always the best way to market and sell organics. The best way was to integrate them with conventional products. That is one of the drawbacks. It might not be the best for merchandising. If retailers put a whole lot of resources to doing a whole organic section, I think it can work. But many times those sections get put in the back in a 5- or 10-foot section and it often goes unnoticed. The best way is to allow the consumers to have that choice right at the point of sale.
Q: Are retail giants like Wal-Mart helping or hurting the cause for specialty and organic produce?
A: Something like between 60% and 70% of organics now is sold in conventional stores. So they are obviously helping. They are helping to lower the cost by increasing the volume. They are helping to bring the growers into that category and dedicate more land to that category. I think as a result you’re going to see prices come down on those items and hopefully more consumers are going to buy them. As more land is dedicated, farmers are going to learn how to increase productivity and you’re going to see a better product coming out as well. Much of the focus of the larger retailers is going to be on those organics that sell. If smaller retailers can target their program directly at their community, that’s potentially a way they can compete against the larger retailers. To survive the day, they are going to have to. If an independent (retailer) doesn’t do that, then they are probably not going to be around.
Q: What effect will the new USDA regulations requiring certification for all food purchased through its programs have on third-party groups like SCS?
A: It is restricting trade. It is of concern, although I do understand (why they are doing it) from an internal systems management point of view. Auditing practices and forms are going to be different from auditing company to auditing company. So it’s most likely that they are doing that to try to have some type of standardization that will be the easiest for them. However, I think that a better approach would be to invite the other auditing companies in to discuss a standardized form or explain what they are trying to accomplish. (The new regulation) not only makes it difficult for the certification companies, it also makes it difficult for the grower-shippers that are using their services. To me it sounds like the decision was made rather quickly. It should have been made available to a number of auditing companies. They should have been given an opportunity to qualify for these standards. It seems to me it was restrictive.
Q: What do you do when you are not thinking about produce?
A: My life pretty much consists of produce and family. I spend a lot of time with my kids. That’s one of the reasons we moved up here to Salinas. It’s just a great area to raise kids. A lot of open country, great schools. Occasionally I like to get out and play tennis or golf. I do some running and biking when I can, but a lot of the time is for my kids.
Q: As a former member of the PBH’s board of directors, were you saddened by the demise of Produce Man?
A: I was around when he first came out, so I would have to say yes, I miss Produce Man. Although I understand the nightmare in trying to manage that program. It just was too cost prohibitive.
