His company, De La Cruz Consulting & Training, Salinas, Calif., has worked with grower-shippers, retailers, wholesalers and foodservice operators.
Speaking at the Idaho-Oregon Fruit and Vegetable Association’s annual conference June 7, he focused on how the onion, cherry and apple company representatives there should reposition themselves in the marketplace to differentiate their products.
A key to that process is shoring up support for what De La Cruz calls “flagship” products — a company’s core items — while seeking niche varieties/packs.
Other considerations include seeking out new domestic and export markets, paying attention to commodities with expanding shelf space at retail (robbing space from other products), and researching the potential for value-added products.
Grower-shippers need to do some soul searching to evaluate their identity in the market, or, as De La Cruz explains it: Explore the value proposition by market segment. What can a shipper offer to a retailer versus a foodservice operator? Only after this evaluation should shippers target specific customers.
That’s a different approach to doing business, but it wasn’t the most novel suggestion De La Cruz presented.
He spoke about a project he worked on for a European multi-national seed company. An executive of the company told him a gram of its hybrid tomato seed was worth more than a gram of gold.
“How could that be?” De La Cruz asked.
The answer: protected agriculture, everything from sophisticated glass structures to shadehouses and even plastic hoop tunnels.
Seems far-fetched, but De La Cruz laid out a convincing argument that one day some growers will find buyers for onions, cherries and apples that are grown in a protected environment.
On a worldwide scale, about 8% of vegetables are grown using protected agriculture methods, he said, but the returns are 20% of overall profits for those companies.
The average gross margin for retailers on protected culture items is 80%, and production of greenhouse vegetables is increasing by about 10% a year, he said.
“Where do you think seed companies are putting their investment dollars?” De La Cruz said.