Organic produce sales slow in Big Apple - The Packer

Organic produce sales slow in Big Apple

02/28/2011 03:17:44 PM
Doug Ohlemeier

While large in some parts of the New York metropolitan area, organic produce hasn’t made a big splash in most grocery stores, produce distributors say.

The product isn’t a big mover on the Hunts Point Terminal Market, said Matthew D’Arrigo, market co-chairman and vice president of D’Arrigo Bros. Co. of New York Inc.

“Organics are a very small portion of our business,” D’Arrigo said. “It’s small volume and there are only a couple of organic houses.”

For organics to flourish, D’Arrigo said the region needs to have larger stores with more linear shelf space footage to carry separate organic lines.

Most of the terminal market’s retail customers have limited space for organic produce and choose the dominant pack, which is almost invariably conventional, D’Arrigo said.

Spring mix, however, remains an exception as organic remains the dominant pack in that category, he said.

Organic purchasing also remains a little sketchy, D’Arrigo said. If retailers run out of product, they don’t mind as much as with conventional product, he said. Therefore, the market doesn’t see many short orders coming from supermarkets for organics, he said.

Carlos Garcia, general manager of Krisp-Pak Sales Corp., New York, said there’s not much interest in the segment.

“There’s not much organics on the market,” he said. “A couple of wholesalers have tried, but they just decided that it either wasn’t worth it or they couldn’t manage it in the right way. There’s just not enough demand for it. You get a few crazy people who want ‘organic this and organic that,’ but they will still go out to eat, so that’s good.”

Demand for organics may be stronger in the suburban areas.

Organic sales are doing well for Maurice A. Auerbach Inc., South Hackensack, N.J.

“It is continually increasing,” said Paul Auerbach, president. “It’s not exploding and it’s not doubling. But it’s at a consistent level of growth.”

Though it has some health food and natural foods accounts, Auerbach — which focuses on garlic but also distributes other allied items such as shallots, snow peas, sugar snap peas, Belgian endive, radicchio, ginger roots, potatoes and asparagus — distributes organics primarily to conventional retail store distribution centers.

Organics remain a major growth item for RLB Food Distributors LP, West Caldwell, N.J., said Joe Granata, director of produce.

“With the economy being down a couple of years ago, you would have thought that organics would take a hit, but they never did,” he said. “Organics continues to be a strong category for us. It continues to run 10% to 12% of our business on a consistent basis. A lot of the new business we’ve gotten has been generated by our organic availability as well as fresh-cut.”

Specialty sales also have persevered, distributors report.

Garcia called specialty sales strong.

“They are selling fairly well,” he said. “Everything sells better when product is tighter, but once you get regular customers on them, it’s a lot easier to sell. Sometimes, it takes a little while to introduce it to them, but if you develop 10, 20, 30 people to buy them, that’s all it needs. It only takes a limited amount.”

Garcia said Krisp-Pak sells many items considered specialties such as French beans and green and white asparagus.

One item that doesn’t do that well is purple asparagus.

He said he’s tried to sell it before but it’s a difficult sell. Garcia said no one likes that color of asparagus.

“It’s too hard to sell, and I thought I could sell everything,” Garcia said.

Specialty produce remains a vibrant category, said Joel Panagakos, executive vice president of J. Kings Foodservice Professionals Inc., Holtsville, N.Y.

“I will say that some of the price challenges that it offers has created the need for some of the guys that are always looking for something new or different to utilize some of the mainstream items which were once considered specialties,” he said. “Because they have become more affordable, we don’t consider radicchio or endive to be specialty items anymore.”

Despite the economy, Granata said specialties have sold well.

He said many specialty items receive attention when cable television channels such as The Food Network feature them in recipes.

“Specialties have taken a nice little leap,” Granata said. “You get people willing to spend a few extra dollars on those items.”

Diners also see such items featured in restaurant menus and want to try them in their home meals, Granata said.

He said New York has a strong appetite for specialties.

RLB offers a full line of specialty items, including blood oranges, pink navels, heirloom navels and sweet limes.



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