Classic Salads makes retail inroads in organics

10/31/2011 02:34:00 PM
Mike Hornick

WATSONVILLE, Calif. — Based mostly in foodservice sales over the past decade, Classic Salads has been making inroads in retail this year — and targeting organic to do it.

The Watsonville, Calif.-based grower-shipper and processor unveiled Half and Half, a spring mix and baby spinach blend, at the Produce Marketing Association Fresh Summit in Atlanta.

It’s the seventh product in an organic baby leaf line begun in 2010. All come in 5-ounce clamshells; two, Baby Spinach and Spring Mix, are also in 1-pound clamshells.

At PMA Fresh Summit, Classic Salads also showed three new organic romaine blends in 7-ounce clamshells — Hearts of Romaine, Italian Salad and Romaine Salad.

“For the past year there’s been a big push into retail,” said John Burge, vice president of sales and marketing.

That’s not a coincidence; he was hired with that mandate in May 2010. Burge had previously started retail programs at Taylor Farms and Earthbound Farm. Earthbound grew from a $20 million company to $350 million during his 1996 to 2006 tenure, a success he contributed to.

Classic Salads sales have grown 20% in the last year, including foodservice and conventional salads or blends. About 75% of its business is foodservice.

Conventional plays a modest part. The company offers two conventional products, spring mix and baby spinach.

“The reason for doing only the two in conventional versus seven in organic is that the consumer of these gourmet or upscale salads tends to equate spring mix and baby leaf with being organic, for some reason,” Burge said. “But there is a price advantage if you have those items in a conventional format. Getting those flavors in conventional and a bag versus a clamshell becomes significantly cheaper, almost a dollar per unit.”

Nevertheless, organic is the focus.

“You tend to specialize in one or the other, organic or conventional,” Burge said. “When you’re just getting started, it’s hard to be as cheap on conventional and go up against Dole or Fresh Express, who do millions of pounds. It’s better to find a niche than make conventional iceberg salads in a bag.”

You still won’t find names like Kroger, Wal-Mart, Safeway or Publix on the client list at Classic Salads. Most of its retail business goes through distributors and smaller chains. But the company has ambitions for more.

“Unlike most produce, packaged salads tend to be sold on fixed-price contracts instead of daily spot auctions,” Burge said. “At the top chains, a lot of times the contracts are two or three years, so as each of those contracts expires I would definitely give them a bid for that business.”

One target is private label, or store brands. To the extent those suggest premium or upscale product, they fit well with the company’s focus on organic and sustainable farming, Burge said.

Foodservice leafy greens ship in 3- to 4-pound bags.

Classic Salads was established in 2000 by owner Lance Batistich. It’s part of the Classic Farms Group of Companies, which grows various produce commodities.



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