The San Francisco economy remains strong and even a potential correction to the high-flying fortunes of tech companies shouldn’t ding strong demand for organic produce.
“The market is very stable out here and organics continue to become more integrated into everybody’s retail set,” said Earl Herrick, president of Earl’s Organic Produce, San Francisco. “I think pricing is less of a focus.”
While an economic correction may be inevitable, Herrick said the food industry is pretty insulated from that type of downturn.
With larger retailers carrying organic for a couple of years now, competition in the form and of lower prices is more of a challenge for mom and pop organic retailers, he said.
Even so, he said smaller retailers can overcome that challenge by providing great customer service and a high attention to detail.
Favorable weather and the lack of rain has provided strong local volume of organic produce, Herrick said.
The local harvest of pears, melons, tomatoes, apples and other produce is plentiful.
A good crop of organic navels and satsuma easy-peeling citrus is expected to increase seasonally by November.
Retailers love featuring produce that is both local and organic, he said.
“I think a retailer uses that to advantage of really playing that trump card of the local organic deal. It’s a big win,” he said, noting Northern California’s easy access to growing areas in Salinas, the Sacramento Valley and the San Joaquin Valley.
Labor is a point of stress for suppliers, he said.
“We have had some growers say that they are definitely challenged and they left some fruit out in the fields,” he said.
Online shopping and home delivery of produce have been big trends nationwide, and even more so in the tech-heavy Bay Area. But Herrick said the big tech ideas don’t always have all the answers and show the ugly underbelly of produce ignorance.
Some companies throw “tech magic” and money at online grocery shopping but may overlook the necessities of having cooling facilities or adequate storage to take care of perishable produce, he said.
“There’s been a bit of attrition in some of the home delivery (solutions), whether it’s meal kits or online marketing,” he said.
While building sales from a bigger place than most areas of the country, Earl’s Organic continues to average double digit growth in organic sales over the past few years, with 2017 sales running a little hotter than 2018 so far.
“Organic continues to grow in the core group of people that are pretty darn committed,” he said.
Earl’s Organic Produce recently began providing seven-days-a-week delivery, adding Sunday as an option.
“We have had people that have wanted to get that seventh day delivery, and it has become pretty popular,” he said, noting that it gives retail customers with limited storage better options.
There is growing interest by some schools to buy organic produce, he said.
“We’ve a couple (of school districts) come to us, and we worked with them,” he said. “What’s nice about it now is there they understand the price point is never going to get to where whatever the federal (school lunch) allotment is, so I don’t even have that conversation anymore. So now we’re getting people (where) there already is a buy-in.”
Earl’s Organic can offer school customers cosmetically challenged organic produce at a lower price and that has appeal to the schools, he said.
He said a Bay area nonprofit group called Conscious Kitchen partners with schools to promote fresh, local, organic, seasonal, non-GMO meals.
Attend The Packer’s Jan. 31 to Feb. 2 Global Organic Expo in Hollywood, Fla.