Fresh carrots have been a mainstay at retail: They’re grown year-round, have a relatively low sticker price, are familiar and hardy for shipping.
This produce category has its peak seasons of demand however, and is subject to fluctuating according to pandemic-related changes in consumer behavior, said Zak Karlen, general manager of Bakersfield, Calif.-based Bolthouse Farms.
The fresh carrot grower, processor, shipper and marketer has two main businesses: fresh carrots and carrots in consumer packaged goods.
“We’ve been dealing with the pandemic as everybody else has for 20-plus months now, and it’s almost like trying to put your hands around smoke as you solve a problem,” Karlen said on the Tip of the Iceberg Podcast. “As soon as you fix a problem, it creates another problem.”
First, Bolthouse focused on health and safety of employees, establishing extra protocols to bolster that critical, essential aspect of the business. Measures include no longer transferring an employee from one plant to another, incentives toward taking personal COVID-19 precautions, and COVID trackers. And, communication, of course, as is so necessary when situations change so often.
“Our communication team has done a really good job on doubling down on policies and procedures to make sure that everybody understands that we’re going to ground ourselves on the basics,” he said.
Some of those issues seem to be stabilizing a bit since early January, Karlen said.
“We’ve had to really kind of expand on the way we look at operations as well, which includes some SKU rationalization to make sure that we’re supplying customers with the core (stock-keeping units),” he said. “And then some of the more labor intensive ones, putting them to the side for 30 to 45 days to make sure that we can keep customers and consumers stocked with carrots.”
Ready-to-eat baby carrot demand dipped while whole carrot demand rose after March 2020 with more people staying at home, but now that whole carrot demand has mostly leveled out back to the 2019 demand.
“But the premiums are picking up quickly, the matchsticks, the petite. And so the category in the last four weeks has been growing relative to other veg, which is exciting, right?” Karlen said. “We want the category to grow. But us being able to stay up with that changing consumer demand has also been challenging through this COVID environment.”
The company’s 2,400 employees haven’t been immune to the industry’s latest supply chain challenges either, possibly complicated even more by the omicron variant, such as labor shortages, freight delays and soaring costs.
When planting carrots in the Central Valley of California, Bolthouse works on a schedule that’s nine to 12 months out.
“And so it’s not like we have that ability to instantly react to a 20% surge in demand if there is such a surge. And so we are somewhat supply constrained because we want to make sure that we’re maximizing acres, and we don’t have excess acres that could potentially go to waste,” he said.
Carrots are experiencing the fallout of driver shortages as well, but as with all these challenges, Bolthouse is focusing on making its own business as stable as possible, getting as many good quality carrots as possible out to customers.
“We’re all kinda in this together, and it’s super important we use shared resources and bounce best-in-class ideas off each other to ensure we keep the food system going — because without that, you can have a serious problem on your hands,” he said. “In a weird way, I’m really excited about 2022, in trying to stabilize what we’re doing and focusing in on what we can control. What we can’t control, I’m not really going to lose a lot sleep over it.”
