Fresh Perspectives is a new series from Canadian Grocer, in partnership with the Canadian Produce Marketing Association (CPMA), where we check in with produce leaders from across the country to find out how consumer behaviours are changing, what are the biggest challenges for produce and what is the outlook for this critical department? In our first installment we talk to Oleen Smethurst, Costco Canada’s assistant vice president, general merchandise.
Produce is never an easy department to manage, but what are the biggest challenges facing it right now?
There are two major challenges. First, the supply chain impacted by COVID. If I think of citrus out of South Africa, right now we’re having lots of issues. There are vessels that are skipping ports, there are ports that cannot handle the volume because of COVID so things are getting massively delayed. So supply chain is a huge issue, as is labour. I know CPMA has been really involved with the government about the foreign worker situation, but we still don’t have enough workers in the country. So labour and supply chain are the two big issues right now.
As a retailer how do you address the supply chain issue?
It’s hard because we don’t buy off the [food] terminals. We contract everything we buy. We can’t just switch and go and buy from the terminal because of our food safety requirements. But our vendors have been fantastic and honestly have done everything and anything in their power to make sure we have product. And likewise if some of the vendors have potatoes, for example, that would normally go to foodservice we’ve tried to help and take what we can as long as the quality and flavour are there. We’ve done some things we wouldn’t normally do just to help out.
Local is a trend that seems to be gaining strength through the crisis–will local produce play a more important role in your offer going forward?
It’s always been important. We’ve always tried to do as much local as we can. I think we’ve gotten a lot better at it over the years, but the challenge, always, is to have enough growers that can cover the volume we need. And that can be tricky.
What categories are thriving right now?
Citrus is still strong, grapes, stone fruit, mushrooms, potatoes, avocado and mango–those are the ones that are really shining right now I would say. And, of course, melons.
What’s the most innovative product you’ve seen recently?
That’s a really interesting question. I think we’re a little bit slow on the innovation right now to be honest, but two things come to mind: one is baby bananas, the difference here being that we’re having them ripened. They come in green and then we trigger them in a ripening room, so that’s exciting because you see baby bananas at retail but no one is actually triggering them so they just sit there [on the shelf] looking green and sad. The ripened product is absolutely fantastic and it’s carving out its own niche beside regular bananas. They’re doing well for us right now and will probably be even stronger when kids are back in school. They’re great for kids because they’re small, they’re sweeter than a normal banana and they eat beautifully.
Another innovation, from a packaging perspective, is top-seal film–so the film used to seal punnets. We can now do mono polymer, which allows us to declare a No. 1 for recycling on the film and that’s a big innovation for the industry. Film is not great, but at least the whole punnet now, including the film, can go into the recycling bin, which is easier for the consumer.
What are the key elements of a good produce merchandising strategy?
For us, the No. 1 merchandising strategy is to make sure the top quality [produce] is out for sale. So, you need to be looking at the products and making sure if there’s something on the floor that you wouldn’t want to buy yourself, then take it off the sales floor. People shouldn’t have to look through things to find what they want to buy. It should all be top quality for sale. And the second thing is just keeping the categories together to make it easier to shop.
Shrink is a big problem in any fresh department. How do you minimize it?
We have specs for every item and they’re quite strict in terms of what we expect and the vendors sign off on these so they know what the deal is going in. It comes down to quality. If you’ve got the right quality, the right packaging and the right product, then the sales normally offset the shrink.
What is the outlook for produce?
I think it’s super positive. I think everyone knows produce is good for you and I think people are going to be even more enticed by produce now because they’re going to be much more conscious about their health going forward, at least for the near future. And I think we’ve got an awesome opportunity just to get people healthier.