Cranney Farms, Imperfect Foods, Dole and Rabobank on Rethinking Produce Supply

 

As restaurants, hospitality businesses, corporate cafeterias and school kitchens remain closed during the pandemic, the produce supply chain is facing unprecedented pressure. With the loss of vital foodservice demand, the industry is being challenged to find new ways to move produce from fields to consumers — and minimize waste.

To explore this challenge, FoodBytes! by Rabobank curated a webinar featuring diverse perspectives in the produce supply chain, including 5th generation farmer Ryan Cranney of Cranney Farms; Tracy Hardin, director of merchandising at Imperfect Foods (and FoodBytes! alum); Ilanit Kabessa, global head of venturing at Dole Packaged Foods; and Roland Fumasi, senior produce analyst at Rabobank.

Over 270 people from 22 countries tuned in to discuss how to rethink the supply chain for a more resilient future, and learn how food and agriculture businesses are finding ways to redirect produce to consumers, retailers and relief organizations. Watch the webinar recording below and read on for top takeaways for the produce supply chain.

 

 

Dealing with Excess Supply: Learnings from Cranney Farms’ potato giveaway and efforts to shift from foodservice to retail

 Ryan Cranney, CEO of 113-year old Cranney Farms in Oakley, Idaho, explained how the farm gave away potatoes to consumers when foodservice channels – normally 95 percent of their business – dried up and the farm was not logistically equipped to pack potatoes in the 5- and 10-lb bags needed by retailers – historically 5 percent of their business. 

With nowhere to sell the majority of the farm’s potatoes, Cranney chose to give away as many as possible rather than have them go to waste. Initially, Cranney posted about the crop giveaway on Facebook. The charitable effort quickly garnered national and international attention, including media coverage on CNN and Live with Kelly and Ryan. Thousands of people came to the farm to pick up potatoes, from individuals with small bags to food banks with pickup trucks and trailer loads. The incredible response has helped build the Cranney Farms brand, while also presenting challenges — including the learning that many government and food relief organizations required potatoes to be washed and bagged, as well as the strain of fielding thousands of phone calls.

The giveaway has generated significant new sales inquiries, including an export inquiry from China, as well as outreach from Facebook about creating supply chain efficiencies to get produce directly to consumers. At the same time, it has revealed supply chain challenges. ‘With the attention, we’ve been able to make a lot of new connections. People have reached out from all over the United States and the world. Selling direct to consumers, direct to grocers and direct to restaurants,’ said Cranney, ‘all have the same logistical and supply chain issues of trying to get product there in small quantities and in an efficient way.’

To increase the farms’ flexibility in the future, Cranney has ordered new bagger machinery to increase its capacity to serve retailers. With historical supply / demand models being turned on their heads, the farm has cut its potato acreage by 20 percent for 2020.  

 

Dealing with Surging Demand: learnings from Imperfect Foods’ success in redirecting foodservice product to consumers

In the wake of COVID-19, Imperfect Foods is doubling down on its mission to eliminate food waste and support farmers and food purveyors with supply that foodservice clients can no longer use. ‘We’re seeing massive waste across the country as farmers and food producers have been forced to discard excess product,’ said Tracy Hardin, director of merchandising at Imperfect Foods. ‘We’ve been able to grow our partner base and identify products that would have slipped through the cracks and redirect them to our customers.’

Imperfect’s produce supplier network has grown 27 percent — and the company is redistributing food from foodservice channels to its customers. For example, in San Francisco, Imperfect is offering consumers 3 lb. bags of pizza-cut broccoli florets to help a supplier who was stuck. When foodservice orders for gluten-free bread company Young Cobras were cut, Imperfect stepped in to purchase retail packs, allowing the company to use its flour and Imperfect to offer a new option in its direct-to-consumer boxes. Imperfect has grown the total pounds of food it has rescued by 80 percent. The company has seen 40 percent growth in its active user base in 2020 alone. Imperfect has also partnered with Kroger to waive delivery fees for seniors who qualify for its reduced cost box – a program that has grown 177 percent this year.

Hardin explained that this rapid growth has not been without its challenges. The company has added 700 new employees since March, and invested in new pack lines that allow for social distancing, emergency leave policy, disinfecting routines, and storage capacity technology.  Although Imperfect is rapidly expanding its capabilities to meet surging demand, the company is keeping many new customers on a wait-list to ensure the safety of its team and deliver a high-quality customer experience.

 

Perspective from Dole: Our obligation to rethink the supply chain and our relationship to waste

Ilanit Kabessa, global head of venturing at Dole Packaged Foods, argued that COVID-19 presents a critical opportunity to look at the connection between food, our health and the health of the planet. ‘We have an obligation to look at new models and consider them,’ Kabessa said of the supply chain. She posed three questions for the industry to consider together:

  1. How can we address issues around farm workers, labor and the affordability of food?
  2. Is it logical that food should travel 3 weeks to get to our plates?
  3. How can our supply chain adapt to reflect the values of Gen Z and millennials?

 

Kabessa highlighted alternative models that prioritize local production, such as Italy’s model where fresh produce is grown and consumed within a few mile radius. She also cited Singapore’s ‘30 by 30’ program, which set a goal to produce 30 percent of the nation’s food locally by 2030.

Kabessa also argued that COVID-19 requires us to rethink our relationship to waste. ‘The numbers are staggering, especially now,’ she said. Dole is mapping its waste from the farm to factory exit door, a journey during which 30 to 50 percent of fruit is lost. Dole is looking at how to utilize and monetize this waste to move closer to the circular economy goal. The company sees opportunities to use agri-waste, including fibers for packaging, and upcycled fruit nutrients for cosmetics, skincare and other products. 

 

Rabobank Perspective: Envisioning a more resilient produce supply chain after COVID-19

Roland Fumasi, senior produce analyst at Rabobank, argued that COVID-19 has heightened our awareness of challenges and opportunities in the produce supply chain that are not new. In helping the industry ‘think forward’ about what produce supply chains could look like post-pandemic, he highlighted two principles that may be partially at odds:

  1. The need for shorter produce supply chains
  2. The need for more flexibility and diversity in produce supply chains

 

Shorter produce supply chains could be a way to reduce bottlenecks and make it easier logistically to shift supply from foodservice to retail. Shorter supply chains might also better reflect consumer preferences for local products, while offering longer shelf-life and potentially lower environmental impact due to shorter transits.

While shorter supply chains could reduce logistical challenges, Fumasi also highlighted the need for greater flexibility and diversity in the downstream customer mix. ‘These are two partially competing ideas. Our job as an industry is to find that middle ground,’ said Fumasi. Compared to hyperlocal chains, regional supply chains with more diversification on the supply side and on the customer side may offer more resilience in the face of disruption.

Post-COVID, value chain participants must also accept new realities around the shift to e-commerce. People are going to buy more food online even after the pandemic is over — and consumers expect more information in the online channel. Fumasi highlighted the need for digital assets upstream at the farm level to tell the story of food for consumers. ‘In this new environment, it’s time for the value chain, including farmers, to begin to get the digital assets in order so that your products can be promoted,’ said Fumasi.

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