Gills Onions looks to retail to expand business

September 5, 2007

Although organic onions make up only a small part of Gills Onions’ business, the company is looking to expand its retail offerings with organic packages.

The company has been certified organic for a number of years, supplying diced onions or purees to industrial manufacturers of soups and salsas. But Gills is banking on organics at retail to grow business in the coming years.

“I think organic buyers are very passionate about what they buy,” said Nelia Alamo, director of sales and marketing for Gills Onions. “I think it’s the biggest growth area for us.”

The first organic product released was a 6/10-ounce container of diced yellow onions sold under the Gills Onions brand name. The company sells diced and sliced conventionally-grown onions at retail, all under the same brand name, but after the sales of the organic product has taken off, more will likely follow.

“The retail response has been very good,” Alamo said. “We’ll definitely get into those other cuts.”

The biggest challenge with fresh-cut onions, both conventional and organic, is marketing them on supermarket shelves. The cut onions have to be refrigerated, so they’re not displayed near the whole onions, so consumers don’t have the opportunity for a side-by-side comparison. Alamo said the company was looking at ways to move the products in the stores, but it would probably require purchasing coolers, an expensive proposition considering the fresh-cut onions are distributed nationwide. So Gills Onions is finding other ways to reach consumers, and Alamo said when customers do discover cut onions, they’ll continue to buy them.

“When they try them once, I think they’ll be hooked,” she said.

Although organic foodservice packs are available, there hasn’t been much demand for organic onions from foodservice provider, apart from the occasional university.

“At the foodservice level, I don’t think organic is going to take off,” Alamo said.

Gills Onions is a grower as well as a processor. Nearly all of the conventional onions are grown and harvested on land that the company owns, but so far none of the land has gone organic. The yellow onions used in the organic retail product are sourced from organic growers, so the price will probably fluctuate as organic onions become more scarce during the winter. Alamo said there are contracts in place for some of the supply, but the rest will have to be determined as supply dictates.

Organics make up only a small percentage of the company’s business – about 5 percent, Alamo said. As the organic segment grows, Gills Onions would likely convert some of its land to organic for a consistent supply of organic onions, and possibly add more processing lines for organic products. Right now, organic onions are run during the first shift of the day, after the sanitizing crew has cleaned from the previous day’s processing. That limits the capacity that can be processed, but won’t be a problem until the market expands.

Expanding into organics is more than a market niche for Gills Onions. The company has been working on a variety of ways to reduce its impact on the environment and become more sustainable.

“We’re looking at different ways that we can be an environmentally friendly company,” Alamo said. “Everyone has a different idea of what sustainable is.”

To Gills Onions, sustainability covers everything from farming to packaging. The onion crops are on regular rotations to lessen the nutrient loss in the soil, and all of the company’s packages are now made from recyclable materials and PLA.

Gills Onions also is looking at ways to use the waste byproducts generated during the fresh-cut processing. The onion skin peels now are put into the field, where they’re tilled in to restore some nutrients to the land, but the company is investigating a way to compress the skins and use them as energy. When the program is implemented in about a year, the processing facility will be able to generate its own power with the waste products.

Organic produce buyers are loyal and passionate about what they buy, and Gills Onions is looking to the segment to grow the company. But more than offering the organic equivalent of their other lines, the grower and processor is looking at how everything operates to make it an environmentally conscious company, and that’s something that will make a difference to customers living an organic lifestyle.


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