Innovations: Raw Materials

Industry professionals who have accomplished the successful transformation from the produce growing and packing business to the value-added fresh-cut business will attest to the pitfalls in pursuing the same strategy for both. One of the basic differences lies in the business models themselves.

The traditional produce industry is driven by market fluctuations. Some are somewhat predictable, such as seasonality, and others seem to break in time like waves at the seashore: up, down, big, small, one direction or another. Growers and packers need to have a tremendous instinct for surviving, with a goal of thriving, in this business. It is somewhat like the lure of a gambler to a high stakes poker game. With the right hand under the right conditions, enough profits can be made to sustain operations in mere days that can last a company for years. Or the opposite can happen.

Wholesale brokers and retailers are drawn to the promise of big profits as well, driven by the chance to capture products in a scarce market or the opportunity to cut an unbelievable deal during times of glut. The “driver’s seat” frequently shifts from one end of the spectrum to the other, as supplies are constantly depleted from shelves and warehouses due to consumer demand and the perishable nature and availability of the product. The nature of this variability makes it difficult, sometimes impossible, to rely on advertising to alert consumers of time-limited promotions.

New Issues in Play

The fresh-cut business opens exciting new doors and the chance to sell products with a relatively stable supply and demand. The opportunity for profitability can be much greater, but new issues are now in play as the “bar has been raised” and brand identity, consistent availability, predictable price and consistent quality are all at heightened levels.

Raw materials are a major determinant in the total cost of goods, and also the main factor contributing to barriers to market entry. However, numerous interactions can and do impact the flavor characteristics, sensory acceptability and the attainable shelf life of fresh-cut produce such as variety, source, season, initial maturity, optimum processing maturity, slicing and cutting equipment, chemical or other treatments and dips, packaging environment, temperature management, shipping and handling.

Research has shown that in order to achieve optimum quality and flavor, produce must be harvested at just the right stage of ripeness. Produce destined for further processing should generally be harvested specifically for that use, and this may not necessarily be the harvest maturity required for the fresh market. In addition, temperature control is an extremely important issue, as the temperatures encountered at each link of the chain have a direct bearing on the shelf life, quality, and potential safety of fresh-cut products.

Players who fail to develop a strategy that provides for the steady availability of quality raw materials will not be successful in the fresh-cut industry. Issues that impact quality happen all the time. Weather changes, such as heat, frost, hail and hurricanes, interrupt farming operations and can render raw produce scarce and result in compromised quality.
Disease or insect infestations can have the same effect as well. In these situations, the field manager alerts the production manager that raw material supplies will be affected, and a strategy to deal with the situation must be developed. Frequently, the relaxation of raw material specifications will be debated as a temporary measure during these situations.

Production protocols were developed presuming that the raw materials conform to established specifications and defined tolerances. To the further processor or end user customer, the observation of defects leads to the reality of compromised raw materials and the perception that this could well constitute the “tip of the iceberg” of pervasive, far-reaching and ongoing plant tissue deterioration processes. The slicing, washing and packaging steps may even accentuate or accelerate the underlying problem so that quality glitches appear during transit and product is not saleable well before “use by” dates. Suboptimal shipment regimes, or “sitting on the dock”, will only make matters worse. Blackheart or tip burn in lettuce, bolting in carrots, celery or spinach, diseased broccoli or cauliflower are but a few of the myriad of examples.

Raw Material History Important

Processors of value-added produce need to become privy to the complete history of all raw materials lots that enter their plants, and this should be part of the ongoing contracting and buying process?not just a QA workup on incoming loads. Harvested materials, for example, can be easily stripped of leaves and florets in the field or the packing shed which would otherwise serve as evidence of overt signs of stress; this will mask a real problem such that product can appear to the fresh-cut processor as being within the range of acceptability. Shelf life is inevitably reduced by the rapid onset of physiological or microbial breakdown caused by issues such as these.

Ultimately, a sound business strategy that provides for a steady supply of the highest quality raw materials?adequately hedged against climatic and market fluxes?is one that will be sustainable. After all, we all love to get dealt the royal flush, but in the poker game of real life, that only happens in fairy tales. However, playing with substandard raw materials is more like a game of Russian roulette.

Note: Thomas Orton, Ph.D. is extension specialist, and Lou Cooperhouse is director of the Food Innovation Center of Cook College and the New Jersey Agricultural Experiment Station at Rutgers University. For further information, please contact Tom Orton at Orton@aesop. or Lou Cooperhouse at cooperhouse@aesop.

Be sure to check out our other specialty agriculture brands

Organic Grower