Tuesday, April 19, 2011

Sustainable Fruit Production: Eliminating "Shrink"

(This post originally appeared on Sustainablog on 4/19/11.  For links to all my posts on various sites click here)
Many consumers have the noble desire to purchase fruit and vegetables from sustainable sources.  Grocery retailers and food service companies clearly want to be able to respond to this demand.  A "whose-who" of the retail and foodservice industry have joined the Wal-Mart initiated, Sustainability Consortiumwhich has, among its goals, a desire to define and then source "sustainable produce."  What they end up with as a definition and a means of  measurement is likely to be very influential because they certainly have so much leverage in the produce market.  The problem is that the many stakeholders in this process are far from agreement about what "sustainable produce" really means.   Many believe that it has to do with the details of how or where the fruit and vegetables are grown, making it mostly the farmer's responsibility.  While I'm sure that there are some incremental gains that could be made on-farm in terms of inputs of water, fertilizers, fuel, chemicals..., I would argue that those are minor in comparison to finding a better answer to this question:
"Is the produce actually being eaten?"
If the answer is "no," then the resources that have been put into the produce have been squandered, and that is not sustainable.

Loss, Waste, Shrink

With produce, there are many potential reasons why it is never consumed.  Losses to pests in the field or to decay after harvest can occur.  The product can lose too much water or it can over-ripen.  Farmers and shipper/packers have done a very good job of reducing these various sources of loss, waste, or "shrink" (to use the industry term).  They do this by using a wide range of protocols and technologies.  The potential for further efficiency improvements "in the chain" now mostly fall to the retailers (appropriate temperatures for holding rooms and displays...).
But there are remaining sources of "shrink," specifically in thefruit industry.  Both are related to quality.  There is an old saying in the business that "produce is sold based on appearance, not based on taste."  Unfortunately, this is largely true and it happens in two ways.  One I will call "Cosmetic Shrink" and the other I will call "Disappointment Shrink."I would humbly recommend to the "Sustainability Consortium" that solving these two issues is within their power and also the first, best step they could take.

Cosmetic Shrink

Almost every fruit or vegetable industry has a "marketing order" which sets the standards for which items can be sold.  The standards are set by an industry committee and over-seen by the USDA or state agencies.  For instance, there are standards for the size, shape and color of apples that can be packed in various quality categories.  Under these rules there is a fair amount of perfectly nutrious and tasty fruit which is diverted to low value processing or animal feed markets because it is small, lacks color or has a funny shape.  This part of the harvest is excluded mostly to control total supply.  During periods of over-supply, the wholesale price of that commodity can crash.  The marketing order also sets the standard for visual quality and uniformity.
From a sustainability point of view it would be far better to find alternative market channels for "cosmetically challenged fruit" that wouldn't undermine the price for the "standard" supply.  Considering how many Americans eat far less fresh produce than is advised, it would be good to find ways to expand consumption with this fruit that does not require growing a single additional acre. American Farmland Trust estimates that it would take 13 million more acres of fruits and vegetables if every American were to actually eat the RDA!  There has to be a way to sell all this perfectly good fruit without killing the main market.
One strategy would be to sell this fruit at "farmer's markets" in urban food deserts.  This would not be an issue of "dumping" low quality produce on anyone.  In fact there are "non-destructive" testing technologies which could be used to pack only the best tasting, off-cosmetic-standard fruit for this new "sustainability category."  This kind of fruit definitely exists, but it would take a mindset shift by the packers, the retailers and the customers to be able to "reclaim" the resources that were deployed to get this product all the way to harvest.

Disappointment Shrink

Everyone has had the experience of cutting into what looks like a nice canteloupe and finding that it has the taste-appeal of cardboard, or eating a nice looking grape that is far too sour. The unfortunate reality of fruit marketing is that the price that the grower is paid is often inversely related to the quality of the fruit.  When supplies are low (e.g. the very beginning of the season or the very end or after a weather disruption), the scarcity of fruit drives up the price and encourages the picking of marginally ripe fruit at the beginning of the season, or the excessively long storage of fruit at the end of the season.  Annual profitability for the grower tends to hinge on those periods of short supply while the price he/she gets in midseason (when quality is high) may not even be enough to break even.  So, the incentives are perversely aligned for the shipping of low quality fruit, which usually ends up sitting in the consumer's refrigerator until mold growth gives the "permission" to get rid of it.  In the worst-case-scenario, that fruit ends up in a landfill generating the potent greenhouse gas, methane.
Disappointment Shrink could be greatly reduced if retailers implemented a different buying practice.  They could negotiate an entire season price that makes it possible for the grower to make money while delivering only high quality fruit that will definitely be eaten. That might mean that sometimes the retailer's prices will be higher than chains that are taking advantage of "spot market" opportunities, but I believe that customers would learn to appreciate that they were at lower risk of getting disappointing fruit from such responsible, sustainability-conscious retailers.
Again, I would challenge the Sustainability Coalition to take on these two sources of shrink and make a significant advance in the sustainability of fruit production.
Apple Image from tecfan.  Grape image from kirstea
You are invited to comment here and/or to email me at savage.sd@gmail.com.  


  1. Hi Steve,
    You have touched a sensitive issue here. Right now we are raising an early variety cherry, it is the first to be picked, and the first to the market. The decision of the owner to grow the early variety is based on the higher price. This gives us some unique problems. We bloom early... this year too early. The wind machine comes on every night to battle the frost. If you grow a later variety this is not as much of an issue. The whole crop can be lost to frost.
    But if you are first to the shed you get the best price. Last year quality was great. Price high... yield low due to frost. As we move forward we are considering the same Cherry for the same reason. Early crop/more money. Late crop... you end up leaving it on the tree because prices drop so low you cannot afford to pick. Price fixing for the season would stabilize markets and make for better production... it is hard to bring these changes about... I would prefer to raise a premium variety that comes in later, but not at 50% of early market pricing... it is a dilemma. So far the only solution we have come up with is direct marketing... but that is an expense too...

  2. John,
    You are right that this is a tricky issue. Ideally growers would get paid for quality even when supplies are strong. The variability of weather also complicates everything - this isn't like manufacturing!


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