Cal Giant Continues Organic Expansion

California Giant Berry Farms, Watsonville, CA, made a concerted effort about five years ago to make sure growth in its organic berry supplies would be an ingrained part of its expansion strategy.

“We’ve been offering organic strawberries for a long time,” said Cindy Jewell, vice president of marketing, “but five years ago we set out to achieve specific goals.”

Cindy Jewell, VP Marketing, California Giant Berry Farms

That effort has been successful, and the company now offers both organic strawberries and organic blueberries on a year-round basis.  Its organic raspberry production has not yet reached that level as they are available in good supplies from October through May.  “Our organic program mirrors consumer consumption which is about 10-15 percent of total supplies” in the berry sector.

Jewell said the increase in production has gone well with the company now able to provide the needs of its customers on organic strawberries and blueberries on a year-round program.  The strawberries are produced in California during the bulk of the year with production coming from Mexico primarily during the late fall to mid-winter months.  Organic blueberries are a bit more logistically tricky to source as the harvest tends to move around about every six weeks.  Cal Giant sources organic blueberries from California, Mexico, Chile and the Pacific Northwest during a 12-month period.

Though the supply issues have been worked out, it is not completely smooth sailing ahead, especially for strawberries.  Jewel said the company goes into a “defensive posture” in the heaviest production stretches of the season, most notably from May through July when California is cranking out strawberries in huge numbers.  “During that period, the rubber does not necessarily meet the road,” she said, referring to the returns that organic strawberries bring to the grower.

There is no argument that it costs more to produce organic strawberries than conventional berries.  It’s not so much that the yields are less but the labor costs are significantly higher.  Strawberries are a labor-intensive crop in any format, but the cultural practices that must be hand done – like weeding – drive the cost of producing an acre of organic strawberries much higher than its conventional counterpart.  “It costs 25 to 30 percent more to produce organic berries and that’s the premium the growers need,” she said.

For much of the year, that extra cost is reflected in a higher f.o.b. price.  But that hasn’t been the case during the summer.  When the California strawberry industry is producing eight to nine million flats per week during that time frame, the f.o.b. price drops to its lowest level.  And the price for organic berries drops right along with it.

In 2018, both conventional and organic producers were operating in red ink during the peak shipping weeks.  Talking to OPN last week, Jewel said the industry is hoping for a better situation this summer.  She reasoned that the late date for Easter (April 21), which is then followed relatively quickly by Mother’s Day – always a strong promotional period for strawberries – could result in huge sales and an f.o.b. price that doesn’t drop through the floor.

Jewell said the organic and natural food stores that focus on organic produce sales continue to buy organic berries and will pay the needed premium throughout the year.  But she said some customers are reluctant when conventional berries drop to their season low. 

Looking at the current crop, Jewell said there will be plenty of organic strawberries and blueberries available throughout the late spring and early summer months.  She said it will be an excellent time for retailers to promote organic berries, just as it will be an excellent time to promote their conventional counterparts.