Coronavirus concerns & opportunties

Amid the ongoing pandemic, the produce industry is facing new challenges, but is still finding new ways to innovate.

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Since mid-March, the world has been operating differently due to the ongoing coronavirus pandemic. In some cases, work is done differently, with fewer workers in a greenhouse at any given time. Some businesses are even requiring masks and have other precautions in place. Others have shut down entirely due to coronavirus outbreaks at their businesses, putting workers at risk and shutting down production. For businesses looking for guidance, the Centers for Disease Control released its guidelines for agricultural workers. Those guidelines can be found here.

Still, some operations are moving forward and creating new opportunities for themselves amid the pandemic. Many businesses – including Michigan-based hydroponic operation Revolution Farms, Brooklyn, New York-based aquaponics operation Upward Farms and Minnesota-based Revol Greens — have expanded in the past few months. Investment in controlled environment agriculture continues too, with businesses like German food service start-up Infarm raising new capital. Others, like Pittsburgh-based farm Fifth Season, launched direct-to-consumer shipping and salad kits.

Events went digital too. At the first-ever digital United Fresh event, chairman Michael Muzyk made his pitch for the industry coming out stronger on the other side.

“I can’t tell you what the future looks like,” he said during the event’s opening keynote. “I can’t tell you if restaurants are going to win, I can’t tell you if big-box stores are going to win, if brick and mortar [stores] are going to win, if home delivery is going to win. I can tell you, food will win, and you’re on the winning team.” – Chris Manning

Opportunities in the COVID crisis

Indoor Ag-Con’s first online panel explored ways for CEA growers to stand out from the crowd.

As Indoor Ag-Con moves to a virtual platform this year, the organization hosted its first Indoor Ag-Conversation. There, Paul Lightfoot, CEO and founder of BrightFarms, Alex DiNovo, president and COO of DNO Produce, and Victor Verlage, senior director of Agriculture Strategy Development at Walmart were joined to discuss the future of indoor growing.

“United Fresh Produce Association Panel: Produce Trends & Business Opportunities For Indoor Growers Emerging From COVID-19 Pandemic,” moderated by Tom Stenzel, president and CEO of United Fresh Produce Association, covered the challenges and opportunities indoor agriculture is seeing emerge from the COVID-19 pandemic.

Here are five key takeaways from the panel:

1. Berries are big on the horizon.

Panelists agreed that berries will be among the next hot items in CEA since growers can provide tastier options with longer shelf lives than conventional farms.

“How variable is a strawberry’s taste when it’s conventional?” DiNovo asked. “You can have one that tastes fantastic and you can have one that tastes like dirt. You can have the same flavorful berry without Mother Nature wreaking havoc on it.”

Highly perishable items with complex supply chains are ripe for disruption, panelists said. “What we’re interested in is beyond the shelf life, we want home life for the customers,” Verlage said. “We don’t want them to waste produce because it goes bad quickly.”

2. Create value by standing out.

From a marketing standpoint, DiNovo said indoor agriculture operations shouldn’t fight a conventional battle. By creating new names for products and branding them to stand out, growers can change the game.

“Create its own value by calling it something else,” he said. “If you call it by a conventional name, you’re going to compete on a conventional price basis.”

The coronavirus has impacted everything from supply chains to shopping habits.
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3. COVID-19 has increased consumers’ desire to keep money local.

DiNovo said the economic impact of the coronavirus has led to a greater demand to keep money in the local economy, whether it’s spending inside the community or providing jobs.

“That’s what local means to me more than anything else — it’s local impact,” he said.

4. Labor and supply chain concerns could lead to opportunities.

Lightfoot said he sees an opportunity to promote safety due to a smaller supply chain, noting that the current salad industry has seen issues with safety in the recent past.

“One farm’s contamination could have a bigger impact since more products are coming into contact with each other,” he said, stating that a longer supply chain makes tracking more difficult. “Those structural challenges don’t exist in our model as they do in the incumbent supply chain model.”

Creating new names and brands for products can help your CEA operation stand out in the marketplace.

The year-round nature of indoor agriculture could also give CEA operations a leg up on labor.

Farm labor shortages, which he said have worsened due to the current administration’s policies on labor and immigration, have only been made more difficult by COVID-19. Housing and transportation have left farm employees more vulnerable to the disease.

“When this is over, borders will probably be less open, not more, so this issue will probably become worse,” he said.

“That’s what local means to me more than anything else — it’s local impact.” — Alex DiNovo, president and COO of DNO Produce

CEA operations are better equipped to control entry to facilities and year-round labor provides more stability in the workforce.

5. Retailers are looking for the right size solution for their stores.

Verlage said Walmart is looking for ways to mix big and smaller growers since different growers will bring solutions better suited to different communities.

“We are trying to figure out what is the right size project for the demand we face in different stores,” he said. “It has to be affordable, good nutritious food so that we can help everyone enjoy healthy food.” – Kate Spirgen

COVID research

At the end of March, Produce Grower sent out a survey asking readers to detail their experiences operating when the coronavirus pandemic hit. Between March 27 and April 12, 166 industry members responded to the survey. We will be following up on this research with a follow-up survey in the near future.

In addition to the answered questions, some respondents submitted comments about how their businesses have been operating amid the pandemic.

“We are seeing a dramatic increase in vegetable plant sales,” one wrote. “A lot of people are planning to put up food this growing season in case of a food shortage or being made to stay home.”

Others highlighted the challenges to produce operations amid uncertain times.

“If restaurants don’t open soon, there will be a big impact on sales,” another said.

“My biggest concerns are: 1) whether two of my smaller distributors will remain in business; and 2) how many of my restaurant customers will reopen,” another wrote.

And one respondent detailed how the current environment has delayed plans for their businesses’ plan for a bi-weekly farmers market.

“We are in a rural area of Wisconsin,” they said. “We were holding a monthly farmers market during the winter months and planned to transition to a bi-weekly farmers market beginning in May. Those plans are on hold right now. We are heavily dependent on tourist traffic to support our operations. That could significantly impact our markets and vendors if travel continues to be restricted into early summer.”

A follow-up survey will be sent out in the near future.

August 2020
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