Growers Must Learn to Think Like Marketers
This article by Tracy Rosselle appeared in "The Packer," May 17, 1999.

An old journalism professor of mine liked to ask a simple question of his new students: "What's the purpose of a newspaper?" The naive responses flowed freely. "To report the news." "To be the watchdog of government." "To chronicle the events of a community." The professor took much pride in setting straight a classroom full of idealists. "The purpose of a newspaper," he'd say, "is to make money."

Invariably, this revelation came as quite a shock. His students, after all, were not working toward their degrees in business administration. It was a telling commentary that the bottom-line concept of profit went so unexamined by generally literate, educated people.

I think profit remains an under-appreciated concept by more than a few folks on the supply side of the fresh-produce industry. If pressed on the subject, of course, we all would acknowledge the basic fact that any company in any industry must record more revenues than expenses in order to stay in business. But the day-to-day language of many growers and shippers implies a parochial and slightly skewed understanding of how and why profits are generated throughout the fresh-produce industry. A couple of brief stories will illustrate this.

A shipper once took issue with something I reported that had the potential to hurt his sales. I reported that health officials in Florida were publicly blaming a fresh-produce item for some food-borne illnesses in that state. The shipper was one of the few suppliers of this particular niche item. He called to tell me how unhappy he was, and furthermore, he couldn't understand why I'd report anything 'negative' about the fresh-produce industry. I should be 'pro' industry.

I told him something he should have understood: The industry, at its most basic level, is composed of both buyers and sellers – and they don't have the same interests. One wants to sell high, the other wants to buy low (and then turn around and sell high). If health officials – rightly or wrongly – are saying bad things about fresh produce, then that's important news. Wholesalers in Houston know this all too well, since many of them were stuck with thousands of dollars worth of strawberries when local officials erroneously advised Houstonians not to eat the fruit during the summer of 1996. Shippers in California were hurt even more during the scare.

Just as the aforementioned disgruntled shipper (who was worried about his own sales) didn't understand that his buyers might actually have a similar profit motive, the vegetable grower who plants acreage purely on speculation (and then complains about poor f.o.b. prices) doesn't fully appreciate how profits are generated beyond his 100-acre tract of land.

An industry veteran, speaking from the shipper's perspective, once told me this: "Poor prices have always been caused by one and only on thing – over-production."

Too simple an explanation? Maybe. But that statement's essential truth becomes evident when growers wax nostalgic about the way things used to be. Once upon a time, it was sufficient to grow a good crop, to always strive for better yields. The sales and marketing took care of itself. The grower didn't have to worry about it. He got his boots dirty, worked with his hands, lived the quintessential American life down on the farm.

There are plenty of growers who wish it were still so. Some of them continue to resist the marketplace, refusing to listen to the messages they must eventually – inevitably – take to heart. They don't want to form alliances, they don't want to think of themselves as marketers. They want to keep the dirt under their nails, and keep doing things the way they've always done them, which is precisely the way their fathers did before them.

Meanwhile, the people selling their produce hope for another El Nino; 1998 was a heck of a year for trying to grow crops in many parts of the United States, but it turns out the year was generally pretty good for the bottom-line profits returned to growers. The wonders of supply and demand.