“ProducePay, the marketplace transforming the global produce industry into a more connected and sustainable supply chain, and Four Star Fruit, one of the largest growers and shippers of table grapes, today launched the fresh produce industry’s first-of-its-kind direct-to-retail supply chain program. Leveraging the ProducePay platform and Four Star Fruit’s extensive expertise in table grapes, this transformative initiative helps U.S. national retailers solve two of its greatest challenges – how to meet year-round demand for high quality fresh produce while also keeping prices stable for consumers.
ProducePay believes the success of this industry-first table grapes program with Four Star Fruit will be the first of many commodities to adopt this direct-to-retail procurement model.
By directly connecting table grape growers and retailers, and making investments in sustainable growing practices, traceability and product quality, this transformational model has positive impacts throughout the fresh produce supply chain. In addition to creating quality, supply and pricing assurance for retailers, this novel approach offers growers greater long-term financial sustainability, and by eliminating much of the unnecessary intermediaries in today’s current fresh produce supply chain, helps to significantly reduce economic and food waste.
U.S. consumers are increasingly looking to have access to their favorite high quality and sustainable fresh produce 365 days a year. Yet retailers face challenges meeting this demand due to extreme pricing volatility, supply chain fragmentation, speculation, and increasing supply chain disruptions from climate change, pandemics and political-economic crises. This instability results in high transaction costs for retailers who are managing multiple suppliers in an ever-changing environment.
Starting with table grapes and the Four Star Fruit partnership, ProducePay is improving on the traditional distribution model where produce has multiple touchpoints from the moment it leaves a farm to landing on store shelves. Consider that a single shipment of produce will typically travel 1,600 miles from farm to plate. It will be handled by four to eight intermediaries, marked up three to six times because of this changing of hands, and will be rebranded at least two times making it difficult to trace where the produce originated and how it was grown. All of this contributes to an opaque, highly fragmented and inefficient industry.
These supply chain inefficiencies result in significant economic and food waste. ProducePay estimates more than 60 percent of the fresh produce supply chain value is lost through supply chain fragmentation and speculation. By going directly from grower to retailer, this new model eliminates much of the additional cold storage and transportation required to move product between the different intermediaries. This reduces much of the food waste that occurs along these steps and avoids carbon emissions associated with the transportation, energy use and fluorinated gasses used in cold storage.
“Meeting retailer demand for year-round high quality table grapes consistently in an increasingly unpredictable world requires reimagining how we grow and source,” said Jack Campbell, Chief Executive Office for Four Star Fruit. “Starting with grapes, our partnership with ProducePay ushers in a new era that will better serve retailers by creating a more stable and sustainable supply chain. We look forward to expanding this innovative model and partnership to other fresh produce commodities.”
How it Works
With operations today in California and parts of Mexico, Four Star Fruit is able to meet demand during peak grape production in late spring, summer and early fall. Through this partnership, Four Star Fruit is leveraging ProducePay’s network of trusted Mexican and South American growers, thereby expanding its production capacity into the late fall and winter.
ProducePay will also provide quality enforcement, order tracking and trade mediation to ensure prompt delivery from its network of growers, as well as give retailers price stability through multi-year fixed pricing contracts. The program also uses ProducePay’s industry-leading Quick-Pay solution to pay participating growers immediately following quality acceptance of their shipment. With known pricing, committed long-term contracts and cash-in-hand, growers have the capital needed to plant more, and invest in operational improvements and sustainable best practices to ensure future reliability of high quality grapes in future harvests.
“With today’s announcement, we’re improving on the antiquated way in which the fresh produce supply chain has been structured for decades,” said Patrick McCullough, ProducePay CEO. “By directly connecting retailers with growers, this transformational initiative is creating the stability required throughout the supply chain to reduce economic and food waste, while improving overall quality experience for consumers. Four Star Fruit is a leader in fresh produce, and we are excited to expand this program to other regions and commodities for even greater impact.”
ProducePay’s innovative approach to supporting fresh produce buyers and growers has helped propel the company into a recognized leader in the agtech space. Fast Company recently named ProducePay one of the most innovative companies in the world after the company grew overall transactions on its marketplace by 279%, surpassing $4 billion in total produce transactions.
Co-Investing in Farming Communities
As part of this partnership, the companies will co-invest in Latin American growing communities to support the adoption of sustainable farming practices and innovative grape breeds, as well as develop educational programs in underserved rural areas across the region.
Investments impacts include:
Both companies are recognized leaders in sustainability. Four Star Fruit has a rich history of adopting innovative sustainability practices and investing in the farming communities where they grow. In 2022, ProducePay launched a first-of-its-kind Carbon Offset Program in partnership with ALLCOT specifically for produce growers, who until now have not had the tools to participate in the rapidly growing voluntary carbon market.”
*This article is excerpted from perishablenews.com website, published 14th July 2023