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OPN connected with Roger Pepperl, director of marketing for Stemilt, to get his perspective on opportunities and challenges for the industry.
Roger is a panelist at the upcoming Organic Produce Summits’ educational breakout session "The Organic Supply Chain - Opportunities and Challenges.”
Roger Pepperl, director of marketing for Stemilt
OPN Connect: Stemilt is a leader in organic tree fruit production in the Northwest. What are some innovations and advancements the company is investing in?
RP: "Organic apple production is approaching 30 percent of our total. We have to see where demand goes, but we plan to be 40 percent organic as we grow.
The biggest thing we’ve done is to preplan our organic production as we plant orchards. In the past, our organic decisions were made by changing markets.
Today we are planting organic orchards in locations that will be better for the tree. Places that are buffered from pest and disease pressure.
Variety choices in organic are the one of biggest things that has changed. The organic shopper doesn’t want a red delicious. They prefer the newer better varieties even more than the conventional shopper.
When we plant Honeycrisp, we plant an organic counterpart. One of our oldest varieties, the Piñata, is now 35-40 percent organic. In the future we plan to have more organic Sweet Tango and Rave than ever.
When we plant an orchard, we have a plan that includes transitioning it to organic. We start most orchards in conventional production, so they have horsepower. Once we get good tree structure, about two years later, we start transitioning them to organic. When the tree is five to six years old, it’s certified organic.
We have installed special controlled atmosphere rooms designed specifically for organic. This allows us to hold varieties longer than ever before.
Organic has made our job harder because of the numerous SKU’s on each order. We just invested in a new robotic Automated Storage and Retrieval (ASR) system. The 25 robots select products simultaneously in a cube shaped warehouse environment that holds 8 levels of pallets high.
We can load the truck in 20 minutes rather than 90 so we give the customer more products with quicker service."
Organic cherries and summer fruits are packed quickly after harvest due to the perishability of these fruits.
OPN Connect: With your history in the organic fruit business what are some new trends you are experiencing in organic?
RP: "Parents want healthy and convenient food for their kids that they can grab and go! Our kid sized apple programs like the “Lil Snapper” has done very well. The entire line of organic kid friendly items has been a real win for us.
We sell organic “Lil Snapper” in 3-pound pouch bags instead of the 2-pound format. We know that the organic consumer buys more pounds of produce than other shoppers. So, let’s sell more organic fruit to that shopper---not less!
One hundred percent of our peaches and nectarines are organic. We don’t sell it as organic summer fruit; we sell it as our only summer fruit because of its superior in quality.
We do have more pest pressure producing them organically, but we have good sized, juicy flavorful fruit. This is because the low nitrate stresses the trees and this gives them tremendous flavor.
We have retailers that buy them to fill the organic niche but others that buy them because it’s the best tasting fruit."
OPN Connect: What do you see as the industry’s most pressing risks and brightest opportunities in the year ahead?
RP: "Our biggest risk is shelf space and promotion. That’s what’s going to make the organic supply and demand curve work. Regardless of what it costs to grow it, if we can’t sell it we are doomed.
The other risk is getting it picked. The labor issue is out of control and its costing us a lot of expense.
Stemilt is doing the the H2A program and will have homes this fall.
We are doing the H2A program and we will have 1400 beds this fall. These are nice homes out in the orchard. When we build an orchard, we build a community.
Another bright opportunity is online shopping. We work with retailers to develop good stories and photos about our fruit. The consumer will read that story and buy the apple from a family that’s been farming for hundred years."
OPN Connect: As a panelist at the Organic Produce Summit you will be addressing the organic supply chain. What message do you hope to convey at this session?
RP: "Retailers should know their supply, who grew your fruit. They need to understand what they are buying and what they are getting for their money.
Organic is different - you can’t apply wax which stops the dehydration of apples. You want apples that just woke up from a controlled atmosphere room. You don’t want something that’s been sitting around, or you risk dehydration, loss of pressure and shine.
The supply chain has to think field to fork and not be so transactional."
OPN Connect: Why is the Organic Produce Summit an important venue for your company to attend?
RP: "Organic is part of our history and culture. Wes Mathieson’s grandfather Tom transitioned the first orchard in 1989
We want to reimage ourselves at this venue coming up on our 30-year anniversary as an organic leader.
The OPS is getting big and I like the opportunity to talk one on one with people about the supply chain. Everyone sells more fruit with a premediated plan.
We want to attract people to be with us in the future.
Organic is who we are, and we want to meet people who are just like us at this show. The best is yet to come!"
