Potato expectations critical in buy-sell relationship

January 15, 2018 10:48 AM
 
ORLANDO, Fla. — Communicating quality expectations clearly is the best way to avoid conflicts in buyer-seller relationships, according to panelists at the 2018 Potato Expo.

ORLANDO, Fla. — Communicating quality expectations clearly is the best way to avoid conflicts in buyer-seller relationships, according to panelists at the 2018 Potato Expo.

In a fresh market track workshop called “Identifying the Source of Quality Issues in the Fresh Potato Supply Chain,”  retailers and shippers on Jan. 11 talked about how they sort out quality expectations and if and how they use U.S. Department of Agriculture inspections to resolve disputes.

The session was moderated by Mac Johnson, president and CEO of Category Partners.

Johnson said the common perception is that consumers are increasingly quality conscious. He asked the panel if that perception translated to retailers and growers.

While price is important to customers and drives traffic to stores, Jeff Heins, regional quality control manager for Walmart in Florida, said consumers also expect high quality.

“They just don’t have time to mess with product that is inferior,” Heins said.

Scott Bennett, produce/floral sales manager for Jewel-Osco, said strong quality can demand higher prices.

Even the color of red potatoes can be pivotal in the Chicago market, he said, with consumers attracted to bright red potatoes compared to dingy red potatoes.

“Our customers expect the best,” he said.

Over time, retail expectations have come to vary for different retailers and wholesalers, depending on their market, said Steve Elfering, vice president of operations at Potandon Produce.

“In one market it might be the color of red potatoes and in another market it might be sizing,” he said. “It is getting to know each of your customers and having that relationship and knowing what their expectations are,” Elfering said. “You can’t ship everything the same to everybody; the overall bar has been raised but it is higher in different areas and different markets,”

Tony Trujillo, quality control manager for Farm Fresh Direct, said the communication standard for quality reference is USDA grade standards, although expectations deviate by retailers, regions and distribution centers.

Walmart’s Heins said the chain’s quality standards are built from a U.S. No. 1 basis with exceptions to the standard written into specifications as needed. As part of the quality control team, he said his team doesn’t “set the speed limit but just enforces it.”

Johnson asked how suppliers manage different quality expectations.

Elfering said Potandon keeps profiles on each customer and can systematically adjust packing based on their needs.

Trujillo said Farm Fresh understands the personality and needs of each receiver they ship and can adjust if needed.

 

Handling rejections

Johnson asked how panelists deal with rejections, which can be especially tough to deal with when trucks are tight.

Heins said Walmart has level of service goals that aims to get every truck in and out within four hours.

“If there is a rejection on that truck, our goal is to try to get that communicated to the supplier within an hour after that,” he said.

Johnson asked how retailers deal with quality expectations such as color that aren’t in the specifications.

“If (the issue) it is not in the standard, then we are not going to reject it,” Heins said. “It needs to be clearly stated in the standard what our expectations are - we are not in the business of sending product away,” he said. “Typically there is not a lot of gray area.”

Bennett said Jewel-Osco has a partnership with the supplier so they understand what the expectations are.

Trujillo said when a rejection notice is received, the packing shed manager is notified and the customer complaint is evaluated and options are considered.

Likewise, Elfering said that Potandon evaluates the complaint, with the packing shed manager and quality control staff involved to determine if it was an isolated incident or part of a broader problem.

Johnson asked about USDA inspections requested by suppliers after a rejection by a receiver.

Elfering said calling for an inspection can depend on the relationship with buyers and the understanding of their quality needs.

Heins said Walmart welcomes USDA inspections.

“It helps me do a couple things from a leadership standpoint — it helps me ensure that our teams are on the same page and showing consistency,” he said.

Heins said an inspection can also give the shipper peace of mind about how a load was handled.

Bennett said at Jewel-Osco, building partnerships with suppliers is key. He said the chain will send pictures of product to suppliers to illustrate quality problems and suppliers trust the chain if a load has been rejected.

Trujillo said Farm Fresh Direct sometimes calls for an inspection for its own information and to get a larger sample size of the reported problem.

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