There are few people in the produce industry who leave an impression like Soren Bjorn, EVP of Driscoll’s. Soren possesses sharp intelligence paired with a fierce focus. If you’ve attended one of his trade show appearances, or caught him in conversation, you know he has the ability to engage people on a deeper level of thinking.
So, if anyone can articulate why the produce industry is struggling to keep up with the overwhelming organic demand sweeping consumers into a frenzy, it would be Soren. And, since this berry buff is a consummate wordsmith, it’s best to let his answers stand alone.
To start, what is organic demand like?
Today, organic makes up 15-20 percent of Driscoll’s business, but that’s not a true reflection of demand. If we could have it our way, we would have 30 percent of our business in organic. We are only fulfilling a little more than half of the demand. So, why don’t we have more? This is a segment of our business, more than any other, that is constrained by supply. That is the biggest challenge ahead of our industry—finding supply solutions.
What are some supply issues in organic?
If we were to approach organic in the traditional way, we would need to get a lot more organic land to grow on. That’s the idea, right? You want to put the existing land on a five-year rotation, with different crops in between. But there isn’t enough land to go on long rotations due to the lower yields of organic farming. The entire industry has the same challenge, we can’t create any more land. This is a fundamental issue.
If we convert all land to organic, then there wouldn’t be enough for conventional. We need to find a balance. In 10 to 15 years, we could have one-third of the land organic, and two-thirds conventional. But, we have a long way to go, it’s a slow and expensive process to get through this conversion and certification.
We have been trying to figure out how to overcome that, and ask, “How can we help our growers?” Often, the grower is not the landowner. The person eating the risk and doing the work is the grower, while the person who benefits the most is the landowner. The grower faces the risk that there won’t be a financially viable organic business after starting the three-year transition. That’s not easy to overcome.
That’s why you see the conversion rate staying moderate. It’s not going as fast as we would like to see, or as fast as the market demands. For the foreseeable future, you’re going to see a significant demand exceed supply. That’s the core issue right now.
So, what are the best organic supply solutions?
There are three components: geography, genetics, and technology.
How do you leverage geography to offer organic?
The primary way we create any supply is to find a geography to bring it to life. As we’ve made all four berries—strawberries, raspberries, blueberries, and blackberries—available year-round, the first thing we look for in a geography is the ability to produce during a certain time of year.
What surprised us is that we actually have areas now where most of the supply is organic. Take a look at the Baja region of Mexico; more than 90 percent of our strawberry supply will be organic in the upcoming season. We knew it would be a good geography for a certain time of year, but we didn’t know that it would be so uniquely excellent for organic with the sandy soil which carries few diseases and limited pests, along with its proximity to the ocean. The geography really lent itself well to organic farming.
The challenge of geography in organic is that there are certain tools we are accustomed to that we no longer have—traditional geographies become extremely challenging to grow in. For example, we would be in Florida in the middle of winter for conventional strawberries, but due to the humidity and the organic standards prohibiting fungicides, it makes it almost impossible to grow organic there.
With fewer options on the inputs for organic farming, it forces us to concentrate growth in certain regions. Consequently, we don’t have the same diversity in organic production as we do in conventional, which makes it more risky.
That is part of the premium cost to consumers; not only are the inputs higher with lower yields, but we are taking more risk as growers. If all of our organic supply comes from Mexico and something bad happens during the season, our crop might be completely knocked out. In conventional, we have diversified supply in Mexico and Florida, and it’s very unlikely that something would happen to both crops. The risk element of organic business just can’t be ignored.
However, these issues have been on our radar for a long time, and recently there has been a huge movement in berries to diversify growing locations. For us, 25 years ago, it started with raspberries. In the winter, we would grow in Chile and fly the berries to the U.S. What we discovered is that you can go to Central Mexico at a certain latitude and altitude, and it is a similar climate to California. What happened initially was that the berries had incredibly tough skin, like leather. You almost couldn’t bite through it. This was because the elevation increased the exposure to radiation from the sun. So we got creative and put a cover over the plants, which solved the problem. Then we were able to extrapolate that out—now we know that around the world, at a certain latitude and elevation, the growing conditions will be almost identical—and that opens new doors for organic farming.
How do you use genetics to offer organic supply?
Genetics have been with us since the beginning; Driscoll’s varieties are unique to us. It’s the same concept as geography, some genetics work better for organics, and others work better for conventional.
For example, we have a new strawberry variety that we launched in both conventional and organic for use in the Watsonville and Salinas regions of California. But it’s very much preferred for organic, because it doesn’t need as much fertilizer, which is a significant issue in organic supply. It is a naturally vigorous variety, which lends well to organic production. As it turns out, the organic growers prefer this variety. Moving forward, genetics will be a critical way that we solve the challenges we have to overcome in organic supply. Challenges like soil, disease, and pests can be overcome with traits like vigor, size, and productivity. That plays into a core strength of our company.
However, now there is a greater burden on us to make sure we are testing new varieties for both methods of farming. Something that works in conventional may not work for organic farming, and a variety that is successful in organics may not be preferred in conventional. A fast-growing plant may not be ideal for a conventional grower who wants to keep the plant under control, to keep it compact so that it is easier to see the fruit. They might not need a plant that is overly vigorous, particularly for a season that is very long. We just have to keep both segments in mind.
How do you leverage technology to increase organic supply?
When I discuss technology, I mean production technology: the agronomic aspect of what we are doing. New production systems are really important. For example, we’ve had a lot of success growing organic blueberries in California from substrates. We plant them in pots, and it turns out they grow and get into fruit production quicker. Using that technology, you get into cash flow and economic viability sooner than you would otherwise. Even though it is a big up-front investment, as a grower, you are going to get your money back faster. Technology is a critical component of organic supply.
How does labor come into play in organic?
Labor is a huge topic in our industry, whether it is organic or conventional. But you can apply the same three components to address it. You use geography to ensure you are growing in areas where labor is readily available. You use technology to grow berries in a way that is easier for the pickers to pick. You use genetics to grow a variety that is more attractive for the harvesters to harvest. You want to grow a compact plant where it is easier to see the fruit. When these crews show up to the fields, they are evaluating the work and asking, “Can I see the fruit? Is it easy to get to? Is it overgrown, how difficult will this be?”
We can’t make it more difficult for a limited labor force, which is already shrinking, to do the work. We have to make it easier and more accessible. These same solutions come together to overcome different challenges.
How do you transition more land from conventional to organic?
The critical issue is to allow growers to take advantage of technology. For example, if you grow in a pot, you can get substrate that is already certified organic. It doesn’t depend on the land. You can be certified organic from day one. That’s huge! It’s very important that this continues. We would also argue that this method is much more sustainable—it uses 40 percent less water than traditional farming.
However, there has been argument about whether these practices will continue to be certified organic. It’s a philosophical debate. Some people feel that organic is defined by the health of the soil, while others feel it revolves around not using synthetic pesticides, and some argue that it is about sustainability. It forces us to define the answer to the question, “What is organic?” Depending on how it swings, the consequences will have a big impact.
For Driscoll’s, we hope we can continue to use this substrate technology, at the risk of slowing down the growth of the organic segment and preventing us from meeting consumer demand. If we can continue, however, we believe that reaching one-third organic land is very realistic. If we can get that big, it will also become more efficient and shrink the huge premiums you are seeing on organic. It’s very clear that the number one issue keeping consumers from purchasing organic is the price.
We always want to keep the consumers in mind during these conversations. So often in this industry we get focused on the supply-side, since it is undoubtedly the hardest part of our work. But as a company that is committed to consumers, we recognize that we have a long way to go to provide everything they want in organic. As an industry, it is our job to serve the consumer. After all, that is why we are here.
With major obstacles to overcome, the organic fresh produce sector has a long journey in front of it. What lies ahead? With regulation and legislation shaping the future of the organic industry every day, only time will tell.
