Jul 14, 2023

First direct-to-retail supply chain program started by ProducePay

ProducePay is partnering with a table grape grower to start what ProducePay calls the fresh produce industry’s first-of-its-kind direct-to-retail supply chain program, according to a news release.

ProducePay’s platform will help Four Star Fruit, one of the largest growers and shippers of 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 officials said in the release. “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, the model will yield positive impacts throughout the fresh produce supply chain, ProducePay said in the release. “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,” ProducePay said in the release.

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, ProducePay said in the release.

“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.

Four Star Fruit, which has been in table grape production since 1987, is family owned and operated for three generations by the Campbell family. Fields are located throughout the San Joaquin and Coachella valleys, as well as Mexico. Four Star grows, packs, and ships more than 2 million boxes of organic varieties, 15 million boxes of domestic varieties, and 3.3 million boxes of Mexican varieties per year.

Founded by Pablo Borquez Schwarzbeck, a fourth-generation farmer, ProducePay provides a more connected and sustainable supply chain by giving growers access to the market, financial solutions, and insights.