Chapter 6: Supply Chain Case Studies
6.2 Organic strawberry case study – A taste for the environment
Warren and Olga initiated their organic strawberry operation in 2003. Set in bushland near a medium sized SW rural town (population over 4000), they are certified by NAASA and produce approximately 20 tonnes of organic strawberries per annum for Western Australian and interstate markets. They supply to organic retailers as well as supermarket chains. In 2006, with the help of regional development grants, they established a small processing plant on their property with a view to using their seconds (which previously went to an interstate organic foods manufacturer) to produce their own labelled products. They are also setting up a café and plan to run a farm tour business focusing on production of organic and high quality food and on the importance of the environment.
Their goals are to create profitable, meaningful and enjoyable work, to manage the environment sustainably and to provide fresh and tasty strawberries. They take a pro-active role in marketing and product placement and make efforts to communicate their environmental commitment. They were the first farm business to be ‘certified’ under the BestFarms EMS program and Warren is a strong advocate of the program. Through the development of their EMS, they established an environmental vision for the enterprise which is advertised on their website.
Sometimes sustainable practice to protect the resource base does involve financial loss. Warren and Olga operate from exceptional principles of environmental sustainability, demonstrated in their growing techniques but particularly when they turned off the water to 40,000 plants in order to maintain their wetland which they see as an indicator of sustainable water use. Drought conditions put their main groundwater supply source under stress and in January 2007 they let the strawberry crop die both to retain the future season’s water supplies and to keep the wetland in good health. An explanation of the reason for the fall in supply is posted on their website. Unlike most strawberry growers, there is no wastage with all seconds going either to an interstate processor or to a local fruit ice small business, and in the future to their own jam making operation.
Using a personalised approach, Warren communicates closely with his supply chain. Primarily his focus is to ensure the cool chain approach is faultless but he also takes an active role in following his product to understand his markets better. He deals primarily with a Perth based organic fresh food wholesaler for WA distribution and a number of other conventional wholesalers for interstate distribution.
Through his wholesalers, he sells to Woolworths, Coles, Safeway and organic fruit suppliers. Warren and Olga also make an effort to stock the local town with their produce though this is more a social networking exercise than it is a financially beneficial one. Committed to organic food, Warren is a serious and professional business manager who believes the only way to make the business grow is to compete with the conventional growers, rather than targeting niche markets (although this is also a strategy). Warren and Olga are independent and knowledgeable and know where to source information. Warren commented that despite trying he received no support from industry associations such as the strawberry growers association, who suggested that commercial growing of organic strawberries wouldn’t work.
An important actor in this supply chain is the Perth based organic fresh food wholesaler mentioned above. Managed by a husband and wife team, the company has a staff of 12. They are enthusiastic advocates of the organic food industry and were involved in lobbying Coles and Woolworths to develop organic food sections. They also pay strong attention to quality and they ensure that the cool chain continues to the shopfront. They ranked environment as their most important concern. For them, environmental management issues are adequately addressed through organic farm production.
They support eco-efficiency initiatives in their operation and also recycled and minimum packaging. They continually explore methods to better communicate the environmental and organic values of their products and packaging is a key issue in this. Whilst not opposed to the concept of environmental assurance or certification, they were opposed to any system bringing more paperwork into their already hectic schedule. With several organic certification paperwork trails to manage, they have more than enough to deal with.
One of the retail outlets that sells Warren and Olga’s strawberries is a Perth organic outlet in the suburbs of Perth. The store manager, Marian, commented that whilst they attempt to stock them, Warren’s strawberries can be hard to obtain because they are often sold directly over east or sold out because of Warren’s good reputation. She said that Warren understandably chases the markets so there are no guarantees of supply. When asked about having this and other products environmentally certified, Marian suggested that ‘it’s not going to matter a jot and we may not even put (the related information) in the shop because it would be just another bit of paper to stick up to confuse people’. She commented that the important thing for this shop is the organic certification. She suggests that most of her customers are primarily concerned about their well being, but there would be a percentage of people who are buying organic with an environmental aspect in mind.
Interactions throughout the supply chain are largely driven by the active presence of Warren in each stage. Except in his interactions with Coles and Woolworths, where he says he loses influence and control, the product which is labelled with information about sustainability, as well as the NASSA logo, seems to maintain the key values it leaves the farm with, which are health, nutrition, environmental sustainability, taste and organic. This was confirmed in interviews with the wholesaler, retailers and consumers as shown in Figure 9. Taste was an important issue mentioned by all supply chain actors including the consumers interviewed on this product and so is added here as a value. Taste was mentioned by all supply chain segment except for wholesale.
Figure 9: Transfer of environmental and other sustainability values in organic strawberry case study
Product statistics
Retail price = $4 to $5 per punnet (200% conventional)