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Naumes Inc. chosen to supply Albertson's Photo by Jim Craven Steve Miller, produce manager at the Albertson's store at Foothill and Barnett roads in Medford, arranges Naumes Bartlett pears for sale. `Preferred' status will help company grow here, abroad By DAVID PRESZLER The box helps It took more than quality pears for Naumes Inc. to get its product in Albertson's produce aisles. The Medford company had to bring in a better box, as well. Mundane as it may seem, the size and shape of the box that pears were packed in was very important to Albertson's. The grocery giant wanted a pear vendor willing to use what the industry calls a "Eurobox." As the name suggests, the box is commonly used in Europe and is a standard 16-by-24 inches. In the U.S., different products are often shipped in different-sized boxes _ one for apples, one for pears, one for grapes, etc. That can make it difficult for grocery chains to build efficient shipping pallets. It also often means that produce clerks in the stores have to hand stack displays. The grocery chain is trying to get as much of its produce as possible shipped in the standard-sized Euroboxes to make for a more efficient system. "That box will allow us to move product through our system with less handling," says Dan Sutton, Albertson's vice president of produce procurement. "Naumes was the first pear shipper to step up and say this will work for us." Naumes, eyeing expanded sales in the European market, had wanted to integrate the Eurobox into its operations anyway. But doing so was expensive and the company was hesitant to make the investment for a speciality market where its sales fluctuate. "This allows us to get a higher return on the box," Freytag says. Other grocery chains have also begun looking to switching to the Eurobox. Freytag says Naumes shipped some fruit in the boxes to Kroger this week, at the grocery chain's request. The pears on Albertson's produce aisles hardly look like markers of a new direction for one of Southern Oregon's largest fruit-growing companies. They aren't any different from other pears grown and shipped by Naumes Inc. But company officials say the way they got there marks both an industry shift and the first step toward expanding Naumes' market in the U.S. and abroad. Naumes became the "preferred vendor" for the Albertson's grocery chain last month _ a new, more direct strategy for a company that traditionally sold nearly all its fruit through wholesale brokers. As grocery chains have grown larger, they've worked more directly with growers and the growers who want to do business with them have moved to do the same. "It's an incredible opportunity for us," says Tony Freytag, Naumes' director of marketing. Like the grocery chains, many growers have gotten larger. With 7,000 acres of orchards in three states, Naumes is the nation's largest independent apple and pear grower and its size helped make the deal possible. "We're big enough to say, `We can take care of this,"' Freytag says. "A smaller grower simply couldn't produce the volume." With orchards in California, Oregon and Washington, Naumes can also provide fresh fruit for a much longer period of time than more centralized growers. The company began shipping its pears a few weeks ago to some Albertson's stores, including those in the Rogue Valley. This time of year, the pears come from the company's California orchards. As the season progresses, Naumes will phase in pears from its Oregon and Washington orchards. As with most produce agreements, Naumes' deal with Albertson's is more of a relationship than a contract. It calls for Naumes to be the primary supplier for Albertson's throughout the 2,400-store chain as long as the company's fruit meets quality and supply expectations. So far, Naumes' fruit has gone mainly to stores served by Albertson's Portland distribution center, but its presence will be expanding center by center. The deal isn't expected to bring a huge spike in sales for Naumes. What it does give the company is a more stable market for its pears. Because Naumes assumes the role of both grower and wholesaler, it can work closer with Albertson's to take advantage of variations in pear production, featuring certain varieties more prominently when supply allows. For example, Naumes' crop of Bartlett pears in California this year has doubled projections. In the past, Freytag says, that would have left the company scrambling to find buyers for all those pears. But the addition of Albertson's sales to Naumes' traditional wholesale outlets makes it easier to sell the extra fruit. "Had we not had this additional outlet, that could have been a big problem," he says, noting Naumes is working with Albertson's to promote the bumper Bartletts. Naumes has sold directly to grocers in the past, including Albertson's, Safeway and Kroger's (the parent company of Fred Meyer). But it was done on a temporary, "spot market" basis rather than as part of a planned program. Freytag says the company expects sales to Albertson's to make up 10 to 15 percent of its business. Within a few years, he expects direct sales to make up 40 to 50 percent of the company's business. "That's a far cry from where we have been," Freytag says. Today's Business Index Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA