Anybody sell produce to Whole Foods?

[Curtis]

Whole Foods toured our property and they want some of our Pomegranate crop, aswell as other stuff as its available seasonally.

I have never dealt with them, and Googled and could not find what I am looking for, but I am curious as to how well they pay?

Anyone here sell, or know anyone who does sell to Whole Foods?

We have several outlets available for our Pomegranate crop including them, local CSAs and Farmers Markets and plan on exploring all options, however storing the crop is an issue and its important that we are able to sell a bulk amount at once so we don't waste anything.

And can you negotiate with them, or is it going to be a "take it or leave it" type deal, because if the price they offer is too low I have no problem giving them my own price... They were very very impressed with our property and setup, they ship their Pomegranates in from California and were thrilled to find a local source of a lot of fruit so I feel like I could haggle with them a bit.

[MountainDon]

I've never dealt with them, but I suspect they operate like any large corporation. You may be especially vulnerable to them low-balling you and making it all sound like they are offering you a wonderful deal unless you are a great negotiator. You need to find a mentor, someone who can tell you how to go about getting the best deal for the produce you sell. You've started that by asking here. Are there any small grower associations who can offer the advise of their experience?


I hope my comment is not too negative. I mean it to be cautionary. Having dealt with large corps when I was in the retail camera trade I know there are a good many vultures out there. Until you learn the business it's easy to become prey. Whole Foods may be a very fair and decent company to do business with. Or they might use the WalMart business model.

Best of luck on finding how to deal with them and any other retail or wholesale grocers.

[Curtis]

Thanks for the words of wisdom, it didn't seem negative at all.

Well lets talk numbers here, and maybe we can figure something out.

Whole Foods sells their Pomegranates, that they have told me that they ship in from California for $3 a piece. They sell Pomegranate seeds for (I think) $12 / a POUND... (Maybe it was $10, either way, a pretty penny).

So they ship what they have now in from out of state. The deal is with local growers, they bring it to them their selves. So it would be myself delivering the fruit, saving them the shipping cost and hassle.

If they sell it for $3 a piece, what percentage of that $3 would be good to shoot for?

We're expecting a harvest of about 12,000 +/- 1K here or there. (Keeping in mind that I am not interested in selling it all to them, I think a good portion of that could be sold by myself or through other means with a better price coming in to me)

I have no problem telling them, "Thanks, but no thanks." if they can not provide a reasonable price.



I do not know of any small grower associations or any other local growers for that matter. I moved 1,500 miles in March to come out here and act as caretaker / business manager of this developed Orchard that has never once been harvested. Owned by some rich dude who lives here 4 days out of the month and is a "nice place to sit" more or less, but now he understands that all these trees out here grow $1,000+ of fruit, hahaha...   Plus we're planting about 400 new Pomegranate trees, which in four years will mean we have hundreds of thousands of Pomegranates to sell, instead of just 12,000 or so.

Also I'm working on a online shopping system where customers can order produce online direct from us, we ship it to them quickly (preferably west of the Rockies customers to assure it arrives quickly with lower shipping costs) so we have another outlet of selling produce, however I have been filing a fair share of paper work and trying to take care of the legalities of all of this... But we're becoming an established "business", and not just a producer with no name.

Sorry for the essay, haha.

[MountainDon]

Well, once again, a caveat, I've never been in the produce business, but I would think that they would have to be working on at least a 33% gross margin, or a 50% markup from cost. That is if they buy an item for $1 they would sell it for $1.50.  Buy at $2 and sell it at $3, and so on. Maybe even a higher markup as what they are selling is more or less a specialty item as compared to Wonder Bread. 


Maybe this site will help...   http://www.producetalk.com/

[rwanders]

It would seem to me that your starting point would be your cost of production plus cost of delivery to Whole Foods---then add whatever you think is a reasonable profit margin----how much they have to mark it up for their overhead plus profit is their problem---not yours.

[Curtis]

Thanks for the tips, and i'll register at that website MountainDion, it just seems like its not very active (yet), but hopefully there are some people there that can help.

[StinkerBell]

I have ot had a pomegranate in years! Sounds so yummy right now.

[Sassy]

I have a friend who is a nationwide sales rep for Honey Gardens  http://www.honeygardens.com/  They sell to Whole Foods.  Honey Gardens also has a blog.  You might want to ask them.  They are out of Vermont.  Not a great big company - started as a family run business I think.  They sell raw, organic honey, elderberry syrup etc.  and are very interested in helping the bee population around the world survive.  I'm sure they'd be interested in talking to you about what you are doing. 

I'll try & contact her & see if she knows how Whole Foods work.  Honey Gardens won't sell to Trader Joes because they want everything for free    A good bargain for the consumer isn't always too great a bargain for those who are selling produce or a product. 

Sounds like you've found your niche at the moment & things are going well! 

[waggin]

As the former purchasing manager of a small, independent company, former senior buyer in a couple of small/mid-sized corporations, an operations buyer in a large corporation, and having a degree in procurement (yes, there is such a thing), I'll give you my $.02.  My background is manufacturing, so I definitely will miss some of the issues with produce.

1.  You can always negotiate.  2.  You can negotiate ALL terms.  (Price, COD or net 30/60/90 billing, early pay discount, late charges, FOB where? -very important with something that can spoil or be easily damaged!, minimum order size, lead times from order to delivery, returns/spoilage, inspections/grading & definitions of quality, size, ripeness, packaging, labeling, and I'm sure, many other things)  3.  You can say no if you don't like their terms and can't negotiate something mutually beneficial.  4.  Be careful.  Make sure the whole package makes sense for your long-term plan.  You already know not to be too dependent on them, which is good.  I pity the poor companies that get roped in to Wal-Mart and basically end up at their mercy. 

If you're delivering it to the store yourself, some of the FOB issues go away, but the rest remain.  Will you have to package/label it a certain way that isn't what you would normally do?  Factor considerations like that into your contract price. 

Be sure all expectations are defined IN WRITING.  This is not an unreasonable expectation or being antagonistic, and done properly, it will help foster a happy, productive relationship for both you and them.  Remember, a verbal contract is only worth the paper it's written on. 

[Curtis]

I have a friend who is a nationwide sales rep for Honey Gardens  http://www.honeygardens.com/  They sell to Whole Foods.  Honey Gardens also has a blog.  You might want to ask them.  They are out of Vermont.  Not a great big company - started as a family run business I think.  They sell raw, organic honey, elderberry syrup etc.  and are very interested in helping the bee population around the world survive.  I'm sure they'd be interested in talking to you about what you are doing. 

I'll try & contact her & see if she knows how Whole Foods work.  Honey Gardens won't sell to Trader Joes because they want everything for free    A good bargain for the consumer isn't always too great a bargain for those who are selling produce or a product. 

Sounds like you've found your niche at the moment & things are going well! 

I will check out their website right after this post! Sounds nice... We also have about 30 bee boxes here and I have been reading about harvesting / producing honey aswell... I went through about a half gallon of it in two months as I ate it on everything! Haha, it was soo good, but it was harvested by the past care taker. There is a shared FDA approved kitchen in town that we could rent out and use to produce a lot of honey...

Waggin,
Thanks for the tips. I'll email them back tonight and ask some specific questions about what will be required on our end, as far as what sort of packaging, minimal orders, etc would be required. I know that the first step is obtaining our business liability insurance that covers up to $1,000,000 which we will have soon. After that, picking some samples from multiple trees for them to test their quality (and delivering these to them). After that, not sure.


Thanks for the help everyone.