Pacific Coast Producers See Boost in Product Marketing with USDA VAP Grants
Posted on 03/01/2016 at 03:08 PM by Shannon Hoyle
Pacific Coast Producers, a California processor of fruits and tomatoes, energized new product and marketing ideas with two successful Value Added Producer Grant (VAPG) proposals, one in 2014 and one in 2012.
The ideas were vastly different, but each provided a footing for the grower-owned cooperative to remain competitive in an industry that has seen setbacks among consumers in recent years.
“Younger consumers have not grown up with canned foods,” explained Mona Shulman, Vice President and General Counsel at Pacific Coast. The reasons are many, including the year-round availability of fresh foods and misinformation about the nutritional value of canned fruits and vegetables.
“Our food category is not as robust as it used to be. We decided to fight back,” she said. Results from each initiative have been both helpful in refining ideas and positive in maintaining incomes of cooperative grower members.
Developing New Products
The 2014 grant award of $200,000, matched with coop funds, enabled the company to develop preparation-ready canned tomato products, specifically sandwich-ready sliced and salad- and taco-ready cuts. Each of these products is marinated, seasoned or combined with a medium in the can that complements the end-use. The company’s sales team members proposed the ideas, with convenience to consumers as the marketing key.
Shulman said the initiative’s work plan included running new product samples and making product presentations to customer companies. Pacific Coast Producers’ products are all private label and sold for store brands. Having the retailer enthusiastic about the products will lead to quicker introduction to store shelves, and the consumer. “We have learned a great deal, in part due to the VAPG awards. We used to be a brand follower, waiting until our stores would request specific products. We have turned more into a brand leader.”
Pacific Coast is comprised of 165 producers and has three California plants, with headquarters and a peach processing plant in Lodi and two more seasonal plant operations in Woodland (tomatoes) and Oroville (fruit mixes and fruit bowls). The production season extends from July through September. Seasonal employment is approximately 4,500; 700 are employed year-round.
She said the one-year grant project has been very helpful for the company, including pointing out needs for changes in plans. “We’re still in finishing stages of the project timeframe,” she noted.
“The VAPG award gave us a big boost in developing this new product line. We needed to find out if it would work in production and in customer choices,” said Shulman. She described Pacific Coasts’ markets as “mature” with 50 percent of sales on the fruit side of production and 50 percent in tomatoes. While the sales on the fruit side have recently remained flat, even declined slightly, the cooperative has been able to hold on to market shares with product innovation on the tomato side.
Also beneficial in advancing Pacific Coast goals was a $300,000 VAPG award in 2012 to develop a wide reaching marketing campaign to make canned fruits and vegetables competitive with fresh products. While this grant’s timeframe is now completed, Shulman said it enabled the development of a social media and digital marketing campaign that is ongoing.
Originally, she said, the project concept was built around a theme of “fresh as fresh can be.” That idea has transitioned into a broader “canned fresh” approach and can be seen at www.canned-fresh.com. The campaign created a multi-function website and social media platforms for the cooperative’s buyers. The website now posts research articles and findings about the healthy attributes of canned produce, attributes that are often overlooked in the current trend toward eating more fresh produce. Examples: “Canned Fruit Has No More Sugar than Fresh Fruit,” which notes that fruit canned in juice has no added sugar and “Canning Increases Antioxidants and Some Vitamins in Fruits and Vegetables,” which is evidence by articles such as one by the Linus Pauling Institute in Oregon, and others. Recipes and links to a variety of food bloggers are also available.
“The VAPG funded projects have been good for us . . . successful,” said Shulman.
VAPG funding has been offered by the United Stated Department of Agriculture (USDA) periodically since the early 2000s. To be considered value added, projects must show how products are differentiated by various means from commodity crops. Typically, projects must also show how they may deliver greater returns to producers. Independent producers, farmer or rancher cooperatives, agriculture producer groups and producer-owned business ventures, including non-profit organizations may apply. Applicants must be producers of the raw commodity who will maintain ownership of that commodity through the process of creating a value-added product. In prior cycles, grants have been available for planning projects (such as marketing, business plans and feasibility studies) and working capital projects (such as wages or packaging supplies).
Assistance from the Agricultural Marketing Resource Center
The Agricultural Marketing Resource Center (AgMRC), a virtual, multi-university enterprise funded by the USDA, offers a wide range of resources to assist producers and agricultural businesses to successfully create and submit applications for VAPG program funding. A strong search function on the website (www.agMRC.org) enables those seeking information to find tools to develop their ideas and businesses (startup to long-standing) in value-added endeavors.
The AgMRC home page offers a direct link to additional VAPG information about the program and from USDA. In addition to the website, those seeking assistance can reach the Center by phone, toll-free, 866-277-5567.
AgMRC does not produce, sell, market or distribute any product or commodity, nor does it recommend specific companies that do. Instead, it provides a solid stream of information to begin or expand businesses in agriculture.
More information may also be found at the USDA Rural Development website http://www.rd.usda.gov/.