Produce Branding Co. Helps Small Farms Leverage Previously Cost Prohibitive Traceability Technology
August 22, 2012 | Jessica Vernabe
When you go to the grocery store, it’s not always easy to find out where your produce or meat came from and all the details that go with it—whether the farm is local, which farm lot it originated from and the farmer’s growing practices.
Salinas, Calif.-based Top 10 Produce, LLC, though, has found a way to help smaller, independent farmers share that information with their customers using global standards barcodes and quick response, or QR™ codes. The company’s goal is to create a more transparent system—something the industry is quickly gravitating toward—and to give smaller farmers a more competitive edge, said Top 10 Produce Founder and Executive Director John Bailey. Bailey, who founded the company in April 2009, is also working on a new mobile commerce system for farmers.
The company was created in anticipation of federal food safety legislation, which was signed into law last year. The Food Safety Modernization Act (FSMA) aims to help prevent the spread of foodborne illnesses by creating a new regulatory framework for those in the food industry. One of the law’s focus areas has been the ability to trace food products from farm lot to market shelf. Bailey says that while the government has not yet mandated that food producers have traceability programs in place, many of the major food retailers and wholesalers are now requiring these programs from their vendors. That creates a challenge for many independent farmers who don’t have the resources to go it alone, he said.
“We can do it more economically because we’ve got economies of scale,” Bailey said, noting that food producers under Top 10 Produce can use a shared barcode and brand system. “There are plenty of people doing what we’re doing for the global brands. Nobody’s doing what we’re doing for independent farms.”
Besides heading Top 10 Produce, Bailey is also a dispute resolution attorney in agricultural law and a member of the technology working group for the Produce Traceability Initiative (PTI), an industry-led, supply chain-wide initiative designed to improve traceability procedures.
Top 10 Produce has also created brands that independent farmers can use for tracking and marketing themselves. Top 10 Produce brand members have the ability to use branded GS1 barcodes (or global standards barcodes provided by the nonprofit organization GS1) and QR™ codes.
The GS1 barcodes can be scanned by retailers at store registers or by shoppers on their smartphones, allowing them to track information such as a product’s place of origination, down to the lot number, and at times even farm maps. This particularly comes in handy in situations such as product recalls, Bailey said. The QR codes link the barcodes with specific websites, allowing the customers to view more information about a farm, such as maps, farm profile information and social media links. Top 10 Produce allows farmers to showcase this information through its website OurLocale.com and through certain mobile app providers, such as ShopSavvy.
Top 10 Produce Brands
Top 10 Produce members can pay an annual membership fee of $280 in order to include 10 of their products or farm locations under one of the company’s brand names and its barcode system. (There’s a $10 charge for every additional product or location.)
Top 10 Produce’s brands include Grower’s Reserve, Locale and Top 10. Grower’s Reserve is geared towards growers working with wholesalers. In this situation, the brand and barcode are mainly just used on the cases of products. Locale is a consumer-focused brand that tells the shoppers which region they are buying from and allows them to scan the barcodes for more information. Top 10 is the company’s flagship brand and is more exclusive. It means the product is sourced from a single farm location, or the product is grown or raised on contiguous land, Bailey said.
About 40 produce farms are licensed to use the Grower’s Reserve and Locale brands, Bailey said. There are also three farms licensed to use the Locale brand for certain meats other farm-produced items such as beef jerky, dairy and processed foods. As for the Top 10 brand, there are currently only three food producers using it.
Top 10 Produce’s Locale QR program available on OurLocale.com is free to all farmers, even non-members, and has more than 100 users. Top 10 Produce’s members and users are located in 18 U.S. states and in Canada.
Bob Blanchard, who owns Old Creek Ranch in Cayucos, Calif. with his wife, said he finds value in the Top 10 brand. One of the wholesalers he works with requires him to use a GS1 barcode, which he noted is only possible for him because of Top 10 Produce’s lower prices.
“If we hadn’t had that from Top 10, it would have been costly and time consuming,” Blanchard said. “It was one of those things where it would have been a deal stopper. … Bailey’s deal made it doable for a smaller producer like ourselves.”
Bob Corshen, farm-to-market director for Davis, Calif.-based Community Alliance with Family Farmers, said Top 10 Produce’s services are important on multiple levels.
“The program … not only will allow them to abide by any future legislation for food safety, but it gives them a wonderful marketing add-on,” Corshen said.
He noted an experiment that his organization teamed up with Top 10 Produce for. They used Old Creek Ranch’s organic Valencia oranges to test a theory—that traceability plays a large factor in shoppers’ purchasing decisions. They chose three markets and offered the same oranges labeled in two different ways. As Corshen and Bailey describe it, one set of the oranges was priced at $0.99 per pound and was only identified by their type—organic Valencia oranges. The other set were priced at $1.29 per pound, but it showed a picture of the farmer, a sign with the USDA’s “Know Your Farmer, Know Your Food” logo and a QR symbol.
In all three cases, the sales were about evenly split, meaning just as many of the shoppers preferred the traceable product as opposed to those who didn’t, even with the higher price. The test resulted in the grocery stores agreeing to sell Old Creek Ranch’s oranges for higher prices, Corshen said.
Bailey says there are three Ps tied to sustainability: people, planet and profit. His focus is on the profit aspect.
“If it makes a profit for an independent farm, their farm stays in business and the farms that are doing the right things are able to get rewarded for that,” Bailey said, noting that his company works with many farms using organic and environmental sustainability-focused practices. “Having a 30 percent premium on your Valencia oranges in the store over the Valencia oranges that are imported from Chile helps the independent farm sell into the local market.”
Bailey plans to next launch a mobile commerce system, which will allow farmers to sell products using a mobile platform that links the product barcodes with the farmer’s pre-selected payment providers, such as ShopSavvy and PayPal, Bailey said. That would enable the shopper, wholesaler or retailer to purchase goods right on the spot through their smartphones. The system will use HTML 5 software. The system has already been beta tested and is slated to be released in December.
Top 10 Produce has received two Small Business Innovation Research grants from the USDA, Bailey said. The company received a $100,000 grant in 2010 for its Top 10 brand. However, the project did not qualify for a second funding round because USDA determined that the project wouldn’t make enough money. Top 10 Produce next received a $100,000 grant this year for its mobile system. If it qualifies for round two, the project will receive $450,000 of additional funding, Bailey said.