For the past seven years, the U.S. fresh produce industry has worked steadily to improve the collection of data on supermarket sales of fruits and vegetables. This activity has been driven by several factors, among them: · Increased produce variety has complicated checkout identification.
· Interest in building on produce's vital role in store profitability has heightened. Meanwhile, an understanding has grown that a better way to identify fresh produce could be developed through a broad-based approach. Retailers and suppliers have turned attention to identification standards: universal product codes for packaged produce and price look-up codes for bulk sales. Work has proceeded under the umbrella of the Produce Electronic Identification Board, a group run by the Produce Marketing Association.
The PEIB has spearheaded development of the standard codes and their broader use at both retail and supply levels. But the catalyst driving even greater interest in the standard PLUs has been the food industry's recent focus on Efficient Consumer Response. This top-level attention by supermarket management has focused on several questions:
· Is it efficient to have retail personnel apply coded stickers manually in-store when machines can do it on the packing line? How can checkout be speeded up, particularly for items which escape coding in-store? And why should our company use its own codes, thereby limiting industry consistency and driving up costs? They've found answers in the ongoing work of the PEIB, which has championed standardized codes so that suppliers could handle the identification labeling process.
· How fast has this trend to standard PLU codes for produce taken hold? Consider that by year-end 1994 around 2,000 stores (out of a total 30,000 supermarkets nationwide) were using the codes. By the end of 1995, we estimate this number will have swelled to more than 5,000. Major chains in Canada have followed and implemented the U.S. numbering system.
Just as U.S. and Canadian supermarket chain executives have asked this efficiency question of their companies, so, too, are others around the world beginning to ask the same thing. Another example: The first meeting between U.S. and Mexican representatives to explore standard code use in Mexican stores was held in December.
All of this points to the reality that produce marketing is truly a global business done across and between continents. As suppliers in Southern Hemisphere countries begin to use the standardization PLU codes for the United States, they wonder why other developed markets aren't following the same path. Indeed, the PEIB approached some European retailers in the late 1980s only to hear that they weren't interested at that time.
But nothing succeeds in catching attention like success. The drive to take costs out of the system by using standard PLUs on produce sold in North America shows that industrywide solutions are the best way forward. Therein lies a lesson: Communal answers are increasingly needed in our increasingly interdependent world. That is why the next meeting of the PEIB in March will include representatives from around the world interested in bringing the best efficiencies to already profitable produce retailing. We should all welcome this new global interest. Bryan Silbermann is executive vice president of the Produce Marketing Association, Newark, Del. PMA and SN Global are unaffiliated.