The Van Trump Report

How Companies are Winning the High-End Produce Market

Some produce lovers out there are willing to spend a surprisingly large amount of money on what’s been dubbed “designer” fruits and vegetables. From strawberries that run upwards of $5 each, to mini, seedless peppers that cost three times that of  their full-sized cousins, these products have transformed produce aisles into one of the more pricey sections at many grocery stores.

According to research from IRI, spending on fresh fruits and vegetables has climbed over +30% since 2018. While inflation plays a role in that increase, another driver has been the specialty produce items that command a premium price. Volume-wise, US shoppers scooped up a whopping 4.5 billion pounds of produce in 2023, an +11% increase since 2018. The trend has also given rise to some interesting and innovative companies that have found success in bucking conventional wisdom.

Row 7 Seed Company: Row 7 was co-founded by world-renowned chef Dan Barber on “the notion that deliciousness might just change the world—and that it starts with the seed.” Around 2010, Barber began talking to Michael Mazourek, a researcher at Cornell University’s School of Integrative Plant Science, about how to get vegetables that taste better. Mazourek explained to him how it all starts with the seeds and then shared some miniature squashes that he had bred to taste more flavorful. That in turn inspired the pair to co-found Row 7 Seed Company. They started by seeking out breeders who had developed high-flavor, interesting produce varieties that had failed to gain traction at a commercial level. The company has been selling seeds for a growing list of uncommon varieties ever since. More recently, Row 7 struck a partnership with Whole Foods to sell the high-end produce grown from their seed varieties, including “Badger Flame Beets”, that run about $10/pound; Koginut” and “Honeypatch” squashes, priced upward from $2.50/pound; and “Sweet Garleek,” a type of leek that tastes like garlic and will be rolled out nationwide this year. Learn more about Row 7 Seed Company HERE
Impressively, Oishii has avoided the same fate as other vertical farming companies, many of which have struggled to stay afloat after the industry crashed from its nosebleed peaks in 2022. Oishii founder Hiroko Koga claims the fallout was completely predictable – he watched the same boom-and-bust cycle play out in Japan in the early 2000s. Taking from those lessons, Koga says he decided Oishii would always focus on the quality of its product rather than unrealistic timelines and funding rounds. Oishii earlier this year opened a new 237,400 square-foot facility in Phillipsburg, New Jersey, in order to try and keep pace with the insatiable demand for its “Omakase” and “Koyo” strawberries, which go for $10-$15 a pack of 9, as well as its new “Rubī Tomato” that retail for $20 for a pack of 11. Oishii raised a $134 million Series B at the start of this year to help fund the new production hub. CEO and co-founder Hiroki Koga told AgFunderNews the new facility was an answer to the company’s production constraints. “We have so much demand from the market, but it took us many years even just to get to the Northeast US market. Even there, we’re not in nearly as many stores as we want because of production capacity,” he said. The new facility will allow Oishii to enter new markets along the East Coast in the US. Other facilities are “under construction.” Learn more about Oishii HERE.  

Mastronardi Produce:
Since building the first commercial greenhouse in North America in the 1940s, four generations of the Mastronardi family have built the company into one of the most successful, year-round produce growers in North America. While you may not be familiar with the Mastronardi name, you’ve likely seen their rainbow of “Sunset” brand snacking tomatoes. The companies first high-end tomato, Campari, was launched way back in 1995 and is still a top-seller. When the company noticed a surge in interest around produce as “snacks” they launched their first bite-sized tomato under the Sunset brand, “Flavor Bombs” cherry tomatoes, in 2014, to huge success. Other products under the Sunset brand soon followed, including Sugar Bombs, Honey Bombs, Lolli Bombs, and Umami Bombs. According to Dean Taylor, the company’s VP of business development, Mastronardi is running trials with 500 promising new tomato varieties at any given time. Fourth-generation Paul Mastonardi, currently President and CEO, says flavor is still the key.  “I have learned that once a consumer is hooked on flavor, you’re guaranteed repeat sales,” Paul says. Mastronardi Produce has grown consistently through the years, both in acquisitions and grower partnerships. In 2023, it ranked number one on the list of the largest greenhouse vegetable growers in the United States. The company has more than 5,000 acres of controlled-environment productive growing capacity spread across Canada, the U.S. and Mexico, working with hundreds of grower partners. Learn more at their website HERE. (Sources: Forbes, Food and Wine, The Wall Street Journal)

Leave a Comment

Your email address will not be published. Required fields are marked *