The high-end grocery chain has teamed up with strategic partners in the Finger Lakes area to create a regional hub for food growing, processing and manufacturing, which will focus on bringing natural, sustainable, healthy and organic products to consumers, Bill Strassburg, vice president of Wegmans Food Markets said.
In particular, members of the collaboration will explore developing organic wine, growing more organic grains for animal feed and baked goods, and using high pressure processing to provide more stores with fresh juice options, he told attendees at the Cornell Food Systems Global Summit Dec. 8.
The grocery chain is drawn to these projects in part because they tap into the Finger Lakes region’s rich agricultural industry and because consumers demand for organic and fresh foods appears insatiable, Strassburg said.
He noted that consumer demand for organic food has increased 350% in the past 10 years at a year-over-year rate of 20% to reach $35 billion in 2014.
Consumer interest in organic meat is growing particularly fast and requires innovative strategies for producers and retailers to meet the demand, Strassburg said. Since 2010, sales of organic pork at Wegmans has increased an average of 40% per year and is up 97% since 2011, he noted. Organic chicken sales also are up 27% to 46% per year in the same time frame, he said.
This interest in turn is driving up need for animal feed made from organic grain, of which there already is not enough of to meet consumer demand for human foods, Strassburg said.
Creating a market for "on the way" organic
To ease the shortage, Wegmans has partnered with Cornell Institute For Food Systems and developed a network among farmers, millers and plant breeders to develop organic grains. It also planted 20 acres of organic grains at its organic farm for research, Strassburg said.
One of the main challenges Wegmans and its partners are addressing is convincing conventional farmers to switch to organic grains. While certified organic grains sell at a higher price than conventional grains, growers are hesitant to convert because it takes three years to become certified organic. During that time they will be operating at about a 20% lower yield than conventional farming yet unable to sell their products as certified organic at a higher price.
Wegmans is trying to assure farmers of a market for their non-certified organic grains by creating a market for organic “on the way” products sold at a slightly lower premium than certified organic grains. The chain is trying to explain to consumers that “on the way” is still grown organically, but Strassburg acknowledged this message is difficult to convey.
He added that farmers also may need some subsidy during the three transition years from conventional to organic.
Cultivating more organic grains locally also could ease import costs of organic grain for feed, most of which currently comes from China, Strassburg said, noting that the U.S. exports vast amounts of conventional grains to China in return.
Investing in high pressure processing
Wegmans also is partnering with local companies to invest in high pressure processing equipment to make more fresh juice from local produce more widely available, Strassburg said.
The chain sells cold-pressed juice in some stores now, but because it has a shelf-life of only three days the company cannot ship it to other stores. But HPP extends the shelf life of fresh juice to 30 to 45 days, which means Wegmans could process juice at a centralized location and ship to more stores before the expiration date.
Strassburg also said he reached out to baby food maker Beech-Nut, which is located in New York, to gauge its interest in using Wegmans’ HPP equipment when the chain is not using it. The baby-food maker could use the equipment to create a line of refrigerated baby food to be sold at Wegmans.
Earlier in the day at the conference, Beech-Nut CEO Jeff Boutelle mentioned that the company is exploring producing a line of fresh, refrigerated baby food as part of its efforts to update how baby food is made and sold in the U.S. (Read more about what Beech-Nut is doing to attract millennial moms HERE.)
Finally, Strassburg said Wegmans is working with regional partners to develop organic wine that could be sold in the grocery chain’s stores.
The project is in very early stages, but is another example of how new products can be brought to market more easily though teamwork, he said.