Progress 07/01/10 to 02/28/11
Outputs
OUTPUTS: Activities: Our company has been actively participating as a volunteer on the technology working group for the industry led product traceability initiative ("PTI"). We have been steadfast advocates for small independent farms, to ensure that the industry solutions proposed would be workable for the small independent farms we represent. Events: We had Al Johnson, our label designer, attend the annual training held in New Jersey, to become a GS1 certified barcode consultant, to ensure that our Grower's Reserve consulting services meet the highest industry standards. GS1 US Certified Barcode Consultants offer the most comprehensive consulting services for the implementation of GS1 System standards. Services: Services offered under our Grower's Reserve Service Mark, through our GS1 Certified Solutions Partner, Al Johnson, include: 1) GTIN Assigment to all products, 2) GLN assignment to each members farm to identify the source of the item, 3) Label design to assure Produce Traceability Initiative Compliance, Databar enabled, or shelf barcode enabled item-specific product marketing unique to the member grower, Our Locale Marketing progrm, including complimentary brand management and monitoring utilizing database applications, trademark licensing, copyright licensing and access to our technology partners' software applications. Products: With their first year annual subscription, each of our growers receives point of sale traceable shelftalkers to alert consumers that their produce is now traceable to the source farm. We also create grower specific, or grower group specific, custom labels. For each of our growers, we also create a mobile phone compatible profile that can be accessed by smartphones when they scan any of the barcodes on any of our custom product labels or shelftalkers. Our primary product is data: accurate, detailed, product-specific data about the product, the farmer, and the source farm. We use industry standard traceability technology provided by our technology partners to connect consumers to that data at the point of sale. Dissemination: Our company presented the results of our SBIR I research at the annual Ecofarm Conference in Asilomar, CA, held January 26-29, 2011. The summary of that presentation, taken from the EcoFarm website, stated as follows: "Barcodes Without Harm: High impact marketing opportunities The mainstream produce industry is demanding barcodes for cases of products. Come learn about a new innovation to give small farms cost-effective access to the bar codes they need to sell into mainstream markets. Retailers and distributors alike who want to support small farmers will be able to do so better with barcode technology that improves their inventory system. This workshop will explain how to make barcodes work in your favor as a farmer, retailer or distributor. Barcodes have the ability to put your farm's story in front of consumers while they are standing in the produce aisle. Shoppers are already using cell phones to verify value and authenticity as they make purchase decisions. Learn how to link the barcode to the content consumers want." PARTICIPANTS: John Bailey, Executive Director of Top 10 Produce LLC. Bob Corshen, Director of Local Food Systems at Community Alliance with Family Farmers. Community Alliance With Family Farmers: Today's Community Alliance with Family Farmers is the result of efforts by both farmers and urban activists working together for almost 30 years. Their mission is to build a movement of rural and urban people to foster family-scale agriculture that cares for the land, sustains local economies and promotes social justice. Brian Adam, Professor of Agricultural Economics at Oklahoma State University. Al Johnson, Owner of AgriLabel & Tag LLC and GS1 US certified barcode and ecom solutions partner. Dragan Miljkovic, Professor of Agricultural Economics at North Dakota State University. Victor Pham, Co-Founder of Top 10 Produce LLC. Alex Muse, CEO of ShopSavvy, Inc. Stephen Carter, Owner of Randommouse Software. Craig Kaufman, Owner of Fullsteam Marketing & Design. Marci Bracco, Owner of Chatterbox PR. Manny Espinoza, Owner of Espinoza Graphics. Israel Tellez, Independent Database Management. TARGET AUDIENCES: Endorsement from Bob Blanchard, CA0002 "Top 10 Really Gets It: what the consumer wants in traceability and how to achieve it without placing an unmanageable burden on the country's small farmers. Terri and I are fully supportive." Endorsement from: Michelle Brune, MO0001 "I would like to thank you for all your help over the last few months. We are now printing and using GTIN labels. Thanks to you and Al we have met our September deadline for GTIN readiness for our largest buyer. Now the St.Louis area will be able to continue enjoying our fresh local produce. My employees will continue enjoying a pay check also. Keep up the good work so that us small family growers have a chance to continue providing for our families. Supporting our communities and surviving in a market place dominated by large growers." Endorsement from Billy & Elizabeth Ledford. SC0001 "We produce a variety of different vegetables, tomatoes, yellow squash, zucchini, and eggplant to name a few. Top 10 Produce is great for small farms to help provide us with the bar codes our buyers are demanding." Endorsement from John Dicus, CA0001 "I support Top 10 Produce LLC because I know they are beating the bushes to scare up some innovative marketing techniques that will benefit the small grower like ourselves." Endorsement from: Alex Karp, Island Harvest Organics,LLC HI0001 I would like to say that Top 10 Produce has been a considerable help for us as a small independent grower. We are competing with produce that comes in from various regions and countries and Top 10 provides us with the bar codes that the grocery stores are demanding which helps them to scan in the proper item codes. PROJECT MODIFICATIONS: The main change in our project was our shift from item level to case level traceability as our prime focus. The results from this research have already helped convince both growers and retailers that the Top 10 technology and approach is worth considering further. In a sense, Phase I served as an extremely useful "proof of concept" for the technology and the hypothesized benefits. The difficulties incurred in the initial phase of our Phase I project have proved to be an invaluable learning experience for Top 10. We now have a much more nuanced understanding of the difficulties growers face in implementing traceability - the direct cost of implementing the technology is only part of the cost; disruption in supply chain management, particularly at harvest time, is also a significant cost. This understanding has helped redirect our focus towards lowering the direct and indirect costs of implementing a comprehensive and therefore workable produce traceability system, as well as a better estimate of the extent to which growers might experience increased demand. One way that Phase I research helped reduce those costs is by convincing us to focus on case level labeling coupled with a traceable shelftalker, rather than item labeling. This allowed us to offer essentially the same traceability and "know your farmer" benefits, but at a greatly-reduced cost and much less disruption in farmers' packing operations. While large grower/packing house enterprises can label each item (e.g., labeling individual Fuji apples) because they have made an expensive investment in assembly-line machines that affix the labels, small and mid-size farmers cannot afford this. By providing case-label traceability, affixing labels and cards to cases rather than to individual items within a case, Top 10 can reduce costs to these farmers while still providing the benefits of traceability to consumers as well as retailers and farmers. This shift has greatly improved the probability that small and mid-size farmers can profitability implement the technology.
Impacts
Change in knowledge: After recognizing a reluctance on the part of small growers to participate in the industry driven Produce Traceability Initiative, or to satisfy the regulatory requirements imposed by the Food Safety Enhancement Act, we used the opportunity provided by our SBIR I grant to measure, as objectively as possible, the benefits that producers could expect to receive from selling their produce using traceability technology and an associated "Know Your Farmer" marketing concept. We put non-traceable and traceable Valencia oranges side by side in three retail stores and tracked sales of each. The results validated the hypothesis that not only did consumers prefer produce that was traceable back to the farmer, they were willing to pay more for it as well. This is a double benefit to farmers: first, using this technology differentiates their produce from that of non-traceable produce so that when the market is over supplied, these farmers will be given a buying preference, and second, these farmers may receive a price premium, since consumers appear to be willing to pay a higher price for produce sold using this technology-enabled transparent marketing. Change in actions The cost of item-labeling is much higher than case labeling, especially for smaller growers. While large producers can spread the cost of investment in labeling machines and associated supply chain costs over a large volume, for small producers the cost is prohibitive. We learned that case labels, along with a traceable shelftalker that can be scanned by consumers using smartphones to communicate the case-level traceability, was sufficient to pique consumer interest. As a result of this discovery, we recommend case labels to producers, but provide free shelftalkers to each of our new growers. These growers can then choose to incur the expense of item labeling only for stores that regularly use item labels for easier and more accurate checkout. This strategy was reinforced by the adoption of the Tester amendment to the Food Safety Enhancement Act, which exempted growers with annual gross income less than a half-million dollars per year from some of the traceability requirements in the regulations if they are shipping within a limited geography. However, these growers need to post the farm address conspicuously at the point of sale, and our traceable grower shelftalkers (free to growers in the program) satisfy this requirement and provide the "Know Your Farmer" traceable marketing to these growers who might otherwise not have reason to participate in our program, and therefore find themselves locked out of the wholesale marketplace in the long run. Change in conditions With traceability now a government mandate, the cost of regulatory compliance is steep for a smaller independent grower. The high price and time commitment required to implement the industry-chosen traceability system was going to result in small independent growers being increasingly shut out of retail chains. Top 10 Produce LLC's low-priced, full-service traceability program has changed that.
Publications
- Bailey, J, Corshen B, Faupel, M; 2011; Barcodes Without Harm: High impact marketing opportunities; (4) Ecol.Farm.Conf. 2011:Order Number 11-D 1 (CD available fore order at http://www.eco-farm.org/docs/CDorderForm11(FINAL).pdf)
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