California Fresh Fruit Association: Kroger Must Not Adopt Net 90 Payment Plan

Kroger’s Net 90 Payment Intention Will Hurt California Farmers

By Patrick Cavanaugh, Editor

The California Fresh Fruit Association told California Ag Today recently that they do not want to see any relaxation or easing of Kroger Supermarket Chain in what they announced as a 90-day payment intention for all vendors.

Ian LeMay

“What our industry wants to see is Kroger to withdraw this proposal and to go back to the 30 day payment period,” said Ian LeMay, Director of Member Relations and Communications with the California Fresh Fruit Association in Fresno.

Kroger is the largest supermarket chain in the U.S,. spanning the East, South, and Midwest, and they have stated that they want a net 90 day payment plan on all vendors, including the farmers in California, which provides up to 70% of the fruits and vegetables and 100% of the nut crops that consumers enjoy throughout the year.

As to why Kroger is going this way? It’s most likely to help on their cash flow.

“That’s not necessarily the prerogative or needs to be the interest of our shippers. The shippers have a payroll to make and other bills to pay and they don’t need to carry that credit for Kroger,” LeMay said. “It’s just not good business and not to mention, we’re dealing with multiple commodities with many of our commodities, with a harvest that does not last many weeks. I mean, cherries here in California are six weeks long, so they’re supposed to carry that credit longer than their own season? It just, that doesn’t make sense.”

And making matters worse is that Kroger is even asking farmers to forfeit their rights under the Perishable Agricultural Commodities Act, created by Congress to specifically protect the perishable fresh fruit industry. The act states that payments must be made in 30 days.

“Their answer to that … [is] that they’re partnering with Citibank and that … if you want an expedited payment, then you would have to basically pay upwards of .72 percent on the money you’re owed, so you’re actually going to have to pay money to get money back,” LeMay explained.

LeMay said he thinks when two people are doing business with each other, there’s an expectation that they will keep agreements between each other.

“This is not what California shippers agreed upon. Kroger wants to force this on then. We would like to see Kroger withdraw and hold true to PACA,” he said.

Frieda’s Karen Caplan Fears No Fruit

Frieda’s  – A Legacy of Introducing Americans to Exotic Fruits & Vegetables

 

By Laurie Greene, Editor

 

Karen Caplan, CEO and president, Frieda’s Inc., the 54 year old family business that first introduced kiwi fruit to America in 1962, recounted, “We’ve probably introduced close to 200 exotic fruits and vegetables to American consumers, mostly through supermarkets, but also through restaurants. We continue to introduce new and exotic fruits and vegetables. You’ve got the kiwi fruit; you’ve got sun-dried tomatoes; you’ve got habanero chilies, spaghetti squash, alfalfa sprouts, hothouse cucumbers, shallots, purple sweet potatoes, and purple potatoes.

PurpleKiwiBook_Karen Caplan

 

Caplan knows consumers love to try new products and new foods. “We really credit the TV Food Networks,” she explained. “If you’re watching ‘Chopped’ one night or any of the other food shows and you see these exotic fruits and vegetables like our purple snow peas as a secret ingredient, and you watch a couple of chefs cook with them, you say, ‘Wow that’s really exciting. I never would have picked that up at the grocery store.’ Consumers go to their local grocery store and find those products. It works in a synergistic way, but we continue to have new varieties of fruits and vegetables to introduce.”

 

Caplan continued, “It is wonderful that American supermarkets seem to realize consumers are passionate about trying these new foods. I think they realize that if they don’t offer the exotic fruits and vegetables, like tropical fruits, different varieties of citrus fruits and some of the peppers, consumers are going to go online and either order them as meals through Blue Apron or purchase the products on Amazon Fresh.”

Fear No Fruit, The Frieda Caplan Documentary
Fear No Fruit, The Frieda Caplan Documentary

 

At Frieda’s, we represent about 1,000 different suppliers, mostly farmers. About half of them are in California; the rest are outside of California and around the world. I think the biggest challenges shared by all our farmers, are first of all—water and how to use it efficiently, and then number two—how do we find the labor to pick our products.

 

When asked how farmers are doing, Caplan replied, “I in awe of farmers. I heard a peach and plum and grape grower speak this morning about his passion. He said, ‘I love this business. I could stop growing this product right now and make more money by putting in nuts, which I could harvest automatically.’”

 

Caplan continued, “I think what’s so admirable about farmers is they do have a passion for the land and for their products. We’re seeing resurgence in young people wanting to come into the business because everyone has to eat of course; but they love the lifestyle that goes along with it and the work-life balance.


Frieda Rapoport Caplan, Ph.D., founder & chair of the Board, Frieda’s Inc. established Frieda’s Finest/Produce Specialties Inc. in 1962, in the male-dominated Los Angeles Wholesale Produce Market. One of very few women in the produce industry at the time, and the first to own and operate a U.S. produce business, Frieda debuted with a purple sign, which later became the company’s signature color, and her premier product was fresh brown mushrooms – an unusual specialty at that time. She quickly developed a reputation for buying and selling new and unusual produce specialties.

Frieda’s two daughters, Karen Caplan and Jackie Caplan Wiggins, head up the family company and the third generation, Karen’s eldest daughter Alex Jackson, has linked in too.