From The Summer 2004 Issue of Natural Grocery Buyer

Giant Food Pushes Local Produce

Randy Barrett

Why sell flavorless, bullet-hard tomatoes from Uruguay when the farm down the street grows the best beefsteaks on the face of the earth?

Giant Food LLC of Landover, Md., questioned that publicly in July 2003 when it launched its Roadside Stand program, highlighting a broad range of fresh produce from local growers in the Washington, D.C., region. In fact, Giant has been selling local produce at its 193 stores during the summer months since 1994—but with little revelry.

The move to brand the Roadside Stand program came in response to other grocery chains that were starting to market their own local produce. “Our competitors started following our lead, and we needed to differentiate ourselves,” says Chris Downs, director of produce sales and planning for Giant.

In recent years, supermarket competition has intensified in Giant’s trading area, which includes Virginia, Maryland, the District of Columbia, Delaware and New Jersey. Along with such longtime competitors as Safeway, Food Lion, Harris Teeter, Wal-Mart, Ukrop’s and Giant Eagle, new Whole Foods Markets, Wild Oats and Trader Joe’s have opened in the area. Sutton Place Gourmet is expanding under new management, and Rochester, N.Y.-based Wegmans has been working its way south, opening its first metro-D.C. store with great fanfare.

To appeal to quality-conscious shoppers, Giant has expanded its natural products sets. In March, Giant announced it will carry five flavors of Cafe JaVaNa, a gourmet, fair-trade coffee. The stores also carry Laura’s Lean natural beef and Springer Mountain natural chickens and chicken breasts. Giant used its considerable marketing might to push the Roadside Stand concept in print and radio advertising. The company won’t disclose sales figures, but Downs describes the success of the program this way: “We wouldn’t spend so much on marketing if it didn’t make money.”

Local produce ends up being cheaper for Giant to sell because it is delivered directly by farmers to Giant’s warehouse or to individual stores. “Why pay for freight from California if I can get beans today for tonight?” Downs asks rhetorically.

Giant currently works from July to November with 30 to 40 local growers who produce everything from melons to corn to apples. Most of the produce isn’t organic because there are so few certified farms in the area, Downs says. As well, pricing of the produce tends to be cheaper than local farmers’ markets, because the company buys in high volume.

The original program rollout called for sidewalk sales at 19 Giant stores and full-blown, parking-lot farmers’ markets stands at four locations. The rest of the stores tagged the local fruits and vegetables with large signage inside their produce sections. Produce managers at several stores report there was solid buyer interest last year, but it wasn’t gangbusters across the board. “Customers seemed to like it, but it wasn’t real big from a sales standpoint,” says Jason Testa, produce manager for a Giant store in Leesburg, Va., which ran an outdoor stand.

Customers did appreciate the freshness and even recognized some of the farms where the produce was grown. “Most people around here know where the farms are and try to support them,” Testa says. That’s exactly the kind of response a retailer wants, says Jon Hauptman, a vice president with Willard Bishop Consulting in Barrington, Ill. “Giant’s program gives them the opportunity to turn produce from strictly a commodity to something with special features,” he says.

The Roadside Stand signage often includes a photo of the farmer and information on the origin of the produce. “They’re selling a story around it,” Hauptman says.

From an operational standpoint, the program is remarkably simple. All produce pricing and payment to farmers is centralized at Giant’s headquarters. Produce managers at the stores don’t need to treat the local goods any differently from a bookkeeping standpoint than big shipments that come from other parts of the country.

Farmers love it because Giant buys in large quantities and pays on time. Jennifer Sturmer, president of Hummingbird Farms in Ridgely, Md., which supplies about 30 Giant stores with tomatoes, says the company usually pays within 30 days.

Sturmer delivers directly to stores and likes dealing with produce managers personally. “It’s interesting how important the produce manager is in merchandising,” she says. “They can make or break the product.”

Sitting on his tractor chatting by cell phone, Robert Worm of Breezeway Farms in Preston, Md., couldn’t be happier with the program. He’s been selling watermelons and sweet corn to Giant since 1994. “They’re grower-oriented. They’re a straight-up bunch of people,” Worm says.

Free-lance writer Randy Barrett is president of the Business Writers Group in Falls Church, Va.