Top 10 Reasons Why the Produce Industry Sucks

#10 Ruthlessness Trumps Reciprocity

We’ve all heard of the concept win/win in business.

Theoretically, this seems like an achievable outcome, right? Two parties enter into business dealings in order to improve each other’s standings in their respective or common industry.

This is not a new concept:

Apple and Hermes. Spotify and Starbucks. John Deere and Kespry. It even happens between competitors.

While this works well in most other industries, it does not prove successful in the produce industry.

Here’s why:

In most industries, every deal or transaction that’s made stands on its own. In other words, most businesses don’t enter into a deal if they know up front that the net result will be a loss.

These losses come in different shapes and sizes. Some are opportunity losses but many are true fiscal losses.

In our industry, this is far from the case. In fact, the most successful produce traders follow a simple methodology that looks something like this:

Lose some. Win more. Come out ahead in the end.

Due to the nature of the business, there’s little option but to follow this methodology if you want to scale/grow your business. As backwards as it sounds, many people would say the more negative transactions you have, the more likely it is you have high quality retail or processing customers, assuming a high degree of competence and you’re taking some calculated risks.

How could this be? Why would losing money be a requirement for a good customer?

Because the game is rigged. That’s not the reason, but it’s the cause. This business is backwards most of the time.

Supply and demand at street level don’t always correlate (and sometimes run congruently) with FOB markets. Growers/suppliers take advantage of weather, demand surge, storage, and coincidence to spike markets. Conversely, wholesalers, retailers, and brokers take advantage of flooded markets, kicking growers when they’re down by pushing purchase prices well below packing costs despite already respectable margins.

While this is the game we’ve been playing for years, it’s not only dangerous but extremely inefficient. It’s every man, woman, and child for themselves. Between the drinkin’, smokin’, fibbin’, and swearin’, God knows this industry is no place for children.

Companies fold, dreams are broken, and sometimes, good people lose everything. The struggle is real.

A few cold facts about produce transactions:

→ An extremely low % achieve reciprocity

→ Loyalties are occasionally broken for $.25

→ Allegiances are commonly overlooked for $1+

What makes a business that’s so commonly referred to as “relationship-based” so incestual and cutthroat that a buyer would leave a valued and proven trading partner for a mere $.25 on any given transaction?

The answer, like most other challenging equations, does not have a singular problem, which is what makes it such a challenge to solve. However, when we examine the root, there is one contributing factor that is most glaringly responsible for a lack of loyalty and makes a win/win culture (in our industry) nearly impossible. To isolate the largest contributing factor is easy. It’s a simple 5 letter word.

Trust.

More specifically, a lack of trust.

This absence of trust runs deep. So deep that it may be inevitable and impossible to overcome industrywide. Like everything else, this absence of trust is part of a never-ending cycle of cynicism that flows throughout the industry. Channeling this trust truancy toward the guilty party presents more frustrations, as it exists everywhere and nowhere, depending on the many variables present at the time.

Trust in mother nature. Trust in one another. Most importantly, trust in the system.

My definition of trust can be summarized in a simple equation

Competency + Value + Integrity + Consistency = Trust

RISKY BUSINESS

Us grizzly veterans are acutely aware that virtually all of our trading partners “care” about the bottom line of our business, until it’s conversely related to the bottom line of their own.

Because we’re always chasing the equalizer to our last bad deal, we’re constantly looking for a better one the next time. This can translate to a procurement merry-go-round, or leveraging a supplier to drive the price down with “regulars”. For various reasons, this often gets us into more trouble and certainly contributes to the overall distrust within the industry.

How do we break the cycle? How do we make sure that every deal is a good deal for everyone? A real win-win?

Yeah Right. Doesn’t Happen. Will not happen.

Until fundamental changes are made.

Where do we go from here?

The people I do business with are good people. We were raised right. We genuinely care.

Do I believe these changes will be made? Absolutely. Eventually. When? That depends on us and the tools we equip ourselves with. It starts with me and ends with you. That’s the way we need to look at this.

I’m going to challenge you (as I’ve challenged myself) to leave our industry in a better place than you found it. One call, one deal, and one day at a time.

By practicing a few of the valuable lessons we learned in our youth, we can bring forth the change that’s needed to improve this industry, each other, and most importantly, ourselves.

1. Treat others as you wish to be treated

2. Respect character and commitment, not power or wealth

3. Lead by example

4. Your word is your bond

5. It’s not all about you

6. Admit your mistakes

7. Change is good

8. Get by giving

9. Trust others

10. It’s never too late to start

There’s not one individual who can change this old dog of an industry. For real change to take root, it’s going to take a movement.

How do you start a campaign of this magnitude? Just like anything else, it starts with one believer, then two, then two more. And so it builds.

Call me the guy at the baseball game trying to start the wave. Or the first girl at a concert to flick my Bic and begin the chant. Encore, encore, encore…

Call me an eternal optimist.

Call me whatever you want, but don’t call me crazy, because you’re still reading (and my guess is you want change too).

A 20+ year entrepreneur with a no-B.S.-in-business attitude, Shaun Black has powered over $30 million in annual revenue with his trading and importing company, Diamond Produce, founded numerous successful local businesses, and remained on the cutting edge of national start-up industries for over a decade.

His experience as a grocer taught him the importance of exceeding expectations, one relationship at a time. Through systems, automation, and personal touch, his businesses deliver consistent retail-minded service. His “add value” approach to vendor and teams alike has paid dividends and been the driving force behind growth and profit.

When in Doubt, Add Value.