Costco Connection - February 2008

quality-assurance program, added, “No matter what countries Costco fresh produce originates in, all are under the same stringent Costco quality guidelines.”

Food-safety testing is ongoing. Besides Costco’s in-house testing department, the company employs numerous independent third-party auditors. Inspections start at the grower level and end at warehouse checkout. If concerns arise, production ceases.

I asked Heather Shavey, Costco produce general merchandising manager, about flavor, size, consistency and shape requirements. Each produce item has a Costco-supplier confidential specification sheet listing very tight acceptability factors. For example, Costco has zero tolerance for undersized Cara Cara oranges, all blueberries must be handpicked and mini watermelons are randomly cut open at Costco depots to check for hollow centers, which are not tolerated.

Value is always a priority. A quick comparison finds a long and varied list of Costco produce with lower prices than those offered by two national retailers (see chart). A special nod goes to Costco’s blueberries, strawberries and raspberries, with savings of more than 50 percent.

Keep to the code

Integral to Costco’s quality formula are the company’s strict Supplier Agreement and Vendor Code of Conduct, which spell out precisely how Costco expects the companies they deal with to treat their own employees. If a company is found to have broken the law, Costco will either put them on probation or discontinue business with them completely, depending on the severity of the breach.

Curious to hear a grower’s perspective on these requirements, I dined with Alejandro Aldunate, the owner of Aconex and one of Costco’s largest suppliers of Chilean fresh fruit.

This gentleman has a healthy respect for Costco. He shared that as a result of their eight-year partnership many positive changes have occurred at Aconex. Worker benefits, including dentists at the workplace, special housing programs to assist workers with financing and building their own homes, and training and education courses for entire families, are now offered—and production is up 30 percent annually.

Excess access for success

Costco works with more than 500 such produce suppliers in 24 countries. The need for so many partners is straightforward: to provide members with greater access to high-quality, healthy foods on a daily basis. Heather explained, “We search the globe to find the best quality, form long-term commitments, bring in truly fresh items and always try to buy locally or within a country. If our members want asparagus in February, then we get it for them.”

Costco’s produce purchasing plan is deceptively simple: Follow the sun. This means most U.S. Costco

warehouses offer local and domestic fruits and vegetables (with an ever-increasing emphasis on organic items) during the Northern Hemisphere’s peak harvest times. Once finished, Costco switches to the cli-matic-opposite Southern Hemisphere.

For example, Costco’s onions come from Idaho, Washington, Oregon, California, New Mexico, Texas, New York and Georgia during the U.S. warm season and from Mexico, Peru and Chile in the winter. Apples, a cold-weather crop, have the opposite schedule.

Suppliers great and small

I spent a morning walking the convention floor with Frank Padilla, Costco fresh foods assistant vice president. Everyone knows Frank, and he never failed to stop and ask about farmers’ families and crops. I was surprised Frank spent just as much, if not more, time talking with small, independent farmers as he does with large growers. When I asked why, he listed several reasons: “There is an opportunity for all growers to sell to Costco; we want to make sure that the folks we deal with are in good shape—we need them not just this year but every season; I want to ensure that Costco and our buying team are treating them fairly; and it’s important to thank all the suppliers for helping Costco grow each and every year and to encourage their support for years to come.”

Many suppliers stopped and shared Costco stories: Janice Honigberg, president of Sun Belle Inc., credits Costco with helping to transform blackberries from a fleeting summer treat to a year-round delight. Brian Bocock of Naturipe Farms reported, “Costco has helped open up the world market for us. We started out selling our U.S. fresh blueberries at Costco’s New Jersey warehouse. Now we distribute them to most warehouses in the U.S., as well as Canada, the UK, Taiwan and Japan.”

Veggie

tales

IRIDIO PHOTOGRAPHY

AT COSTCO, every fruit or vegetable has a story.

For example, the warehouse’s very thin and tender French green beans are much more than good-looking, good-for-you veggies. They represent Costco’s commitment to work directly with more than 2,000 Guatemalan farming families participating in the Juan Francisco Project and the Cuatro Pinos cooperative for socially responsible, sustainably sourced products.

Thanks to this partnership, more than 10,000 Guatemalans are now receiving access to health care, education, credit and technical assistance, training and decent and affordable housing.

Class act

Before leaving, I asked about spot buying. This is when a retailer purchases repackaged, untraceable produce. Heather stopped in mid-stride and states, “It’s our goal not to do this. We have a responsibility to uphold to ourselves, our families, Costco and our members. Quality and safety are always on our mind.”

World class through and through, wouldn’t you say? C

Dale Hollingsworth, Costco produce buyer, who has visited the project many times, notes, “Today I see a bag of Costco French beans as more than just French beans in a bag. It makes me think about an improved quality of life for many people.”