Small farmers can make it big with Rustan’s

Small vegetable and fruit farmers are always finding it difficult to market their fresh produce in supermarkets and usually have to contend with bringing their products to the wet markets and often, have to grudgingly accept measly margins.

In recent years, however, vegetable and fruit produ-cers have been diversifying their markets and are ear-ning more. Mid-scale and upscale supermarkets, once thought of as the turf of large-scale producers, are now increasing their reliance on small farmer groups for their supply of fresh produce.

One of the first to start this trend is Shopwise Supercenter, a member of the Rustan’s Group of Companies and a pioneer of the hypermarket concept in the country, which since its introduction of its "Fresh" section in its Shop-wise outlets about five years ago, has been steadily expanding its links with local vegetable and fruit producers.

Rustan Supermarkets on the other hand, pioneered in offering fresh products in its outlets and this has allowed it to distinguish itself from other supermarkets. In the process, Rustan’s patronized mainly by the AB class, has, lead and set standards in retailing. Back then, its links with local farmers were limited.

"But now, we have more direct marketing contracts with several farmer groups close to the urban centers and as our fresh produce section has been gaining ground, we want to extend this opportunity to local farmers and traders," said Frances Yu, assistant vice president for marketing of Rustan’s Supercenter Inc. (RSI) which runs Shopwise Supercenter.

The "Fresh" section now accounts for about 26 percent of total RSI sales.

At its Shopwise Supercen-ter outlets, Yu noted that RSI has also been quite success-ful in luring the middle and lower-middle class to patro-nize its locally-sourced fresh fruits and vegetables.

"Our aim was really for the masses to appreciate our Fresh section and to ensure that they keep coming back, we made it a point to make our prices affordable and comparable even to the prices in the wet markets or palengkes. It’s convenience shopping that they get, you buy at reasonable prices without sacrificing quality which is usually the case in wet markets when the products are exposed to the elements," said Yu.

RSI was able to bring down the prices of fresh produce for its Shopwise outlets because of the direct marketing agreements with producers.

"What drives prices up are the middlemen. But getting the products directly from producers through long-term contracts with farmers allows us to sell these commodities at lower prices," added Yu.

Shopwise has a long list of suppliers. It’s outlet in Alabang is the gateway to vegetable and fruit-growing provinces in the Calabarzon area (Cavite, Laguna, Batangas, Rizal, and Quezon). This enables Shopwise to have access to cheap fresh products directly from farmers. At the same time, this guarantees farmers‚ profit margins as they free themselves from the mercy traders who dictate prices.

In recent years, Shopwise has noted the market’s growing clamor for organic fresh produce that are grown without chemical-based pesticides and fertilizers.

"Filipinos are becoming more health-conscious, and we see this as another oppor-tunity for local farmers to get into. This will be good for those who don’t have the big-sized farms and just want to create a niche in the market," said Yu.

With the growing need of Shop-wise, and Rustan’s Supermarket growing need to meet its "green" requirements, the RSI asked the assistance of the Department of Agriculture (DA) in forging new business links with local fruit and vegetable producers.

Accordingly, DA and Shopwise recently launched the Shopwise Fresh Festival at the Filinvest Corporate City in Alabang which features a month-long activities that showcase and highlight local fresh produce.

"We hope that this will encourage farmers to produce quality products worth selling in all of our outlets. Already, we are negotiating with several groups so that we can set standards and discuss how to ensure that supply will be steady and at prices that are acceptable," said Yu.