Handling Specialty Products

As consumption of organic and luxury food items grows, the onus is on logistics providers to offer higher levels of service.

October 21, 2013

According to the International Federation of Organic Agriculture Movements (IFOAM), organic food is a $63 billion industry worldwide. Furthermore, between 2002 and 2011, the industry grew 170 percent, or about 19 percent annually, with the U.S. comprising the single largest market for organic food and beverages.
Organics are not only popular with consumers; even logistics companies see the advantages of acquiring the necessary certifications to grow, transport and handle organic products.
In the warehousing and distribution sector, earning the Organic Distributor certification from Quality Assurance International (QAI) is an achievement that sets those companies in the logistics industry apart from other food grade operators.
QAI is the leading provider of organic certification services verifying organic integrity throughout the supply chain. The organization is a USDA-accredited certifying agency, approved to provide organic certification in accordance with the USDA’s National Organic Program (NOP).
In September, Prism Team Services, based in the San Francisco Bay Area, was awarded the Organic Distributor certification, which allows the company to repack and provide value-added services for their organic product customers.
“As consumers become increasingly attentive to food labels, ingredients and the way their food is processed, we expect to see continued growth in Organic and natural food markets in this region and nationwide. The entire Prism team is committed to achieving and maintaining the highest caliber of service possible for this important and growing customer segment,” said Jere Van Puffelen, President of Prism Logistics.
Prism Team Services in Hayward, Calif., was the first of the company’s four facilities to be certified and the firm expects to expand the program throughout its network of Northern California distribution facilities, including those in Sacramento, Stockton and Livermore.
Meanwhile, United Natural Foods, Inc. (UNFI), which distributes more than 65,000 products to more than 27,000 customer locations throughout the U.S. and Canada, is in expansion mode too with some of that activity also taking place in the San Francisco Bay Area. It’s just acquired Trudeau Foods, the largest Minnesota-based distributor of natural, organic and specialty food products. And, UNFI recently announced plans to build a 450,000 square-foot DC (with potential to expand to 800,000 square feet) in Gilroy, Calif., which is about a 90 minute drive south of San Francisco.

Growth in organics means changes in logistics

The 20th anniversary of USDA Organic occurs in 2023. Quality Assurance International (QAI), a leading USDA-accredited organic product certifying agency, offers its view on what that milestone will usher in—and by extension—how it will impact logistics providers.

Prediction #1: Stricter Organic.
The USDA’s National Organic Program (NOP) and National Organic Standards Board will bring even more rigor to the federal regulations in terms of specificity for practices and allowed substances and practices. Government oversight will make it more difficult for “organic” to be used loosely as a marketing term, i.e. “Organic Café” or “Organic Resort.”

Prediction #2: Food Safety Fusion.
The organic food supply will fuse with food safety and other “product integrity” programs, adding more disciplined food safety practices that are audited and certified at even the smallest of farms and plants. Organic and food safety audits will be increasingly synchronized. QAI anticipates continued growth in the offering of multiple audits so companies may bundle organic, gluten-free, kosher, and/or numerous food safety audits into one thorough audit and inspection.

Prediction #3: Harmonic Convergence.
International standards for organic will be harmonized with USDA Organic, removing former obstacles to international trade. The U.S. also will move closer to its European neighbors in Non-GMO verification and labeling requirements.

Prediction #4: Sustainably Organic.
Increased focus on companies’ impact on biodiversity, water and soil conservation will translate to additional sustainability metrics in organic practices. As the spirit of organic is to grow in harmony with nature, each farm and company’s environmental impact will be under more scrutiny.

Prediction #5: Transparency Made Tangible.
Consumers need to know and trust the sourcing of the products they buy will drive total transparency in the organic production chain, and make QR (quick response) codes—already introduced by QAI in July 2012—commonplace for all organic certificates and on packaging. The USDA Seal for organic will remain credible, and online tools will be used by consumers to see the credibility of each product’s organic claims.

Prediction #6: No More Shopping Gaps.
Practical steps will be taken to be more inclusive and steps will be taken to include new or emerging industry sectors. This will make organic certification available in sectors currently excluded in the regulations—like aquaculture/seafood. It also will address underserved categories like dietary supplements, pet food, personal care, cleaning supplies, fiber and flowers. If it starts with a plant, mammal or fish, it can be certified organic. Consumers will be able to find certified organic products in all sections of the supermarket and pharmacy.

Prediction #7: Organic Literacy is Evident.
After years of some confusion in the marketplace, efforts by the NOP (USDA’s National Organic Program), Organic Trade Association, and retailers pay off in increased consumer literacy for organic. Land grant universities also help increase knowledge in organic through their own research initiatives and increase in organic and sustainable agriculture tracks.

Prediction #8: Accessible Organic.
Larger organic production, from farm acreage expansion to processing facilities, will translate into organic landing where it is most needed: schools, hospitals, food banks, convenience stores and in mainstream America’s homes.

The Luxury of Lobsters

Air cargo connects U.S. businesses and Chinese consumers

By Leandro Moreira

Lobster season has begun, and consumers around the world are flocking to local restaurants and grocery stores to snap up the luxury seafood that is as much a delicacy as it is a symbol of economic status. Particularly in China, there is a rapidly growing demand for fresh, live lobsters, but while chefs may cook the dinner, it is air cargo logistics that puts lobsters on the plate.
In China, urbanization, income growth and greater access to credit are all yielding a larger middle class with a taste for luxury. China’s growing middle class enjoys more disposable income, and many consumers are electing to purchase the high quality luxury seafood that was previously out of reach. As a result, seafood prices in China have outpaced other major food items, rising five percent annually over the last decade, according to data from China’s Academy of Agricultural Sciences. This kind of growth is expected to continue, and as imports constitute an ever larger portion of the Chinese seafood supply, there are numerous opportunities for businesses worldwide. Accessing these opportunities, however, presents significant challenges for seafood producers. How can fishermen reach high demand markets if they are half-a-world away?
In Key West, Florida, fishermen are catching lobsters whose size, weight and taste is comparable to the renowned Australian lobster species. Yet, these U.S. lobsters bring a more competitive price, if they can reach the Chinese market. The challenge for U.S. fishermen is moving live lobsters across 8,000 miles in less than 24 hours. For this kind of logistics challenge, the only solution is air cargo.
American Airlines Cargo works with shippers and forwarders in Florida to move live lobsters to Shanghai via Los Angeles. Air cargo’s greatest advantages—speed and efficiency—are critical to ensuring the lobsters are kept viable throughout their international journey. Lobsters cannot survive for long outside of water, and for international logistics, the clock starts as soon as the live crustaceans are removed from their holding tanks. After packing them in seaweed and a small amount of dry ice within an insulated Styrofoam container, the shipper works with their forwarder to quickly drive the lobsters to the airport. There, a waiting air cargo operations team completes the necessary screening and customs forms before ushering the shipment onto the plane.
While a fast moving supply chain requires a precise handoff from the forwarder to carrier—as well as a jet aircraft traveling about 600 mph—the real key to ensuring live lobsters reach their destination in perfect condition is a brief transfer time. In Los Angeles, American’s operations teams are waiting to quickly remove the lobster shipment from one plane and onto another. Doing this in less than two hours takes a lot of planning, much of it before the lobster season even begins.
Pre-season planning is important for all cargo commodities. However, when dealing with delicate, high value seafood, there is no room for error or guesswork. From setting aside the appropriate capacity to coordinating flight times and working with customers, American has detailed plans in place before lobsters ever leave the water. This pre-planning is what keeps lobster shipments moving without delay, and the Los Angeles teams receive daily alerts on when to expect the next shipment so they are prepared to execute a quick connection when the plane arrives.
Logistics is often the unsung hero of international commerce. Consumers rarely see or even know that without air cargo, the products they enjoy would be far more difficult—if not impossible—to access. Air cargo plays a critical role in helping the growing Chinese middle class satisfy their consumer appetite, but logistics is also critical for business and economic growth. The seafood shippers in Florida and around the world could not capitalize on the globalized marketplace without the fast, dedicated and coordinated work of air cargo logistics.
Because of air cargo’s unique role in fostering global trade, the industry serves as a thermometer on international economic performance. There remain many challenges for economic success, but through air cargo, businesses in the United States and consumers in China are enjoying the luxury of lobsters.

Leandro Moreira is a regional sales manager for American Airlines Cargo. He is responsible for managing cargo sales in the southeast region of the U.S. and is based in Miami.