Fruit and vegetable box companies look to local produce to lower prices

TORONTO - Fresh fruit and vegetable prices may be climbing at a rapid rate, but the costs of food delivery box subscriptions are holding steady as economic and weather forces align to make local food a better deal.

See Full Article

"You haven't seen the increased prices on local foods, locally produced foods in the way you have for imports," said Ran Goel, who founded the Greater Toronto Area's Fresh City Farms in 2011.

Fresh City Farms is one of many food box subscription companies to offer regular deliveries of pre-selected or customized produce.

In January, food costs for Canadian households were four per cent higher than they were at the same time a year earlier, according to Statistics Canada's latest consumer price index. Fruits and vegetables fuelled the hike, rising by 12.9 and 18.2 per cent respectively.

This year, overall food costs will outpace general inflation again, according to the Food Institute of the University of Guelph. Fruit and nut prices will jump between 2.5 and 4.5 per cent, according to the institute's annual food price report projections, while consumers will pay roughly two to four per cent more for vegetables.

The low Canadian dollar and a drought in California and Mexico - where much of the produce Canadians enjoy over the winter is grown - are largely to blame for the situation, including the near-double-digit price tag for a head of cauliflower earlier this year.

Locally grown produce, therefore, acts like a "buffer" from the steep price increases on imported foods, said Goel.

Many food box providers pride themselves on including mostly local offerings that include root vegetables and apples. So their subscribers may feel the pinch less than those shopping for imported produce at grocery stores.

Fresh City Farms packs its produce bags with an average 70 per cent locally grown food throughout the year.

For example, the company's boxes include potatoes - Ontario's largest fresh vegetable crop, according to the Ontario Potato Board. The humble spud actually cost 5.4 per cent less last month than in January 2015, according to Statistics Canada.

During the winter, when the growing season in southern Ontario grinds to a halt, Fresh City Farms' produce bags have about half local, half imported goods.

Then, Goel said, he attempts to select American produce sold at a good value. That means there was no cauliflower during the so-called cauliflower crisis.

Goel has consequently been able to keep his food basket prices steady. The only extra cost passed on to consumers, he said, is that sometimes they receive slightly less produce than usual in their baskets - a tactic also used by other companies.

In its food boxes, B.C.- and Alberta-based SPUD mostly removed imported fruits like mangoes, bananas and oranges, said Corbin Bourree, SPUD Edmonton's managing director.

"That's where we're seeing the biggest price jumps," he said.

Instead, the company has substituted those tropical fruits with more local offerings, including Canadian cucumbers and apples, so that prices don't spike.

Such defensive purchasing strategies also helped the Food Share's food box prices remain the same, said Alvin Rebick, a manager at the non-profit organization who's also a loyal customer.

He signed up for the service to lower his grocery bills. Rebick estimates he saves about $15-20 a week on produce to feed his family.

Other consumers are apparently beginning to see food boxes as a financially savvy option amid rising food costs.

Fresh City Farms doubled the number of customers it serves over the past year, said Goel, which is atypical growth for the company that has been steadily increasing its subscriber base by roughly 40 to 50 per cent a year since 2012.

SPUD Edmonton, meanwhile, reports a 50 per cent increase, said Bourree, in a province grappling with a significant economic downturn.

But the doom-and-gloom rhetoric of rising food prices may also be spurring some customers to suspend or cancel their delivery services, said Rebick.

"When people are hearing that the food prices are too high and walking into the grocery store and seeing those prices," Rebick said, "I think they sort of shy off, and say ... 'It's not going to be good enough or it's going to be too expensive."'



Advertisements

Latest Economic News

  • Takata Corp. files for bankruptcy in Japan and U.S. following air bag recalls

    Economic Toronto Sun
    Japanese air bag maker Takata Corp. has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of faulty air bag inflators. The company announced the expected action Monday morning Tokyo time. Source
  • From condoms to caskets: merchandise marks Canada's 150th birthday

    Economic CBC News
    It's been said that Canadians are not brash about their patriotism, but you wouldn't know it from the variety of merchandise, big and small, being snapped up in advance of Canada's 150th birthday July 1. From T-shirts to hats, flags to flasks, condoms to caskets, goods adorned with celebratory logos are popping up faster than you can say sesquicentennial. Source
  • Canadian lumber producers brace for second round of softwood lumber duties

    Economic CTV News
    MONTREAL -- Canada's softwood lumber industry is bracing for a second wave of U.S. duties expected to come Monday that could put further pressure on producers, particularly smaller ones, to cut jobs. The U.S. Source
  • Warning labels might be coming to cheese: CBC's Marketplace consumer cheat sheet

    Economic CBC News
    Miss something this week? Here's the consumer news you need to know from CBC-TV's Marketplace. Get this in your inbox every Friday. Sign up here. Fake drugs American prosecutors accuse CanadaDrugs.com and its CEO Kris Thorkelson of selling unapproved and counterfeit cancer drugs to U.S. Source
  • Debt, protectionism could drag down improving global economy

    Economic CTV News
    FRANKFURT -- The global economy has picked up and prospects for the next few months are the best in a long time. But the recovery is maturing and faces risks from populist rejection of free trade and from high debt that could burden consumers and companies as interest rates rise. Source
  • Air bag maker Takata bankruptcy expected Monday

    Economic CTV News
    DETROIT -- Drowning in a sea of lawsuits and recall costs, Japanese air bag maker Takata Corp. is expected to seek bankruptcy protection in Tokyo and the United States early Monday. Takata was done in by defective air bag inflators that can explode with too much force, spewing out shrapnel. Source
  • Air bag maker Takata files for bankruptcy in Japan, U.S.

    Economic CTV News
    Japanese air bag maker Takata Corp. has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of faulty air bag inflators. The company announced the expected action Monday morning Tokyo time. Source
  • How Sears' troubles could hasten radical change in Canada's malls

    Economic CBC News
    Sears' plan to shut down 59 of its locations is grim news for the chain's landlords across Canada. Could it also spell doom for the nation's neighbourhood malls? Anchor tenants — typically big department stores — have always been a critical component of mall design. Source
  • Proposed rules for CRA amnesty program could expose more tax-cheat advisers

    Economic CBC News
    The Canada Revenue Agency is tightening its amnesty program for tax cheats, including a proposed rule that could expose more of the shady advisers who set up dodgy tax schemes to help clients hide their money. Source
  • Italian PM 'guarantees' savers' accounts in 2 troubled banks

    Economic CTV News
    ROME -- Italy's premier says holders of accounts in two troubled Italian banks will have their savings guaranteed despite insolvency proceedings. Premier Paolo Gentiloni was referring to Veneto Banca and Banca Popolare di Vicenza, each struggling with unpaid loans. Source