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

  • California hits Gatorade in court for 'anti-water' videogame

    Economic CTV News
    SACRAMENTO, Calif. -- Gatorade has agreed not to make disparaging comments about water as part of a $300,000 settlement reached Thursday with California over allegations it misleadingly portrayed water's benefits in a cellphone game where users refuel Olympic runner Usain Bolt. Source
  • WestJet signs code-share agreement with Hong Kong Airlines

    Economic CTV News
    CALGARY -- WestJet Airlines Ltd. (TSX:WJA) says it has signed a code-share agreement with Hong Kong Airlines that will allow the Asian carrier to sell tickets on WestJet flights using its own designator codes. The agreement builds on an existing interline agreement put in place earlier this year. Source
  • 'Small number' of RBC credit card holders affected in Equifax breach, bank says

    Economic CTV News
    TORONTO -- RBC says "a small number" of its credit-card clients' personal information may have been affected in the massive Equifax security breach. Bank spokesperson A.J. Goodman said in an email that RBC has not yet identified any impact to clients and is continuing to investigate the issue. Source
  • New deadline established for competition to design navy's new warships

    Economic CTV News
    OTTAWA -- Defence companies and shipbuilders competing to design Canada's new fleet of warships have been given until Nov. 17 to submit their proposals. It's the third such deadline for the design competition, which is the most recent -- and arguably most politically sensitive -- phase in the entire $60-billion plan to build 15 warships. Source
  • U.S. stock market regulator urging corporate cybersecurity upgrades is hacked

    Economic CBC News
    The U.S. federal agency responsible for ensuring that markets function as they should and for protecting investors was hacked last year and the intruders may have used the nonpublic information they obtained to profit illegally. The disclosure arrived two months after a government watchdog said deficiencies in the computer systems of the Securities and Exchange Commission put the system, and the information it contains, at risk. Source
  • WestJet breaks ground on hangar for new Dreamliner 787 widebody jet

    Economic CTV News
    CALGARY -- WestJet Airlines Ltd. (TSX:WJA) is gearing up for delivery of its first Boeing Dreamliner 787 by breaking ground on a new $50-million hangar at the Calgary International Airport. The company announced in April it had placed a firm order for 10 of the widebody jets which will allow it to serve new destinations in Asia, South America and Europe with higher-end offerings like lie-flat seating. Source
  • B.C. securities regulator changing crowdfunding rules to help companies

    Economic CTV News
    VANCOUVER - The B.C. Securities Commission is changing its crowdfunding exemption rules to enable B.C.-based issuers to access investors in Alberta. The regulator says the changes will also increase the amount that some will be able to invest. Source
  • Mercedes to invest US$1 billion at Tuscaloosa, add 600 jobs

    Economic CTV News
    FRANKFURT - Germany's Daimler AG says its Mercedes-Benz luxury car division will invest US$1 billion to set up electric vehicle production at its Tuscaloosa, Alabama plant. The company says it will make future electric SUVs under Mercedes' EQ sub-brand there and will also build a new battery plant, adding 600 new jobs in the region. Source
  • TTC suing Manulife for alleged negligence related to benefits fraud scheme

    Economic CTV News
    TORONTO - The Toronto Transit Commission is suing Manulife Financial for alleged negligence in connection with a benefits fraud scheme that first came to light three years ago. To date, 170 TTC employees have been dismissed or have resigned or retired to avoid dismissal, and 10 former employees are facing criminal charges for their part in the alleged fraud. Source
  • Toronto family on the hook for $37K commission after failed home purchase

    Economic CTV News
    A Toronto family who decided to walk away from a new house they agreed to buy says they are shocked to find out they still have to pay real estate commissions, even though the deal never went through Source