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

  • Russia says oil production cuts may continue to boost prices

    Economic CTV News
    KUWAIT CITY -- Russia's energy minister says there's "94 per cent" compliance on a six-month oil production cut among OPEC members and non-cartel nations, as well as discussions about continuing the cuts to boost crude prices. Source
  • Iran imposes sanctions on 15 U.S. companies

    Economic CTV News
    TEHRAN, Iran - Iran has imposed sanctions on 15 American companies over their alleged support for Israel, terrorism and repression in the region. A Foreign Ministry statement carried by the state-run IRNA news agency Sunday said the companies are barred from any agreements with Iranian firms and that former and current directors will not be eligible for visas. Source
  • How to roll up the rim without buying coffee

    Economic CBC News
    You don't need to make a purchase to enter contests such as Tim Hortons' Roll Up The Rim To Win. But sometimes the alternatives are just as costly. (Tim Hortons ) Despite the well-known slogan, you don't actually have to roll up the rim to win. Source
  • Convenience or comparison? Why sticking with 1 bank might not be the best option

    Economic CBC News
    Consumers love the convenience of one-stop shopping for their financial needs — but it could be costing them. In a poll conducted by Ipsos and commissioned by LowestRates.ca, an online interest rate comparison site, six in 10 Canadian respondents said they prefer to have all their financial products and credit cards at one bank. Source
  • More TV streaming services join U.S. market, leaving Canada far behind

    Economic CBC News
    YouTube's announcement that it will soon launch an online TV streaming service cut deep for some Canadians. That's because it's not coming here. YouTube TV will offer more than 40 live TV channels for only $35 US a month. Source
  • Poker tables keep decreasing on Las Vegas casino floors

    Economic CTV News
    LAS VEGAS -- When the Monte Carlo closes its eight-table poker room in about a month as part of a $450 million overhaul, the Las Vegas Strip will have lost nearly a quarter of the tables it had a decade ago. Source
  • Las Vegas casinos continue to close poker rooms

    Economic CTV News
    LAS VEGAS -- When the Monte Carlo casino closes its eight-table poker room in about a month as part of a $450 million overhaul, the Las Vegas Strip will be down nearly a quarter of the tables it had a decade ago. Source
  • Google's YouTube loses more advertisers over offensive videos

    Economic CBC News
    An advertising boycott of YouTube is broadening, a sign that big-spending companies doubt Google's ability to prevent marketing campaigns from appearing alongside repugnant videos. PepsiCo, Walmart Stores and Starbucks on Friday confirmed that they have also suspended their advertising on YouTube after the Wall Street Journal found Google's automated programs placed their brands on five videos containing racist content. Source
  • National contest tries to convince students that lucrative sales jobs are 'sexy'

    Economic CBC News
    Sonya Meloff wants everyone to know that a career in sales is sexy. Not sleazy. "I think that sales is a really sexy job," says the founder of the Toronto's Sales Talent Agency. "You get to be at the forefront of representing a company, you're the one that gets to talk to the customers. Source
  • Report examines grim Bangladesh leather trade, links to West

    Economic CTV News
    DHAKA, Bangladesh -- Hazardous, heavily polluting tanneries, with workers as young as 14, supplied leather to companies that make shoes and handbags for a host of Western brands, a non-profit group that investigates supply chains says. Source