"The Internet has helped us find specialty grower contacts."

Sometimes the global village isn't a very friendly place, especially in the vegetable patch. While major organizations such as the Food Marketing Institute (FMI), Washington, D.C., and the Produce Marketing Association (PMA), Newark, Del., talk about the need to support a global marketplace, growers in Florida, California and Mexico eye each other distrustfully. And countries continue to guard their markets.

Florida growers claim they lost as much as 30% of their market share to Mexico because of the devaluation of the peso and the North American Free Trade Agreement (NAFTA). Mexican exporters worry about having to institute expensive new safety measures, and California growers complain that NAFTA hasn't helped them much at all.

In the fluid dynamics of global economics, retailers are seeing growing patterns and growing areas fundamentally change.

Just like the interstate highway system opened the door for the dominance of California produce four decades ago, technological advances in shipping and horticultural advances in the fruits and vegetables themselves have made it possible to supply American produce sections from as far away as South Africa, Holland and Chile.

Imports made up 17.5% of the produce consumed in the United States in 1998, up from 16.9% in 1997, according to the latest figures available from the Economic Research Service of the U.S. Department of Agriculture.

Fresh fruit, including bananas, makes up a much larger share of imports, accounting for 41.4% of the fruit consumed in the United States in 1997 (the latest year for which USDA fruit data is available). Imported vegetables, including potatoes, represented 15.1% of the vegetables consumed in the United States last year, according to USDA.

By far, Mexican product dominates U.S. imports, accounting for approximately 70% of the imported vegetables and 20% of imported fruit. NAFTA opened the door to major changes in imports from Mexico. Produce imports from Mexico alone have more than doubled since 1992 and they are expected to continue to increase. The volume of produce imported from Mexico rose from 1.6 billion pounds in 1992 to 3.8 billion pounds in 1998.

Retailers have come to rely on the global marketplace to provide fruits and vegetables year-round, and for a supply of produce that can't be grown in the United States. And supermarket companies themselves are becoming international.

"We see the marketplace getting broader, with fruits and vegetables becoming increasingly global," says Tom Stenzel, president and CEO of the United Fresh Fruits and Vegetable Association (UFFVA), Alexandria ,Va.

"The important questions are whether it is a level playing field and whether produce imports are meeting the same standards of quality and safety," says Stenzel.

"In 10 years, with continuing globalization, produce buyers will be going to whoever has better prices, quality, markets and delivery," he says.

Today, retailers are using imports to extend their selling seasons. "A lot of specialty crops grown in the United States have a short season, so by going to the Southern Hemisphere you get a second season," says Greg Hess, manager of product procurement for Frieda's Inc., Los Alamitos, Calif.

It is technological breakthroughs and transportation developments that have played key roles in creating a global marketplace for produce. Advanced quick-cooling methods can add a critical three to four days to shelf life for much produce, and climate control during shipping means that it's possible to get grapes from Chile, tomatoes from Holland, as well as for U.S. growers to ship fruits and vegetables to Japan.

Instant global communication via the Internet has also opened the way for more imports. "The Internet has helped us find specialty grower contacts," says Debra Cohen, director of marketing and product development for Melissa's/World Variety Produce Inc., Los Angeles. "The Internet has definitely opened the door to more variety, more access and more streamlined communication," she adds.

While most fruit and vegetable experts agree that the market for local produce—when it is in season—will remain strong, they also say that people now routinely expect to have a year-round supply of produce. "We are not capable of producing enough to supply produce departments," says Karen Brown, senior vice president of FMI. "We need Central and South America to fill out our supply."

From a marketing standpoint, retailers need produce from around the world more than ever, according to Brown. "One of the main reasons consumers choose a store is the produce department, so variety year-round is very important," she says.

Despite the increase in imports, the large majority of fruits and vegetables on U.S. supermarket shelves are still grown in America. "Most retailers look at imports as complementary to the domestic supply," says Bruce Peterson, vice president of perishables for Wal-Mart Supercenters.

But Florida growers say the global marketplace is creating an unfair advantage for its competitors in Mexico. "With the tremendous devaluation of the peso in 1994, a significant amount of produce in direct competition with us began flooding the U.S. market," says Mike Stuart, president of the Florida Fruit and Vegetable Association, based in Orlando. "That influx of produce—primarily tomatoes, bell peppers, squash and eggplant—knocked our growers down for the count. Our market share went from the 60% to 70% range to 30% to 40%. A number of growers have gone out of business and the industry is changing. From a practical standpoint, if this trend continues, the domestic capacity to produce will be eroded to the point where we are completely dependent on foreign produce."

Wal-Mart's Peterson disagrees. "It's ridiculous to think that imports will threaten the domestic supply," he says. "First and foremost, our domestic producers have the ability to produce outstanding produce that is easy to distribute locally. But the domestic industry has to come to grips with the fact that we live in a global marketplace."

While some produce demand is shifting, experts feel California is still likely to remain the main source of U.S. fresh fruits and vegetables for the foreseeable future. "Right now, 50% of the produce comes from California alone," says Kathy Means, vice president of PMA. "So it would take an awful lot for the majority of produce sales to shift to imports."

But the Western Growers Association, Irvine, Calif., which represents most of the large California growers, is worried that domestic problems—such as labor costs, government regulations and pricing—will undermine the ability of growers to compete internationally.

"Our growers, when they talk about more foreign produce coming into the market, talk about the loss of crop protection tools through implementation of FQPA (the Food Quality Protection Act), problems of labor availability, and the general price of commodities in the marketplace," says Heather Flower, spokeswoman for Western Growers. "Those are the things that growers are most concerned about."

Flower recognizes the need for an international supply. She says that even though growers have improved their technology and growing techniques and shortened the window when domestic produce is not available, California and Arizona just can't grow product year-round. "There is a trend of wanting to offer customers year-round produce, and you have to go out of the continental United States in order to provide that," says Flower.

The dynamics become even more complex as international supermarket conglomerates expand into the United States. Royal Ahold, for example, an international retailer based in Zandaam, Holland, now operates five major U.S. chains with more than 900 stores: Bi-Lo, Stop & Shop, Giant Food Inc., Giant Food Stores and Tops Markets. "Ahold has supermarkets on five continents," says UFFVA's Stenzel. "When they buy produce, they are looking at global sources."

Giant U.S. supermarket companies, such as Kroger and Safeway, also are buying globally, says Stenzel, and all of these companies are looking for producers who can supply fruits and vegetables year-round. "A large number of U.S. growers are producing in another country," he says. "Just because they are growing in California or Florida doesn't mean they aren't also growing in Peru or Chile."

For retailers competing in a mature market where a point-of-difference produce section can attract new customers, offering year-round fruits and vegetables has become essential. "In the last 10 years, it has become more and more popular, and now customers expect year-round convenience," says Frank Gillespie, corporate director of produce for Roundy's, which distributes produce to 153 stores in Wisconsin. Roundy's, operating in the heartland of America, routinely brings in tomatoes and bell peppers from Holland, as well as fruits and vegetables from Chile.

"With the economy the way it is, people are looking for convenience and they are not as price conscious as they used to be," says Gillespie. "The Holland tomatoes are $3 to $4 a pound and shoppers buy them."

While Americans are demanding produce year-round and expect to pay more for some specialty produce, they also expect it to be safe. The FDA has been working with foreign suppliers of fruits and vegetables to help them implement the Good Manufacturing Practices for Produce regulations adopted for domestic growers last year. "We are applying the same standards internationally," says Lou Carson, deputy director of the food safety initiative staff for the FDA. "Countries are being very thoughtful of the regulations because it is in everyone's best interest to look for ways to improve their systems."

The FDA held an international workshop in April in conjunction with the USDA, and more than 25 countries were represented. The workshop was designed to share training of good agricultural practices. Representatives from other countries also were provided a video translated into Spanish, French or Portuguese.

A more complete study of good agricultural practices for produce growers is planned for next year. "We began a study of domestic practices, which is in the pilot phase," says Carson. "In 2000, the FDA and USDA will be conducting a full survey to determine which practices are being used, and we hope to use the results of this survey internationally to give advice to other countries on those practices that should be employed."

Despite the sharing of information, despite the surveys and despite FDA's plan to sample 1,000 pieces of imported produce as part of a random safety inspection, there are no new controls or standards in place to force foreign growers to change their practices. And that, say produce import critics, is why some foreign-grown produce may pose more of a danger than the domestic supply.

"There are no common standards," says Angela Dansby, spokeswoman for the Institute of Food Technologists (IFT), Chic-ago. "That's not to say that other countries don't have good standards, but we don't know because we don't test it. We test U.S. produce every couple of years to make sure it meets EPA guidelines for pesticides, but we aren't doing that for foreign produce. What gets inspected at the border is next to nothing."

The Institute and Dansby are calling for international standards with teeth. "Countries should be held to those standards," says Dansby. "Hypothetically, there is an equal microbial risk for foreign and domestic produce, but for other things, such as pesticide residue, we simply don't know about imports. We are not doing enough testing."

A non-profit group dedicated to promoting Mex-ican produce takes sharp exception to the implication that Mexican crops undergo less scrutiny—or are less safe. "Produce coming from Mexico is inspected at a rate five times higher than produce in the United States," says Kathleen Vandervoet, communications director of the Fresh Produce Association of the Americas, Nogales, Ariz.

"U.S. officials are required to do computer-generated random sampling of Mexican imports," notes Vandervoet. "They don't go to farms in the United States or supermarkets, except in a limited manner. But they do a shopping basket survey several times a year of Mexican produce."

Vandervoet also says that most of the pesticide violations for Mexican produce is exactly the same as for U.S. produce—and the reason is the same, as well. "The greatest violation runs between 2% and 4% (which just exceeds the FDA-established tolerance level of detected pesticide residue) for both the United States and Mexico," says Vandervoet. "The reason for the violation is the same in both countries—the wind carries pesticides from one crop to another."

The Fresh Produce Association of the Americas, established in 1944, supports more testing by USDA or other agencies. "We support it, but someone is going to have to pay for it," says Vandervoet. "Either the government will have to pay for it or the cost will be passed on to the consumer."

As far as Florida growers losing market share, Vandervoet says it boils down to supplying what consumers want. And that, says FMI's Brown, is the crux of the matter. "The imports present an opportunity for domestic growers to take a look at their growing practices so that they can remain competitive. From the standpoint of consumers, variety and competition are always good things," she says.