By Joel Gebet
06/19/2006
Utilizing the purchasing power it has gained from representing over 30 percent of the U.S. watermelon supply, Sundia Corp. has signed an agreement with Weyerhaeuser on behalf of Sundia's grower-partners.
Under the agreement, Sundia's partners will be eligible to reduce their price per pound by purchasing "Sundia" branded paper products, such as bins and packaging, made by Weyerhaeuser at the guaranteed lowest pricing. The agreement will also enable growers to return unused products at the end of the watermelon season to Weyerhaeuser and receive up to a 5 percent rebate for them.
"Our ongoing goal is to continually provide value for our grower- partners," Brad Oberwager, chief executive officer and founder of San Francisco-based Sundia Corp., said in a statement. "Bins and other paper products are a big cost for growers; this agreement gives them stability in what previously has been a highly volatile market. Weyerhaeuser's recognized commitment to agriculture and expertise in produce packaging made them a perfect fit."
"This is a win-win-win arrangement," Rick Goddard, Weyerhaeuser's Bulk Packaging Group's managing director of demand, said in the statement. "Sundia has consolidated buying power for its partner growers and has also helped to streamline the demand for bulk packaging products. Because of this partnership, we are able to increase our production efficiencies and then pass on the savings to the growers."
Dan Hoskins, Sundia's chief operating officer, said that the company had been negotiating the agreement for the past three months and that the products, which would include "any and all items that our partners would buy from Weyerhaeuser," would be available immediately.
"This is a big deal for the growers, and we are getting very positive feedback from them," Mr. Hoskins told The Produce News. "Before, [growers] used to have to buy all their bin supplies up front and guess how many they would need. At the end of the year, if they guessed long, they had a warehouse full of bins and had to sit on that inventory until the next year. With the program we have now, they can sell back those bins to Weyerhaeuser and get cash for them so their inventory carrying costs go down to nothing."
Mr. Hoskins noted that Sundia is looking at all the different components that make up the watermelon growers' costs, including bins, stickers and web site development, and is working to reduce them.
"It's not rocket science. We're going out there trying to aggregate buying power on all of those items and that has never been done in the watermelon industry," Mr. Hoskins said. "We want to be as big a service as we possibly can to our grower partners." |
