“…Where did Marcus go?”
At the words Stephen let slip unconsciously, the man turned around. A sharply tailored charcoal-gray suit, shoes without a speck of dust on them. He was a foreign presence, one that looked terribly out of place on this barren farm.
“Ah, good to meet you. I’m Geoffrey Banks, the new head of fresh foods at Bristol Farms Market.”
Geoffrey Banks walked over and held out his hand. When Stephen clasped it with a frown, he continued.
“Mr. Marcus Jensen was recognized for last year’s performance and moved on to another company.”
Stephen was slightly surprised by the unexpected news. After the Lehman crisis, cold winds had been blowing through the distribution industry, and it would not have been strange for anyone to be laid off. For someone to have been scouted and moved elsewhere instead was truly surprising.
“I see. Where were you originally based…?”
“San Francisco.”
“Ah, then you must know California well.”
“This place is practically my own backyard.”
Stephen, who had thought he might be able to relax a little if the man was not from around here, felt his guard rise sharply. If he had worked for a long time dealing with wealthy customers at Bristol Farms’ San Francisco branch, then his network would be considerable, and he would know California’s distribution routes inside and out.
Sure enough, Geoffrey continued with a cold smile.
“On top of that, I’ve already finalized Joint Logistics contracts with local farms near San Francisco. Unfortunately, it seems we’ll be getting the jump on this deal as well.”
At those words, Stephen flinched. When dealing with fresh foods—especially fruit like Singo pears, which carried a heavy premium, had a high unit price, and were sensitive to damage—a joint logistics agreement could become an enormous weapon.
First of all, under a typical distribution contract, if a refrigerated truck was sent out just to carry the output of a single pear farm, transportation costs would make up a large share of expenses. But if the shipment was combined with produce from nearby farms and the truck was filled to capacity—Full Truck Load—the delivery cost per box would drop drastically.
With distribution costs reduced in this way, Geoffrey would have room to offer Chloe a higher purchase price than other companies without hurting the market’s profits.
In particular, large distributors like Whole Foods Market passed through multiple stages of logistics centers, while a local joint network minimized the steps from farm to store. Especially in the August heat wave, jointly operating a dedicated cold-chain network that kept refrigeration uninterrupted could reduce the risk of fallen fruit and spoilage.
Moreover, the fact that he had formed a joint distribution network with nearby farms meant he had the ability to immediately disperse the Singo pears not only to Bristol Farms stores, but also to other local premium channels participating in the joint venture. In short, it meant he could ease concerns about inventory as well.
Though he felt a strong sense of crisis, Stephen did not back down.
“Chloe’s pears will have quite a large volume this year, so Bristol Farms alone will have a hard time handling it. Unless you have the reach of our Whole Foods Market.”
“Who knows. Well, I suppose that depends on what Ms. Chloe thinks.”
But the two of them were not the only ones there. A young Asian woman of rather modest height with long straight hair opened her mouth without taking off her sunglasses.
“I suppose you don’t even see us at Dean & DeLuca as a competitor?”
The two men flinched upon learning her affiliation. Dean & DeLuca was known not only in New York but across the world as the final word in premium grocery stores, and to New York’s upper class in particular, there was even a saying that “Dean & DeLuca is the kitchen.”
“Why come all the way here from New York…”
For Stephen of Whole Foods Market, the person from Dean & DeLuca was even more unpleasant to see than Bristol Farms. If Whole Foods Market was a large supermarket chain with a healthy organic image, Dean & DeLuca was an overwhelmingly luxurious market.
“Why else? Because it’s good fruit, so I came to take it.”
Geoffrey Banks of Bristol Farms seemed just as displeased, and spoke with an expressionless face.
“The volume Dean & DeLuca handles won’t even amount to five percent of Chloe’s entire harvest, will it? Do you think Chloe would take the risk of letting the other ninety-five percent rot just so you can put them on some little shelf in Manhattan, New York?”
At those words, Olivia lowered her sunglasses slightly and looked at Geoffrey. Her black eyes seemed to know no such thing as difficulty.
“Don’t worry. We’ll leave some for you to take. We’ll only be taking the very best.”
If only the top-quality fruit was pulled from Chloe’s Singo pear shipments, Bristol Farms would be losing the most profitable part. Naturally, Geoffrey had to avoid that at all costs, so he simply whipped his head away.
He knew there was nothing to gain from exchanging more words. And the same was true for Stephen Levin.
“Chloe will be the one making the choice anyway, so let’s not waste our strength for nothing.”
Stephen was not the type to give up just because he could not get in touch. He had already notified her several times, both through her personal contact information and through the company, that he would be coming here today. So if she had even the slightest intention of talking, he believed she would come out here. And it seemed the two others felt the same.
And so… under the blazing sun, the three of them continued to wait.
---
At that moment, Chloe, the owner of Chloe’s Orchard, was under the air conditioner, her blond hair swaying as she grumbled.
“What’s with those people? They’re making me uncomfortable.”
Having just come in from under the hot sun, I chuckled and took off my hat.
“Of course they’re anxious. The response was good last year.”
“We need to confirm the condition of the fruit before deciding who to sign with.”
This was not simply to raise the price of the pears. Chloe and I were hesitating to sign a contract too hastily because the harvest volume and final quality truly had not been confirmed yet.
For one thing, August was a time when the final fruit size had not yet been determined. The fruit continued to swell until at least mid-August. We expected and hoped it would turn out well, but since consumers would be eating the fruit itself as-is, I had to confirm the final quality before I could feel at ease.
On top of that, in August, fruit drop had not yet finished. Because of natural drop or disease-related drop, we would not know the actual harvest estimate until at least the end of August.
And above all, the sugar content had not yet risen all the way. In supermarket chain contracts, the most important factor was sugar content, and Singo pears had the largest increase in sweetness during the two weeks right before harvest. We were trying to delay the meeting as much as possible because we had to reach at least that point before we could confirm the quality.
“But you’re happy, aren’t you?”
When I said that with a smile, she smiled shyly too.
“I am happy, but… I didn’t know the response would be this good right from the start. It just feels needlessly overwhelming. Especially Dean & DeLuca—I’d only seen them in magazines and on TV.”
“Don’t be intimidated for no reason. They’re all here because they want Singo pears. By the way, how’s the almond farm? Do they say it’s okay?”
“Yeah. We got through that crisis well, so the damage wasn’t too bad. We did take… a bit of a loss?”
In other words, there had been damage, but it was bearable.
“Yeah, that’s good enough. The harvest volume is the problem.”
“Right. They say almond prices are already showing signs of going up. These days, Dad only talks about almond prices with my brother at home.”
“But you don’t feel left out, do you?”
Chloe stretched out her body and murmured languidly.
“Nah, I don’t feel left out. If anything, I just feel bad that only my farm is doing well… Still, he does ask sometimes how the pear farm is going. I think he’s curious, but because of my brother, he can’t show it openly.”
“I suppose so. But how long are you going to leave them standing outside?”
Chloe shut her eyes tightly, then looked at me.
“What should we do? It’s not one person, but three, so I don’t even know what to say. What do you think would be best?”
I thought it over carefully. If only Bristol Farms had come, we could have divided things appropriately with Whole Foods Market like last year. But with Dean & DeLuca stepping in, it had become a headache. Giving them up would be a shame, but letting them in would definitely make it difficult to deal with Bristol Farms once the A-grade pears were taken out. As for Whole Foods Market, we could just give them the rest, but still…
If there was truly no other way, there was the easy method of holding something like a sugar-content auction. But if we did that, it might be good for us in the first year, yet the buyers who failed to make margins would intentionally avoid carrying Singo pears from then on. If several premium markets joined hands and deliberately refused to purchase them, the pears would inevitably lose their value.
“Let’s meet them first and talk.”
“I’ll go out and come back.”
Putting her hat back on, Chloe went out again and walked for quite a while before opening the latch at the farm entrance.
“Come in.”
At that, the three buyers who had been standing under the scorching sun relaxed all at once and stepped inside. After being out in the blazing sunlight, the pleasant air-conditioning improved the expressions of all three buyers.
Chloe casually tossed her hat onto the table, then sat with half her hip perched on the sofa where I was sitting.
Naturally realizing that the one in control here was not Chloe but me, the expressions of the three buyers changed subtly.
“Please, have a seat. I’m Brian, Chloe’s business partner. It was a little hot outside, wasn’t it?”
At my words, Stephen Levin was the first to sit, wiping his forehead with a handkerchief. Geoffrey and Olivia also sat down while maintaining their respective distance. Inside the cramped office, only the low mechanical hum of the air conditioner lingered.
“It seems you’ve all introduced yourselves to one another, so let’s get straight to the point. I understand that all three of you came because you want Chloe’s Singo pears. But as you can see, the pears are limited, and there are three of you.”
When I opened the conversation, Geoffrey of Bristol Farms spoke up as if he had been waiting for it.
“Mr. Brian, I’ve already brought a logistics innovation plan to propose to Ms. Chloe. Through a joint network with nearby farms, we’ve reduced transportation costs per box by more than fifteen percent. Those savings will directly lead to an increase in Ms. Chloe’s received price.”
At this, Olivia of Dean & DeLuca stepped in.
“Cost savings? How modest. We plan to display these pears in the main window of our flagship store in Manhattan, New York. Under the title ‘California Gold.’ The moment Dean & DeLuca guarantees them, these pears cease to be mere fruit and become luxury gifts. Surely Mr. Brian and Ms. Chloe understand that the long-term benefit of brand value is greater than the few dollars of margin Mr. Geoffrey is talking about?”
While the two of them continued their war of words, Stephen bit his lip anxiously. He had neither logistical efficiency nor an overwhelming luxury image. What he had was only a popular distribution network spanning the entire United States.
After exchanging a glance with Chloe, I spread a map out on the table. Then I spoke slowly.
“First of all, we’ve heard your proposals. Hmm… Then how about we do this? I’d like to propose a Tiered Allocation method.”
“Tiered allocation, you say?”
“Yes. We’ll set the unit price of the pears according to each grade. Of course, we’ll select and disclose the sugar content, acidity, and size standards for each grade. From my position, I’d like the three companies to coordinate with one another and take quantities appropriate to each grade. If you compete against one another and drive up the unit price, that’s good for us right away, but continued competition like that will reduce your companies’ margins.”
Stephen was the first to respond.
“That works for us.”
Unlike the other two companies, Whole Foods Market did not necessarily want only the highest-grade Singo pears. In fact, because they wanted a larger quantity even if the price dropped a little, lowering the grade and reducing the wholesale price would be far more profitable for them.
The remaining two were Geoffrey of Bristol Farms and Olivia of Dean & DeLuca. The two of them met each other’s eyes, then nodded.
“Fine. We’ll accept.”
“I’ll accept as well.”
The two of them would probably decide the quantity for each grade by agreement.
“Good. That said, I have no intention of letting them go too cheaply, so don’t get your hopes up.”
For the top-grade Singo pears, we would present a price around what we had received last year, then lower the price step by step, but even the lowest B-grade Singo pears would be offered at a minimum of twenty dollars.
“As long as the quality is guaranteed, we can handle that.”
For Stephen, who had been worried he might not receive any shipment allocation at all, this was an enormous relief, so a slightly high price was not a major concern.
After the three buyers left, Chloe looked outside, where the heat still shimmered, and said,
“It really… really was so hard, but hearing that everyone likes my pears and will buy them makes all that hardship feel like it was nothing.”
“That’s probably the heart of a farmer.”
With Chloe leaning against my shoulder, I enjoyed the cool air-conditioning and looked out the window.