retail news in context, analysis with attitude

The Seattle Times reports that in order to "get enough organics to stay in business day in and day out," Costco is taking steps to address supply chain issues.

Costco, the story says, now is "working with farmers to help them buy land and equipment to grow organics ... The idea is to ensure a greater supply of organic foods at a time when demand is soaring but supply has not kept up.

"While other retailers might have loan programs for suppliers to upgrade equipment or offer financial incentives such as advance payments or long-term contracts, helping farmers buy land to grow organics appears to be unusual in the industry."

At present, Costco is just partnered with one farmer in the effort, but it is looking to expand the initiative.

The story notes that Whole Foods "has had since 2006 a loan program to help its local producers grow their businesses. About $18 million has been lent so far, for everything from helping farmers buy equipment to building greenhouses and packing facilities, according to the company." And Washington State co-op PCC Natural Markets "supports preservation of farmland through PCC Farmland Trust, which the Seattle-based co-op founded in 1999," and has "worked to conserve more than 1,600 acres of Washington farmland, according to PCC."
KC's View:
When demand outstrips supply, it only makes sense to do something to improve and expand the supply chain. You can't just wait for the other guy to do it...