Pismo Oceano Vegetable Exchange: Bringing Classic Asian Vegetables to the Modern American Table

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The Pismo Oceano Vegetable Exchange (POVE) grows, packs and ships the freshest vegetables harvested from 2,000 acres of California’s central coast. The five main growers operate fields from Moro Bay to Rio Arroyo Grande, producing tender vegetables for traditional markets and Asian specialty markets alike. POVE originated as a grower-owned cooperative in 1928, growing out of a Pismo Beach-area pea growers association and representing primarily growers of Japanese descent. Over time the number of growers and variety of crops flourished, despite a number of unforeseen challenges. Dan Sutton, general manager at POVE and an 11-year employee of the company, explains that POVE has survived much more than just dips in commodity prices:

“We are a very historically charged company and we got our start just before the market collapsed in 1929. Fast forward a few years later and our growers were all sent to internment camps, so there is a strong will and determination amongst our members to weather all challenges, especially the economic climate of today.”

Despite historical challenges, the co-op is still going strong over 80 years later, representing families who own and operate all of their own land. Currently on its fourth generation of growers, POVE remains one of the only year-round suppliers of Asian vegetables left on the market.

“We like to hang our hat on that accomplishment, because there are not very many other suppliers in the industry who can produce these vegetables all year and we keep our clients happy because of it,” explains Sutton. POVE currently offers two kinds of bok choy, Napa (Chinese) cabbage, green and red cabbage, eight varieties of lettuce (leaf and head), spinach, leaks, broccoli, green bell peppers, squash, celery, snow and snap peas, along with kale and some garden herbs, shipping from Oceano with the majority of production taking place between May and December.

Going After New and Ancient Tastes

POVE not only sets itself apart from the competition by growing items not often available from other suppliers, but the co-op also stays ahead of the game due to its structure. Every company has challenges and must find ways to respond swiftly in order to stay in business. Sutton works with the Board of Directors, each representing the interests of his or her own farm, to bring together a variety of perspectives and opinions to determine the course of the co-op.

“Every decision we make has been analyzed from every angle, so by the time we move forward with a decision we rest assured that the growers as a whole will benefit from that decision,” explains Sutton. “It’s why we have stuck with the co-op dynamic for so many years.”

POVE made one of its biggest decisions in 2010 and completely revamped its cold storage facility, which includes hydrovaccuum tubes, icing machines, off-ground packing machines and more to reduce the aging process of vegetables. Additionally, POVE partners with Primus Labs, a third-party auditor, to assure the facility meets all Good Agricultural Practices. These decisions were made in order to keep up with client demand, increasingly strict food safety regulations and customer quality standards.

“We invested a lot of money in the infrastructure we needed to deliver a better product on arrival and it had the added bonus of making us more energy efficient,” explains Sutton. The new facility renovations have had a positive effect on sales, as well as on the satisfaction level of the customers and board members.

Keeping a Lid on Input Costs

POVE is a highly vertically integrated company and maintains a much smaller supply chain than some of its competition. In order to stay in the black, the co-op works with in-house sales and marketing staff to seek new markets for its staple items, like Shanghai bok choy and Napa cabbage, as well as to identify niche produce with a lot of potential. Sutton asserts that the co-op’s primary concern has always been to find a balance between producing superior product and keeping costs down. He explains:

“We have a solid customer base at this point, but it is important for us to stay on top of the markets and look for new ways to market our products, but our reality is tied to our input costs. If fuel and labor costs go up by five cents that gets multiplied across our production, and it has a significant impact on our bottom line.”

POVE does not maintain its own transportation division, and as a critical part of a grower-packer’s production the co-op relies upon some of its customers to include the costs of transportation in the sale price, offsetting profit margins, but maintaining quality and customer loyalty along the way.

Taking further steps to increase profitability, POVE continues to concentrate on keeping up with technological advances in the industry in order to elevate food safety standards and fill orders more efficiently. “It wasn’t all that long ago that we were doing everything on paper,” reminisces Sutton. “Now we use iPads to access the data we spent years compiling and it’s fully integrated in our daily operations at this point, so we can share information in real time with customers and the co-op members.”

Increased access to information in real time is only a small part of the company’s investment in its future. As the economy improves, Sutton hopes that the recovery will eventually spill over into the commodity market, which combined with POVE’s commitment to hard work will lead to many more decades of proud tradition. As a successful agriculture cooperative with three-quarters of a century to build upon, the Pismo Oceano Vegetable Exchange is sure to gain steam in the next few years, identifying underserved niches and continuing to support long-term customers.