Costco Is Buying Over A Thousand Acres Of Land For Local Farmers To Grow Organic Produce



Did you know that Costco is one of the largest distributors of organic food products in the United States? 


  

According to Costco CEO Craig Jelinek, they sell so much organically produced fruit and veg that they struggle to keep up with their customer’s demand.




“We cannot get enough organics to stay in business day in and day out,” Jelinek told investors during a shareholder meeting.

Costco are tackling the problem head-on and have come up with an innovative idea. They are about to buy land and equipment for farmers so they could start growing organic produce for them!

The project is still in its infancy. To date, Costco has only worked with one grower, the San Diego-based produce wholesaler Andrew & Williamson Fresh Produce. They subsidized the organic farmers so that they could buy equipment and 1,200 acres of land in the Mexican state of Baja California.

Although other retailers have similar loan programs in place to help farmers at grass-root level, this is one of the only initiatives that is solely designed to encourage farmers to go organic.

The reason retailers encouraging suppliers to go organic is so rare in the food industry is because it can take many years and lots of money to transition from conventional to organic farming. Land that is needed to grow organic food is scarce and usually very expensive, making Costco’s initiative even more impressive.



The Costco project came about as a  direct response to the increased demand for organic products.  Problem - Solution - Reaction.

Sales of organic food jumped up from $11.3 billion in 2004 to $35.98 billion in 2014 according to the Organic Trade Association.

“Demand is increasing. But we’re not seeing the same level of farmland,” says association spokeswoman Angela Jagiello. “We’re not seeing the level of growth we need in domestic supply to meet demand.”

This isn't a new idea  for Costco to spend money to increase their supply of organic food. Costco has been buying cattle for the last year and is contracting with owners of organic fields in Nebraska to have ranchers there raise livestock for their organic ground-beef program.

To meet the demands of the increased want for organic food, Costco’s projects to help local farmers grow organic produce will boost their supply. In turn, it will also help local farmers utilize their land to its full potential and reduce the need for imported food products, some of which have been found to contain high levels of pesticides, antibiotics and harmful bacteria.


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