Sales of Mail-Order Edibles Are Mushrooming : Food: Many California firms are getting a slice of the $1.2-billion market, which is busiest during the holidays. Overnight delivery service has helped.
‘Tis the season for mail-order giving, and more of the gifts crisscrossing the nation make for a transportable feast.
Fruit in the mail is nothing new, but how about six pints of assorted gelato packed in dry ice? It’s yours, if someone doesn’t mind paying $10 a pint to get it to you.
And forget the mundane fruitcake. Select instead a bouquet of porcini mushrooms, a pair of smoked quail or a basket of prickly pears.
The 3,600 companies that tempt the palate with mail-order edibles are competing for the $1.2 billion that Americans are expected to spend on food orders this year, according to a recent study by the New York market research firm FIND-SVP.
Growing at an annual rate of about 10%, sales of mail-order foods are likely to total more than $3 billion by 2000, FIND-SVP said.
Business whips into a frenzy during the final quarter, with some mail-order companies doing virtually all their shipping between September and January. Entire 747 jets have been stuffed with nothing but thousands of pounds of holiday pears from Harry and David.
Based in Medford, Ore., Harry and David has sales of more than $120 million, making it perhaps the largest mail-order food company in the nation.
FIND-SVP says the top 10 food-by-mail companies control 45% of the market. About 3,000 companies are characterized as mom-and-pop operations, with sales less than $50,000 a year.
Although the vast majority of food moves by ground transportation, most of the industry’s growth is in overnight and two-day delivery services, which can guarantee that a delicate or perishable item arrives intact.
Clambake Celebrations of Cape Cod, Mass., for example, can promise a customer in Albuquerque, N.M., that she will have lobster, mussels and a few ears of corn--all packed in seaweed--steaming on the stove less than 48 hours after phoning in the order. The cost: $119.95 for two.
San Francisco’s Gelato Classico Italian Ice Cream is just begining to offer its products by mail. Six pints--a minimum order at $59.95--are packaged in dry ice in a foam container much like a picnic cooler.
Consultant Jay Walker, who heads Ridgefield, Conn.-based Catalog Media Corp., said that though food-by-mail has been big business for a long time, “overnight delivery . . . allowed a freshness perception for millions of people who didn’t believe they could get (food) fresh in the mail. And it made sure food can be given as a gift reliably.”
Federal Express will tell you that it has been a major boost to the food industry.
“Our business . . . allows them to extend their business season right up to Dec. 21,” said spokesman David Brandon. “If you do 80% of your business in one or two months of the year and can extend that selling season by just two weeks, it’s a tremendous boost.”
Companies with very narrow product lines can stay in business because they cater to a national--rather than local--clientele. Franklin Foods of North Franklin, Conn., for example, sells only exotic mushrooms such as Polish cepes, shiitakes and porcinis. Smithfield, Va.-based Fin ‘N Feather will put a smoked pheasant buffet on your table.
Mr. Spear Inc. of Stockton has cultivated a list of 25,000 fans of its colossal asparagus, its sole product. “It’s an alternative to flowers,” said President Chip Arnett.
His super-premium asparagus, which has been served at the White House, simply is “not in sufficient enough quantities to make it available from a retail standpoint,” he said.
Consultant Walker believes that the food-by-mail business is “countercyclical” to the economy--that is, as the recession deepens, business is likely to increase.
Consumers who feel pinched for cash typically “trade down” when it comes to buying gifts, and food is a popular alternative because it has “no comparative market price,” Walker said. “You don’t know if a dozen apples from an orchard in Oregon is a $20 gift or a $40 gift,” he said.
Perusing catalogues in the coziness of one’s own home and ordering with the mere push of telephone buttons has become a recreational pastime of sorts for many Americans.
“People are sitting home, and they’re bored, and so they pick up the phone and buy on a credit card,” said Debbie Cohen, a national saleswoman for Melissa’s World Variety Produce Inc., a Los Angeles company that specializes in shipping exotic produce such as purple potatoes, elephant garlic and prickly pears.
Though consumers who buy foods through the mail make up less than 2% of the population, they are an affluent lot willing to pay more for convenience and a guarantee of quality.
A pint of Gelato Classico costs just $3.95 in one of the company’s 32 shops, but the minimum six-pint mail order commands a $36 shipping charge. Too extravagant to buy for yourself, perhaps, but an exquisite gift to give.
The mail-order business does have its limitations.
Identifying customers can be costly, and it is difficult to adapt quickly to changes in consumer taste. A company that must put together its Christmas catalogue by August can’t suddenly decide to replace its pecan pie if cranberries become the rage.
In addition, the threat of higher postal rates always looms large. Third-class postage, the rate for most catalogues, has increased more than 350% since 1970, and the U.S. Postal Service plans another rate hike for February.
Mail-order companies are being pressed to collect sales taxes on a higher proportion of their sales, forcing them to compete harder against local retailers.
Finally, because the food business is seasonal, some companies actually are forced to shut down during spring and summer. Others try to round out their offerings with other products. Harry and David, for example, has a sister company called Jackson and Perkins, a gardening and flower concern, which helps smooth out sales through the year.
