L.A. market copes with business slump - The Packer

L.A. market copes with business slump

06/26/2012 08:09:00 AM
Tom Burfield

Los Angeles-area distributors are doing their best to cope with a stagnant economy coupled with rising prices and an increasing number of produce buyers bypassing the market.

“No one’s celebrating in the L.A. market,” said Jin Ju Wilder, founder and president of Status Gro, a South Pasadena, Calif.-based consulting firm. “It’s been a tough couple of years in terms of sales.”

Tom BurfieldOscar Benitez (left), buyer for Mercado El Rey market in Lake Forest and San Juan Capistrano, Calif., looks at product at Season Produce Co. on the Los Angeles Wholesale Produce Market with salesman Felix Hernandez on June 21. Benitez makes the trip to the market almost every day.Wilder said companies are seeking her help as they strive to reinvigorate sales.

“Chain retail business is not picking up at all. It’s decreased instead,” she said. “Everyone is competing for the same independent customers.”

Some distributors are examining their business to see if they can “diversify and get creative in terms of their business models,” she added.

“To survive is really difficult,” said Steve Cantor, director of sales and produce and a partner in Produce International on the Los Angeles Wholesale Produce Market. “Wholesalers have to be real careful now.”

One of the main problems distributors face is that customers and purveyors who used to source from the market now go direct to suppliers, bypassing wholesale distributors.

“You don’t have the chain store buyer walking the market anymore,” Cantor said.

There was a time when Cantor dealt with four or five major chains on the market. That number has dwindled to one.

Business has been “OK” for Consolidated West Distributing Inc., Commerce, Calif., said Joel Young, one of the owners.

Distributors should be thankful for any business they have, he said.

Many companies are trying to eliminate “fluff” without having to lay off employees.

“It’s a lot tighter than it has been,” Young said. “The idea that someone can still work and not be productive doesn’t work anymore.”

Business in the region “has not been tremendously strong by L.A. standards,” said Jeff Weisfeld, owner-president of Fruit Distributing Corp. of California in Commerce.

“We feel the overall economy has not yet bounced back to the level that it should,” he said.

The produce industry felt somewhat immune to economic downturns because of the “everyone has to eat” mantra, he said.

But the industry soon learned that people were not eating out as much, or they were “opting for mac and cheese versus a nice, healthy salad.”

“We’re just not seeing the same business that we were in the past,” Weisfeld said.

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julian lipschitz    
Reedley, Ca.  |  June, 26, 2012 at 10:36 AM

The erosion of the LA Produce market has been going on for over 30 years. The loss of business with suppliers going direct is old news. Anyone who is successful now has already made the changes necessary to stay a float.

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