L.A. produce businesses survive tough economy - The Packer

L.A. produce businesses survive tough economy

07/26/2013 11:18:00 AM
Tom Burfield

Farid Khanlov (left) and John Meert check out tomatoes.Tom BurfieldFarid Khanlov (left) of Jordan Market in Laguna Hills, Calif., checks out some heirloom and cluster tomatoes with salesman John Meert of Maui-Fresh International LLC on the Los Angeles Wholesale Market. Most distributors say business has been decent on the market this year.Nobody says produce business is going through the roof in the Los Angeles area this summer, but nobody is saying the floor has dropped out, either.

Most distributors report modest gains over the past year, and many say they’ve tightened their credit requirements to make sure they don’t fall victim to their customers’ financial misfortunes.

At Fruit Distributing Corp. of California, Commerce, business is “probably up this year” compared with last year, said Jeff Weisfeld, owner and president.

Sean Villa, president of Great West Produce in Commerce, also seemed optimistic.

“Business has been better over the last six to 12 months, partly driven by good markets,” he said.

Business in general seems OK at Consolidated West Distributing Inc. in Commerce, said Joel Young, an owner of the company.

“All of the wholesalers are working harder at their business to maintain their customer count and figuring out how to make a profit as their costs go up,” he said.

Young said he senses “renewed energy” from some of the smaller supermarket chains, sparked by more aggressive moves to grab market share on the part of some of the major chains.

Perimeter Sales & Merchandising, Los Alamitos, Calif., continues to grow solidly, said president Brad Martin.

“Retail food business is very good,” he said.

He believes he sees a trend toward consumers coming back to traditional supermarkets.

“It seems like the Wal-Marts and the Targets of the world have lost their luster,” he said.

“Our same-store sales for the chains are up — nicely,” Martin said. “That’s what we’re hearing from everybody else, as well.”

Five major companies declared bankruptcy during the past year, but Fruit Distributing Corp. was fortunate enough to have missed them all, Weisfeld said.

“We successfully screened out potential poor risks,” he said.

The pendulum may be swinging upward, he said, but the risk is far from over.

“The danger (of a customer going bankrupt) is as strong as it ever was,” he said.

For the first time, Great West Produce has put credit limits on all of its customers, said chief executive officer Paul Villa.

“We noticed a trend to slower pay,” he said.

The company also invested in some upgrades to its point-of-sale computer program to better track where customers are in terms of their credit, Sean Villa said.

“We basically judge the creditworthiness of each customer,” Paul Villa said.

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