Low prices, oversupply hound Toronto wholesalers

02/17/2012 11:03:00 AM
Amelia Freidline

TORONTO — Wholesalers blame unseasonably good weather and a lack of natural disasters for low prices and an oversupply of fresh produce in Toronto.
“The weather’s been too cooperative,” said greenhouse specialist Fred Koornneef, president of Grimsby, Ontario-based Koornneef Produce Ltd., from the Ontario Food Terminal.
“The markets are so saturated, so cheap, that in a lot of places the price is below the cost of production,” Koornneef said.
The good news, said Jim Gordon, operations manager of Burlington, Ontario-based Ippolito Produce Ltd., is that the Canadian market remains strong and steady while other countries and sectors falter.
“A lot of us were thinking that sooner or later, we’re going to get hit,” Gordon said.
“I don’t think that’s happened to any great extent, but we’re still keeping our fingers crossed.”
Stephen Rodrigues, national sales manager for Global Fresh Canada, said the import-exporter’s research shows retail chain produce sales are up over last year in dollars and in volume, while sales at the Toronto food terminal are down, although not by much.
The fine weather has certainly made winter vegetables easy on the pocketbook.
“Usually in January there’s a cold snap in the U.S. that leaves product short and leads to higher prices, but not this year,” said Tony Fallico, salesman for F.G. Lister & Co. Ltd.
“We’re paying $15 instead of $40 for a case of tomatoes,” said Farley Donsky, director of sales for local restaurant supplier Mister Produce. 
“Romaine is $21, in February. Some years it’s gone up to $70.”
While the balmy February weather made standing outside the food terminal selling Ontario carrots and golden beets more bearable for six hours a day, Rick Philipp at the Denboer Farm stand in the farmers market said last winter was busier.
“There was a shortage of everything last year, while this year there’s a surplus of everything,” Philipp said.
Frigid weather hurts sales, he said, because produce is stored inside the trailers, so occasional buyers see only trucks with their doors closed.
Bruce Nicholas, general manager of the Ontario Food Terminal Board, which runs the market, said volumes were up slightly to 975,000 tons in 2011 compared to 971,000 tons in 2010. The buyer count remains at more than 5,000 registered buyers.
Tonnage may be increasing, said Joseph Comella, senior buyer for The Garden Basket supermarket in Markham, Ontario, north of the city, but the market is becoming saturated as more chain stores such as Wal-Mart increase their market share and deal direct rather than buy from the terminal.
“I still see the market as healthy,” said Comella, a regular at the terminal for 25 years, “but it’s not going to be a banner year.”
Minneapolis-based Target Corp. is also preparing to target Toronto next spring, with many of its first 24 stores opening in the Greater Toronto area. 
The company said it plans to open 125-135 stores by the end of 2013.
Rodriguez said rising fuel costs and the lack of equipment in U.S. growing areas at peak harvest times also affect the Toronto industry.
Also, with North America’s current financial problems, there may not be as much produce going south as truckers would like to see to make their trips more cost-effective, he said.
Fresh may be slow, but fresh-cut is seeing “unbelievably big growth” in Toronto, said Anthony Pitoscia, vice president of Fresh Advancements Inc., citing gains in fruit and vegetable trays and sliced apples and dip.
“We’re doing humongous sales at FreshCo (Sobeys) and Food Basics (Loblaw), and staggering numbers at Wal-Mart,” said Pitoscia, who packs under the Freshline label.
“People with limited time want to buy squash, but they don’t want to buy the whole thing and peel it,” Pitoscia said. 
“When packaged, it’s just the right amount, easy with no mess.”
Eric Biddiscombe, senior director Field 2 Fork for Brampton, Ontario-based Loblaw Cos. Ltd., agrees the value-added category continues to grow, especially in urban Toronto.
“It’s all about convenience,” Biddiscombe said. 
“It’s a sign of the times that people want to grab and go but they still want a good eating experience — they want something healthy and nutritional.”
The challenge for retailers, he said, is to keep the category innovative and exciting.
“There’s much opportunity to really build that program and be creative with it.”


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Bryan    
Canada  |  March, 01, 2012 at 12:20 AM

Get your facts straight food basics has no affiliation with loblaws; it's an empire holdings

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