Recession hits Boston produce businesses hard

04/03/2009 12:00:00 AM
Andy Nelson

(April 3, Boston Know Your Market) CHELSEA, Mass. — Produce distributors in the Boston area are feeling the effects of a recession whose size and scope some say are unprecedented.

Few if any can see the light at the end of the tunnel.

For Yanni Alphas, president and chief executive officer of The Alphas Co., the current recession is unprecedented.

“This is the worst one in my 25 years in the produce business,” he said. “I don’t know when it will turn around. I think it will be at least a year or two.”

Because of the recession, sales are off about 20% at Mutual Produce Inc., said Richie Travers, partner.

“Even the high-end retail guys are looking for value,” he said. “Everybody’s working on smaller margins, us included. The competition’s more keen — you have to react and adjust.”

More chains in the Boston area are trying to imitate the value model of Tewksbury-based Market Basket Produce Inc., which often beats other retailers on price, Travers said.

Overall, though, foodservice has been hit harder than retail, Travers said.

Being in perishables does have its advantages in an economic downturn, however.

“That’s where we’re blessed — we’re in a business where no matter what sells, it has to be consumed in a short period of time,” Travers said.

Another blessing in such times, he said, is long-term relationships.

“We still have relationships with different companies dating back 30 years,” he said.

Reining in inventories has become more important than ever, said Frank Lisitano, president of Lisitano Produce Inc.

“You just have to adjust the volume so you stay efficient,” he said. “If you bring in the same amount of volume, you can’t move it. It’s not devastating, but you feel it. Only time will tell.”

Instead of running two trucks for deliveries, Lisitano Produce now runs just one, Lisitano said.

And truck traffic isn’t just down at Lisitano Produce, which is located across the street from the Boston area’s two terminal markets — the New England Produce Center and the Boston Market Terminal.

“I can see the difference in the number of trucks coming into the market,” he said. “A lot of them are starting to feel the pinch.”

Now’s not the time to add new programs, Lisitano said.

“I wouldn’t want to expand now,” he said. “We’re keeping expenses down as much as we can. We haven’t had to lay off anyone. They’ve all been here awhile, and we want to keep it that way.”

Two “terrific” weeks at the beginning of the year were followed by three “horrible” ones, Lisitano said.

“Everything we made, we gave back,” he said.


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