Recession’s cloud may be starting to lift

03/30/2010 10:36:35 AM
Andy Nelson

CHELSEA, Mass. — While they, like most everyone else, are not out of the woods yet, many Boston wholesalers said business is better so far in 2010 — and none said it has worsened.

When asked how business is, Tom Ciovacco, co-owner of Mu-tual Produce Inc., said fair.

But that’s not as quite as luke-warm as it sounds, Ciovacco said. The recession may have the folks at Webster’s redefining what the word really means.

“‘Fair’ is like the new ‘good,’” he said. “If you’re doing fair, you’re doing OK.”

Ciovacco doubts if the story is much different at other stops along the New England Produce Center and Boston Market Terminal.

“You go to other businesses, that’s what you hear,” he said.

To make it in such a tough environment, companies need to stay on their toes, Ciovacco said.

“You have to adjust, come up with new ways of generating income,” he said.

One trend that Ciovacco thinks is not the answer to ensuring the industry’s health is distributors’ trying to stick their hands into too many pots.

“Everybody’s dabbling in everybody else’s business, and I think it makes things worse,” he said. “We’re trying to focus.”

For Mutual Produce, that means not straying far from its staples, which include melons, berries, grapes, broccoli, cauliflower and a few other commodities, Ciovacco said.

One specific fallout from the recession has been the loss of the secondary market, Ciovacco said. A $20 item doesn’t fall to $15 if the quality’s not up to snuff, he said. It falls to $5 or $6.

In such an environment, a focus on quality and long-term relationships is more important than ever, Ciovacco said.

“People can’t go through (product) like they used to,” he said. “Our relationships are 30-plus years and we’re trying to maintain them. You have to be right on price. There’s no room for error.”

Another effect of the recession Ciovacco said he could live without is the slackened pace of business, which has given industry members plenty of time to contemplate their navels and other matters.

“With slower business, everybody has time to analyze every-thing,” he said. “Everybody’s an expert.”

Weather aside, the economic climate also has been better thus far in 2010, said Maurice Crafts, salesman for Coosemans Boston Inc.

“Business has been pretty brisk the past couple of months,” he said. “Better than last year. We’re staying relatively busy.”

The best indicator of that, perhaps, is a fourth man behind the desk on the Coosemans floor at the New England Terminal Market.

Dave Braga came on board in August, Crafts said. For the five or six years before that, three salesmen had been sufficient.

Another wholesaler on the New England Produce Terminal, The Alphas Co., also is optimistic about an upturn in the economy.

“We’re off to a much stronger start — we’re very optimistic about this year,” said Yanni Alphas, the company’s president and chief executive officer. “2009 was a rough year.”

Some reports on the health of the economy were more mixed, however.

“It’s been a real rollercoaster,” said Steven Piazza, a salesman for Everett-based Community-Suffolk Inc.

“The beginning of the week is real good, the middle of the week is terrible and then people reload again for the weekend,” he said.

Piazza attributes that up-and-down pattern in part to a dip in restaurant business.

“People aren’t going out to eat as much, and they’re shopping for value, not just what they want,” he said.

Even without the freeze, business has been up, Lisitano said.

“The economy’s kind of leveled off,” he said. “It’s not where it was, but it’s come back and it’s staying there.”

Ken Cavallaro, treasurer of John Cerasuolo Inc., also reported an uptick in demand compared with recent recession-affected years.

“It seems to be starting off bet-ter,” he said, also citing the Florida freeze as a contributing factor. “The markets are higher. The weather conditions in Florida have shortened product considerably.”

Sam Rocco, president of BC Produce Inc., also is more optimistic about the current year, though he said it may be partly a matter of lower expectations.

“Things are definitely improving — either that, or we’re getting used to it,” he said. “But I think the economy here is resilient compared to the rest of the country.”

One big upcoming test, Rocco said, will be how many Bostonians and others in the region take vacations on Cape Cod and how much produce they’ll consume when they do.

“I’ll be curious to see how the cape does,” he said. “They’re so sensitive to the economy down there. I don’t think last summer was that good.”

Rocco himself vacationed on Cape Cod last summer and noticed that it was easier to get tables in restaurants than in years past.

While strong markets for tomatoes and other vegetables were giving many Boston wholesalers a boost in the early months of 2010, Rocco said his company was getting a boost from some weak markets as well, which were encouraging brisk movement.

“It probably helped that some of the stuff got so cheap,” he said. “I haven’t seen potato prices like this in a few years. It’s been a good year for selling Idaho potatoes.”

Normally, BC Produce sources spuds from Prince Edward Island, Canada, but because of the big Idaho crop this year, the company is sticking with Idaho, Rocco said.
 
“PEI doesn’t want to compete with Idaho on price,” he said. “They long for the days of $1.50 Canadian to $1 U.S. I don’t think those days are ever coming back.”



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