Value-conscious buyers work with closer margins - The Packer

Value-conscious buyers work with closer margins

03/25/2011 12:38:42 PM
Susie Cable

It’s difficult to talk about any type of business these days without mentioning the effect the recession has had.

Produce buyers, like consumers, have become more value-oriented, and that’s probably the biggest trend Boston produce distributors are noticing now.

“Everybody is more value-conscious,” said Richie Travers, partner in Mutual Produce Inc., Chelsea, Mass.

Consumers in Boston are looking for the best value when making produce purchases, Travers said, so advertisements and promotions are perhaps more important than ever.

“When you promote it, it sells,” Travers said. “It putts along and doesn’t do too much if it’s not on sale.”

Retailers are working on closer margins, as are distributors and others in the industry, Travers said, and as a result the Boston area, already known for being a competitive market, is even more so now.

“(Buyers are) looking for good stuff at the right price to keep their retail prices down or to keep their plate costs down,” said Steve Piazza, salesman for Community-Suffolk Inc., Everett, Mass.

Produce prices soared after recent freezes in Mexico and Florida damaged crops and disrupted supplies.

“The last couple of weeks, the biggest issue is high prices for everything,” said Maurice Crafts, salesman for specialty produce house Coosemans Boston Inc., Chelsea, in mid-March. “I’ve never really seen a time when there was so many things at such high prices, even regular items.”

Coosemans maintained its customer base and didn’t lose many sales because of high prices, but the sales staff got to hear a lot of complaints about higher prices, Crafts said.

Frank Lisitano, president of Lisitano Produce Inc., Chelsea, said sales volume was down at his company by about 25%. Most of Lisitano’s customers are restaurant buyers.

“Prices need to break for the volume to go back up,” Lisitano said. “It’s (the weather has) been pretty nice, but prices are still very high.”

Some restaurants in the Boston area changed their menus to give themselves more flexibility in what fresh produce items they feature so they can buy based on value, Crafts said. Some buyers substituted broccoli for higher priced asparagus.

Lisitano said restaurants stopped buying eggplant when it got as high as $60 a box. The U.S. Department of Agriculture’s Boston terminal market report said 1 1/9-bushel cartons of medium-size eggplants from Florida were priced at $56-60. Cucumbers are another item restaurateurs cut back on, Lisitano said. The USDA reported 1 1/9-bushel cartons of medium-size cucumbers from Florida were $48 on March 16 in Boston’s terminal markets.

Foodservice buyers’ interest in fresh-cut produce can be driven by perceived value. Community-Suffolk doesn’t carry many fresh-cut items, but buyers who look for fresh-cut produce often are looking for ways to get guaranteed fixed costs, Piazza said. There is less variability on fresh-cut pricing than on f.o.b. prices, he said.

Fresh-cut produce appeals to value seekers because there is no waste and because it lessens labor costs.



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