Produce in the Heartland weathers economy just fine - The Packer

Produce in the Heartland weathers economy just fine

09/18/2009 02:36:12 PM
Bob Luder

KANSAS CITY, Kan. — The last year certainly hasn’t seen the type of economic climate whereby companies produce record profits — at least, not companies who haven’t received any of President Obama’s stimulus or bailout money.

Yet, Liberty Fruit Co., which ended its fiscal year in June, posted a record year “by far,” said Arnold Caviar, the company’s owner and chief executive officer. And Caviar can explain why that occurred with one word … diversity.

“Being diversified can help handle tough economic times,” Caviar said. “Always, as an owner, you’re thankful for what you have and where you’ve been. I’ve surrounded myself with good people. We keep trying to increase sales. I’m sure we know what needs to be done, not only in the economic times we have now, but in past decisions we’ve made to increase our exposure.”

While most produce distributorships specialize their business in one sector of the industry, Liberty currently operates with equality in mind — 33% of business is in foodservice, 33% in retail and 33% with other wholesalers.

“We’re not a typical model in this industry,” said Scott Danner, Liberty’s chief operating officer. “We’re diversified. Foodservice is flat, even though in theory, we’ve gained new business. And, the retail side of things has more than made up for it.

“We’re in a good situation for when this (economy) does straighten out.”

Nick Conforti, vice president of Kansas City, Mo.-based C&C Produce, said his company’s sales also are up, mainly because of an emphasis in retail.

“People are staying home more,” he said. “We also service 12 school districts and all the military commissaries around the area.”

David Haun’s potato brokerage business in Merriam also has fared well, mainly, Haun said, because his is a lean and efficient company.

“You adapt to the amount of business that’s out there,” Haun said. “We don’t miss anything. There are just three of us (in the office). We’re in here working hard. Overhead is low.”

Haun said there definitely isn’t as much produce getting moved these days. Foodservice has taken a hit, especially high-end restaurants. Retail has hung tough, but even that has flattened out somewhat, he said.

“Nobody’s going to tell you the potato business is jumping,” he said. “Business tends to depend on supply. If supply gets tight, prices go up and people want them. If there’s plenty of supply, prices go down, but people want to buy more.

“I’m thankful every day for the consistent customer base we have. As people have become more price conscious the last couple years, we’ve picked up business because we don’t have to deal with profit margins and overhead others have to deal with.”

Those in the industry in other parts of the heartland also have held up in these rough economic times.

Des Moines and Norwalk, Iowa

Despite having a majority of its business tied up in foodservice, Des Moines, Iowa-based Loffredo Fresh Produce Co. Inc. still reports that its bottom line improved over the last year.

“The retail market is flat from last year, but certainly up compared with foodservice,” said Gene Loffredo, president and chief executive officer and part of the fourth generation of a family that’s owned the business since 1892.

“We’re down about 5% with restaurants. However, because of retail, we’re up overall. Diversity is important to us, and today it’s more important than ever.”

Loffredo said he’s especially optimistic about the future of his business in fresh-cut.

Capital City Fruit Co. Inc., Norwalk, Iowa, which does a bulk of its business in tomatoes, was hit hard last summer by the Salmonella Saintpaul scare, but chief operating officer Brendan Comito said the company was bouncing back in the new fiscal year.

“We lost some competition, because a couple locals here closed down,” he said. “It’s gotten to the point where you have to be really small or go big. There’s no in-between.”

Omaha, Neb.

Like its peers to the east and south, Greenberg Fruit Co. Inc. in Omaha, Neb., has held its own.

“It’s just attributable to hard work,” said Greenberg’s general manager Brent Bielski. “We’ve seen a dip in certain areas and an increase in others.”

Bielski said his company has stayed alive by always putting the customer above all else.

“You have to keep customer service in mind,” he said. “We just believe in taking care of our customers on a daily basis. That’s what we’re going to keep doing.”



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