Wholesalers report decent performance in down economy

11/03/2009 02:15:00 PM
Cynthia David

MONTREAL — Between Mother Nature and the surging Canadian dollar, it’s been a difficult year to be a grower in Quebec.

Yet for Montreal wholesalers and importers, the rise of the dollar close to par has been the icing on a not-so-bad year.

Cynthia David

Companies such as Gaetan Bono, Montreal, have had trouble selling organics this year because of their higher price. Overall, the rising Canadian dollar has helped Montreal wholesalers endure a weak economy.

“It’s been a good year,” said Guy Milette, vice president of international sales and development at Courchesne Larose. “We were expecting the economy to be much harder hit. The produce economy did slow down a little, but it hasn’t reflected what we hear in the news.”

Milette said most Quebec wholesalers are down up to 40% over last year, while Courchesne’s strong importing side led to a small percentage of growth.

“Everyone’s doing fine,” said George Pitsikoulis, president of Canadawide. “There’s a little less business in foodservice and a little more retail, so one compensates for the other.”

Tony Bono, a partner in Chenail Fruits and Vegetables, agrees the media have done a great job whipping up bad economic news, but he has definitely seen a change in eating habits.

“People are eating more at home than at restaurants,” said Bono, “and they’re eating differently — cutting out pricey peppers from Holland and blueberries at $4 a pint, and buying broccoli instead the week it’s on sale. They’re also eating more lettuce and tomatoes. We’ve had to adjust our buying decisions week by week to meet the demand.”

On the import side, both Courchesne and Chenail are building strong international programs in the Southern Hemisphere.

“The world is opening up a lot more, especially in South America, and we have great connections with growers,” Bono said. “We’re bringing in beautiful mangoes, papayas and avocados directly from growers in Chile, Argentina, Peru and Belize.”

Milette also sees the region developing.

“Chile and Argentina used to have a monopoly on fruit such as grapes,” he said, “but it’s now spread among other countries, which is creating more competition. And there’s been an exponential growth of blueberry production.”

For the beleaguered Quebec grower, meanwhile, 2009 has been one for the record books.

“In June and July it rained every day, leading to losses in the fields,” said Andre Plante, director of the Quebec Produce Growers Association.

“Then in August and September it was so dry that growers had to work harder and use irrigation.”

“In the end, we lost 25% of the crop,” Plante said. “Unlike last year, however, we couldn’t raise prices to cover the shortfall because the stronger dollar restricted exports. I don’t know if Barack Obama’s ‘buy American’ message made a difference, but it was very tough.”

Then the weather turned unseasonably cold.

In early October, as he looked over the broccoli fields owned by Les Productions Margiric in Laval, Quebec, Mario Cloutier was shaking his head.

The crop desperately needed warmth to grow to harvest size.

“If we’re lucky, we’ll get half the 325,000 boxes we’d planned,” said the marketing director. “And we had so many peppers that boxes we normally sell for $10 were selling for $6, below the cost of production.

“It’s going to be a strange ending for a strange season,” Cloutier said, “and we thought 2008 was the worst. It’s the same story for all the growers.”

The one bright spot for growers, perhaps, is that Quebec chain stores are all committed to promoting local products in season.

“It’s good for us,” said Valerie Grenier, sales and marketing director for Savoura greenhouse tomatoes and cucumbers in Portneuf, Quebec.

The company is now waiting with baited breath to see how prices will fare when Mexican production gears up this month.

“We hope they won’t go as low as last year,” said Grenier.

Organic outlook

When it comes to organics, the jury is all over the map.

“There’s a growing demand for organics, but the price is out of the consumer’s reach,” said Eric Landry, vice president of CDS Brokers Inc.

But though there are no major volumes now, CDS is aggressively sourcing products for the future, convinced that sales will rise in the next five to 10 years.

Montreal organic pioneer Gaetan Bono said the economic downturn has made it a difficult year.

“People are buying as cheaply as possible right now and they don’t want organics,” said the central market wholesaler. “Sales to retailers, distributors and fruit stores are slowing down, not growing. We’re bringing in the same amount, but we’re working harder to sell it.”

At the foodservice level, Benoit Lecavalier, director of sales and development for produce at foodservice supplier Hector Larivée, said organics aren’t selling and he doesn’t get many requests for it, even from top chefs.

“They’re too expensive and unreliable,” said the director of sales and development. “A bag of regular carrots is $10 and a bag of organic is $22.50. Nobody wants to pay it. The next week, we don’t have any. We need steady availability.”

On the import side, Lecavalier said he’s delighted with the high-flying Canadian dollar.

“When you have a full load of product at $8,000 U.S. it’s almost like $8,000 Canadian,” he said. “It used to be more like $10,000 to $11,000. If you take that extra $3,000 and divide it among the load, that’s $3 a case.”



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