Economy's trouble takes its toll on the industry - The Packer

Economy's trouble takes its toll on the industry

07/06/2012 03:30:00 PM
Jim Offner

Some news reports say the economy is rebounding. Others say another recession is nigh.

Produce suppliers in the Pacific Northwest say they have their own indicators that point to troubled times.

“I think the biggest thing I’ve noticed is some of the companies that we’ve dealt with over the years that were slower-pay types or a little more difficult to deal with have disappeared,” said Dale Hayton, sales manager at Valley Pride Sales, a Mount Vernon, Wash.-based grower-shipper.

The region is still loaded with an ample number of produce suppliers, but tough economic times have thinned out the numbers, Hayton said.

“I look at my (Red Books) — I have stacks of them from years and years ago, and they used to be substantially thicker than they are now,” he said.

The downturn that hit the U.S. beginning in 2007 and continues today has contributed to that, Hayton said.

“That’s just fewer companies, and I think the economy probably hurt those companies that were, you know, getting by but not doing great, and some of them have disappeared,” he said.

Focus shift

Economic pressures caused Seattle-based City Produce to shift its focus a bit, said Pat Suyama, owner.

“I stopped doing retail because they have a lot of (wholesalers) around me who are like mom-and-pop places, and I can’t compete with them because they’re so cheap and don’t have any overhead,” Suyama said.

Certain sectors of the foodservice business have slowed, though, which presents a quandary, Suyama said.

“People are still going out but not like before,” he said.

Federal Way, Wash.-based Botsford & Goodfellow Inc. also has altered its emphasis a bit, said Ron Escene, manager.

He said his company has changed from about half retail and half foodservice to about 70% retail.

“Fewer people eat out, but those same people still want to eat good product, and they’re buying it at retail,” he said.

All in the same boat

Economic pressures are weighing heavily on suppliers, said Terry Luppino, vice president of Northwest Fruit & Produce Inc. in Fife, Wash.

“It’s killing us, (but) everybody’s in the same boat,” he said, listing the cost of fuel and competition among the pressures.

He said suppliers try to undercut each other in price and offer something rivals don’t have.

“Restaurants are closing their doors,” he said.

Consumers are finding good bargains, Luppino said.

For suppliers, it’s a bit different, he added.

“It’s a tough deal,” he said.

Unemployment in Oregon and Washington both exceeded 8% by the latest counts, according to the U.S. Bureau of Labor Statistics. However, there are some bright spots, said Ernie Spada Jr., owner of Duck Delivery and United Salad Co., Portland, Ore.

“I was just reading yesterday that Oregon’s economy grew and, compared to the rest of the country, our growth is pretty good right now,” he said.

Spada said he disagrees with forecasts that another recession is imminent.

“I’m not telling you it’s back where it was, but I feel a little better about it today than I felt about it a couple of years ago,” he said.

Doug Huttenstine, executive vice president of sales for Charlie’s Produce, a Seattle-based wholesale distributor, said he also detects indications that things are improving.

“In the restaurant business it’s getting a little bit better,” he said.



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