Philadelphia distributors deal with slow produce economy - The Packer

Philadelphia distributors deal with slow produce economy

09/08/2009 05:06:56 PM
Doug Ohlemeier

PHILADELPHIA — The recession hasn’t skipped the fresh produce industry here.

Produce distributors in the Liberty City report a slowing of demand and sales.

The tighter produce demand comes as merchants look forward to relocating to the new Philadelphia Regional Produce Market, which is being constructed in the southeast part of town near the airport.

The new facility, loaded with modern food handling and refrigeration technological advantages, is supposed to help attract more businesses, distributors said.

The operation is expected to open late next year.

Meanwhile, businesses in the current terminal market are working harder to make ends meet, said Rick Milavsky, vice president of BRS Produce Co.

The wholesaler, which sells to customers that visit his market units, used to get applications for work every couple of weeks. Today, four to five people inquire every week.

“Everyone’s struggling out there,” Milavsky said. “From what you hear from people, everyone is just working closer. All kinds of businesses are. It’s tough. The number of applications we receive just goes to show you the jobs are a lot tougher to come by now.”

Jimmy Storey, president of the terminal association and president and owner of Quaker City Produce Co., said sellers of produce are fortunate in that people have to eat and that their products remain in demand.

“Business could be better, but it’s not bad,” he said. “It’s tough, I can tell you that. It’s not easy to make a buck anymore. You really have to be on top of your game and you have to work at it every day.”

The slowdown has affected wholesalers of all sizes.

Mike Maxwell, president of Procacci Bros. Sales Corp., characterizes sales as “going well but not great.”

He said Philadelphia has been blessed in that the economic downturn hasn’t hurt the region as much as Florida, Arizona and California.

“This is not a great year by any means, but it is a steady year,” he said.  “Business goes up and down. We are not like Wall Street.”

Everyone, Maxwell said, has been tightening their belts, and while Philadelphia has seen its share of layoffs, the job cuts haven’t devastated the region.

Distributors are eagerly awaiting next year’s expected opening of the new produce market.

“This new market will give us a lot more ability to service our customers and different customers,” said Todd Penza, salesman with Pinto Bros. Inc. “It will only be a benefit to us and will affect more than just Philadelphia. It will affect the whole East Coast and will make the Philadelphia market much more important than it already is.”

Storey said the move is long overdue.

“We need to get out of here,” he said. “The condition of this market is deplorable. All the sidewalks are cracked and weren’t made for the heavy equipment that rolls over them.”

Retail sales in the Northeast have kept steady.

“Retail is doing quite well or at least holding its own,” said Ron Carkoski, president and chief executive officer of Four Seasons Produce Inc., Ephrata, Pa.  “Volume is strong for the retailers and wholesalers that we sell to.”

Carkoski said he has noticed a trend of slightly less robust sales of value-added products such as packaged salads compared to higher-selling commodities such as head lettuce.

The slowing economy has taken its hits on foodservice sales.

“You go to the restaurants, it’s pretty scary,” said Tom Curtis, president of Tom Curtis Brokerage. “You can see how the money has tightened up. You wonder how these people exist.”

Jack Collotti Jr., vice president of Collotti & Sons Produce Inc., worries about repayment. He said produce sellers are seeing more slow-pays.

“Collecting money is slow and it’s worse than it ever has been,” Collotti said.  “Shippers are looking to get paid fast. The economy scares me for this reason: People are not able to pay their bills and stay ahead.”

Curtis said the slow payments issue “has turned into a real problem.”

He said it’s not worth trying to gain additional sales if the customer won’t repay. Curtis said many produce sellers are running into slow-pays and no-pays.

Sales to numerous ethnic groups remain strong, wholesalers report.

“We are handling more Hispanic items than in the past,” said Chip Wiechec, president of Hunter Bros. Inc., which has been selling more tomatillos, cilantro, maradol papayas and specialty hot peppers. “These ethnic groups are becoming more important.”



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