Produce demand strong; regional deals fare well - The Packer

Produce demand strong; regional deals fare well

09/08/2009 04:53:55 PM
Doug Ohlemeier

PHILADELPHIA — Despite difficult economic times, produce distributors in the City of Brotherly Love remain optimistic that demand and sales will continue.

They also rely heavily on regional produce deals that begin during mid-summer and run through early fall.

“The only problem I see, at least on our end, is that with the economy being the way it is, some of the specialty items, not tropicals, but items like raspberries, we sell some but are selling fewer now,” said Mark Levin, co-owner of M. Levin & Co Inc. “People don’t have to have raspberries, which many consider a luxury item. Certain items fall off because of that luxury status.”

Levin’s bananas and tropicals business, on the other hand, has taken its turns but remains steady in sales, he said.

Levin said he has noticed that shoppers are increasingly turning toward more durable produce — items such as apples, bananas and oranges — that can hold up well in children’s lunchboxes.

Preparing for tougher economic times, Procacci Bros. Sales Corp. in April released a line of prepackaged fruit and vegetables that targets price-conscious shoppers.

Procacci’s value-packed program, which includes up to 40 items custom-packed to retailers, features produce overwrapped in plain wrappers with no branding except to say “value.”

Mike Maxwell, president, said the distributor hasn’t downgraded grade and condition, but has only lowered sizes to make packages more consumer-friendly.

Children, the elderly and people on fixed budgets look for smaller-sized produce and value packs, he said.

Grocers don’t have to sell extra large or jumbo-sized bell peppers or the larger-sized apples when medium or smaller sizes can increase movement and reduce retail prices, Maxwell said.

Retailers can sell 88-size apples for $1.29 or can put three smaller apples in a tray and sell it for 89 cents, which more mothers should pick up, he said.

“We are adding value to the people that are price-conscious,” Maxwell said. “You have to think backwards all the time. What do consumers want and how can we get it to them at what price point? How can I make my retail and make money in the process for myself and for the grower? It has to go back to the farm.”

Jimmy Storey, president of the terminal association and president and owner of Quaker City Produce Co., said retail sales vary with the economy and interest in health.

“People are looking to eat a little healthier,” he said. “With all of these promotional programs they have in the schools as well as the Produce for Better Health, all of this has to be helpful to our business.”

Quaker City specializes in selling berries. Storey said he sees increased demand for strawberries, blueberries, blackberries and raspberries.

With New Jersey being so close, Philadelphia wholesalers every year eagerly await the start of regional produce deals and remain big buyers of The Garden State’s produce.

“New Jersey pumps out a lot of vegetables,” said Tom Curtis, president of Tom Curtis Brokerage. “That state has The Garden State moniker for a reason.”

Pinto Bros. Inc. sells New York-grown produce and has represented sales for three generations of New Jersey farmers.

“These regional deals are becoming more valuable,” said Todd Penza, salesman. “They seem to be more important these days. We are the middlemen for the farmers and have very strong commitments for their products.”

While many supermarkets dedicate sections to regionally grown produce, Penza said many restaurants are increasingly featuring regionally grown produce on their menus.

Curtis said West Coast volume often dips in July and August, and remains much smaller than the “free hand” those growers have October through June, before the various regional deals start production.

Because of encroaching development, for a time during the 2000s, a lot of New Jersey farming land became more valuable for real estate development than farming, Curtis said.

However, following the real estate decline, more land has reverted to agricultural use, he said.

Chip Wiechec, president of Hunter Bros. Inc., said another problem pressing regional growers involves input costs.

“There are fewer regional farmers, and fewer smaller ones,” he said. “They have been struggling over the last couple of years due to the cost of fertilizer. Those costs have been hurting a lot of them.”

Wiechec said sales of regionally grown produce have been increasing.

Hunter Bros. sells product grown in New Jersey, Pennsylvania, New York and throughout the East Coast as well as Ontario-grown vegetables. 

Procacci sources regionally-grown produce from a wide geographic area, including Pennsylvania’s neighboring states, Ohio, Michigan, Canada and the entire eastern deal, including broccoli from Maine.

“We have a big East Coast network,” Maxwell said. “We look forward to this deal. It provides a nice boost.”



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