DALLAS — The business climate in Texas is no different than many other markets: where one major player is closing up shop, others are opening new branches and expanding service areas.
The San Antonio market is still reeling from the late December shock of Delta Produce LP and Superior Tomato-Avocado closing their doors. Many local businesses did business with the company, said Trey Touchstone of San Antonio-based brokerage Touchstone & Associates.
“Up until the shock, things have been a little bit better than before the recession,” Touchstone said. “We’re losing a piece of the puzzle. It will be harder to complete loads.”
The business will go somewhere, though, Touchstone said.
Such as to San Antonio-based Murphy Tomatoes, which opened its new Dallas office in January.
The company started doing business in the Dallas area in April, said Brad Corlew, national accounts manager.
In Fort Worth, foodservice operator Ben E. Keith is planning a major expansion into the southeast Texas and Louisiana markets with the construction of a distribution center expected to open in 2013.
The economy is strong in oil-rich Houston, said Brent Erenwert, vice president of Brothers Produce.
“We’re on pace to hit $100 million in total revenue for our two locations, Dallas and Houston,” he said. “We’re looking forward to 2012, expanding east and west.”
Houston-based Chefs’ Produce Co., which also has an office in Dallas, is having a strong year.
“The market hasn’t been affected as much as other parts of the country,” said Juan DeFranco, general manager. “We’re in much better shape than other states, and business has been good, especially in the last year.”
Cost-cutting measures
Like many other companies, Chefs’ has looked for ways to tighten its belt during the recession and make deliveries more efficient.
“We try to be as efficient as possible with deliveries,” DeFranco said. “We had to go to minimum orders.”
Erenwert said Brothers Produce doesn’t charge a fuel surcharge, but it tries to steer customers toward a more efficient delivery schedule. Daily deliveries don’t guarantee fresher produce.
“It’s either in our cooler or yours,” he said.
Sewell said his company does the same.
“Even though we may be able to have trucks there five times a week, that lettuce is probably coming from one of three deliveries a week,” he said. “It’s no fresher if you order it every day than if you get it every other day.”
To make the drop-off process more efficient, Ben E. Keith implemented an order scanning system in its trucks.
About 80% of the company’s fleet has it, Sewell said.
“It’s helped us reduce delivery times and increase order accuracy a great deal,” he said.
Retail diversification
South-central Texas is dominated by San Antonio-based H.E. Butt Co., but several companies are expanding southward from Dallas-Fort Worth.
Batavia, Ill.-based Aldi Inc. plans to open its first Houston location in the suburb of Katy, and Monrovia, Calif.-based Trader Joe’s plans to open a handful of Texas stores this year.
Even Austin-based Whole Foods Market Inc., plans some hometown expansion, doubling its number of stores in the Austin area to four.
Minneapolis-based Target Stores Inc. also is a company to watch. Target did extensive marketing for its fresh produce in Dallas and Austin in 2011, including a radio jingle by Austin-based artist Alyse Black.
Norman Scott, retail salesman for Chefs’ Produce, said he’s seeing expansion of Target’s fresh produce program in Houston.
“Target is a retailer to watch in the Houston area,” he said. “It looks like they’re making a go of it here. There’s not a lot of items in produce, but it’s such a draw at those stores.”
Scott said Cincinnati-based Kroger and HEB still have a strong presence in Houston.
“They’re both very powerful in this market,” he said.
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