Economy upturn a boon, suppliers say - The Packer

Economy upturn a boon, suppliers say

05/24/2013 02:32:00 PM
Jim Offner

Produce suppliers in Minnesota aren’t saying they are insulated from economic doldrums that have plagued the rest of the U.S., but they do say they could have it worse.

Unemployment statewide was 5.4% in March, which was more than 2 points lower than the national average of 7.6%.

Joblessness peaked in Minnesota peaked at 8.3% in April 2009.

At least one produce dealer in Minneapolis, Wholesale Produce Supply, is trying to find workers to fill slots in its packing and transportation staffs.

“We’re working hard to find people right now,” president Brian Hauge said.

Sales serve as another positive economic indicator, according to a number of produce suppliers in the Twin Cities.

That’s particularly true in restaurants, which often take the biggest hit when times are tough, said Dan McElroy, executive vice president of the St. Paul-based Minnesota Restaurant Association.

“In general, it’s continuing to do a little better,” he said.

Product costs, particularly beef and pork, continue to escalate, but foodservice outlets are coping with the help of fruits and vegetables, McElroy said.

“You’re seeing more side dishes,” he said. “A minor trend at the moment is savory oats, cooked with onion and garlic, to add substance to the lower cost.”

Produce suppliers say they’re not insulated from the caprices of the economy, but they also say they’re well positioned to handle slumps.

“When things get tight and people start worrying about their jobs and worrying about their houses they (sales) take off,” said Tom Rodmyre, warehouse manager for St. Paul-based Co-op Partners Warehouse.

Pressures that did exist a couple of years ago have eased noticeably, said Adam Gamble, general manager of North Country Produce, an Inver Grove Heights-based subsidiary of Wadena, Minn.-based Russ Davis Wholesale.

“I don’t know if it’s gotten to a point where people are certainly comfortable, but it certainly has lightened up a little as far as the tightness of consumers,” Gamble said.

Retail operators, who deal with consumer issues first-hand, say sales in their produce departments are much improved these days.

“In the beginning (of the last recession), you could definitely tell people were worried, and I think, overall, our store had zero growth, but that was five years ago,” said Dean Schladweiler, produce manager with The Wedge Community Co-Op, a retailer in Minneapolis.

Every year since then, the store has seen sales go up, he said.

“People are more comfortable doing the full shop now,” he said, noting that produce sales account for $5.7 million of the store’s $34 million in yearly sales.

At Kowalski’s Markets, a nine-store retail chain based in Woodbury, Minn., the economy has not been a major problem for at least 18 months, said Tim Fortier, produce manager.

“Sure, we felt it in 2010 and 2011, but I think it’s gotten better,” he said.

“It sounds arrogant to say it, but I don’t see us being affected by the economy.”

For Maple Grove, Minn.-based Chandler-Topic. Inc., the high cost of fuel continues to be a drag on growth, said Tim Grace, spokesman.

That translates into higher prices for consumers, he said.

“But, people are still buying it,” he said.

Things are better than they had been but there still is room for improvement, said Tom Bergin Jr., vice president of Bergin Fruit & Nut Co. in St. Paul.

“I was thinking it was looking rosy last fall. Now, I think it’s better but not as strong as what I was hoping for,” he said.

“Maybe it’s safer that we’re slowly coming out rather than jumping out fast.”

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