A gradually improving economy coupled with a holiday sales boost could mean an uptick in business for produce companies that supply foodservice accounts this winter.

“Business is showing a nice turn and starting to come back,” said Dan Canales, vice president of sales and marketing for Misionero Vegetables, Gonzales, Calif.

The company is experiencing growth among existing customers as well as through new business, he said.

The percent of foodservice business at the company was greater before the recession, he said, but any reduction in foodservice sales was offset by an increase in retail sales.

Canales said he is pleased that as foodservice business starts to come back there has been no inverse reaction at retail.

Steady business

The good news for the foodservice segment is that “business is steady, not falling,” said Thomas Walsh, salesman for Underwood Ranches, Camarillo, Calif.

The company, which specializes in high-end items like baby beets, fennel and colored carrots for upscale restaurants, has not seen business return to pre-recession levels, he said, but sales are decent “considering the times.”

Supplies and quality should be good this winter, Walsh said.

New U.S. Department of Agriculture rules calling for more nutritious school meals resulted in a big increase in sales to school districts, said Ernst Van Eeghen, director of marketing and product development for Church Bros. LLC, Salinas, Calif.

“It almost happened overnight this fall when school started,” he said.

Business has stayed up, he said, as schools switch to lettuce blends and start to add more color to their meals.

“There seems to be quite a bit of movement,” Van Eeghen said.

Three-year-old GreenGate Fresh LLP, Salinas, has “been blessed with continued small growth,” said Jay Iverson, vice president of sales and marketing.

The company appears to be doing well with its value-added salads and slaws featuring items like spinach and spring mix.

GreenGate does a lot of business with quick-serve restaurants, hospitals, institutional accounts and schools, Iverson said, many of which prefer its value-added product to help control labor costs.

Foodservice business remains steady at The Chuck Olsen Co., Visalia, Calif., said vice president Jeff Olsen.

Olsen has noticed more requests for 5- and 10-pound packs and for lemons sold by count.

Citrus, grapes and melons are the company’s main foodservice items, along with some berries, peppers and other items.

Foodservice accounts for up to 40% of the company’s business, Olsen said.

Jason Grolnick, foodservice salesman for Tanimura & Antle Inc, Salinas, isn’t ready to declare the recession over, but he said consumers are still going out to eat.

“It’s kind of an anomaly out there,” he said. “Restaurants are still packed solid in the cities.”

Major foodservice distributors like Sysco Corp. and U.S. Foodservice mostly are holding their own, he said, “but the smaller guys may be struggling.”

Foodservice business can be divided into different categories, said Rick Antle, chief executive officer at Tanimura & Antle.

“There is discretionary foodservice spending. Then there’s fixed foodservice spending,” he said.

The company supplies schools, prisons, cafeterias and factories as well as restaurants.

“We really can’t say we lost foodservice business,” he said.

Sales growth

Castellini Co., Wilder, Ky., is another company that has seen foodservice sales increase substantially over the past two or three decades, said Joe Klare, executive vice president.

“We’ve enjoyed substantial growth in our foodservice line,” he said.

The company’s basic products are potatoes, tomatoes and onions, but its Club Chef value-added division offers items like tossed salads, shredded lettuce, chopped cabbage and diced onions.

Canales said Misionero is starting to see opportunities for growth in its foodservice business on the retail side.

“There’s a whole other segment going on within the retail community that translates to foodservice business,” he said.

That’s because traditional retailers continue to offer more and more home meal replacement sections, add delis and sell sandwiches.

“They are like a causal restaurant,” he said.