Foodservice slow down little noticed by ethnic produce grower-shippers, marketers

06/22/2010 02:11:58 PM
Don Schrack

It is no secret that most foodservice operators would like to forget all of 2009 and a good chunk of 2008.

The recession found fewer patrons dining out and choosing, instead, to visit McDonald’s or Burger King — or to fire up the stove and eat at home.

Grower-shippers and marketers of fresh produce witnessed the changes in dining behavior from the sidelines. For most of them, the loss of foodservice business was returned by larger orders from retailers.

“We’ve seen it from the increase in retail sales, because people are shifting their spending dollars — and we’ve added some new retail accounts,” said John Killeen, vice president of sales and marketing for Muranaka Farm Inc., Moorpark, Calif.

The company, which does not specialize in ethnic produce, markets green onions, radishes and cilantro and is well established in Asian restaurants especially in New York, he said. Muranaka Farm may have gotten orders while newer or less well established grower-shippers lost out.

“A lot of our customer base is the Chinese houses in New York, so our label has become well known,” Killeen said.

The effects of the recession on Princeton, Fla.-based New Limeco LLC had more to do with supply and demand than with smaller orders from foodservice operators, said Eddie Caram, general manager.

Caram said he saw the effects of the recession on restaurants, especially for commodities that for a variety of reasons became scarce. A case in point, he said, is the boniato, also known as the Cuban sweet potato.

“It’s a great seller in New York and Chicago,” he said. “But the freeze in December damaged that crop, and the price has escalated.”

New Limeco’s customer base is divided fairly equally among retail, wholesale and foodservice, Caram said. As foodservice struggled, retailers filled in.

Limeco specializes in Hispanic or fruits and vegetables, but also serves Asian and African cultures, Caram said. Hispanic shoppers played a huge role in propping up retail sales, he said.

“Not only do Hispanics do lots of in-home cooking, but they tend to want larger fruit and larger vegetables,” Caram said.

It is a view shared by Mary Ostlund, director of marketing for Brooks Tropicals LLC, Homestead, Fla.

“Food is the last thing Hispanics cut back on,” she said. “It’s priority one.”

Surveys have found that Hispanics spurn frozen, prepared or value-added items in favor of fresh, quality produce for their tables, Ostlund said.

Nearly all the inventory of fruits and vegetables at Brooks Tropicals fell in ethnic categories, but the company has not seen any real changes in wholesale business, she said.

Though Pardi Produce Inc., Edinburg, Texas, also markets to retail, distributors and foodservice a wide variety of vegetables targeted at ethnic groups, the restaurant slow down was little more than a small speed bump, said Gus DiNovo, president.

“We never really felt the foodservice dip,” he said.

Another factor that is boosting retail sales is that many commodities once thought of as Hispanic or Asian food items are becoming mainstream, DiNovo said. He pointed to cilantro, a commodity used by a variety of cultures.

“Before holidays or big events such as the Superbowl, sales of cilantro just skyrocket,” he said. “In fact, the consumption curve for cilantro has been going up for several years.”

Fresno, Calif.-based Baloian Farms has for many years grown, packed and marketed Asian favorites napa cabbage and bok choy among its inventory of mainstream vegetables. Napa cabbage and bok choy usually are sold to wholesalers or distributors who, in turn, service Asian restaurants, said Jeremy Lane, sales manager.

If the recession slowed sales for customers of Baloian Farms, the dip was nearly imperceptible, he said.

“If we do see a slowdown in foodservice sales, we probably won’t notice until we start our bell pepper season this spring,” Lane said. “That’s when we have more direct sales to foodservice.”

“We haven’t really noticed it,” said Adrian Capote, sales manager for J&C Tropicals, Miami, of the recession’s blow to foodservice.

“Actually, we’ve seen an increase in our business,” he said.

One reason, he said, could be that J&C Tropicals markets many ethnic food items tailored to low-to-medium income families. 

Across the country in Los Angeles, the foodservice slowdown caused only a slight decrease in foodservice business at World Variety Produce Inc., said Robert Schueller, director of public relations.

“And the decrease was concentrated in the West,” he said.

As with other marketers, World Variety made up for the decrease with increased revenues from retail, Schueller said.

Yet another grower-shipper-marketer noticing a slight dip in foodservice business was M&M Farms Inc., Miami. Higher retail sales more than covered the foodservice dip, said Mark Vertrees, marketing director.

“People must eat,” he said. “Our products are very much like potatoes are to the average American. They are the staples of the diets of Hispanic and Asian families.”



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