#1 story of 2009: Produce industry weathers recession

01/04/2010 01:15:26 PM
Dan Galbraith

While reports varied and some in the fresh produce industry downplayed their losses attributable to the recession compared to other business sectors, The Packer’s editorial board ranked the economy’s effects on produce business as the top story of 2009.

The Packer published numerous articles throughout the year detailing how the recession hurt sales of fresh produce at restaurants because traffic was down, and how, even at retail, specialty and organic items suffered financial hits, almost across the board.

While the foodservice industry has suffered arguably the most by the U.S. economy’s downturn, the change in business has also led to opportunities for values at restaurants and at retail.

But, even within prepared foods, value items seem to be what consumers are looking for and savvy produce retailers marketed value whenever possible.

Despite the economic woes, however, October brought a sign of recovery when the Produce Marketing Association’s Fresh Summit enjoyed record attendance, with 19,000 people from 58 countries descending on the Anaheim Convention Center for the nation’s largest produce trade show.

The previous record Fresh Summit attendance of 18,670 was set in 2006 in San Diego.

The four-day 2009 event, running Oct. 2-5, also had more than 800 exhibitors spread throughout more than 2,500 booths.

Comparing October 2009 survey results to those from the previous year, it’s clear the dark economy lowered expectations of new business generated at this year’s show.

Results indicated Fresh Summit attendees placed a higher importance on networking than signing business deals in 2009.

In August, the number of restaurant closings in the U.S. rose, with independent and fine dining restaurants taking the worst hit.

Chicago-based NPD Group’s latest ReCount, a census of commercial restaurant locations done by the consumer research firm, reported 4,000 fewer restaurants in the U.S. compared to August 2008.

Chains with more than 500 units broke the trend, gaining 1% over the last year in total restaurant locations. Smaller chains and independent restaurant numbers declined.

While most fresh produce company-related business failures in 2009 did not appear to be a direct result of the recession but instead more a result of tight credit conditions, the closing of Red Zoo Marketing, a large Canadian grower-shipper of greenhouse tomatoes and other vegetables, was attributed at least partially to the poor economy.


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