#1 story of 2009: Produce industry weathers recession - The Packer

#1 story of 2009: Produce industry weathers recession

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

Jay Colasanti, president and co-owner of the Ruthven, Ontario-based company said its last shipment of tomatoes from growers arrived May 1.

“We’ve had some difficulties with some investments in Mexico,” Colasanti said.

“The salmonella issues from last year really broke our back. Then we’ve had issues this season with the bad markets … In this economy, nobody wants to take on that much debt.”

In April, The Packer reported the economic downturn was forcing tropical fruit suppliers to adjust.

Some are adjusting to greater efficiencies and stronger sales, while others sought to provide greater value to customers.

Earlier in 2009, analysts warned grocers that consumers would likely trade down to cheaper produce, a trend that appeared to ring true, even in late 2009, with the exception being locally grown produce.

In February, produce industry officials reported similar business numbers in 2008 as they did in 2007 but also, almost across the board, indicated they didn’t think their businesses were getting hit as hard by the recession as many other industries have.

In the most even distribution of results across five multiple choice replies in the two-year history of Produce Pulse, respondents rated the 2007/2008 comparison as basically a wash, mostly saying that while sales conditions didn’t improve in 2008, they didn’t worsen either.

Twenty percent said their produce business was much better in 2007 than in 2008 and 21% rated their business as “somewhat better” in 2007, but 22% said their numbers crunched out about the same in the two years.

Meanwhile, 23% said their business improved somewhat in 2008, and 15% experienced tremendous improvement from 2007 to 2008.

In response to a separate question asking respondents to compare their company’s 2008 business to the overall U.S. economy, 20% said their businesses fared much better than the overall economy, 45% said their business fared somewhat better, 31% said it was about a wash, and only 3% said their produce business dropped off somewhat more severely than did the overall economy.

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