Sales improvement can’t come soon enough for Southern produce companies - The Packer

Sales improvement can’t come soon enough for Southern produce companies

06/30/2011 02:16:00 PM
Dan Gailbraith

Kentucky’s and Tennessee’s economies continue to struggle, though the numbers show some improvement over the past year.

As of May, both states continued to have unemployment rates higher than the national average of 9.1%, according to statistics from the U.S. Department of Labor.

While higher unemployment rates typically mean restaurants lose customers — which, in turn, affects produce suppliers — and some Kentucky and Tennessee produce companies that focus on the foodservice industry said sales were lower, they’ve still found ways to build their customer bases.

Frank A. Campisano & Sons Fruit Co., Louisville, Ky., sells to restaurants and retailers and has lost business in the past two to three years, said Frank Campisano Jr., president.

Some lost sales were due to the advance of broadline distributors that sell fresh produce and nonperishables, and that can load multiple product lines on a single truck. Those big-volume companies typically sell produce at lower prices than Campisano & Sons can offer.

Campisano competes by offering good service, but not by trying to meet broadliners’ lower price points, Campisano said. He educates customers about the need to buy based on quality and service instead of price.

Some buyers in Tennessee and Kentucky are looking for local produce in an attempt to cut costs. With no freight charges, distributors sometimes can afford to sell local items for less.

The Kentucky Department of Agriculture’s Kentucky Proud Restaurant Rewards program helps promote local produce and other local products by offering rebates to restaurateurs and foodservice buyers when they purchase Kentucky-grown produce.

The Pick Tennessee Products program also promotes local product, particularly the locally famous Grainger County tomato.

One trend Kyle Holmberg, marketing specialist, Tennessee Department of Agriculture, Nashville, has noticed in Tennessee is a growth in farmers markets and community-supported agriculture as avenues for local produce sales.

Sales of local produce at those venues don’t appear to have changed the overall grocery market much, however, Holmberg said. The majority of consumers still shop at supermarkets in search of inexpensive produce.

“There’s a big enough switchover (to local) that we see (farmers) markets popping up,” Holmberg said.

There is “exponential growth” in the number of farmers markets in the state, likely due to grants from the department of agriculture, said Annette Wszelaki, vegetable extension specialist, University of Tennessee, Knoxville.

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