Kentucky, Tennessee distributors persevere in sluggish economy - The Packer

Kentucky, Tennessee distributors persevere in sluggish economy

06/30/2011 02:12:00 PM
Dan Gailbraith

As the U.S. economy continues to lag and consumers to tighten their belts, some produce distributors say business remains tough.

The most recent data available from the U.S. Department of Labor’s Bureau of Labor Statistics show that May unemployment rates in Kentucky and Tennessee, 9.8% and 9.7%, respectively, were above the national average of 9.1%. Both rates were better than a year earlier, though, when Kentucky’s rate was 10.4% and Tennessee’s was 9.8%.

Lee Pittman, owner and president of Dixie Produce Inc., Chattanooga, Tenn., says the economy has been tough in the southeast, where his company distributes produce. The company, a member of Nashville, Tenn.-based Produce Alliance LLC, is primarily a foodservice distributor, but it also sells to retailers and wholesalers.

Dixie Produce’s same-store sales to foodservice customers have declined by 7% to 10% over the past two years, Pittman said.

“We’ve been able to curb that by tightening our belts, being responsible and making tough decisions,” Pittman said. “We’ve survived.”

Dixie Produce also increased its customer base to compensate for lower per-store sales. Even in slow economic times, there is opportunity for growth, Pittman said.

In fact, Dixie Produce’s overall sales are up due to the addition of customers and items.

For Memphis, Tenn.-based Orbit Tomato Corp., a tomato and red potato repacker that relies primarily on one major retailer customer, sales are about the same as they were last year, but less than two years ago, said Lee Forcherio, general manager.

“They are definitely not increasing,” Forcherio said.

Frank Campisano Jr., president, Frank A. Campisano & Sons Fruit Co., Louisville, Ky., said the produce business is not good.

“My business has been losing a lot of business in the last two or three years,” Campisano said.

Campisano & Sons sells to restaurants — including fast food — independently owned grocery stores and convenience stores.

“I’ve had chain accounts that on Saturday are selling strawberries, going through 25, 30 flats,” Campisano said. “Come Monday, they’re bankrupt.”

Campisano expects to stay in business, despite the difficulties.

“It’s been pretty rough,” he said. “We’ll be around for a few more years.”

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