Recessions means growth for some companies

05/21/2009 06:30:34 PM
Dawn Withers

SALINAS, Calif. — The recession means more bare dirt and late plantings in the Salinas Valley alongside green rows of iceberg.

More conservative consumer spending practices caused by the poor economy affect fresh produce companies of all sizes as they start the busiest time of year in the country’s top lettuce-growing region.

Companies are reporting fewer acres at the start of season and an unwillingness to gamble by overplanting. There just may not be enough buyers.

“We’ve sort of geared our business toward foodservice,” said Michael Boggiatto, president of Boggiatto Produce Inc. Boggiatto said foodservice sales have been softening for the past several years — falling sharply this year — and the company’s volume is down because of that.

Nevertheless, he is still filling orders for the company’s signature baby iceberg and other foodservice-oriented commodities, Boggiatto said. He said he expects the bottom of the market is near.

“Things will turn around,” he said, “they have to.”

Mark McBride, sales manager for Coastline Produce Inc., said while sales are remaining steady even though acreage is down the recession has given the company a chance to improve its grower base and boost the availability of its products.

“We are definitely trying to upgrade our growers in all areas,” McBride said.

McBride declined to comment on how specifically the recession has affected the company’s sales but “we are still doing well.” He said he believes the industry will come out of the economic downturn more efficient and adjust to the new market.

Rick Antle, president of Tanimura & Antle, said he does not consider produce to be recession-proof because if that was so prices would be increasing as volumes fall for commodities.

“We’re recession-resistant,” Antle said.

Antle said the company is looking to increase plantings this season to meet customer needs.

Danny Canales, vice president of sales and marketing for Misionero Vegetables, Gonzales, said the company is feeling the recession through its foodservice business. Over the past eight years, Misionero, a processor of salads and wash-and-trim fresh-cut vegetables, did more business in foodservice than retail, though that’s changed now, and retail sales are helping to offset any decline in foodservice.

“We have been able to retain market share and achieve growth,” Canales said of the company’s plan to achieve 25% growth this year.

“We think it’s obtainable,” he said owing to the company’s reputation for high quality products and variety of organic and conventional salads.


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