CHICAGO — While all the space is occupied on the decade-old Chicago International Produce Market, there is no joy among wholesalers and distributors about the attrition that has claimed two big tenants over the past several years, industry leaders said.
Auster Co. closed its doors on the market a couple of years ago. More recently, World Wide Produce Inc. has quit operating.
Panama Banana has expanded into some of the units formerly occupied by Auster, and J.L. Gonzalez has expanded its footprint by acquiring space formerly used by World Wide Produce.
One of the bigger challenges to the market is that one major player seemingly goes out of business each year, said Mark Pappas, president of Coosemans Chicago Inc.
“The obvious thought would be if someone closes, the more business there would be, but I never thought like that,” Pappas said. “I look at it like there is a shrinking customer base,” he said.
Not all the companies who have gone away were poor operators, Pappas said.
In today’s economic environment, being successful requires more than putting the key in the door.
“You have to work at it,” he said.
Departures open doors
The market retains its energy, wholesalers said.
“When you come down here, you can get everything on one strip,” said Steve Chmelovsky, president and chief executive officer of Everyday Fresh Produce Inc.
The demise of operators has opened the door for other wholesalers to add commodities, he said.
“For us, there is no comparison of being on this market compared to being somewhere else.”
Going forward, Chmelovsky agrees he would like all operators on the market to stay open.
“We don’t want to see guys that go out of business. We would rather they stay open and the market stays a full-service market,” he said.
The market has changed over the years so that wholesalers there are not so much the specialists they used to be but instead offer a bigger portfolio of produce options, sources said.
The wholesale market opens at 3 a.m., and some buyers arrive that early to see what items are fresh, said Jason Gonzalez, transportation manager with J.L. Gonzalez.
Older buyers typically arrive at the market from 3-5 a.m., while younger buyers arrive from 6-9 a.m. Meanwhile, some buyers are placing orders by smartphone.
Strong competition
While some market players have fallen by the wayside, Gonzalez said the competition for business is as stiff as ever.
With more operators carrying more produce options, diligence is required to make sure that buyers who move from dealer to dealer are good credit risks, he said.
“There are less vendors today selling more items than the product lines it used to be,” said Deke Pappas, co-owner of Panama Banana. “We are all kind of stepping on each other’s toes, which allows independents to come in to make some tremendous buys.”
Pappas said independents are looking for pricing commitment, but wholesalers face a fluid market, he said, with overnight price variations caused by many vendors selling the same products.
The market is in good shape and remains in a strong competitive position, said Lisa Strube, director of finance for Strube Celery & Vegetable Co.
Strong wholesale market operators are needed, even by retailers who increasingly depend on direct shipments from shippers, said Ed Romanelli, vice president of sales and marketing with Agrow Fresh, who notes retailers have to space their orders far out in advance and can be caught short.
“You are missing out on business at retail if you don’t have product in the warehouse,” Romanelli said.
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