Business seems to be suffering a summer slump for some Los Angeles-area produce companies, but suppliers say business overall hasn’t been bad, and they anticipate a strong fall selling season.
The Los Angeles area is experiencing a “summer vacation slump,” Sean Villa, president of Great West Produce Inc. in Commerce, Calif., said in late July.
“Prior to that, the year had looked pretty good,” he said.
“We’re really looking forward to the fall and the back-to-school and holiday business that comes along with it,” Villa said.
Some customers are complaining about a summer slowdown, he said, “and we’re feeling a bit of that, as well.”
On the Los Angeles Wholesale Produce Market, business seems to have slowed overall, said Steve Cantor, director of sales and produce and a partner with Jay Kawano in Produce International.
Nonetheless, Produce International is doing well, he said, thanks largely to its partnership with Watsonville, Calif.-based berry grower Well-Pict Inc.
“Business has been very good to us,” Cantor said, though mid-summer is not necessarily the best time for selling strawberries.
“The dog days of summer are approaching on strawberry sales,” he said. “Markets are volatile as far as strawberries go.”
That’s because consumers often focus on items like soft fruit and cherries at this time of year.
“Things are pretty steady” at Consolidated West Distributing Inc. in Commerce, said Elvia Menendez, owner and president.
“There are no real swings,” she said, and business, for the most part, is similar to past years.
Sales have been good at Pura Vida Farms in Brea, Calif., despite increasing competition in all segments of the industry, said owner Wes Liefer.
“There is price pressure on everybody,” he said.
Retailers, who are struggling to differentiate themselves from their competitors, have had to turn to “aggressive advertising and retail pricing,” which makes differentiation a challenge, he said.
Yet supermarket chains continue to move into the area to try to claim a share of the market.
“A lot of retailers come into Los Angeles and don’t realize how much competition is here,” Liefer said.
Some of the more than 1,000 produce suppliers in the region have tried to survive by finding a niche and focusing on specific items, he said.
The status of the 100-year-old Seventh Street Market across the street from “The New Market” seems to be unchanged, say those who work in the area.
The site was part of the extensive Row Downtown L.A. acquisition in 2014 by New York-based Atlas Capital Group LLC.
Additional mixed-use occupants, including offices and retail businesses, reportedly are being sought for the area, but Atlas maintains that there are no plans to shut down the produce operation.
“As the produce market celebrates its 100-year anniversary, it continues to be the heart and soul for our overall vision of Row DTLA,” an Atlas representative said in late July. “We remain committed to a bustling produce market.”
On Sundays, the 5-acre market is transformed into Smorgasburg L.A., where “dozens of exciting food vendors” and “sophisticated shopping from the realms of design, craft, style, vintage, wellness and more” can be found, according to the Smorgasburg L.A. website.
Elias Produce, which operates on the market during the week, is part of the Sunday scene, said Carlos Franco, son of manager Ali Farhat.
Meantime, the effects of a statewide minimum wage hike from the current $10.50 per hour to $15 per hour by 2023 are beginning to be felt in the Los Angeles market.
Villa believes that eventually the wage increase “is going to affect everybody.”
“Regardless of what your pay scale looks like today, I think you’re going to have to adjust with the new minimum wage,” he said.
“I have a feeling it will affect us in ways we haven’t even considered yet,” he said.
Menendez said s he does not believe the higher minimum wage will have an immediate effect on Consolidated West because the company is not a packer or processor.
She does expect prices to rise eventually, however.
Produce International already pays at or above the new minimum wage, Cantor said, adding that the company recently bumped up its hourly rate by $1.