Business looks strong for produce in the Heartland

Produce suppliers throughout the U.S. Heartland continue to cope with the impact of the COVID-19 pandemic, with most enjoying a sales boost on the retail side while foodservice business is taking a hit.

Distributors reported a successful summer and were gearing up for what they hope will be a profitable fall.

Applewood Fresh Growers LLC, Sparta, Mich., already had finished its harvest of Honeycrisp and gala apples in early October and was harvesting red delicious, golden delicious and proprietary bicolor Kanzi apples, said owner Scott Swindeman.

In all, Applewood Fresh Growers will have up to 12 varieties available by the end of October, Swindeman said.

An early upshot of the coronavirus was a drop in retailer demand for proprietary apple varieties.

“Panic buying made for chaos for a lot of retailers,” Swindeman said. “When COVID hit, retailers really scaled back on what they were carrying in their stores.”

Read more about the Heartland produce market here. 

Some supermarkets offered only the top 30-35 stock-keeping units across the whole produce department.

Since not many proprietary apples fell in that range, most were “temporarily” discontinued but never got back on the shelf, he said.

Stores seem to have reinstated most of those SKUs this season, he said.

Another effect of the pandemic has been an increase in sales of packaged product, Swindeman said.

Since COVID-19, sales of packaged apples have topped sales of bulk apples.

Swindeman believes that could be due to a couple of factors: cautious consumers preferring to pick up bagged product that has not been handled by others, and moms buying more apples, since, with many schools closed, kids are eating lunch at home.

Bagged apples are a good value pricewise, he said, and usually contain smaller, kid-size fruit.

Kansas City, Kan.-based Liberty Fruit Co. Inc. offers a full line of produce and is heavy on tomatoes, row crops and berries, said John McClelland, CEO. 

“We sell everything,” added president Allen Caviar.

As a major foodservice supplier, the company features a wide range of specialty items, like purple potatoes, kumquats and star fruit, he said.

Read more about foodservice here.

“What I’m most excited about in our industry is, if you look at the two largest generational groups in the U.S., the largest being millennials and the second-largest being baby boomers, both of those are very heavy produce consumers — for different reasons,” McClelland said.

Baby boomers eat fresh produce because their doctors tell them to, he said.

And millennials are “very, very focused on authentic food, healthier food, cleaner food, and produce is at the very top of that list.”

When Nick Conforti, an owner of North Kansas City, Mo.-based C&C Produce Inc., recently looked over his sales numbers for the past year, he was pleasantly surprised.

“I was very happy where our foodservice is and ecstatic about where our retail is,” he said.

Retail/wholesale numbers were up 32%, he said, and foodservice sales were down only 9.6% compared to last year.

“It’s been a fantastic year for C&C overall,” he said.

Thanks to the U.S. Department of Agriculture’s Farmers to Families Food Box Program, the company was able to boost its payroll by 160 employees, he said.

Nearly 40 remain with the company even after the program is finished.

The Payroll Protection Program also was a big help.

“We were definitely ready to start having to cut people,” he said. “Because of the PPE money, we were able to keep people on staff and figure out ways to grow the business.”

Heavy potato sales also played a role, as did increased sales on the retail side.

Read more about produce retial here. 

At Des Moines, Iowa-based Capital City Fruit Co. Inc., where foodservice accounts for about 55% of sales, “Business took a pretty big hit,” said Brendan Comito, chief operations officer.

He credited government programs with helping the company get through the early days of the COVID-19 crisis.

“PPP was a lifesaver for us in April and May,” he said.

The company also was able to benefit from the food box program.

“If we didn’t have the food box program, we would have had a really terrible time,” he said.

Capital City handles all the staples produce items, including tomatoes cucumbers, peppers, watermelon, specialty peppers and squash.