Philadelphia’s produce shoppers are returning to basics while driving digital methods into high gear.
The COVID-19 pandemic is driving consumers toward more staples and value items in Pennsylvania’s largest city.
Basics such as grapes are selling better than higher-priced produce such as cherries, said Richard “RJ” Durante, salesman and food safety director for Nardella Inc. at the Philadelphia Wholesale Produce Market.
“I’ve seen people be more spending conscious. Cherries are just one example. Everything moved to a utility grade,” Durante said.
John Vena Inc., also at the Philadelphia market, is seeing buyers steer clear of higher priced or niche items in all sectors in favor of versatile basics that store well and can be widely used, said Emily Kohlhas, marketing director.
“With the instability in the market, we’re hearing that it’s just too much to risk shrink on high value items,” Kohlhas said.
The exception has been foods thought to have healing capabilities, such as ginger, garlic and lemongrass — some of which saw “insane demand” as the coronavirus first arrived in the U.S., she said.
Business has increased at the market terminal since February, but that’s not across the board for all 18 merchants, said market general manager Mark Smith.
The number of trucks passing through the entry gate rose in February, March and April compared to 2019, although Smith didn’t have an estimated or exact number.
“Everybody has been working to figure out how to stabilize their business, and most have been successful at it to date,” Smith said.
Hunter Bros. went out of business in 2019, and its H units were auctioned off to G&G Produce, Smith said.
John Vena Inc. expanded into G&G’s old spaces, taking the entire F section, said Christine Hofmann, the market’s marketing coordinator.
“We have lost a lot of foodservice business — restaurants in Pennsylvania and New Jersey are pretty much only doing takeout business — and, of course, schools closed down in March, but we’re holding our own with retail customers,” Hofmann said.
John Vena Inc.’s customer base is typically split about 50/50 foodservice to retail, if retail includes meal kits, but since the coronavirus took hold of the Northeast, those ratios have definitely skewed more heavily toward retail, Kohlhas said.
While retail business spiked immediately after pandemic-related shutdowns, Kohlhas said, while foodservice dropped.
Since the steep decline, foodservice business has returned incrementally, yet “we are nowhere near pre-COVID volumes,” she said.
Winning a U.S. Department of Agriculture Farmers to Families Food Box contract not only prevented layoffs but enabled more hires to expand the packing team.
John Vena Inc. produced 60,000 boxes, each with 20 pounds of American-grown produce. The Share Food Program distributed the boxes in the greater Philadelphia region.
The USDA renewed the contract, so the company will produce 80,000 more boxes by Aug. 31.
The program created a relationship with the area food bank, forming a more meaningful connection between their work and the local community, she said.
M. Levin and Co., also at the Philadelphia market, has a customer base that’s about 65% wholesale, 20% retail and 15% foodservice.
Owner Mark Levin said the company didn’t get a USDA contract, but it’s breaking down large items, such as four 10-pound boxes of bananas or bagged peaches and plums, into smaller packages, “so people can sell them in smaller amounts at a reasonable price.”
“What I’ve seen with the virus is prices have gone up on merchandise, but not too much that they’re being gluttons,” he said.
Levin said he also doesn’t bounce back and forth between suppliers or transportation companies.
“They don’t gouge me when they could, and I don’t beat them up when I don’t have to,” Levin said about prices.
He’s worked with many suppliers for 30-plus years.
“You go home with the person who brought you to the dance.”
Nardella’s customers are 60% large retailers and wholesalers and 40% corner stores, mom-and-pop shops, foodservice and those who deliver to foodservice.
“We have guys who will take pallets of stuff, and we have guys who take a box here and there. You’re getting charged the same,” Durante said.
That treatment can help the small produce-stand customer who can’t offset expensive produce with cheap toilet paper or laundry detergent, Durante said.
“So how do you work that out? You offer the best, most competitive prices to everybody.”
Going digital
E-commerce was ramping up already, but “COVID-19 has injected rocket fuel into the e-com engine,” Kohlhas said.
This means customers will want more accurate specifications, custom packaging, descriptive content and photography, she said.
“As a wholesaler, we’ve got to make sure we are ahead of that trend and at the ready to provide value there,” she said.
ShopRite, Acme, Giant Food Stores, Walmart and Target had the highest market share in the Eastern Pennsylvania, Delaware and New Jersey region that includes Philadelphia, according to Shelby Market Data numbers for July 2020.
All five retailers have online shopping options for pickup and delivery.
During Philadelphia’s peak of the virus, Levin said the market was a “ghost town” and most orders were by e-mail, phone calls and texts.
That less-personal communication doesn’t work as well when you’re trying to solicit new customers or bring back old ones, Levin said.
“If you don’t get a reply, does it mean they don’t need the product? The price is wrong? I can tell from the tone of your voice,” he said.
The market posts a couple of times a week on its Instagram and Facebook accounts to entice masked visitors back to its bright, uninterrupted cold chain facility built in 2011.
By the end of July, more buyers were back at the market in person, wearing masks, tenants said. But over-the-road drivers are still staying in their trucks.
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