Despite rising inflation and some other challenges, business at the Ontario Food Terminal in Toronto appears to be thriving.
Even with a sagging economy, “Everybody still needs to eat,” said Angelo Alberga, buyer and salesman for Canadian Fruit & Produce Co. Ltd. at the terminal market.
Costs of product, fuel, labor, packaging and other necessities have risen, but the company is “trying to make it work,” he said.
The firm is concentrating more on products that consumers want most, such as citrus. Canadian Fruit & Produce has increased its volume of commodities like lemons, oranges, grapefruit and limes, Alberga said.
At this time of year, the company gets most of its citrus from California and a smaller amount from Spain. Peppers, zucchini, eggplant and other commodities come from Mexico and offshore growing areas, like Costa Rica and Guatemala.
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Once product arrives, securing access to trucks is no longer is a problem, Alberga said. But they are a little on the expensive side, largely due to the high cost of fuel.
That bothers Alberga.
“Diesel fuel is way overpriced,” he said. “It makes absolutely zero sense what we’re paying for fuel.”
The cost of trucks will remain high as long as fuel costs are inflated, he said.
At North American Produce Buyers Ltd., also at the Ontario Food Terminal, business has been “quite positive, albeit quite challenging,” said Stephan Schmekel, chief sales and marketing officer.
“Overall consumer demand for our products remains strong, although more price sensitive than in previous years,” he said.
As supplies continue to grow in certain producing countries, as logistical concerns are addressed and as ocean freight resumes its normal course, the industry has seen significant volume being imported into Canada early in the season, Schmekel said.
“Due to high inflationary pressures being put on the consumers and their discretionary income, a consumer shift toward the discount retailers has been increasing,” he said.
The company imports, sells and markets deciduous fruit, including grapes, stone fruit, blueberries and citrus fruit.
Proprietary grape varieties have become particularly popular, he said.
At this time of year, the firm sources most of its products from Peru, Chile and South Africa.
The terminal market is a good place for independent retailers to shop for produce, said Julian Sarraino, chief operating officer for Milton, Ontario-based Fresh Taste Produce Ltd.
“The Ontario Food Terminal allows independent retailers to get a really good look at their product before they purchase it,” he said. “It’s a very manual process, but very detail oriented, and therefore works well for independents.”
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Fresh Taste, which has a facility at the market, is involved in farming, packing, importing, processing and distributing fresh produce from more than 35 countries and offers hundreds of products, he said.
Produce demand from the firm’s customers is up, Sarraino said, in part because the company focuses on “differentiating the quality requirements of each consumer.”
But, inflation is a challenge.
“An increase or decrease anywhere in the chain immediately impacts the next part of the chain, and so on,” he said.
The company’s pricing structure fluctuates to compensate for the cost of goods, Sarraino said, but the key component to costs is typically tied to product availability.
“If Mother Nature yields small crops, the [price] of those crops increases to cover costs,” Sarraino said. “The inverse applies on a large crop. Prices can come down.”
This is why prices fluctuate from season to season on similar commodities from different countries or even growing areas within a country, he said.
Some good news for Toronto-area distributors is that foodservice business is making a comeback following the downturn caused by the COVID-19 pandemic.
“Foodservice business is getting back to normal as consumers get more comfortable going out to eat again,” Alberga said. “Everybody wants their normal life back.”
Foodservice sales were down 50% to 60% at Canadian Fruit & Produce during the pandemic, he said, but they have been getting “progressively better and stronger” over the past year.
The same was true at Fresh Taste.
“Our foodservice business has rebounded from the COVID-19 slowdown and is now surpassing pre-pandemic levels,” Sarraino said.
