Rising costs changing how LA market does business
In the Los Angeles market, several shippers said they’ve had to change the way they deal with customers and do what they can to adapt to higher costs. Meanwhile, wholesalers said business has dropped way off.
In dealing with the obstacles of doing business, Giumarra Cos. is looking at how it can do things better to offset the current financial strains.
“Rising costs across the supply chain continue to be a challenge for our industry as a whole. We are exploring ways to be more efficient,” said Megan Gorgisheli, director of marketing administration at Giumarra.
The changing financial dynamics have two Los Angeles wholesalers wrestling with how to respond to the drop in activity at their warehouses.
“There’s much more cost pressure this year. It’s very difficult to translate into sales prices,” said Matthew Clark, president and owner at LA Produce Distributors. “The prices we’re getting are not enough to cover the added costs. It’s just not feasible to sell at the old prices. So, we’re being very selective with our customers to navigate the current market conditions.”
Ray Davis, president and owner of Pacific Sun Distributing, said business is suffering unless you have some contract business. Not everyone does.
“It’s slowed way down. Overall activity is horrible,” Davis said. “One day a week of decent business is good.”
In the face of this reality, wholesalers and distributors are trying to keep their heads up.
“I try to stay positive, but it’s hard. I need to laugh when I can and keep working,” Davis said. “I’m looking around to see what I can make it happen.”
While market pressures hit wholesalers and grower-shippers alike, one talked about a particular factor that never goes away.
“In the produce industry, the greatest challenge is always going to be Mother Nature," said Oscar Guzman, director of marketing and sales at Progressive Produce. “And on top of that challenge, we have to make sure our customers know about the ongoing changes in crop availability.”
