Twin Cities looks for strong fall-winter sales

Sales are on the rise and fob prices on many items remain strong as Twin Cities-area produce suppliers prepare for what looks to be a promising fall-winter season.

James Collins, senior director of supply chain for Co-op Partners Warehouse, St. Paul, Minn., anticipates a change in product mix as leaves begin to fall and temperatures drop in the Twin Cities area.

Although sales of the company’s staple items, such as bananas and broccoli, will remain steady, fall-oriented commodities, such as local squashes, apples, green beans, potatoes, sweet potatoes and onions, should see an uptick over the next several months.

“We’re lining up the supply chain and making sure we have the right partners to help us meet our customers’ demand and needs,” he said.

Late summer is a relatively slow period, following peak season in April, May and June, which is characterized by a plethora of local product and farmers markets, Collins said.

Sales should start to pick up again in mid-October and remain strong through March, thanks to some seasonal products and winter citrus selections.

About 70% of the firm’s business is retail, but Collins said he hopes to grow the foodservice side in the coming years.

“We are a very restaurant-rich area,” he said. “The Twin Cities area is a hotbed for a variety of unique and interesting food and restaurants.”

Little Canada, Minn.-based Bix Produce Co. is working hard to meet customer and consumer needs with its grab-and-go product line, said CEO Alejandro Montoya.

“We’re always introducing new products,” he said.

The line includes grab-and-go salads, sandwiches and wraps made at the company’s own facilities.

Customers include universities, stadiums, business cafeterias and hospitals.

The grab-and-go concept is popular because consumers don’t have to go through a line and wait for someone to prepare their food, Montoya said.

“They look at it in the cooler, they grab it and they go.”

The line, marketed under the Created Fresh brand, includes more than 50 items.

It was launched about 18 months ago and has been growing ever since, he said.

But the grab-and go line makes up only a small part of the company’s business.

The firm also provides “thousands of products,” including fresh produce, dairy products, flour, sugar and many more offerings.

“Whatever is in demand, we supply,” he said. “If we don’t have it, it probably doesn’t exist.”

Becker, Minn.-based Ben Holmes Potato Inc. currently is shipping red, yellow, white and russet potatoes out of central Minnesota, said owner Kevin Olson.

The company will begin a program out of North Dakota in October.

Potatoes are packed in totes, cartons and paper bags, and the company packs private-label poly bags for some retail customers.

“Quality has been good,” Olson said.

Prices have been good, too.

The USDA reported fob prices for 50-pound cartons of size-A round red potatoes from Big Lake at mostly $18-$19 on Sept. 9. Size Bs were mostly $21-$23. On the same date in 2021, the prices were $9.50-$10 and $20.50, respectively.

Russet potato prices were also strong in early September. “I’ve never sold a load of russets worth $20,000 before,” Olson said.

But inflation has taken its toll.

Farmers reported that costs were up a minimum of 20% to 25% for expenditures such as fertilizer, diesel fuel for tractors and electricity.

Ben Holmes Potato sells product primarily from three Minnesota growers — Ewing Farms in Big Lake, and Edling Farms and Hayes Farms in Clear Lake.

Most of the business at Minneapolis-based G.O. Fresh is with foodservice accounts, said Mark Remold, director of purchasing.

While the company felt the impact of the pandemic, he said institutional business, such as hospitals, military bases and colleges that remained in operation, kept business moving.

“There’s always a need for food,” Remold said.

The pandemic seemed to affect various commodities differently.

“We took a bigger hit on lettuce and romaine, but we saw increases in things like peppers, oranges and fruit items,” he said.

Now, foodservice business has come back to pre-COVID-19 levels.

“We actually have seen an increase in sales,” Remold said. “We were very fortunate in that we had products that kept us going through the pandemic, and we were able to build on that.”

G.O. Fresh has had to pass cost increases on to customers, Remold said.

Freight rates are starting to come off a bit, he said, but the company is still dealing with high wages because of competition for workers, and planting and irrigation costs have increased for growers.

He estimated that growers have seen a 14% increase in their costs this year.

Co-op Partners Warehouse, where foodservice accounts for about 30% of the business, was affected by the shutdowns sparked by the COVID-19 pandemic, but Collins said overall business actually increased.

“We lost a tremendous amount of business during that stretch,” he said. “But it was offset because everyone was going to the grocery stores and buying products instead of going to restaurants, so our retail grocery business increased beyond what we lost.”

The company is rebuilding its foodservice line and customer base as the category continues its comeback, he said.
Bix Produce took advantage of the downtime during the pandemic to effect a makeover that had been previously planned, Montoya said.

“COVID made it easier to execute our transformation because we were dealing with less product and less volume in the warehouse,” he said.

The changeover included integrating technology that improved accuracy, boosted productivity and enhanced execution of the day-to-day operations.

“Because of that, we are in a much better place than we were three years ago,” Montoya said.

Business has now returned to pre-pandemic levels “and then some,” he said.

Ben Holmes Potato does not deal with foodservice operators directly, but Olson said foodservice business “pretty much collapsed” for its wholesale customers that dealt with foodservice operators during the pandemic. “At a minimum, it was 50% of what it used to be,” he said.

Some companies that were taking three loads a week cut back to one load, he said.

But with sporting events back and cruise ships running again, customers are back to taking three or even four weekly loads, he said.