Value-added fuels growth for Russ Davis Wholesale

From its plain beginnings as a “one-truck” fresh produce distributor more than 60 years ago, Russ Davis Wholesale still sells fresh fruits and vegetables. Most everything else looks quite different.

Gary Davis, former president and owner of Russ Davis Wholesale in Wadena, Minn., died Jan. 3. He was 81.

His father, Russ Davis founded Russ Davis Wholesale in 1955 and Gary Davis started working there with him just two years later and spent his whole career at the company.

In his obituary published earlier this year, Gary Davis was called a generous leader who made his employees owners of the company when he was ready to retire.

Today, Russ Davis Wholesale has five distribution centers, two fresh-cut processing facilities and a division with a trucking firm and freight brokerage business.

Serving mostly a retail customer base, the company distributes to nine states, from upper Michigan all the way into Montana, Wisconsin and Minnesota and down to Iowa and Illinois. One truck has expanded now to 120 trucks per day.

Adam Gamble, now president of Russ Davis Wholesale, said 2018 has been a good year for the company.

“Business is good and the economy is doing well,” he said.

Unemployment is low and wages are on the upswing, but the humming economy is good for everybody, he said.

The company generates about 80% of its sales with retailers but also sells to foodservice customers, he said.

The company opened its first fresh-cut plant in 2010 and has seen rising sales since then.

“I think the convenience factor is the primary driving force behind the growth of value added,” he said.

While younger consumers probably see more of the value in the labor- and time-saving elements of fresh-cut than older consumers, Gamble said all demographic groups are consumers of fresh-cut produce.

Organic is a growing category as well and the company is looking at putting together a program of value-added organic fresh-cut produce, expected to be unveiled in a few months.

“In the most recent years, we have seen higher growth in value-added and organic sales than any other individual category,” he said.

“Fresh-cut has had the steepest growth curve around and continues to be that way right now,” he said.

Retailers can have different priorities about their approach to in-store fresh-cut and value added, Gamble said.

“We’ve seen some retailers that are cutting some products in the store and purchasing others from us. We have some retailers that purchase all of their value-added from us and we do business with some retailers that cut most of the value-added in the store,” he said.

Some retailers go through a cycle in that regard, he said.

“They seem to go back and forth from doing it in store versus not (relative) to the attention to food safety and the difficulty of finding enough labor,” he said.

Currently, the trend seems to be for retailers to move toward sourcing value-added from processors, he said.

Over time, the wholesale market in the Twin Cities has seen consolidation.

“I think that has a lot to do with consolidation in the retail markets,” Gamble said. “As retailers consolidate the freedom of choosing your sources for produce tends to consolidate too,” he said.

Gamble said the wholesaler’s philosophy is attuned to retailers.

“We have a large number of people in our senior management team that are ex-retailers and we really try to run our business like retailers,” he said.

“So we are a wholesaler that thinks like a retailer. We can help a retailer meet consumer demands.”