Ontario Food Terminal adjusts business to today’s needs

It’s not out of the question to assert that Toronto is the New York City of Canada. That makes the Ontario Food Terminal the Hunts Point Produce Market of Canada.

With 2.1 billion pounds of fresh produce distributed annually, the Ontario wholesale market is among the top four terminal markets in the U.S. and Canada.

The 40-acre site is quite different from its Bronx, N.Y., cousin, however.

Besides the 20 warehouse tenants that provide local and imported fruits and vegetables, there is an 8-acre farmers market onsite with about 400 tenants providing local fruits, vegetables and floral products.

And this isn’t your neighborhood farmers market with a tent and table set up in front of a pickup truck, said Bruce Nicholas, general manager, secretary and treasurer of the Ontario Food Terminal Board.

It’s a wholesale farmers market, with tractor-trailers.

“If you’re a buyer who shops at the market for your stores, half of what’s sold is what’s actually at the market,” Nicholas said. The food is also at the wholesale terminal’s warehouses and regional farms, when in season.

The COVID-19 pandemic hurt the Toronto area in a similar way to what it did in New York City.

“What really hurt us was the closing of all the restaurants. Now there’s another lockdown in Ontario with only takeout and curbside pickup. On one point, you’ve got the old-fashioned family thing of making your fruit and veggie meals at home, but foodservice is decimated,” Nicholas said.

“The market needs both. So, we’ve been hurt.”

Some parts of business have been down almost 30%, he said.

Before the pandemic, J.E. Russell Produce Ltd. sold to a lot of foodservice customers and wholesalers that support foodservice, so they had to find new ways to make up for that loss of business, said Hutch Morton, senior vice president.

“Much of it has shifted to traditional retail, but there have been some interesting retail developments in the form of direct-to-consumer offerings,” Morton said.

“I expect that segment to continue to grow and develop in the years ahead and for Russell to find new ways to support these businesses.”

J.E. Russell Produce also upped its direct-store delivery, partly because buyers weren’t allowed to move around the terminal in the early days of the pandemic but also because large and small customers requested it.

“This required expanding our fleet and becoming more nimble to accommodate the varied requests across a large metropolitan area,” Morton said.

Like Hunts Point wholesalers said, the pandemic has made it more difficult to predict customer demand, said Michael Fallico, vice president of F.G. Lister & Co. at the Ontario Food Terminal. That unpredictability puts more pressure on buyers to be more precise when procuring product, because limiting shrink is also even more important.

“The changing patterns have also led to some (stock-keeping unit) rationalization, for example, luxury items,” Fallico said, and “the limited face-to-face interaction with customers has made it a little more difficult to sell products beyond the staples and high-frequency purchase items.”

Prices are higher and customers also want more bagged items, he said.

Toronto businesses are also dealing with stricter rules requiring bagged items to be individually labeled, like grapes, and more food-safety paperwork, both affecting imported products.

To deal with eliminated or reduced foot traffic at the Ontario terminal for pandemic-safety reasons, North American Produce Buyers stopped accepting cash payments for the most part, said Steve Moffat, vice president of finance.

“A lot people switched to electronic payment formats. That’s stuck around,” Moffat said.

Commodity trends

Like in the U.S., citrus has fared well in 2020 and that’s a trend expected to continue in the winter of 2021.

Citrus volume grew 11%, particularly oranges, lemons and mandarins, according to the 2020 Ontario Retail Market Report, preliminary data released by the Ontario Produce Marketing Association before its full release in February.

“This is possibly due to consumers connecting citrus with immune benefits,” said Emilia De Sousa, the association’s marketing and communications manager.

And avocados are having just as awesome a time as they are in the U.S.: Avocado volume grew 20% in Ontario in 2020.

The report also revealed that despite the difficulties of getting fresh exotics to market in 2020, Asian and exotic fruit saw the largest relative increase in tonnage of all fruit.

On the other end of the spectrum, people wanted comfort food that’s cheap, hardy and familiar.

Potatoes and onions saw some of the highest increases in tonnage of all vegetables, with increases of 22% and 23% respectively, according to the report.

Garlic, cabbage and eggplant, while lower tonnage commodities, were in the top five commodities for relative volume growth.

“This may be a reflection of people trying new recipes as they seek to replicate the restaurant experience at home,” De Sousa said.