KNOCKING ON DOORS
With the produce landscape always shifting, wholesalers who lose some of the older customers must constantly find new ones to replace them.
“We look for all means of looking for new customers — in person, over the phone or texting,” says Dominic Russo, buying and sales director at Rocky Produce, Detroit. “We are always looking.”
That last phrase is repeated by many wholesalers when describing how they find new customers.
“We are always looking,” offers Daniel Corsaro, director of sales and marketing at Indianapolis Fruit Company, Indianapolis. “We have a team of business development managers across the Midwest looking for opportunities for Indianapolis Fruit. We get referrals from our existing customers, and we also get people seeking us out.”
Look as hard as you want, it comes down to performance as the only way to hang onto the new customer base.
“You get the first order and then you have to earn it every time,” says Matthew D’Arrigo, chief executive of D’Arrigo Bros., Bronx, NY. “To get new customers, you knock on doors, and there’s word of mouth. It’s word of mouth and hustle.”
There is relatively little new terrain for wholesalers, and business retention is largely a question of maintaining old relationships.
“You’re friendly with everybody, and honest,” says Dominic “Skip” Cavallaro, president of John Cerasuolo Co., Chelsea, MA. “You email, you talk to them and see what you can do. Right now, it’s all the same business that’s been out there for years. It’s all filled up.”
The competition is tougher, however, because the modern produce buyer has more information than ever before.
“Technology changed a lot of things; there is a lot of information available that didn’t used to be,” says Philip Rosenstein, president of William Rosenstein & Sons, Scranton, PA. “You go out and beat the bushes for new customers. You make appointments and presentations.”
Location convenient to large population centers plays a major role in opening up new opportunities for wholesalers.
“We’re centrally located on I-95 in Philadelphia,” says Mike Maxwell, president of Procacci Brothers Sales Corp., Philadelphia. “Forty percent of the population of the country is within 12 hours of us.”
A regional reputation built over time brings a fair number of new customers through the door.
“We get more business through referrals and our 20-year reputation as a high-quality wholesaler here in the Southeast,” says Andrew Scott, director of business development at Nickey Gregory, Atlanta.
The constant display of top-quality fresh produce at the terminal market can be a magnet for customers.
“We are always seeking new customers; big and small,” says Hutch Morton, director of compliance and business development at J.E. Russell Produce, Toronto, Canada. “Through product choice and product quality, new customers are typically attracted to our business, and we are here six days a week to work with them.”
SURVIVAL OF THE INDIES
Many wholesalers focus on service to the independents and small chains to avoid obsolescence in a produce world where much of their traditional role is played by supermarket distribution centers.
“We do a little bit with the large supermarkets, but a large majority of our business is independents and foodservice,” says Francisco Clouthier, owner of Maui Fresh International, Los Angeles. “We used to do more with the large chains, but that changed when they went to direct buying.”
Maui Fresh wholesales a full line of sweet and chile peppers, limes, melons, beans, eggplants, Hawaiian papaya, pineapples, pomegranates and other produce from the business Clouthier started at the Los Angeles wholesale market in 2004.
“For some of the independents we deliver direct to the store, some to the warehouse,” says Clouthier. “They are all different.”
The breadth of service wholesalers provide to small stores often makes them seem similar to partners in the business.
“Many wholesalers around the country are almost indistinguishable from the people who own the small stores,” says Matthew D’Arrigo, chief executive of D’Arrigo Bros. New York, which operates on the Hunts Point Produce Market in the Bronx. “We don’t do planograms for them, but they rely on us for a lot. We give them storage, and up-to-the-second delivery. I don’t know if we ever sold that much to the big, big guys. We do a lot of business with small stores or small chains, and maybe a third is going to foodservice.”
Some of the independents rely on wholesalers to supply them with higher-end specialty produce.
“There has been a resurgence of small-scale, higher-end retail stores, as well as independent restaurants and restaurant groups, especially in urban markets like Philadelphia and New York,” says Emily Kohlhas, director of marketing at John Vena Inc., Philadelphia.
“What’s most exciting about that trend for us is an increase in attention on specialty produce, which is becoming central to the lexicon of food culture and media.”
Many wholesalers on both sides of the Canadian border treasure historic relationships with local markets that often go back generations.
“We have always had a very strong connection to the local independent retailers in our market, and will always make them an important part of our customer mix,” says Hutch Morton, director of compliance and business development at J.E. Russell Produce, Toronto, Canada. “Their desire and need for fresh produce daily makes them ideal customers.”
J.E. Russell Produce wholesales and delivers a full line of conventional, organic and local fruits and vegetables from its facility in Toronto, and is the exclusive source of numerous brand names in Ontario.
Successful wholesalers have found new opportunities in the face of consolidation that reduces the number of large retailers.
“Over the past decade with consolidation running rampant in the food industry, we’ve inched higher in the food chain, working increasingly less with produce managers and chefs and more with the distributors that serve them,” says Kohlhas. “But with more and more entrepreneurs opening up shop and looking for alternatives outside the typical supply chain, we’ve had the chance to strengthen our line to the end user – and it’s great to have an ear-to-the-ground on the front lines.”
Even with invaluable help from their produce wholesaler partners, however, independent markets are in a battle, and they do not always survive.
“The independents we used to sell to 10 years ago are all gone,” says Peter Carcione, president of Carcione’s Fresh Produce, South San Francisco. “Twenty years ago we used to sell to the large supermarket chains.”
Carcione’s has offered fresh fruits and vegetables from its location at the Golden Gate Produce Terminal Market in South San Francisco for the past 50 years.
“Working with a wholesaler is beneficial for just about everyone, especially for ethnic independents or white tablecloth segments of the foodservice industry where access to niche products is a must to keep chefs engaged,” says John Vena, president of John Vena Inc., Philadelphia. “The only instance I can think of in which a wholesaler would drive up the cost of product would be in the very specific case of a large-scale retailer who is buying full truckloads direct. Any other scale of retailer would be well served to have a wholesaler partner. Because a wholesaler tends to keep a tight ship with slim margins, they can often offer pricing at, or below, the level a retailer will see from a traditional retail distributor.”
