Originally printed in the October 2020 issue of Produce Business.
Without the major push from the foodservice sector, players question timing for next wave of produce demand.
The coming of COVID-19 has meant changes in the way nearly every industry conducts business, and the sprawling Los Angeles produce market is no exception.
From the ways wholesalers and retailers do business, to what consumers are buying and how they are buying it, adaptation has been the order of the day.
Francisco Clouthier, the founding owner and general manager of Maui Fresh International LLC in Los Angeles, a wholesaler and distributor of fruits and vegetables for local and national customers since 2004, insists that the Los Angeles produce market, like his own company, is “built to deal with the changes in demand. We have the resources to service all types and size of customers, and we can adapt and change in a very short period of time.”
Maui Fresh maintains its consistency in quality through relationships with its growers and vendors throughout United States, Mexico, Canada and Europe. The company operates out of a 24,000-sq.-ft. lot inside the city’s produce terminal and a 53,000-sq.-ft. warehouse a few blocks away from its market location.
All of Maui Fresh’s retail customers are trying to adapt to the new way of doing business. Clouthier says there has not been much demand from the nontraditional outlets for produce. “Earlier on the pandemic we saw the increase, but it has now dropped off again. I believe that the more flexible you are as a business, the better.” How the business is being influenced by the evolving demographic mix of the city is, he suggests, “hard to say right now.” Sales have been buoyed to some extend by the fact that, as he points out, “unemployment benefits are still available.”
Maui Fresh continues to adapt to the shifting requirements of the marketplace. As Clouthier explains, “We are still learning. At the beginning of the pandemic retailers’ sales soared. We were asked to make sure they had enough supply to meet the increased demand.” Now however, they have grown much more conservative in their buying. They are watching inventories very closely, “and we are getting some last-minute orders, or even some orders to be delivered direct to the stores.”
Changes And Challenges
“It’s all day-to-day here in Los Angeles and contingent on whether the numbers of COVID cases increase or decrease,” says William (Chris) Large, sales manager for Pomona, CA-based Torn & Glasser Inc.
Adapting to lockdowns and retail buying patterns has been, for wholesalers and retailers alike, “a rollercoaster ride for quite a few months,” says Large, “mainly affecting the produce-foodservice end of our business as the buying patterns have shifted from zero to buy only what you need for the immediate. No inventory is to be held, as many distributors got hurt on existing inventory when the lockdown occurred in March.”
Retailers have been faced with an entirely different challenge, Large continues. “How can we keep inventory on prepackaged nuts and dried fruit as the buying frenzy affected them in a good way? Thus you can see the shift. People will eat one way or another.”
As a national produce wholesaler, adaptation for Melissa’s/World Variety Produce Inc. in Los Angeles began in mid-March when the COVID season began and “brought about huge changes and challenges, especially to the foodservice industry which almost shut down the in-dining restaurant industry,” says Robert Schueller, the company’s director of public relations. It then meant greater demands at the retail level, which had begun experiencing shortages.
The L.A. produce market “has always been a great source for surplus supplies of produce,” Schueller says, “that can offer unique opportunities within the marketplace for quick pallet deals of produce that come in domestically or internationally.” Trucking logistics became even more important due to the need to get produce more quickly and efficiently to the stores. “Staple and longer shelf-life items began to flourish,” he finds, “and basically the top 20 produce items saw outages for months before produce slowly came back to normal in late June.”
His company has also had to react to mandates for safety equipment such as face masks, shields and gloves, as well as social-distancing requirements. This all required what Schueller refers to as new standard practices in both the warehouse and offices “in which new food-safety protocols were brought in fast in mid-to late-March to the wholesalers.”
Talia Shandler, general manager, fruit department, at 113-year-old SGS Produce in Los Angeles, suggests the market is increasingly difficult to predict in both volume and item mix. “On top of the pandemic for the consumer, there are outside influences like USDA’s programs, and the weather that has been affecting supply and demand.”
SGS’s commodities are managed from its expansive warehouse, which provides ample wet and dry cold storage to handle more than 1,000 loads, as well as 20 truck docks and street-level loading.
In a market as large and diverse as Los Angeles, tracking and catering to ever-shifting currents is a complex task.
When it comes to the city’s produce trends, says Shandler, “Oh, man — these are increasingly difficult to predict. Before, the industry trends were very obvious. Now it seems like market by market and day by day the trends are shifting. Of course, the overall trend of eating at home, less frequent shopping seems like it will stay for the foreseeable future.”
Shandler and her colleagues “definitely support our traditional markets. However, we are also seeing a strong demand on the delivery side, with CSA (Community Supported Agriculture) and various box programs opening up.”
According to Torn & Glasser’s Large, staples such as beans, rice and grains were in high demand initially, as many Los Angelenos began stockpiling. “More recently, we have been able to offer most of our line: dried fruits and nuts along with the snacking items, as well.”
“Seems we are all living off the retail business,” notes John Castillo, produce buyer for JBJ Distributing, Inc., a distributor of organic produce based in Fullerton, CA. “When the lockdown first started our business on organic potatoes, yams and onions doubled.” Sales have followed a familiar pattern, Castillo continues. “It was kind of the same to all our customers. Beans, rice, eggs, potatoes and onions — as a buyer I couldn’t get enough product.”
“Trends are mostly grab-and-go and larger quantity. And, of course, online delivery has gone way up.”— Paul Dziedzic, Bristol Farms
“Trends are mostly grab-and-go and larger quantity,” relates Paul Dziedzic, director of produce for retailer Bristol Farms, based in Carson, CA. “And of course online delivery has gone way up. Cooking staples [are popular], as well.” His stores have seen high demand particularly in items such as garlic, ginger, turmeric, onions, potatoes, two-to-three-pound cello items, package salads and any item that the retailer makes easy to grab in a larger-size offering.”
People are home more, of course, and so recipe selection has expanded. “Cooking has returned to the typical household on a more day-to-day basis,” Dziedzic reports. His chain has benefitted, he feels, by upholding “great quality standards in product” as well as “continual supply or inventory available.”
According to Dziedzic, it is the uniqueness of the Los Angeles produce market that makes it durable “and able to sell any item.” It is also marked by what he labels “great cultures, different ethnic diversities, and people willing to expand their shopping experiences.”
Dan Lawton, president and managing partner of Vision Produce Company in Los Angeles, identifies several general produce trends currently running through the Los Angeles market, from an increase in organic products and locally grown products to tropical and Latino items. “In specific, we have noticed more interest in items that seem to be related to healthy nutrition but also some medicinal benefits, such as ginger, taro, Mexican oregano, turmeric, herbs and even guava leaves to make medicinal tea.”
Lawton and his colleagues have seen a noticeable increase in demand in some tropical items that their company supplies, such as mangos, papaya and pineapple. Some that are commonly used for condiments have also seen increases, such as limes, lemons and chilies.
Lawton believes consumers in all demographics are becoming more and more aware of what the various other groups are eating, and their cuisines’ origins. “Home kitchens are becoming cuisine experimental stations, and as Los Angeles is a very large and diverse area with many cultural influences, the mix is very panoramic. Being home to a large port where imported product first arrives to our shores gives us the advantage of both freshness and a wide variety.”
“Currently,” says Melissa’s/World Variety Produce’s Schueller, “we are seeing the end-of-the-summer produce season, the ending of seasonal variety (like) melons, many tree fruits, and some grapes, and a look into the start of the fall fruits and veggies, including winter squash, pomegranates, quince, persimmon.” There will also be a new crop of pears, apples, potatoes, sweet potatoes/yams, and onions. Shifts in local crops and demand for imports will start to happen more frequently, he believes, as the city heads into the late fall and wintertime with the holiday season.
As supplies of summer fruits such as variety grapes, watermelons, tree fruits, figs, variety mangos, corn and other seasonal items start to decrease from peak of the season, Schueller relates, “We are seeing a higher demand as America is trying to hold onto summertime domestic bounty.” When the weather begins to change, he adds, “we will see the demand for fall fruits, especially as we prepare for cooler weather and warm dishes (and) comfort cooking season begin.” With weather remaining relatively warm across the country, he predicts the city “will eventually start up demand for these new crop root veggies and comfort produce items.”
As the rules of doing business evolve, players in the city’s produce market have had to adapt quickly.
Vision’s Lawton points out quite a few organizations have shifted their infrastructure so more buyers and sellers are operating from their home office. “We haven’t experienced a big difference in buying patterns except for some increase in regular weekly volumes by retail customers, as it seems more people have been staying home for the majority of their meals over the past five months. We have noticed that fresh food servicing home delivery seem to be doing a very good business.” Vision also operates warehouses in Phoenix and Nogales, AZ.
“Home kitchens are becoming cuisine experimental stations, and as Los Angeles is a very large and diverse area with many cultural influences, the mix is very panoramic.”—Dan Lawton, Vision Produce
“Every retailer handled things differently, as [this was] unknown territory,” Bristol Farms’ Dziedzic recounts. “In produce we went after core items, hard goods and packaged items to help people buy more with fewer trips.”
Initial demand was supplied with the quick response of Dziedzic’s team “not trying to deliver everything. We called on produce suppliers who also delivered our high standards to deliver direct, as delivery was impossible by us with the volume increase.” Shippers were overwhelmed and trucking got “very backed up.” Bristol Farms operates 13 stores throughout Southern California, with its most recent location in Yorba Linda.
Large notes some operators “have really cut back, some working three days a week. Torn & Glasser on the other hand has continued to stay open five days a week, and to offer the same service as always. I do have to admit, things got real dark in March, but have bounced back somewhat.” Reluctant to comment on politicians or policies, he does concede that “it’s been a struggle for most business owners to remain open.”
As in other cities but on a far greater scale, a mix of retailers – a variety of supermarkets, local farmers markets, convenience stores and other non-traditional outlets for produce – continue to vie for their share of the consumer dollar in a market whose dynamics have been altered.
“As a consumer and supplier, I have noticed the retailers are not offering any deep discounts,” Large says, “nor are they in competition for business as they all have had lines awaiting entrance to their stores. The restrictions on open markets and other non-conventional markets have been a struggle for quite a few of our customers. The good news is some have returned to their business with all the added safety measures intact.”
Melissa’s/World Variety Produce supplies its produce to supermarkets, chain stores and foodservice operations. “The supermarket business immediately shot up in late March as they were dealing with shortages across the board,” Schueller recalls. However in foodservice, which includes concepts ranging from white tablecloth restaurants to sporting venues, Melissa’s business dropped to almost a flat line. Many of these foodservice businesses have since struggled to implement delivery options, pick-up and/or out-door dining along the West Coast, which is where the bulk of the company’s foodservice business is located.
“Obviously, sporting venues are yet to be back in business,” Schueller says. “However, I was aware that back in late March local farmer’s markets were shut down, and took until May or June to reopen. Many convenience stores had to shut down, unless the majority of their business was selling food items.”
While few saw a pandemic of this magnitude coming, informed projections of what is to come are still both necessary and valuable.
“The future looks extremely bright for produce in Los Angeles,” Lawton concludes. “As the culturally diverse population in the western U.S. continues to grow, so does the consumption and demand for a variety of healthy, fresh produce options.”
As restrictions gradually ease, Clouthier of Maui Fresh says he and his colleagues are hoping they will see a significant increase on the foodservice side of their business. “My biggest concern is that the next couple of months will see more business close down once the PPE loans run out.”
Interestingly, JBJ’s Castillo suggests the city’s produce market is “not what it used to be. I have been in produce for 38 years and I used to walk the market every night. Hopefully, the small produce company can survive.”
Torn & Glasser “will continue to show up daily,” Large promises, “and if we need to continually make adjustments in order to stay current we will do so. As I always say, ‘People will always eat, so we’re not going anywhere anytime soon.’”
Like Lawton, Dziedzic is convinced the future is bright, as online purchasing and delivery have, in his words, proven to be “habit-forming. We cherish the new customers, and have gladly offered them a stellar shopping experience.”