In an ever-changing produce landscape, customers rely on Chicago wholesalers for consistency and opportunities.
Originally printed in the June 2022 issue of Produce Business.
The diverse and competitive food industry in Chicago requires support from a host of professional and experienced wholesalers, and Chicago wholesalers boast a long history of serving customers.
“The wholesale community is very healthy in Chicago,” says Ryan Dietz, vice president of operations at Heartland Produce Co. in Kenosha, WI. “Buyers rely on wholesalers to leverage our strong relationships with growers to bring them the best possible product at a good value for the consumer — our ultimate customer.”
For decades, the old South Water Market, designed and built in the 1920’s, served the community. However, in 2003, Chicago produce wholesalers relocated to a state-of-the-art terminal market to continue providing the best quality fruits and vegetables to an increasingly demanding marketplace.
Today, the Chicago International Produce Market (CIPM) houses a variety of different businesses in one location. The 450,000 square-foot facility features modern loading docks and refrigeration space all focused on maintaining the cold chain.
T.J. Fleming, vice president and director of sales at Strube Celery & Vegetable Co. in Chicago, IL, relates being in a terminal market to being in a produce mall. “Many of our retail customers come here and shop to pick and choose to their exact specs,” he says. “It’s an advantage for them.”
While the CIPM may not get the same attention as the Philadelphia or Hunts Point (NY) markets, it remains equally strong, if not stronger, says Francine Cossyleon, chief communications officer at La Galera Produce in Chicago, IL. “We are servicing customers in the Midwest and with logistics that serve all of Illinois and its contiguous states,” she explains. “Our business has gained a momentum in sales that has not slowed down. As a matter of fact, due to the demand, we have been able to add more than 50 additional fruit commodities to our line.”
Whether on or off the terminal market, Chicago wholesalers serve their customers by creating possibilities and solving problems. “The benefit to me is really working one-on-one from every category with the wholesalers,” says Vince Mastromauro Jr., director of produce operations at Sunset Foods, which has five stores in Chicago under the Sunset banner and two stores operating under the Grand Foods banner. “Being able to get the information I need about what’s new and what’s coming is crucial. It’s also about being nimble and being able to turn on a dime to adjust to what’s needed or what’s coming. The communication and expertise on a day-to-day basis is what makes the Chicago market and my wholesalers important to me.”
Cossyleon points out wholesalers serve an important role in produce sourcing not only from a quality standpoint, but a financial one as well. “We specialize in understanding where the good crops are growing because we, too, have a reputation to maintain for our customers,” she says. “We seek the best quality on the market and, because we work with so many growers, we can negotiate the best pricing. This allows us to stay competitive, thus keeping our customer costs competitive between grocery stores. If we can negotiate great pricing on great product, then we can pass that savings on to our customers, who can do the same for their shoppers.”
For over 100 years, Strube has been providing customers alternatives and potential deals, affirms Fleming. “We always provide opportunity, whether it’s a discount on a sale item or a last-minute opportunity that comes up if we get extra volume from a shipper,” he says.
For many retailers, the flexibility and daily service provide a real advantage. “We take delivery five to six days a week,” says Sunset’s Mastromauro. “Every week, it’s different from an availability and price standpoint, so we get information right away and work through what we need to. It makes it important for us as a retailer to be able to have product and do our best.”
Another crucial role of the wholesaler is problem solving. “Wholesalers are working with growers, suppliers and retailers to solve some of the industry’s most pressing problems, including food waste, sustainability, inflationary pressures and labor shortages,” says Heartland’s Dietz.
Chicago wholesalers value the relationship aspect of their business. “Relationships have always been an important part of the wholesale business,” says Fleming. “We’ve always been strong with our shippers. It’s not a transactional relationship; we’ve always had more of a partnering focus. We strive to also make our customers feel that we’re partnering with them. We’re here to help our customers grow and thrive.”
The last two years have especially emphasized the importance of relationships, both on the supply and retail side. “Trying times and smaller grocers required assistance with pricing and sometimes flexibility in credit and payment terms,” says Cossyleon. “While difficult, we at La Galera continued to support those grocers in the best way we could — competitive pricing, quality product and flexible payment terms. Some grocery stores didn’t make it, despite our assistance, but some did. Those that did have displayed gratitude, and that created an even stronger relationship. We value all our customers, and we knew that we would need to display empathy for those smaller stores that really struggled through the pandemic.”
Dietz explains Heartland continually partners with its customers and vendors to offer innovative solutions to the problems they face. “We recognize that it takes true partnerships with our employees, customers and vendors in order for us all to thrive,” he says.
From the retail side, Mastromauro notes how a bond with a wholesaler can translate into product deals or availability. “When opportunities present themselves, you are first in line because of the relationships you’ve built over the years,” he says.
EXPANDING PRODUCT LINES
The diversity demands of the marketplace, along with the convenience of already established wholesaler relationships, have led to several wholesalers expanding what they handle. La Galera is adding fruit to its long line of commodities, such as apples, oranges, dragon fruit, cantaloupes, melons, citrus, blueberries and strawberries, says Cossyleon. “We are also adding some more exotic fruits like figs, passion fruit and starfruit. We’ve expanded our line to include flowers and plants, too.”
Strube continues to expand and push organics. “Three years ago, we weren’t really an organics player, but now we have three full-time salesmen dedicated to organics,” says Fleming. “It’s across all our fruit, vegetable and salad lines. We’re really full throttle with organics right now.”
Fleming explains organic demand stems from existing as well as new customers. “We’ve gotten new customers that focus on organics and we’ve also been able to grow with other customers who didn’t do organics before,” he says. “We have helped them grow and dedicate more produce space to organics.”
Strube’s organic business also takes advantage of existing supply relationships as well as creating new ones. “Some of our conventional shippers also produce organics, so we’ve been able to build the business with them,” says Fleming. “And, we’ve also built new relationships with shippers who solely concentrate on organic.”
MORE SERVICES AND SPACE
Chicago’s wholesalers seek additional ways to service their customers. “We are continually looking for new ways to invest in our customers, employees and vendors,” says Dietz. “New product lines and new packaging are always being offered. We are always looking for ways to run our business more efficiently to offset the inflationary pressures we are seeing in our industry and our country. We have worked with vendors and retailers on DSD (direct store delivery) programs, cross-docking, private label, promotions, marketing, merchandising and many other value-added solutions.”
Additional services at Strube include delivery and other logistics facilitation. “We do some cross-docking, but just centered around a few customers,” says Fleming. “We’re doing more delivery. A lot of our customers don’t want the expense of a driver and truck, so we’re working with them to deliver to them on top of being their produce provider.”
Some wholesalers also continue to physically expand. “La Galera has been lucky to grow our space to a total of five units in the CIPM, which is approximately 65,000 square feet,” says Cossyleon. “This expansion has allowed for an increase in commodities to include fruit and frozen commodities. It has also provided an opportunity to grow our sales team and our Chicago-based personnel to over 100 team members.”
La Galera is also currently undergoing construction in its warehouses, with a goal of connecting all its warehouses and provide a better flow of traffic “and a more comprehensive and feasible way to pick orders and get our customers out the door faster,” says Cossyleon.
In May, Heartland Produce Co. will begin operating out of a new, state-of-the-art, 213,000 square foot facility in Kenosha. “This facility has been designed from the inside out with an emphasis on food safety, worker safety, product quality and operational efficiency,” says Dietz. “This facility will allow us to serve our customers in the Upper Midwest with the finest in fresh produce for many years to come.”
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Chicago Consumers Propel Quality And Diversity
A thriving food environment in Chicago sustains retail and restaurant success.
As the third largest city in the U.S., Chicago holds a world of opportunity for produce and food.
“Chicago remains a large and diverse community, lending itself to plenty of opportunities for promoting fresh produce,” says Ryan Dietz, vice president of operations for Heartland Produce Co. in Kenosha, WI.
The U.S. Census Bureau lists the city of Chicago’s population at over 2.7 million people in 2020 and the total population of the greater Chicago Metropolitan area (called Chicagoland) is more than 9.4 million people. Chicago is also an extremely diverse city, ranked 10th among most diverse cities in the world by a 2019 U.S. News and World Report analysis.
The scope and depth of the region’s demographics, as well as its tourism industry, means great produce consumers. “Chicago, as a town, is a very strong produce market,” says T.J. Fleming, vice president and director of sales at Strube Celery & Vegetable Co. “Chicago has a large restaurant, hotel and tourist industry and a broad range of retail which all support produce.”
DIVERSITY DRIVES PRODUCE ASSORTMENT
Chicago’s diversity results in a variety of food outlets and affects the type of produce sold, explains Vince Mastromauro, director of produce operations at Sunset Foods with five stores in Chicago under the Sunset banner and two stores operating under the Grand Foods banner. “For us, we’re on the North Shore, so quality is what really resonates here, as well as variety and new items,” he says. “If there are new varieties of apples, such as Cosmic Crisp, we bring them in because we know our customers are looking for these new items.”
Mastromauro points to the example of the fruit category. “Every year, it just grows because there is so much in varietal offering,” he says. “That really drives business and excitement. For example, Sumo oranges started small, but in three to five years they’ve taken off. Now, my customers are waiting for them.”
With Chicago being one of the most diversified cities in the Midwest, cultural representation is present in specific aisles at grocery stores, adds Francine Cossyleon, chief communications officer at La Galera Produce in Chicago. “This created an opportunity for wholesalers like us to venture out and explore commodities we didn’t know much about,” she says. “From Indian markets to the local grocery store Hispanic aisle, we are embracing every opportunity to learn and service our customers in the best way we can.”
ROBUST RETAIL, AND RESTAURANT REBOUND
Chicago’s size and diversity yields a driven and varied retail environment. “On the retail side, Chicago is a competitive marketplace,” says Dietz. “Retailers who cater to the neighborhoods they serve do very well for themselves and their customers. The Chicago consumers appreciate a robust retail assortment that complements the menu served in the home.”
Major retailers continue to lead the market share and include Jewel-Osco (a banner of Albertsons), Meijer and big box retailers such as Walmart, Costo and Sam’s Club. The market is also significantly occupied by a host of other chain and independent retailers including Mariano’s (Roundy’s), Aldi, Whole Foods, Trader Joe’s and dollar stores. And, dozens of independents each claim a share, including fresh-focused operations such as Sunset Foods, Pete’s Market, Tony’s Finer Foods and Standard Market.
Chicago has a true mixture of retailers, asserts Mastromauro. “There are deep discounters,” he says.
There are midscale retailers. There are also upscale retailers. The city has a good mix of independents, smaller stores, medium chains and large national chains.”
Small and large retailers all contribute to the success of Chicago’s food retailing sector. “Mom and pop shops are dotted throughout the city and suburbs,” says Fleming. “We also have many strong chain stores. It’s a strong, very diverse retail market here.”
In addition to great retail, Chicago boasts a reputation for world-class restaurants. The city’s restaurant sector is recovering quickly from the devastation of COVID-19, and Fleming says foodservice business is picking up again. “It’s probably close to where it was pre-pandemic.”