Focus on Core Fundamentals Keeps Boston Running on Track

Boston

Produce companies on the New England produce center embrace change and celebrate the tried-and-true.

Boston Produce MarketFrench writer Jean-Baptiste Alphonse Karr coined the phrase, “the more things change, the more they stay the same,” which well applies to how business fundamentals play out at the Chelsea, MA-based New England Produce Center.

Maurice Crafts, purchasing and sales at Coosemans Boston, reports business holds steady, despite variables in the marketplace. “We don’t have to reinvent the wheel,” he says. “We do what we’ve always done and try to get even better at it. We have a good reputation, we work hard and people know it.”

Patrick Burke, co-owner of Garden Fresh Salad Co., Chelsea, MA, agrees on sticking to core fundamentals. “We do a good job and will continue to focus on what we do well,” he says. “We see growth internally with our customers because they value the core of what we offer.”

As the current market facility gears up to celebrate 50 years in February 2018, merchants report continued relevance in the retail and foodservice marketplace.

“What are buyers missing if they don’t shop here?” asks John Bonafede, chairman of J. Bonafede Co., Chelsea, MA. “When the buyers are here, we have an opportunity to make a good deal for them and give them something exciting to sell.”

Chains such as Stop & Shop and Star Markets still have a major presence in the marketplace, according to Anthony Sharrino, president of Eaton & Eustis Co., Chelsea, MA. “We also have a host of smaller independent stores shopping here. To many customers, we are still very relevant. They enjoy coming to the market and shopping 30 or 40 vendors to get the best on any given day.”

Bill Maheras of J. Maheras Co., Chelsea, MA, says strong sales lead to loyal retail and foodservice customers. “We have a good mix of big- and medium-sized retailers,” he says. “It’s pretty much the same customers as when I started here 10 years ago.”

Baldor Boston pulls a significant amount of its produce from the New England Produce Center. “We do what’s best for us and our customers; so if buying from the market is best, then that’s what we do,” says Glenn Messinger, general manager of Baldor Boston in Chelsea, MA. “Most of our produce is done direct out of the produce center. The better we do, the better they do. As we grow, we grow our business with them.”

Changing Dynamics

On top of this continued relevance, the Boston market is experiencing dynamic change.

“The retail environment in Boston is getting extremely competitive,” says Steven Piazza, president and treasurer at Community-Suffolk, Everett, MA. “The news of Amazon’s entry into the marketplace knocked everyone on their heels — who knows what will be next? You see the major retailers working to keep up. Developments such as the Amazon-Whole Foods deal are going to have a huge effect on our industry, especially with Millennials.”

Gene Fabio, president of J. Bonafede, agrees the retail environment continues to transform. “Every year, more produce gets to the consumer table via Costco, major chains, and even the internet. Our biggest challenge is expanding the customer base.”

John Bonafede

John Bonafede — J. Bonafede Co.

Even the market’s day-to-day business is more unpredictable, reports Dominic Joseph Cavallaro III, general manager in charge of sales at John Cerasuolo Co. in Chelsea, MA. “Now, every day on the market is different,” he says. “It used to be there was particular business on a Monday or Tuesday, but now you never know what you’re going to get on any given day. The same is true for holidays. For example, before you’d know Labor Day was coming and you’d load up, now you can’t count on significant volume just because of a holiday.”

Yet, Sharrino believes competition can be good. “The fussiest buyers in the produce industry are in the Boston marketplace,” he says. “You can’t get away with a Number Two label in this market. Competition drives us all to be even better.”

Some noted changes in the Boston market include staff and facilities investment. Coosemans has hired Jack McGinn for purchasing and sales. McGinn started in January after spending 20 years at Sid Wainer & Son, New Bedford, MA. Baldor has built a new facility in Chelsea, MA, which will open in December 2018. “It encompasses 100,000 square feet with 37 loading doors and provides more room for refrigeration,” says Messinger. “We are looking forward to having even more room to service our customers the way we increasingly need to.”

Seeking Value And Variety

Market merchants such as Jackie Piazza, citrus sales at Community-Suffolk, report an increasing number of savvy customers. “This helps us because they’re more educated,” he says. “Most of the customers aim to get the best stuff, so price isn’t always the main issue. The educated customer knows what is new and what variety he wants; and he’ll make the buy he wants.”

Anthony Sharrino

Anthony Sharrino — Eaton & Eustis Co.

Scott St. Onge, owner of MSM Produce in Worcester, MA, brokers for about 25 customers and shops the market to look for the best price and quality. “The market gives me a lot of options,” he says. “The environment is competitive here, and we all work hard to stay competitive. The market gives me a huge advantage in doing what I do versus what large companies do. Many salesmen or buyers only see a computer screen, whereas I look at every single box and know what’s in it.”

Cavallaro emphasizes buyers get exactly what they see when buying from the New England Produce Center. “There are no surprises,” he says. “Our flexibility is a real benefit in the current environment, too. A store can make last-minute changes in brand, product or quantity. Often a retailer buys less expensively in the market than they do FOB, and it’s still great quality.”

Russo’s, an independent retailer in Watertown, MA, takes advantage of how flexibility in shopping the market helps the store better serve its customers. “When the market is short in a particular item variety, I can suggest substituting something else instead,” says Arthur Cruz, buyer. “For example, this past fall, with the help of Community Suffolk, I was able to substitute a new variety of good-eating Mandarins for Clementines.”

Of course, customers always want a good deal, and the competitive nature of the Boston market fits the bill.

“We see retail looking for more immediate deals,” says Steven Piazza. “Anytime we can get a good product at a good price and shake things up a bit, it goes over well with our customers, especially as large retail companies drive margins.”

Off The Market

The changing environment strengthens relationships between the market and off-market wholesalers.

“The off-market distributors and wholesalers have always been important customers, and they are a big customer base for this market,” says J. Maheras Co.’s Maheras.

Bonafede’s Fabio says the market’s relationship with off-market wholesalers is mutually beneficial. “We are primary receivers handling entire loads of product,” he says. “We break it down for them. We make it easy for them to get exactly the products and quantities they need. In turn, they support us with their business.”

Crafts reports Coosemans has a great relationship with various wholesalers, including Shapiro Produce of Everett, MA. “We work together to ensure we meet the demands of the evolving marketplace.”

Baldor places high value on its relationships in the market. “The companies on the market are a great partner for us,” says Messinger. “We use Garden Fresh for a lot of processing. They have our back and take great care of us. We also do a lot with Condakes, Tavilla and Maheras. They are crucial partners for us.”

Evolving Product Mix

Changes in the market also involve product mix. “The amount of products in the market today versus 20 years ago is enormous,” says Jim Ruma, president of Ruma Fruit & Produce Co., marketer of ramps, fiddlehead ferns and wild Maine blueberries, Chelsea, MA. “There are so many things going on now between chefs, internet recipes and TV. Interest in new and unique products will only continue to grow.”

John Whitney

John Whitney — Garden Fresh Salad Co.

Ruma reports increased interest in all its products and continued innovation. Last year, the company introduced a new 8-ounce overwrap tray for fiddleheads. “It was well accepted with chain stores, and sales continue to increase,” says Ruma. “Sales are also up from last year in wild Maine blueberries, with volume increasing as well.”

Ramps (also called wild leeks or spring onions) remain a good item with chefs, according to Ruma. “We see sales continue to grow,” he says. “There is still great opportunity for these types of unique, niche items at both retail and foodservice.”

Jackie Piazza reports a proliferation of different options in citrus. “From different products to different varieties to different origins, availability is better than ever,” he says. “We can now get lemons from Mexico, Spain, Uruguay, Chile or California.”

Economics also affects product mix, an issue market merchants show creativity in solving.

“As avocados increased in price, our customers wanted a more economical solution,” says Bonafede. “So we went to 84-count avocados. Especially foodservice customers were looking for more economical alternatives. We saw the same thing with limes.”

Boston’s continued ethnic diversity drives product variety. Bonafede reports continued growth of items once considered specialty. “These items, such as mangos and avocados, are now mainstream,” he says. “We have added other specialty products, including rambutan and Hawaiian plantains, and we have a wide variety of Chile peppers — not only are they popular with the ethnic demographic, but they’re very trendy.”

Baldor continues to expand its range of products to meet increasing consumer interest. “We are selling more specialty items now than ever,” says Messinger. “We are expanding our line to help support the customers in coming up with the concepts they need. Baldor gives customers access to thousands of different items. It’s not hard to do something distinctive because the operation can get the right product from us to make it uniquely different.”

Local continues to play a major role at the market, when in season.

“We do well with heirloom tomatoes,” says Coosemans’ Crafts. “They are our best local item. Also squash does well during the local season.”

Peter John Condakes, president of Peter Condakes Co., Chelsea, MA, agrees local product moves in decent volume during the summer season and reports other regional influences on procurement. “We are seeing the influence of additional acreage of field tomatoes in Canada, particularly plum tomatoes,” he says. “This supply has affected the ability of other areas to ship to New England.”

Fulfilling Convenience

As retailers and distributors look to tighten up and offer more convenience to their customers, merchants on the market have stepped up to fill this need.

“We really focus on repack,” says J. Maheras’ Maheras. “Smaller and more specific types of packs are more popular.”

“Boston is dealing with 50-plus year-old facilities. We are working hard to stay up to speed with increasing food safety regulations.”

— Steven Piazza, Community Suffolk

Ruma reports increasing opportunity for packaged product due to sanitation and marketing considerations. “We have developed attractive packaging to draw consumer attention,” he says. “Consumers like the clean appearance of the product and not having to dig through bulk displays.”

Garden Fresh continues to offer its best-selling convenience-oriented items. “Our most popular products include coleslaw, cut Romaine and iceberg salads,” says Burke. “Consumers are used to the convenience of this category.”

Burke notes with foodservice’s challenge in cost and procurement of labor, pre-cut salads and vegetables will continue to be a crucial part of the business. “For restaurants, consistency is another aspect of the continuing demand for fresh-cut,” he says. “For example, to do 20 pounds of ¼-inch diced onions is a significant foodservice labor investment. If you buy 20 pounds from a company like ours, you eliminate the labor and you actually get 20 pounds; there is no additional waste factor.”

Messinger agrees pre-cut is Baldor’s fastest-growing segment. “We do a ton of pre-cut product for labor and consistency reasons,” he says.

Continued Challenges

Though Boston’s fundamentals remain strong, the market looks to tackle several major challenges in the future. The biggest challenge in the market, according to Steven Piazza, is keeping up with food safety. “As in New York, Boston is dealing with 50-plus year-old facilities. We are working hard to stay up to speed with increasing food safety regulations,” he says.

Burke agrees increasing food safety and traceability requirements continue to present challenges for all. “There are many different customer audits and a lot of recordkeeping requirements,” he says. “We are all working on different aspects of meeting these requirements.”

Merchants also foresee changes in transportation regulations and the continued shortage of trucks as affecting future business.

“Transportation remains a big challenge,” says Eaton’s Sharrino. “For example, truck rates fluctuated in October because trucks were hired to transport water to disaster areas. Rail transport is also getting more difficult because of cost-cutting.”

Merchants also predict the new electronic logbook regulations will have significant impact.

“Since loading time counts as driving time, that will mean less driving time, which in turn will cause delays,” says Sharrino.

Burke foresees a major challenge at least at the start. “We work with a lot of trucking companies who are already implementing it and getting used to the system,” he says. “It may hurt LTL loads more, so perhaps we’ll see more business coming back to the markets instead of small LTL direct-buying.”

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