Evolutions: Younger Generation, Organics and Food Safety
The Los Angeles Wholesale Market continues to evolve, but even in an age of retail consolidation and distribution centers, it still plays a role.
“We’re very optimistic about the future of this market,” says Matthew Clark, co-owner of Los Angeles Produce Distributors, Los Angeles. “We think the market is changing, but there will always be a need for a wholesale fruit market. You just have to be nimble.”
When Jesse Garcia, a specialist wholesaling tropicals like mangos and pineapples, partnered a year ago with Clark to form Los Angeles Produce Distributors, they brought on talent with an emphasis on melons, avocados, Asian produce and other tree fruits.
“Most of the companies have been around for many years,” says Clark. “We’re seeing less involvement by the owners, and we see an opportunity for younger generations to deal with the buyers personally.”
While ethnic produce, from the mainstream to the exotic, have proliferated in Los Angeles, so too has organic produce.
“The demand for organic is increasing,” says David Weinstein, director of sales at Heath & Lejeune, Commerce, CA. “We sell all over the country, but two-thirds stays in Southern California. There was a long time the annual growth rate for organic produce was jumping 25 percent a year, which is great but chaotic. It’s probably more in the 10 to 15 percent range now.”
From his vantage point at a leading California organic produce wholesaler, Weinstein sees both the long road the sector has traveled and the march yet to be completed. “In the past few years, shippers and buyers have been working hard on organizing the flow of organics, and they’ve made some progress,” he says. “It’s been a good year because of the rain in California; there’s a good supply of organic vegetables. There hasn’t been the same recognition on the part of fruit growers on the extent of demand. Everybody and their brother in grapes knows you have to have organic, but for some reason the tree fruit growers don’t.”
Weinstein has seen growers, shippers and wholesalers invest time and money in organics and improve efficiency and quality to the point the sector has reached economy-centric retailers. “When you get large conventional growers involved in organics, they invest in finding ways to produce efficiently. When Aldi steps in, they feel they have to have organic. They are known as a limited variety economy store, but in LA, they know they have to include organics.”
Aldi’s is an economy-oriented store with more than 1,600 locations nationwide, most east of the Mississippi River, that entered California in 2016 and has already opened 39 stores throughout the Golden State.
Los Angeles is also home to other shippers who have played a major role in the development of organics nationwide.
“Harvest Sensations is the original gangster of kale organic salads,” says Robin Osterhues, director of marketing at Harvest Sensations, Los Angeles. “We are the original company that introduced organic kale salad into retail in 2009. It was phenomenally successful. Today, you see many companies with salads based on kale. We focus on non-core items like asparagus, herbs, green beans, peas, and Latin, Asian and tropical specialties.”
While offering produce from around the world, Broc Bengard, vice president of Bengard Marketing, Dominguez Hills, CA, has also noticed more customer interest in organic options. “There’s a trend toward more organic produce and a demand for new varieties,” says Bengard. “Chile is behind the curve compared to the United States on new varieties. The varieties have to be able to hold up over the long travel.”
For many, organic is a way of life and some veterans in the sector — many of them based in Southern California — look at the sales numbers as confirmation of their faith in the category.
“It’s gratifying for someone like me, who has spent his entire career promoting organics, to see the enthusiastic adoption of this kind of food among the whole spectrum of growers, retailers and consumers,” says Weinstein.
Los Angeles Produce maintains flexibility by operating through the produce market and by serving as middlemen. The company has a customer base that includes retailers, foodservice purveyors, other wholesalers and walk-up customers at the Wholesale Market. “We do F.O.B. business; but also being able to sell here at the market gives us an edge,” says Clark. “It allows us to be connected to the day-to-day market.”
Because it is a major hub, Los Angeles is ground zero when it comes to seeing the global implications of recent food safety regulations.
“They are putting on more restrictions,” says Cristy Lopez, general manager of Alamo Produce, Los Angeles. “We cannot deal with growers in Mexico who do not have the certifications. If we don’t have GAP or Primus Lab certifications, we can get fined. For us, it’s a restriction.”
Other wholesalers have also found food safety regulations can make a major difference in how they do business.
“The most significant recent change has to do with the rules and regulations concerning food safety,” agrees Bengard.