Originally printed in the October 2018 issue of Produce Business.
‘City of angels’ boasts fruits and vegetables as diverse as its people.
Los Angeles native Alan Pollack, general manager at Coosemans Los Angeles, has seen a new produce world grow up around him in the more than 35 years he has been in the business.
Cooseman’s Los Angeles, which has been importing produce since the early 1980s — when Los Angeles native Pollack and Belgian-born entrepreneur Herman Van den Broeck would pick up loads of Belgian endive at the Los Angeles airport and load it into Van den Broeck’s Cadillac for delivery — went independent from Cooseman’s International around the turn of the century.
“I’ve been doing produce in Los Angeles for about 35 years, since 1981, when I worked for a purveyor who sold to restaurants,” says Pollack, who has been with the company from the beginning. “On the market today we sell mostly to purveyors who sell to restaurants.”
Although Coosemans Los Angeles and its sister company Coosemans L.A. Shipping, Inc., went independent, the operation is more international than it was in the 1980s.
“We’ve got produce coming in from all over the world,” says Pollack. “Before, it was Mexico, Belgium and Italy, but with the changes in the packaging and transportation, we are able to keep global supplies fresh for weeks while it ships. We ship all over the United States and into Canada and parts of Central and South America. We are a hub for the whole country.”
California produces more than two-thirds of the fruits in the country and more than a third of the vegetables, according to U.S. Department of Agriculture statistics, and Mexico grows more than 40 percent of all the produce imported into the country.
A sizable portion of this bounty comes through Los Angeles before heading back out to the rest of the nation and beyond.
State Highway 101 runs from downtown Los Angeles north to the fields of the Salinas and Pajaro Valleys that yield most of the lettuce, spinach, broccoli, cauliflower, strawberries, blackberries and raspberries grown in the entire country.
Highway 5 travels north from the heart of town to nearby San Joaquin Valley orchards that yield most of the country’s fresh-market citrus, almonds and pistachios, and a healthy harvest of tomatoes, peppers and squash. To the south, the highway connects to the winter vegetable fields of Mexico.
And then there is the Port of Los Angeles, which the locals call America’s Port. Chicago may be the city of broad shoulders, but the dock workers in ‘Tinseltown’ manage to unload more produce than their counterparts anywhere in the world.
“The Port of Los Angeles processed 833,568 Twenty-Foot Equivalent Units (TEUs) this past July, which was the busiest July in the Port’s 111-year history,” according to the facility’s website. “The cargo volumes exceeded July 2017, the previous record, by 4.6 percent.”
This unique combination of unrivaled nearby agricultural productivity and modern facilities to move it by truck, boat or airplane make this city uniquely positioned to receive and ship produce.
“We serve independent retailers and foodservice. The market is more diverse than it used to be; we have less national chain store business but a lot more ethnic chain store sales.”
— Francisco Clothier, Maui Fresh
“Los Angeles is becoming the consolidation hub of the West,” says Francisco Clothier, owner and general manager of Maui-Fresh International, Los Angeles.
Clothier started Maui Fresh at the Los Angeles Wholesale Produce Market nearly 15 years ago.
Although the company is true to its name with Hawaiian papayas and pineapples, Maui Fresh has a line of fresh produce with a distinct Hispanic flavor, including tomatillos, limes, eggplants, chiles and bell peppers, squash, tomatoes, beans, melons and pickles.
“Retail consolidation has not really limited our outlets,” says Clothier. “We serve independent retailers and foodservice. The market is more diverse than it used to be; we have less national chain store business but a lot more ethnic chain store sales.”
A CITY OF DIVERSITY
Hispanics make up more than 45 percent of the metropolitan area’s 4.5 million residents, giving Los Angeles the highest concentration of Hispanics in the country.
“Everything we sell comes from Mexico,” says Christy Lopez, general manager of Alamo Produce, Los Angeles. “We have our own orchards for Persian limes, and our own greenhouses. In the Los Angeles area, the Persian limes are the most important variety. We ship to stores, distributors and to wholesalers in the Wholesale Market. We also ship to San Francisco and Washington; we sell to the West Coast.”
The U.S. imports $12.4 billion in fruits and vegetables from Mexico, according to U.S. Department of Agriculture statistics, which is considerably more than 40 percent of all the produce coming into the country from the entire world.
Alamo Produce is one of the firms that grows fruits and vegetables in Mexico and has a major presence in Los Angeles as an important part of its distribution network.
“Peppers and tomatoes we bring in through McAllen, TX, and ship to New York,” says Lopez. “The bell peppers and tomatoes bring us the best price on the East Coast. In Los Angeles, those prices are not so good.”
As everywhere near California’s coast, flight from high-housing costs has reduced the African-American population in Los Angeles, but there still are 300,000 in the metropolitan area.
There are also nearly 750,000 residents from Asia, including immigrant populations from Korea, Taiwan, Southeast Asia and India, as well as descendants of the Japanese residents who were interned in camps during World War II. This large and diverse group is reflected in the city’s produce business.
“We sell all the ethnic Indian items; we have 80 or 90 items,” says Sam Thakker, sales director at Daaks International, Los Angeles. “The consumers are also Southeast Asian, and some of the items have gone mainstream, like okra. The demand is increasing.”
Daaks grows a large variety of Asian produce varieties in the Western Hemisphere and ships them through a convenient Long Beach location near both highways and the port.
“We do not bring anything in from Asia,” says Thakker. “We sell mainly on the West Coast. We are a grower-shipper and sell to retailers, wholesalers and distributors. We grow in the Coachella Valley, Fresno, Mexico and Central America.”
Reflecting the city’s changing population, the variety of ethnic fruits and vegetables is coming to define the produce business in Los Angeles.
“We are growing as a country in diversity by migration and immigration of the food culture in the United States, and by the demand that increases,” says Robert Schueller, director of public relations at Melissa’s/World Variety Produce, Vernon, CA. “The market is more diverse than it was a decade ago as consumers look for more variety and ethnic produce options.”
Joe and Sharon Hernandez have built the Melissa’s business to occupy more than seven acres of warehouse space by making good on their promise: Delivering the Global Market.
“Your new ethnic markets are being served by mainstream retailers more and more to keep up with the ever-changing demographics in America.”
— Robert Schueller, Melissa’s/World Variety
“Melissa’s Produce is known for our retail business across all 50 states,” says Schueller. “We do foodservice on a more limited basis in Southern California, Las Vegas and a few sporting venues around the country. The L.A. Market gives Melissa’s opportunities when there is a good season or surplus of specific produce. It allows for quick turnaround of produce offers when there is significant change in usual schedules due to weather extremes or other natural disasters that will affect supplies.”
Supermarkets in much of the nation are carrying an increasing variety of ethnic produce items, and Melissa’s finds its Los Angeles location ideal for receiving and shipping to these outlets around the country.
“Your new ethnic markets are being served by mainstream retailers more and more to keep up with the ever-changing demographics in America,” says Schueller. “One of the largest, most diverse is the L.A. Market, which is so close to Mexican border. The close proximity allows for such a diverse variety of produce to be distributed out and around the country most easily through L.A.”
A GLOBAL HUB
Los Angeles even serves as a hub receiving and then shipping specialty produce items to markets far beyond the United States.
“We ship all over the country and to Europe; probably 10 percent of our produce stays in California,” says Alex Jackson Berkley, assistant sales manager at Frieda’s, Los Alamitos, CA. “We import quite a bit from around the world; we’re close to Mexico, and we are a port city. But we also have relations with our growers here in California.”
Berkley is the granddaughter of company founder, and the first woman with a business at the Los Angeles wholesale terminal market, Frieda Caplan, who recently celebrated her 95th birthday.
“L.A. is on top of the trends in food,” says Berkley. “It’s a great place to be on top of what people are looking for in the food world. People are looking for convenience. The bar is being raised in terms of being able to offer fresh, economical and convenient produce.” Caplan introduced kiwifruit to the United States, and the company continues to find growing markets for its wide variety of specialty Asian, Latin and gourmet fruits and vegetables.
“We are totally expanding,” says Berkley. “Because the U.S. population is so diverse, you have consumers born here who like seeing foods from back home. We also have people traveling, or watching food shows and seeing new cuisines.”
Los Angeles is a natural hub not just for ethnic produce, but also for many commodity items grown in California or Mexico and shipped around the country.
“We are one of the major hubs of the United States,” says Chris Martin, president of VIP Marketing, Los Angeles. “L.A. is going to be viable for a long time. There’s a diverse variety of produce here. We handle a full supply of produce from California and Mexico, as well as Central and South America. We sell to customers that ship out of the area.”
VIP Marketing, one of a number of family-owned companies that have been at the Los Angeles Wholesale Market a quarter century, has a particularly strong business in mangos.
“The perception is Latinos are buying the mangos, but there are also many Anglos and other ethnicities,” says Martin. “The consumption is generally increasing. Last year, we saw a surge in mangos, and this year it is a little less. We have a full selection of mushrooms and specialty mushrooms; we are a year-round mango supplier; and we have grapes from California, Mexico, Peru and Chile. We also do strawberries, mixed berries and asparagus.”
“Los Angeles is a very competitive market and a place where you can get top-quality product in addition to the excess volumes from the nearby growing Central Valley.”
— Matthew Clark, Los Angeles Produce Distributors
Consolidation has forced VIP to piece together a changing combination of customers to replace business lost with the larger retailers.
“We are doing less with the bigger chains because of mergers,” says Martin. “We do a little with the independents and quite a bit with the foodservice people. We’re trying to reinvent ourselves at the terminal market.”
Other Los Angeles produce vendors are also finding that the key to survival is a diverse group of customers.
“We don’t have a main customer; we sell to restaurants, wholesalers, and smaller grocery stores in Los Angeles and Orange Counties,” says Denice Ojeda, general manager at V & L Produce, Vernon, CA. “We get it from Mexico, Guatemala and a lot of Central American countries.”
THE NEW ECONOMICS
V & L has been in business near the Los Angeles Wholesale Market for 30 years with a special emphasis on foodservice.
“We sell a variety; we don’t specialize in one item,” says Ojeda. “We have a range of herbs, dry goods, vegetables and fruits. When there is an issue, the wholesalers are calling around. And if we have what they are looking for, that is good for us.”
Other wholesalers are also finding ways to make up for sales lost to the major supermarkets.
“Retail consolidation has limited our outlets but not our sales,” says Matthew Clark, president of Los Angeles Produce Distributors and Los Angeles Produce Fresh LLC. “Los Angeles is a very competitive market and a place where you can get top-quality product in addition to the excess volumes from the nearby growing Central Valley. We service mostly west of the Rocky Mountains. Our portfolio includes retailers, wholesalers, foodservice and cash customers.”
Clark finds there is more retail competition, even when it comes to produce items that were considered specialty not that long ago.
“In comparison to 10 years ago, there are many more items being offered, and these are being offered directly from the source,” he says. “There is always an overlap of ethnic markets. We service a number of independent supermarkets that compete for the same ethnic customers.”
Although consolidation has limited produce wholesaler options, the emergence of new distributors also has narrowed margins.
“Lately, it has been very competitive with new distributors,” says Lopez. “We have to sell more product at lower prices.”
“Years ago, 60 percent of the restaurants in the state were full service and 40 percent were limited. When you look at it today, the opposite is true. We think that it is largely because of the cost of operating a full-service restaurant, the labor plus the other costs.”
— Sharokina Shams, California Restaurant Association
In Los Angeles, as elsewhere, the trend is toward segmentation of produce retailers that is parallel to the economic segmentation of the society.
Kroger is the largest retailer in the metropolitan area with more than 22-percent market share, according to the most recent Chain Store Guide’s 2017 Grocery Market Share report, and Safeway still has more than a 10-percent share.
But both of these mainstream chains that serve middle-class customers have lost some market share in the past two years, while Dollar Stores, Walmart, and Target have seen their shares increase, and Whole Foods, Trader Joe’s, and Sprouts, serving upscale customers, also have increased.
Markets serving predominantly Hispanic customers are increasing in Los Angeles as in few other places, with Numero Uno, Vallarta and Cardenas markets all having a strong presence.
Economics are also reshaping the restaurant sector throughout California, including the Los Angeles metro area.
“More and more in California when new restaurants open, the operators are more likely to open a fast-casual or quick-service establishment than a full-service restaurant,” says Sharokina Shams, vice president of marketing-communications at the California Restaurant Association, Sacramento, CA. “It seems the chains might be in a better position than the independents to absorb the higher costs.”
There already has been a significant decline in the number of restaurants that attempt to offer full service.
“Years ago, 60 percent of the restaurants in the state were full service and 40 percent were limited,” says Shams. “When you look at it today, the opposite is true. We think that it is largely because of the cost of operating a full-service restaurant, the labor plus the other costs.”
For people looking to dine out, however, the number and diversity of options have never been greater.
“The consumer has more restaurants than before to choose from, and that may be affecting the operator’s bottom line,” says Shams. “The number of restaurants has grown over the past few years; there are 90,000 restaurants in California.”
Pollack, general manager of Coosemans Los Angeles, notes the steady emergence of restaurants featuring a wider variety of international cuisines, each with their own particular uses of produce.
“The Los Angeles area has brought in so many chefs from outside of the country and they brought in their own cuisines,” he says. “All of L.A. has changed in terms of its ethnic groups; they’ve gotten more predominant in all areas of the city. It’s Middle Easterners and Hispanics from South and Central America. In the early 1980s, there was a push for farm-to-fork. There are so many smaller restaurants because sous chefs have gone out and started their own places with 25 or 30 seats, so they could be creative on their own. Some of them go to farmers’ markets every day.”