Originally printed in the March 2023 issue of Produce Business.
Wholesalers are experiencing an identity crisis amid the increasingly competitive arena of produce distributors. Our customer needs are changing, and it is up to wholesalers to adapt to this new environment to stay relevant. Luckily, wholesalers are characterized by their immense dedication to the business, and we don’t just overcome hurdles, we break right through them.
Since starting at Nathel & Nathel full time in July of 2020, I have noticed a distinct change in how companies are going about business. Wholesalers are realizing the methods that have allowed us to succeed for the last 100 years will not be the same methods that will allow us to succeed for the next 100. Yes, the traditional “market” business still exists, and it is still important, but more and more customers are looking to market wholesalers to be a service provider for their own businesses.
At Nathel & Nathel, we like to think of our business as an extension of our customers’ businesses — one cannot exist without the other. This philosophy is rooted in building mutually respectful relationships with our customers. They need to feel like our warehouse is their own, and they need to feel like our team cares about the success of their company. That being said, our customers are facing difficult headwinds and wholesalers need to sail these waters with them.
The New York market faces its own unique challenges. The encroachment of large national retailers is threatening the position of smaller stores that have characterized the food culture of New York for so many years. This is the melting pot of the world, and many of these smaller retail stores reflect the nuanced elements of their ethnic cultures. The flexibility and access to such a wide array of product via the terminal markets allows these stores to accurately reflect their heritage through food. If you want to shop at an authentic Chinese, Jewish, Russian, Korean or Dominican market, you can find it in New York City.
Additionally, the produce industry is facing a tremendous amount of inflationary pressure, and wholesalers are stuck between a financial responsibility to their suppliers and customers. Retailers are facing higher overhead and labor costs, while fighting to compete with larger retailers that have the scale to demand more competitive retail prices.
One of the most significant changes in the industry is the growing demand for a turnkey-level service provider.
To meet this need, wholesalers must invest in robust delivery systems that can quickly and accurately get product to customers. This requires a combination of technology and logistical expertise as well as a commitment to providing the best possible customer experience. Within this same discussion is the need to provide more convenient ordering methods. Produce managers are spread thin, and managers are becoming more accustomed to placing orders within a few minutes. It is our responsibility as their warehouse to allocate their orders and find the produce that best fits their needs.
Wholesalers must respond by investing in digital technologies that streamline the ordering process and make it more convenient for customers. This might include the development of an online ordering platform or the integration of ordering systems with mobile devices. Compare this to the traditional methods that largely included placing the call over the phone, line by line. While it is important to maintain relationships, these calls are typically inefficient and time-consuming.
With increasing concerns about foodborne illness and other health risks, customers are also looking for wholesalers that can provide them with the assurance the products they receive are safe and of the highest quality. Implementing practices and procedures to a SQF-certified distributor recognizes a company’s daily commitment to ensuring its distribution practices meet the highest standards.
Additionally, companies can proactively monitor foodborne illness breakouts and provide customers with updated letters and advisory notices to display in store.
A merchandiser is an artist who can transform a generic produce department into a canvas of bright colors that keep consumers coming back. As consumers become more sophisticated and better informed, they are looking for wholesalers that can provide them with the information they need to make better purchasing decisions. This requires wholesalers to invest in marketing initiatives that help them reach customers effectively, such as social media campaigns, email marketing and customer-centric events.
Finally, consumer preferences are changing, and wholesalers are well positioned to be able to meet these dynamic needs — from locally sourced fruits and vegetables to pre-cut and packaged salads. Wholesalers are, by design, structurally dynamic organizations that can leverage an agile procurement model to quickly build inroads with these items and stay relevant among evolving trends.
So what can we do as wholesalers to evolve and compete? The answer is to be a service provider at every level. We don’t just sell produce anymore. We provide a personalized service for our customers, and wholesalers have the experience and industry know-how to provide this for our customers.
Joshua Gatcke is the general manager and fruit buyer at Nathel & Nathel. Opened in 1922 by Daniel Nathel, the company is a fourth generation family-run business operating out of the Hunts Point Produce Market in New York City. The company has earned its reputation as a leading produce wholesaler focusing on the highest quality fruits and vegetables.