Capital region wholesalers distribute produce to prosperous Mid-Atlantic customers.
Fresh produce is big business in the nation’s capital. Headquartered in the area between Washington, DC, and Baltimore, multiple produce wholesalers play a critical role in distributing fresh produce to retail, wholesale and foodservice customers throughout the Mid-Atlantic and Eastern Seaboard.
“It’s our proximity to so many different cities,” says Don Martin, vice president of sales for Jessup, MD-based Pete Pappas & Sons, Inc., which distributes to customers from New England to North Carolina. “We are able to get to the Boston area within eight to 10 hours and can say the same going south to Charlotte, NC, and Atlanta. This is a good hub in terms of proximity to be able to get to so many metropolitan areas and places where so many people live.”
The population of the region is booming. According to the U.S. Census Bureau, population in the Washington-Arlington,VA-Alexandria, VA metropolitan area increased 9 percent from 2010 to 2016. The metro area’s 6.2 million people make it the sixth-largest U.S. metropolitan area. The 2.8 million residents in Baltimore-Columbia-Towson, MD, metropolitan area constitute the 21st largest metropolitan area. The region experienced a 3.3 percent population increase from 2010 to 2016.
Landover, MD-based Keany Produce & Gourmet began in 1978, distributing produce with one truck to one customer from one man. Kevin Keany, president and founder, characterizes the Washington, DC, and Baltimore area as a growing and sophisticated market. “The cliché is this is the most powerful city in the country,” he says. “It’s a very exciting time to be doing business in the Baltimore and Washington area. It’s a very vibrant time. There’s so much going on.”
The nation’s capital region is a produce distribution throwback. Decades after the rise of supermarket distribution centers and businesses offering prepared foods for busy suburbanites, one can still see the places where farmers once brought their wares to a gathering place at the center of the cities.
Produce Market Heritage
Centre Market was the heart of Washington produce more than two centuries ago, occupying the ground between the White House and the Capitol Building. This produce hub, near a railroad station and streetcar line, was also crossroads for DC residents who came regularly to look over the wares from nearby farms.
After the venerable Centre was demolished in 1931, the capital’s produce, meat and dairy peddlers moved to Union Terminal Market at 4th Street and Florida Avenue NE, close to the Baltimore and Ohio Railroad Freight Terminal and a major highway to the farms in the outlying areas.
The beginning of the end of central Washington, DC, as a hub connecting the city’s residents with Mid-Atlantic farmers came in 1962, however, when the city banned the outdoor sale of meats and eggs.
The Union Market still stands in Washington as the facility was renovated after the produce wholesalers moved to the outlying areas. It is now a gourmet food hall.
Ralph Waldo Emerson once proclaimed Baltimore “the gastronomic capital of the world.” The city’s Lexington Market has occupied the same location since it opened as one of the country’s first public markets in 1782. In the early 1900s, the downtown market housed more than 1,000 food vendors. It still benefits from a reputation for foods one might not find elsewhere. Most of the vendors at the modern-day Lexington Market’s 80 stalls offer prepared foods. Three stalls sell produce.
For many of the neighbors there are few, if any, other places to buy fresh fruits and vegetables than Lexington Market. “Many of our local regular customers are getting to the market by public transportation from areas that are or have been defined as ‘high priority food areas’, or areas that do not have easy access to fresh and healthy food options,” says Stacey Pack, project manager for Baltimore Public Markets. “Produce is very important to what we do at Lexington Market.”
Rise of Commercial Market
As foot traffic at Washington’s Union Terminal Market steadily dwindled and consumers looked for prepared food they could pick up quickly, the produce hub for the greater metropolitan area moved a few miles away to Jessup, MD, located midway between Washington, DC, and Baltimore. The Maryland Wholesale Produce Market is a hub receiving produce from local growers and from around the world. The facility opened its first building in 1976, consolidating a number of smaller, less modern markets. It added a second building in 1980. The market houses 27 wholesalers who fill all 101 units. Additionally, four produce wholesalers operate out of a separate seafood market, which is undergoing renovation.
“The Washington, DC/Baltimore metropolitan market is a vibrant economic community with a vast variety of retail and foodservice companies providing this area’s beautifully diverse population with an endless selection of culinary delights,” says Don Darnall, executive director of the Maryland Food Center Authority (MFCA), which owns and operates the produce and seafood markets. Those foods span “everything from multitraditional cultural foods to a broad array of prepared foods fusing one culture with another, providing customers with access to one of the most diverse selections of fresh food in the world,” he says.
Giant Food, the area’s leading supermarket chain, commands a 27 percent market share in Washington, DC, and 22 percent in Baltimore. In Washington, Safeway, Costco, Wegmans, Harris Teeter and Walmart add up to 49 percent of the metro area’s produce sales; in Baltimore, Safeway, Costco, Wegmans, Walmart, Weis Markets and Shoppers Food and Pharmacy, have a 41 percent market share.
Immigration over the past half-century has brought significant Asian and Hispanic populations to the greater Washington, DC and Baltimore metropolitan areas. A steady influx of people of Asian descent has created an independent restaurant market for some wholesalers. In Washington, DC blacks constitute 25 percent of the population; Hispanics 16 percent; with Asians and Pacific Islanders at 10 percent, according to the Census Bureau. For Baltimore, blacks are 29 percent with Hispanics and Asians at 5.6 percent.
Pacific Coast Produce, LLC, in Jessup, sells green beans, broccoli, mushrooms, carrots and bell peppers to Chinese restaurants and area grocery stores. “Selling to the Chinese restaurants is very competitive,” says Rick Ta, managing member and chief executive.
The variety of ethnic groups helps move produce, says Will Staples, director of sales and marketing for Lancaster Foods, Inc., based in Jessup. “Because of the diverse population, we have a lot of requests from retailers looking to expand their offerings in the Asian/ethnic produce category. Also, with the median income being so high in the DC area, (about $82,000, according to datausa.io) we see a continuing push on organic value-added requests.”
Asian restaurants are flourishing. “Bad Saint, Thip Khao and a slew of other concept restaurants have put DC on the map in Asian food; you don’t have to go to the far suburbs for good Korean, Vietnamese or other Southeast Asian cuisines,” says Kathy Hollinger, president and chief executive of the Restaurant Association Metropolitan Washington. “Native and other local chefs are exploring the ingredients in exciting new ways.”
Business strong in Mid-Atlantic region.
In Jessup, MD, many wholesale produce companies on and off the Maryland Wholesale Produce Market distribute produce to retail stores, restaurants, institutions, foodservice purveyors, wholesalers and other buyers throughout the Virginia, Maryland and southern Pennsylvania region.
“We sit centrally on the Eastern Seaboard, allowing us to deliver from Maine to Florida the next day,” says Will Staples, director of sales and marketing for Jessup’s Lancaster Foods, Inc.
The region’s geographical location helps, says Tony Vitrano, president of the Tony Vitrano Co. “The good thing is we are close to many things,” he says. “We are right off I-95, which is great for getting trucks in and out.”
Operating from the Jessup market, the Tony Vitrano Co. distributes to retailers, foodservice jobbers, and a variety of customers in the greater Baltimore-Washington, DC, region, as well as northern Virginia, western Maryland, the eastern part West Virginia, southern Pennsylvania, and the Eastern Shore.
“Because of the government lobbyists, there’s a high concentration of restaurants, particularly in the DC area,” says Vitrano. “There are a fair amount of foodservice suppliers, which makes it very competitive. Everyone is close together. It’s not like there’s only one guy [foodservice jobber] in town. Customers have many options they can buy from.”
Central location key
The location favors distribution. “The food companies operating out of the wholesale food market facilities located in the Maryland Food Center in Jessup are strategically located midway between Washington, DC, and Baltimore, allowing them to serve their customers from the metropolitan epicenter,” says Don Darnall, executive director of the Maryland Food Center Authority.
Wholesalers characterize the produce economy — and the economy overall — as favorable.
“It’s been great the past few years,” says Sal Cefalu, owner and director of CGC Holdings, which owns Jessup’s G. Cefalu & Bro. Produce, Inc., and Capital Seaboard, a foodservice and seafood jobber. “The growth continues to be there. With Amazon coming into Virginia, it’s a plus. We have different areas of growth in Baltimore and DC. We are continuing to see companies coming in.”
In November, Amazon.com Inc, picked Arlington, VA, to house HQ2, one of its new offices. Kevin Keany, president and founder of Keany Produce & Gourmet, based in Landover, MD, points to Amazon’s expansion into the area as evidence the region is experiencing vibrant business growth. “The demographics of the employees that companies such as Amazon are seeking are all here,” he says. “They chose this area for a reason. It’s the resurgence of the Washington, DC, and Baltimore areas. We are blessed to be in this area.”
The region’s restaurants and supermarkets are experiencing strong growth. “Every time I turn around, I see another restaurant chain,” says Don Martin, vice president of sales for Jessup-based Pete Pappas & Sons, Inc. “The supermarkets are across the street from one another. In some areas, you have a nucleus of retail stores on top of another. This area is growing by leaps and bounds. Everyone seems to have healthy growth. There is plenty of business out there.”
Money is a big reason for the region’s prosperous economy. “This market, from Harrisburg, PA, to Annapolis, MD, to Norfolk, VA, to Frederick, MD, and Hagerstown, MD, is probably one of the richer markets in the country,” says Joe Rahll, Sr., president and chief executive of Jessup’s Edward G. Rahll & Sons, Inc. “But, on the flip side, because of all that money, there’s a lot of competition, both in retail and wholesale. On the retail end, with all the stores here, you see all these independents and what they’re butting up against.”
When Cefalu began operations in 1904, it didn’t focus much on the nation’s capital. Today, its business is split between Baltimore and Washington, DC. The two metropolitan areas are now more intertwined. “They once were separate, but now we look upon them as one area,” says Cefalu. “Part of it deals with the money in D.C., and that area’s growth. It is spreading north to Baltimore. The growth has been tremendous through that mid-central area, the area between Baltimore and DC.”
Vitrano characterizes the region’s produce economy as favorable. “The overall economy in the area is pretty strong,” he says. “We are lucky that a big chunk of our economy is dependent on Washington, DC. Though they had a government shutdown this year, they are in business all the time. While Baltimore’s city economy may not be as strong as it’s been, Washington, DC, is strong. Coming into summertime, the Eastern Shore tourist spots and roadside stands will get busy.”
But not all in the industry see it the same way. Rick Ta, managing member and chief executive of Pacific Coast Produce, LLC, in Jessup, describes business as stagnant. “The produce business isn’t as strong,” he says. “It’s not like it used to be. Now, it’s very slow. It’s very hard. It used to be a lot busier. It’s like this for all the distributors.” Many customers buy outside the market while other wholesalers from other areas deliver at lower cost. To compete, Ta says Pacific Coast Produce touts its service.
With increasing movement comes more distribution challenges, because of increasing congestion.
“Moving food products throughout the Washington, DC/Baltimore metropolitan area is a nightmarish challenge,” observes Darnall. “The density of population combined with the vast variety of food establishments leads to congested roadways and almost impossible access to loading and unloading areas. However, the area food distributors are masters of their domain and conquer these daily challenges with the skills of finely trained warriors.”
Wholesalers face many challenges, including transportation. “Logistics remains the largest challenge,” says Staples. “With the new E-log regulations that were put into place last year, we saw a spike in transportation costs across the board. Now, more than ever, we must be cognizant of our costs on all outbound loads and find ways to efficiently cube out trucks, while also maintaining our same service levels.”