The constraints of the past two years emphasize the indispensable customer service wholesalers provide.
Originally printed in the March 2022 issue of Produce Business.
As wholesalers encounter increasing demand for a changing business model, they continue to ramp up a host of services, from expertise to logistics to merchandising.
“Wholesalers are not in the produce business as much as they’re in the service business,” says Rick Feighery, vice president of sales for Procacci Brothers in Philadelphia, PA. “Sometimes it’s in the form of price, sometimes boots on the ground in-store and sometimes it’s education.”
A good relationship with a wholesaler means the retailer has support in everything it does, adds Stefanie Katzman, executive vice president at S. Katzman Produce in Bronx, NY. “We’re an extension of their store,” she says. “We provide new products and information, serve as a warehouse, deliver and give in-store support. Stores can use all of their footprint and resources to serve their customers when they’re drawing on what we offer.”
Retail partners capitalize on the added support. Wholesaler services provide additional help to Redner’s Markets in Reading, PA, with 45 stores, from both a resource and expertise standpoint. “Especially now, we can really use that extra help and expertise,” says Mark Cotê, produce supervisor. “It provides support for our staff and drives sales.”
With so many things on retailers’ to-do list, tapping into the services and support of their produce wholesale partner can be effective, notes Jonathan Steffy, vice president and general manager of Four Seasons Produce in Ephrata, PA. “Well-trained produce department staff members deliver better shopping experiences to consumers and more profitable results for retailers,” he says.
“Buying produce at the lowest cost to the back door will not necessarily translate into a profitable produce operation, if forecasting, handling, quality, freshness, displaying, culling, assortment, seasonality, and pricing practices are not well-trained and implemented,” says Steffy. “We help with staff training, department resets, and show-and-tell showcase learning events.”
During the coronavirus pandemic, wholesalers developed more creative solutions, says Gabriela D’Arrigo, vice president of marketing and communications at D’Arrigo New York in Bronx, NY. “We are nimble and experts in the day-to-day irregularity, so we can provide a variety of solutions,” she says. “We provide a knowing ear to the market and act as link to the supplier.”
Evolution in technology and retail formats also increases the need for wholesale support. “As we begin to work with more omnichannel distribution or exclusively online customers, marketing assets are becoming a ‘sine qua non’ for successful partnerships in the space,” says Emily Kohlhas, director of marketing at John Vena Inc. (JVI) in Philadelphia, PA. “Without accurate, attractive product photography and engaging product descriptions, the customer can’t effectively merchandise.”
Retailers can harness multiple aspects of wholesaler services to support their specific needs. “We write ads, manage administration, provide merchandising staff and procure product,” says Mike Maxwell, president of Procacci. “I want my customers to be in their stores and cater to their customers like we cater to them.”
START WITH COMMUNICATION
A strong wholesale partnership begins with customizing the relationship to each retailer’s specific needs and expectations. “Our strengths align with our ability to invest time and energy in thoroughly understanding what our customers want to accomplish before architecting a service model,” says Daniel Corsaro, president of Indianapolis Fruit Company in Indianapolis, IN. “Determining which services and support make the most sense starts with understanding clearly what each side needs for the relationship to be mutually beneficial. Being transparent on the front-end sets up stronger and more successful relationships composed of more than transactional arrangements.”
Redner’s works in partnership with its wholesalers to explore strengths. “Information and communication is key,” says Cotê. “Without good communication, you’re chasing your tail all day and we don’t want that. We need to be doing what is most effective on our side.”
Mike Tipton, vice president of produce/floral for Schnucks in St. Louis, MO, with 112 stores, reports a great relationship with its wholesaler, Anthony Marano Company (AMC) in Chicago, IL, which supports Schnucks’ northern Illinois stores.
“AMC provides us with merchandising support, as well as day-to-day product information for our store teams on product availability,” he says. “AMC also helps drive our produce business with special buys that create sales lifts for our company. And, when it comes time for partnership project store resets, new items or launching new programs, they are quick to help our store teammates with the implementation.”
Wholesalers, likewise, appreciate their retail relationships. “We take pride in partnering with our retailers to help solve their problems and add value,” says Tom Buzanis, director of retail business development for Anthony Marano Company.
Retailers can harness multiple aspects of wholesaler services to support their specific needs.
D’Arrigo New York’s procedure is to sit and talk with the owner and produce manager about what works. “What is the flow of the store?” says D’Arrigo. “What is the busier time of day? Taking the time to have those conversations really makes a difference before deciding how to merchandise items.”
Information and insight help retailers capture opportunity, avoid problems and make adjustments in a dynamic situation, says Wayne Hendrickson, director of sales at Seasons Produce, which produces weekly Market News newsletters, annual merchandising calendars, and quarterly The Four Seasonal publications. “These materials provide critical resources to independent supermarkets, natural food stores and co-ops, and help with long-term, strategic planning. Introduction to new products to the marketplace via flyers and surveys help stores with access to these products and to stay up-to-date and on trend.”
CAPITALIZE ON STORE SUPPORT
Store-focused services from a wholesale partner offer retailers a chance to grow sales by using experienced produce professionals. “They can leverage their knowledge to help grow their business,” says Brian Dey, senior merchandiser and natural stores coordinator for Four Seasons Produce. “In a lot of cases, this goes far past the numbers. These services provide opportunities to help increase staff knowledge of produce operations and merchandising by using training offered, leading to long-term sustainability of department conditions and success.”
According to Steffy, Four Seasons Produce merchandisers often come from strong retail backgrounds themselves, so they can help with building displays, seasonal resets, and keeping retailers current, all while developing the skills of store staffs through training on produce operations. “This is a key value-added service for the continued strengthening of our customer partnerships, as well as an advantage in helping to develop new relationships,” he says.
Corsaro reports Indianapolis Fruit focuses on lifting the performance of its customers’ departments through standard operating procedure (SOP) development, training and education for staff, merchandising support, department layout and equipment consulting, negotiation and sourcing, assortment review and promotional planning. “Having this service is critical, but having the appropriate team members delivering this service is more important,” he says. “We’re constantly building a team rich with retail fresh experience and a passion for creating world class produce departments.”
S. Katzman Produce employs a merchandiser to help customers set up new stores and store resets. “We work with current and new produce managers to provide information on seasonality and availability, then send a merchandiser to the store,” says Katzman. “We’re coordinating these visits with our seasonal ad plan; so, we set up a schedule to go out to customers with seasonal or commodity changes. Combining the in-store support with the information piece really increases value.”
Procacci has seven full-time merchandisers out in the stores. “Their job is to communicate store needs and help store owners by any means possible,” says Maxwell. “They are experts in judging demographics, so they can help put the right merchandise in the store. For example, a store may say they have Hispanic shoppers. Our merchandisers can help them understand the difference in product mix they need, based on if those shoppers are from Mexico, Central America or the Caribbean — there is a huge difference.”
Ryceo in Philadelphia, PA, also provides experienced merchandising staff to stores. “They mostly support small to medium size independents,” says Filindo Colace, vice president. “Our merchandiser helps in working with customers on planograms, understanding their specific demographic and developing a program to help move the most produce.”
Redner’s taps into wholesaler expertise to help merchandise specific categories. “For example, if I see opportunity to add our Hispanic line to a store, I’ll call the merchandiser to ask for help in setting up these specific items,” says Cotê. “Or if I see room to expand in a store where we can grab more Hispanic sales, then I’ll talk with my wholesaler in that area to work with them to plan it out. We’ll do the order, they’ll come in and set it up and then the produce manager will take it over from there.”
Wholesalers and their retail partners tout real-world examples of how service and support result in success. In the last three years, Indianapolis Fruit has executed more than 300 grand openings for its retail partners. These events include, but are not limited to, department design, equipment consultation, development of offering, impact merchandising and on-site support, says Corsaro.
A recent example from Four Seasons Produce is from a single store operator with a large, successful store in the suburbs of Philadelphia, PA. “The leadership of the store wanted to update their produce department in a way that grew their organics offerings and got their assortment image even more on-trend,” says Steffy. “Our sales and merchandising associates partnered on weekly and monthly plans with the store staff. Eighteen months later, the organics are at an even higher percentage of sales cutout than the original stretch goal, and specials display builds and promotions have catapulted certain produce SKUs to new heights of demand at this store.”
Recently, JVI trialed an in-store promotion event with Redner’s in support of its Brazilian melon program. “We utilized a mascot the grower developed for the item, and coordinated several store visits,” says Kohlhas. “The regional produce manager worked with store-level managers to create abundant end-cap displays of Matisse, supported by canary melons from the same grower, set up a sample station, and offered promotional pricing. The mascot visited each store, spending time greeting staff and engaging with customers.”
Kohlhas admits it was a bit of an old-school tactic, but relays adults and kids alike loved the thrill of seeing a giant Mascot wandering the aisles of the grocery store — especially when going to the grocery store has become such a stressful occasion for many since the start of the pandemic. “The event was just as memorable for store staff as it was for customers,” she says. “The employee engagement benefits may have been just as valuable as the customer touches.”
Supporting a “go for it!” mindset on the merchandising end with partner retailers has been effective, especially with sampling curtailed by pandemic challenges and the labor crunch, explains Dey of Four Seasons Produce. “There have been many recent success stories with massive display builds and fun events at stores by creating these big displays,” he says. “They are impactful — both visually for the customers and profitably for the stores — and lead to increased case movement far past any kind of large display or promotion. Part of the goal of stop-you-in-your-tracks displays is thinking past the display and what that current promotion might mean for future sales on an item like artichokes or Dekopon mandarins or the latest apple variety.”
COMPLETE MARKETING TOOLKIT
Wholesalers also provide a broader array of marketing services to support stores. For example, Indianapolis Fruit offers graphic design and content development services at no additional cost to retail partners. “Our marketing team delivers print and digital media in parallel with our customers’ existing in-house teams and supports customers not able to support their own in-house marketing team,” says Corsaro. “In a world driven by consumer engagement, we’re confident that these services add tangible monetary value.”
Four Seasons Produce writes weekly ads for independent retailers, gathers off-invoice schedules on value-added and noncommodity fresh products, and coordinates monthly promotions and display contests for customers with supplier partners. “With many retailers, there is the opportunity to help develop cool events that are seasonal and store specific to create an atmosphere of fun and excitement on the sales floor,” says Dey. “Building differentiation through custom produce events and creating exciting shopping experiences can be a game changer — it just takes collaboration and partnership.”
Schnucks recently launched a new cut fruit and vegetable program in its northern Illinois stores served by AMC. “Our cut fruit and vegetable category manager worked alongside the AMC merchandiser to build the planograms, reviewed them together and made adjustments as a team,” says Tipton. “When time came for rolling the program out and setting the stores, AMC provided additional support to help us make the store sets come to life for our customers.”
Retailers can also rely on wholesalers to secure materials from shippers. “Our company’s relationships with grower/shippers facilitate the sourcing of marketing assets needed by retailers,” says Katzman. “Whether it’s informational posters, in-store displays or window stickers, we can find it and procure it for our customers. We know what we have access to and can customize it to individual stores.”
D’Arrigo works with customers to assess point-of-sale (POS) and signage needs and connect the retailer with shipper materials. “We’ll work with the shipper to come up with ideas of what will work well for our customers,” she says. “Our involvement helps create unique, useful materials for the retail customer and the consumer.”
Redner’s uses wholesalers to coordinate promotional support from suppliers. “For example, Jazz apples will offer a promotion and our wholesaler will let us know,” says Cotê. “They call us to let us know Jazz has a display contest — sometimes it’s national and sometimes it’s just through Redner’s. We work through the wholesaler to set the promotion up.”
FIND DEEPER AD SUPPORT
Wholesalers can also provide an enhanced perspective on special buys and ad product. “We work hand-in-hand with retailers to write and support ads,” says Procacci’s Maxwell. “We have seasoned people who know what stores should be planning on selling. Being in tune with seasonality is a balancing act of what the retailer wants to push and what the grower has to support. We act as a knowledge base, because the typical store buyer is pulled in a lot of different directions.”
Providing advanced planning is crucial to successful ad planning, states Ryeco’s Colace. “We like to give stores a few items they can put in their paper a few weeks in advance to draw customers in,” he says. “We’re always looking for specials for our customers.”
Dominic Russo, buying and sales manager with Rocky Produce in Detroit, MI, explains they work with customers on certain items that make sense to promote. “Sometimes, we reach out to the customer to let them know a product will be coming on and it’s a good idea to promote it and put on ad,” he says. “Other times, they come and ask us what is good to put on ad or they come and tell us the items they want to put on ad. It requires a lot of open and constant communication with customers, understanding their needs and offering solutions they need.”
OPPORTUNITY IN PACKAGING
Wholesalers have also ramped up services in the packaging arena. “Special packaging and private labeling has increased, especially on value-added items that retailers can order one day and have it the next,” says Andrew Scott, vice president, business development and marketing at Nickey Gregory Company in Atlanta, GA.
JVI works with a number of retailers, both large and small, on custom packs. “We build programs of repack bulk products at the ideal pack size for store level ordering, and develop farmers market style packs ready for merchandising by piece or weight,” says Kohlhas. “We’ve also done private label for niche items. Almost all of the packing work we do is built to match the retailers’ needs. We don’t offer any stock services. It’s the bespoke nature of our packing services that make them so unique — and we don’t reserve that level of service for the largest national banners. We are open to working with independent retailers at all sizes, as long as there is the opportunity for a profitable partnership for both parties.”
Four Seasons Produce handles the best of its grower-shippers’ packaged products, including organics, and also operates an on-site packing operation to bag, wrap, UPC, and sort produce items that don’t already have shipper solutions, according to Steffy. “Having high quality packed items with UPCs and set minimum weights is particularly important for the growing e-commerce and rapid-delivery e-commerce retailer segments,” he says.
Ryeco just started repacking in the past year. “We bought an existing warehouse to serve as a repack facility,” says Colace. “We are now in the process of building a 25,000-square-foot addition next to it to create more repacking space so we can offer repack and private label work.”
USE THEIR LOGISTICS
Over the past decades, wholesalers incorporated more logistics solutions as part of their service to retail. Like many wholesalers, Four Seasons Produce’s sister companies Sunrise Logistics, provides third-party logistics and freight services, and Sunrise Transport has a dedicated fleet of trucks and drivers delivering throughout the Mid-Atlantic and Northeast.
D’Arrigo has witnessed a significant increase in demand for delivery and logistics. “We consolidate, act as a cross-dock and deliver,” she says. “We’re doing more in this area now because of the trucking and labor shortage and cost. We continue to explore how to make ourselves more nimble and provide even more services in this area to meet our customers’ needs.”
With the strain on supply chains and current inflationary pressures, wholesalers must collaborate with retailers on service requirements that manage the costs for both parties, says Steffy. “Some self-distributed chain retailers are seeing value in partnering with wholesalers to manage product categories that can be fraught with logistics hassles, or just to have steady alternate sources,” adding independent retailers are also seeking wholesale partners who can keep their store shelves full.
Direct store delivery is increasingly important with respect to maintaining availability. “Service is having the best quality on the shelf,” says Procacci’s Feighery. “If it’s not there, you don’t get the opportunity to sell to the customer later. They will go somewhere else. Our job is to make sure our customers have the product they need on the shelf every day.”
If the retailer is picking up at a terminal market, Colace suggests they should be taking advantage of delivery options. “We have 21 trucks and we deliver to probably 50% of our customers,” he says, which allows a retailer to use its resources and time elsewhere.
Nickey Gregory operates its own fleet of trucks, delivering across 11 southeastern States. “Having this luxury helps us control the supply chain from our dock to our customers’ docks,” says Scott. “Transportation has become a higher expense these days for delivered cost of goods.”
BUY MORE JUST IN TIME
Increasing supply chain pressures have resulted in more just-in-time (JIT), another expertise wholesalers provide. “Just-in-time is what the wholesale business is and has been,” says Katzman. “Though we have steady business, we are built on that JIT or ‘bail-me-out’ opportunity for customers,” she says. “JIT and emergency-type requests have increased in the past two years because of COVID and supply chain issues.”
Corsaro explains JIT expectations are evolving and are specific to how each retailer chooses to operate their business model. “Wholesalers will be successful when they can leverage a consistent infrastructure to build customized service models around each customers’ expectations,” he says. “It’s no secret transportation and delivery have been impacted by recent disruption in the supply chain. Wholesalers are being challenged daily to deliver consistency. We’re focused on creative methods for recruiting, investing in training and retention, leveraging technology to provide strong business insights, and evolving as a business to meet more fluid demands from the marketplace.”
Wholesalers act as a local distribution center for retailers. “We can take same day orders and deliver the same day or next day,” says Russo of Rocky Produce. “We’re very quick with how we handle things — a critical component to selling perishables. Direct-buy can’t do that. We have a lot of success in partnering to move packages and service our customers.”
Being able to provide mixed pallets and smaller drops is another valuable wholesale aspect, according to Katzman. “We make sure our retailers have the freshest product they can in their store at all times,” she says. “When you buy direct, you have to bring in and sell through the whole truckload. We sell to a lot of people, so we’re constantly bringing in new fresh truckloads.”