Wholesalers Remain a Key Link for Local and Small Farms

Potato Varieties

Wholesalers add value to both sides of the local equation, helping farms and retailers connect effectively.

Golden Delicious DisplayFive or six years ago, one or two local sweet corn producers supplied all of Redner’s Markets, headquartered in Reading, PA. With the growing demand for local produce, Redner’s now uses nine or 10 local sweet corn farmers to meet its needs. “We have seen demand for local increase dramatically,” says Richard Stiles, director of produce and floral for Redner’s. “We use more local farmers and source more via wholesalers to keep all our stores adequately supplied with local products.”

Wholesalers around the country report increased interest in local products. Corey Brothers, Inc. a wholesaler in Charleston, WV, has seen interest in locally grown increase 10-fold for its business. “All our local customers want locally grown as long as it complies with insurance and food safety requirements,” says Bob Corey, chief executive.

In West Caldwell, NJ, FreshPro Food Distributors observes an increase in local demand, describing how customers perceive it as healthier, fresher, having a lower carbon footprint and overall being better for the consumer. “Local has become the new buzzword,” relates Joey Granata, produce sales director.

Retailers experiencing this buzz for local produce find solutions via the wholesaler, according to Rob Strube, president of Strube Celery and Vegetable Company in Chicago, IL. “Our customers report more demand from their shoppers for local,” he says. “Our local offerings help our customers compete against farmers markets and farm stands during the local seasons.”

Wholesalers remain well positioned in the farm-to-market connection if they stay focused on what drives the local movement. “Based on Locally Grown Produceresearch we read and done, we determined local demand is driven by four factors,” reports Paul Lightfoot, chief executive of local producer BrightFarms Inc. in New York, NY. “First is freshness. If you’re not able to exploit the freshness advantage with local, you’re squandering an opportunity. When you’re doing a good job of getting from farm to shelf in a few days, you have an advantage.”

Lightfoot lists trust as the second factor. “This is an issue stemming from the Millennial generation,” he explains. “They don’t trust big food companies and see local as an anecdote to big food. So to sell local, you need to do more than just say local, you need to talk about what farm, town, farmer – being specific relays trust.”

The other two factors referenced by Lightfoot include sustainability and keeping money in the local economy. “These four factors are what anyone in the local food business should be trying to communicate because they drive demand,” he says. “If a wholesaler is messing any of this up, they’re doing themselves a disservice.”

Defining Local

With increasing emphasis on marketing “local,” wholesalers face the challenge of defining what local is. “Local is very subjective in terms of talking to growers,” relates Robert Guenther, senior vice president for public policy at United Fresh Produce Association based in Washington, D.C. “In most eyes, local means down the road or within a certain state such as a state-grown program. But in reality the marketplace is defining locally grown.”

Mike Maxwell, president of Procacci Brothers Sales Corporation in Philadelphia, PA, sees local as a mutable term. “It really ends up depending on your customer base,” he explains. “This is why we label produce specifically by origin: for example, New Jersey Grown, Pennsylvania Grown, or Delaware Fresh, so our customers can decide if it’s local to them.”

S. Katzman Produce/Katzman Berry Corp in Bronx, NY, uses local when referring to produce grown in the New York tri-state area. “We pull a lot of product out of New Jersey and New York,” says Stefanie Katzman, executive manager.

Other wholesalers must widen their local definition given limitation of availability. “Local West Virginia is tough because there are very few farms,” reports Corey. “Since we must procure local, we reach into Ohio, Kentucky and Virginia for local until our West Virginia producers can supply more.”

Location of the customer also plays a role. “A customer located in Northern New Jersey may buy local Jersey corn but that corn could be grown 100 miles south of them, versus corn grown 20 miles away in New York state,” expresses Michael Rigo, produce buyer for West Caldwell, NJ-based FreshPro Food Distributors.

A broader distribution region, such as Procacci’s, may affect its definition as well. “We source product from New England and even Canada,” says Maxwell. “But for our customers further north of our Pennsylvania location, those are local products.”

“In the end, the consumers drive the definition of local to support the growers in their own state, county, or neighborhood.”

— Nate Stone, Ben B. Schwartz & Sons

Ultimately, the buyer/customer and retail consumers decide what local is. “Everybody draws their local line in the sand somewhere different,” says Nate Stone, chief operating officer of Ben B. Schwartz & Sons Inc. in Detroit, MI. “Our customers put the title on what is local. As a wholesaler, we know when people are going to use Michigan product versus California or Texas or Mexico. In the end, the consumers drive the definition of local to support the growers in their own state, county, or neighborhood.”

At the end of the day, according to Emily Kohlhas, marketing and business development for John Vena, Inc. in Philadelphia, PA, the onus is on the retailer or other consumer-facing entity to define what value they assign the word local. “They need to communicate it to their customers,” she says. “As a wholesaler, it’s our responsibility to share the fact: point of origin.”

Expediting Distribution

A wholesaler’s fundamental role in effective distribution is the same with local as with non-local. “Think of us as logistics and sales agents for the farmers,” explains Katzman. “They grow the product, and we sell it and get it to the customers — a true partnership at its best! Everyone specializing in what they excel at and working together to benefit all.”

Though the amount of local food being sold is increasing, Lightfoot reveals many supermarkets are still on the sidelines because of distribution issues. “It’s tough to replace three suppliers with 20,” he says.

Rick Feighery, vice president of sales for Procacci, agrees logistics is a huge issue for the local movement. “A big hurdle for retailers is getting product from the grower to the store,” he states. “We play an integral role in making this connection.”

“Transportation of the product to the stores is a wholesale benefit,” concurs Rick Rutte, produce/floral director at North State Grocery in Cottonwood, CA, with 19 stores. “We don’t own any trucking.”

Coosemans Market ProduceEven local producers who do have direct fulfillment capability, such as BrightFarms, use wholesalers where the cost of sales, order-taking and transportation is more efficient for the wholesaler. “From our Bucks County farm, we directly sell to two large chains but there are several smaller chains where it’s more efficient and economical for us to sell via a wholesaler such as FreshPro,” describes Lightfoot. “Fresh- Pro gets us into chains we wouldn’t be able to service without changing our cost structure or staffing.”

Crucial to the distribution challenge is staying as close to harvest as possible. “It’s a huge advantage to get on the shelf with 11 days of code,” says Lightfoot. “But that requires multiple drop-offs and for small store multiple drop-offs, we just couldn’t do it. However, a wholesaler such as FreshPro plugs that gap beautifully.”

Stone agrees on the importance of helping customers make sure turns on product are as fresh as possible. “We pretty much know in advance what our growers’ plan-and-pick list is,” he explains. “How we expedite daily receiving and distribution of local product is a huge benefit to our customers and shelf life.”

Resolution of the distribution challenge has left room in the marketplace for unique wholesale concepts. BrightFarms works with local food hub wholesaler Zone 7 LLC in Ringoes, NJ. “They’re solving the problem of aggregating volume from lots of small farms to meet a lot of smaller customer needs,” shares Lightfoot. “And, further up in New England, a nonprofit called Red Tomato connects farmers to market as well.”

Mikey Azzara, founder/owner of Zone 7 defines his company as a local food hub, helping local farmers access the wholesale market and sell produce. The company services restaurants, retail outlets and schools. After spending five years with an organization trying to connect farms directly, Azzara realized a lot of the farms were not set up for wholesale. “They don’t have a dedicated sales person, don’t send availability lists, don’t call for orders, don’t have dedicated delivery drivers or refrigerated trucks,” he explains. “Zone 7 fills those voids. We offer a reliable, consistent supply of locally grown products.”

Volume‭, ‬Variety And Value

Variety, volume ad consistency constitute other challenges to marketing local produce and represent another opportunity for wholesalers to provide solutions. “Wholesalers are there to consolidate for buyers,” says FreshPro’s Rigo. “Many buyers don’t have the distribution network wholesalers have. We’re an easy one-stop shop for everything local.”

Procacci’s Maxwell highlights the convenience offered by wholesaler one-stop shopping. “Our customers can get local product from different farms, but without having to deal with 20 or 50 different vendors,” he states.

Helping customers stay consistent with supply profits customers and wholesalers, notes Katzman. “This is crucial for repeat business,” she says. “We also pass customer feedback on to the farmers, so they can try to accommodate customer needs.”

The expanding size of local demand necessitates Redner’s buying from wholesalers to help cover the volume it needs. “This is especially true when growers run short,” says Stiles. “This past year is a good example — with the heat and rain, our direct growers could only provide a limited amount of product so we had to fill in with local product from our wholesalers.”

To better serve customers, wholesalers continue to explore increasing variety for local products and play a more proactive role with growers. About 10 to 12 years ago, Procacci started putting staff at the New Jersey auction block in Vineland. “We wanted a presence there on a daily basis to buy local and bring it to our warehouse,” says Maxwell. “We also have relationships with various growers who rely on us to move their product.”

Azzara notes the benefits of Zone 7’s master crop planning. “We know which farm will come in with broccoli the first week of September and then who’ll be in the second or third week,” he explains. “We have backup growers for most items, so once broccoli goes on the availability list in September it will be there through most of November.”

Wholesalers also alleviate customer crises in local when the inevitable increase or decrease for an order arises. “Because we are a wholesaler we can give them more or give them less if their demand changes,” says Stone of Ben B. Schwartz. “We keep our customers’ shrink to a minimum, and shrink costs money.”

Maxwell ultimately views the wholesaler’s role in local as finding value for its customers. “We seek to deliver value to our customers on a daily basis, and if I can get it from a local grower, I’ll seek them out,” he says. “A lot of times, locally grown product is cheaper because of freight. It’s up to us to identify and market this advantage.”

Partnering With Farms

Wholesalers also play a vital role in collaborating closely with local farms to help them achieve long-term success. “As wholesalers we operate more as an extension of our farmers,” relates Katzman. “We view it more as a partnership than a buying and selling relationship.”

For farmers at or reaching mid- to large-scale production, Vena’s Kohlhas notes wholesalers offer an incredible opportunity. “Working through a wholesaler diversifies and adds stability to a farm income stream in a way business-to-consumer and direct-to-institution sales can’t,” she explains. “Especially considering the time investment necessary to pursue them.”

One major benefit for local farmers working with Vena is access to an established market with huge buying power. “This comes with little to no investment in business development or direct sales for the grower,” states Kohlhas. “They also receive constructive feedback and partnership on developing grading, packing, and labeling standards meeting the criteria of conventional retail and foodservice buyers.”

Delivery efficiencies are another essential wholesale element. “Having a wholesaler handle local items provides smaller farms an outlet for their products versus delivering to multiple locations,” says North State Grocery’s Rutte.

Maxwell points out how farms selling directly to a store must deal with the ups and downs of market and volume fluctuation, something wholesalers can neutralize. “We have standing agreements for fixed amounts of produce,” he says. “We help growers plan their planting and growing schedules. If you’re working knowing your orders in advance, it helps. Also, if growers are long on a product, we can put out opportunity buys and move product quickly.”

Zone 7’s commitment to the farms it works with includes a crucial planning element. “We sit down with all the growers in the winter and do master crop planning,” reports Azzara. “We’re looking back at the year; what worked, what didn’t work? What did we have enough of, what not? We’re trying to minimize their risk by giving our best estimates of how much we’ll take per week and what price range we’d expect to pay. This is in contrast to just buying in a volatile market.”

Wholesalers remain a vital link between production and market, essentially serving as a conduit of information. “We try to give our customers as much information as we can,” states Strube. “So much of availability is weather pending. We know when a local farm will start and what they project, but one hailstorm can wipe everything out. For us, we always know what’s going on all over the country and with our local guys. This way, if need to jump to fill gaps, I know where.”

Advancing The Link

Consumer interest in local details necessitates emphasis on information for both wholesaler and customer. “Tell the story about the grower using signs and pictures to reinforce the local grower involvement in the community,” advises FreshPro’s Granata. “Many are third- and fourth-generation growers who have a wealth of knowledge. Sharing that knowledge with the end consumer drives the local movement.”

Procacci’s wholesale market site not only lists locally grown, but also identifies the specific farmer’s name for the customer. “Everybody wants to know where the product is from and support the region and locally-grown product,” says Maxwell.

Corey notes the importance of making sure all shelf and product displays have signage stating locally grown. “If possible, include a photo and brief description of the grower,” he suggests. “We also support our customers by helping promote via in-store radio and outdoor banners/signage.”

North State Grocery stresses the importance of providing the name of the farm and location for customers. “Many customers know the growers from farmers markets so brand identification helps both retailer and farmer,” expresses Rutte.

“Many customers know the growers from farmers markets so brand identification helps both retailer and farmer.”

— Rick Rutte, North State Grocery

Redner’s posts signs labeling the specific product origin. “We also utilize a variety of local growers instead of one large grower because Hyvee Homegrown Tomato & Garlicmany of our customers know these growers,” adds Stiles. “They are fourth- or fifth-generation farmers who have a reputation in their area. For example, our well-known sweet corn farmers actually bring customers back to our stores and increase demand for our corn.”

Wholesalers, customers and growers can find support via local or state organizations. “Increasingly, states are dedicating more funds to promote local and state-grown through programs such as the Specialty Crop State Block Grant Program or Farmers Market Program at USDA,” says United’s Guenther. “For instance, New York just launched a new New York State Grown & Certified program and announced a $20 million food hub at Hunts Point Produce Market to increase access to farm-fresh produce.”

Linking farms, buyers and consumers is an integral function of the wholesaler. “The linkage we provide between buyers and producers is a great part of what we do,” explains Maxwell. “It gives produce managers and buyers a whole different sense of what the product is and their confidence level in it.”

Procacci’s Feighery recounts one produce manager’s farm visit: “He noted how he’d been in the produce business for 25 years and only ever saw the back of a truck,” he remembers. “This was the first time he’d ever been in a field!”

A Lasting Legacy

Local may be new to the marketing world but it’s old hat to wholesalers who have been sourcing locally for generations.

By Jodean Robbins

While local may be a trendy new label, Nate Stone, chief operating officer of Ben B. Schwartz & Sons Inc. in Detroit, MI, points out it’s not a concept new to wholesalers. “Our company has used and supported local growers since its inception in 1906,” he explains. “We’d be silly not to appreciate everybody’s newfound love and quest for local produce. Local gives the wholesaler something else to offer the customer – but not because it’s new; merely because most of the time it’s seasonal.”

Local product has always been central to John Vena, Inc. in Philadelphia, PA. “When product is in season locally, there is no substitute in taste or economy,” says Emily Kohlhas, marketing and business development. “We’re just glad after 40 to 50 years of ambiguity in the supply chain and demand blind to flavor or source, consumers are again beginning to recognize where their fruits and vegetables are coming from, and how they taste.”

Strube Celery and Vegetable Company in Chicago, IL counts itself among one of the larger and longer-term local-handling wholesalers in its area. “We’ve always handled local,” says Rob Strube, president. “I’m a fourth generation and my grandfather set up deals with local farmers to sell to Jewel Osco. We carried on this tradition.”

More than 80 years ago, S. Katzman Produce/Katzman Berry Corp in Bronx, NY, was wholesaling product from local farmers. “We have grown with them every year since,” says Stefanie Katzman, executive manager. “With the increase in hype for local product from our customers over the years, we developed partnerships with our local farmers to get the customers what they want because, after all, it’s about making them happy.”

Small But Safe

Wholesalers toe the line on food safety even with small local farms, offering support to local growers to ensure compliance.

By Jodean Robbins

The increase in demand for local produce has led to increasing scrutiny and speculation about food safety and small growers. Though in some instances small farms are exempt from regulations, Robert Guenther, senior vice president for public policy at United Fresh Produce Association based in Washington, D.C., asserts the market drives the standards. “Under the Food Safety Modernization Act, small farms are exempt from the produce regulatory requirements for food safety,” he explains. “However, we believe if you are selling into the commercial marketplace you should have some baseline of food safety practices on your farm.”

Wholesalers support this assumption, noting their reputation and business are on the line. “Everybody expects the highest level of food safety,” says Nate Stone, chief operating officer of Ben B. Schwartz & Sons Inc. in Detroit, MI. “Good food safety is a minimum requirement. A company wouldn’t be in business if the farm didn’t have good food safety. No retailer would allow the product in the stores and no well-established wholesaler would ever sacrifice their reputation.”

Procacci Brothers Sales Corporation in Philadelphia, PA, maintains stringent food safety requirements for everyone it buys from. “Every one of our growers is responsible for the highest food safety standards,” asserts Rick Feighery, vice president of sales. “We require it and our customers require it as well.”

Food safety programs, recall and trace-back programs, and proper insurance coverage are all items FreshPro Food Distributors in West Caldwell, NJ, requires before using a vendor. “This may put us
at a disadvantage over others but we adhere to our internal policies and guidelines,” states Joey Granata, produce sales director.

Redner’s Markets in Reading, PA, won’t purchase product from a local farm if it is not Good Agriculture Practices (GAP)-certified. Richard Stiles, director of produce and floral, notes the company’s wholesalers that supply the retailer know what they’re looking for. “We rely on them to ensure our standards are met,” he relates. “Also, we don’t play games with the certifications. Sometimes farms may be certified for green squash but not for sweet corn. We require them to be certified for the specific product they’re selling us.”

As more and more local farms seek to enter the commercial supply chain, wholesalers assist them to ensure food-safe practices. “We work with farms to see where they’re at on food safety and get them up to speed with third-party audits and certifications,” reports Mikey Azzara, founder/owner of Zone 7 LLC in Ringoes, NJ.

Wholesalers and farms garner support from various sources. “There are programs out there helping small farms meet basic requirements,” reports Guenther. “For instance, in some states they are using Specialty Crop Block Grant funding to provide GAP on food safety to small and very small farmers. In addition, USDA has just launched a GroupGAP program, which makes it easier for growers of all sizes and grower groups to receive USDA GAP certification.”

Zone 7 is looking to utilize GroupGAP to aid more farms. “We can work with 30 of our growers hand-in-hand and share costs,” explains Azzara. “This program is designed to help the small growers. We are involved in the training and paperwork end.”

According to Bob Corey, chief executive at Corey Brothers, Inc. in Charleston, WV, there is a substantial movement in West Virginia to train current growers and attract new growers. “We want them to be GHP (Good Handling Practices) and GAP certified and with packing facilities to properly pack product,” he says. “Corey Bros works closely with the governor’s office and Department of Agriculture. It’s important to help the grower become compliant without fear; to make it easy for them to understand, to provide advice, counseling and encouragement.”