Drivers Of Evolution
As the years present increasing challenges, wholesalers and suppliers turn to each other to innovate and stay viable. “When I look back, I can say that if we kept doing business the way it had been done, we wouldn’t be here,” says Larry Davidson, president of North American Produce Buyers Ltd. in Toronto, Ontario, Canada. “Establishing direct relationships and adding value for the growers has allowed us to build our business.”
As business becomes more complex and difficult from a supply chain standpoint, strong and transparent relationships help streamline the process, explains Daniel Corsaro, vice president of sales and marketing with Indianapolis Fruit Company in Indianapolis. “It’s a much faster pace and higher execution rate with solid relationships,” he says. “Suppliers know exactly what we’re looking for, when we’re looking for it and when we need it. Having a streamlined and efficient process is very meaningful in this day and age.”
Dan Vena, director of sales at John Vena Inc. (JVI) in Philadelphia, has seen the relationship between wholesaler and supplier change. “The strongest relationships we have are the ones that have been able to evolve along with the industry,” he says. “We are aware of our place in the supply chain, and we understand our suppliers are not going to remain competitive with certain types of customers if their products all have to be sold through us. Because of this we are constantly trying to figure out ways we can add value for our suppliers and their customer (when it is not us). We provide logistics, cross docking, cold storage, ripening and consolidation in an effort to add value for our supplier. So while these relationships are certainly more complicated than they once were, we have found that in most cases the complications have made them stronger.”
On some level, notes John DiFeliciantonio, owner of North American Produce Company (NAPCO) in Philadelphia, business has always been based on relationships but 40 years ago, the cost of operation was much less than it is now. “Back then, guys could plant, hope for a good crop and if something went wrong, losses weren’t spectacular like they are now,” he says. “It’s the same for us too. Our costs of doing business are astronomical, and they’re not going down.”
New services continue to evolve by necessity because the costs in the system are higher now, agrees TJ Fleming, vice president and director of sales at Strube Celery & Vegetable Co. in Chicago. “Trucking costs are a good example,” he says. “It’s easier for a supplier’s truck to drop off here and for us to consolidate and fulfill the order. Also, wait times at DCs can cost the shipper money, so again it may be easier for everything to come here for consolidation and then delivery. Changing regulations such as drive time also push the need for further collaboration. We must rely more on each other; it’s where the long term relationships between suppliers and wholesalers come into play even more.”
Locally Grown — Wholesalers Team With Local Suppliers
Wholesaler relationships with local suppliers boast deep roots reaching back in some cases to foundings. “Many of our local growers are multi-generational as is Strube, and we appreciate our long history with them,” says TJ Fleming, vice president and director of sales at Strube Celery & Vegetable Co. in Chicago. “I enjoy continuing relationships and doing business with people my grandfather started with.”
Local New York and New Jersey farmers gave S. Katzman Produce in New York its start in the industry and many have grown alongside the company through the years, according to Stefanie Katzman, executive vice president. “A true partnership is only successful when it’s mutually beneficial, and we always want our local famers to benefit from their partnership with us,” she says.
With steady demand for locally grown product, many wholesalers ally themselves with local growers to fulfill locally grown programs. “Small customers don’t have direct connection to the growers,” says Dominic Russo, buying and sales director/logistics coordinator at Rocky Produce in Detroit. “We align with local growers to support such programs and supplement the distribution we already have.”
Local growers value the structural services wholesalers provide. “Many local growers are handicapped logistically,” says Matthew D’Arrigo, chief executive of D’Arrigo New York. “If a local grower has 15 items adding up to one truck of product, he or she is better off sending it to a wholesaler to break it down and get the product moved.”
Indianapolis Fruit Company, delivers to more than 20 states, managing what Daniel Corsaro, vice president of sales and marketing, calls micro-regions for locally grown. “Distribution and supply chain management are key areas we support all our local growers in,” he says. “Farmers want to be in the fields. They don’t want to be in storage, wholesale, or sales, so we help them in these areas as part of our partnership with them.”
Riggio Distribution Co. (RDC) in Detroit serves as a conduit for local growers to access customers and markets that can be challenging to obtain on their own, explains Dominic Riggio, president. “As a 12-month produce business, RDC has the logistics, sales team, and warehousing necessary to efficiently service the entire Midwest,” he says.
The relationship is bolstered by retail customers turning to their known wholesaler to service local needs. “Some national retailers with stores in our region count on us to aggregate high-quality local produce that meets their spec from GAP-certified growers and distribute it to those stores in season,” says Dave Hahn, director of procurement for Four Seasons Produce in Ephrata, PA. “As the wholesaler, we provide services to growers and retailers to ensure consumers get the local produce they want.”
Similar to national programs, wholesalers reinforce local suppliers in a variety of ways. Local exclusivity helps establish a relationship with the customer and prevents a grower competing against its own product, explains John DiFeliciantonio, owner of North American Produce Company (NAPCO) in Philadelphia, PA. “We’re also a release valve for over supply locally,” he says. “We are in the middle and reach out both ways to communicate information and coordinate promotions — especially when growers are long on product.”
One major benefit Indianapolis Fruit provides many of its artisan suppliers is helping to ensure they’re up to par on the food safety side relates Corsaro. “Many smaller growers need help understanding and implementing the various requirements, not only from government standards but also those of more stringent customers,” he says.
Indianapolis Fruit also educates local growers about customers. “We sit down a season or two ahead of time and help them understand what retailers we’re working with, what gaps we’ve seen in the supply chain and what they can cultivate and harvest to meet specific windows,” says Corsaro.
Nickey Gregory Company in Forest Park, GA, strongly promotes the state’s Georgia Grown program. “We have the Georgia Grown logos on our trucks and the front of our buildings,” says Andrew Scott, vice president business development and marketing. “Benefits include picking up Georgia Grown orders on our own trucks (controlling the logistics and on-time piece), less food miles from growers to distributor to end user, quicker inventory turns, fresher product and supporting the state we live in.”
Fierman Produce Exchange of Bronx, NY, has operated a packing facility in upstate New York for the past 50 years. “We are loyal to our growers and do our best for them,” says Joel Fierman, president. “They know at the end of the day when they send me their product that we will deliver for them and they’ll get paid.”