Wholesalers shift gears to better serve customers with innovation and expertise.
Originally printed in the October 2023 issue of Produce Business.
After the massive changes exacerbated by the pandemic, technology at the wholesale level has become even more crucial in the current age of labor and supply challenges.
“Technology is something every successful wholesaler needs to implement,” says Gabriela D’Arrigo, vice president of marketing and communications at D’Arrigo New York in Bronx, NY. “It’s the direction everything is going.”
And that technology adoption has created new expectations for everyone, adds Billy Itule, senior management at Willie Itule Produce in Phoenix, AZ.
“I want seamless digital experiences as a customer,” he says. “That expectation transfers to business-to-business transactions. At every level of our business, technology enables more efficient operations, higher quality and profitability.”
Technology adoption started at S. Katzman Produce in Bronx, NY, more than 15 years ago, according to Stefanie Katzman, executive vice president, but in the last seven years, it has moved to every part of the business.
“It’s shifted to be more user-friendly, with quick, easy-to-use, minimal keystroke options because the environment on the floor is fast-paced,” she says. “It can be expensive, but it’s designed to pay off in the long run.”
John Vena, president of John Vena Inc. (JVI) in Philadelphia, PA, believes the industry is at the point where it’s non-negotiable for wholesalers not to have some tech foundation in place.
“An ERP, whether it’s out-of-the-box or custom-built, is essential now,” he says. “That gives you real-time inventory, sophisticated pricing systems, digital invoicing, accounting integrations and reporting, and the traceability required for modern food safety programs. We’ve custom-built a number of modules for our ERP to suit our needs, but it’s an ongoing journey to keep up. Customer and regulatory demands keep piling up.”
The broad range of customers that rely on wholesalers need those wholesalers to stay effective and efficient to help them compete and differentiate in the marketplace, says Jonathan Steffy, vice president and general manager at Four Seasons Produce in Ephrata, PA. “Technology allowing wholesalers to scale the most expensive parts of operating their business, while still providing customized programs and service, will be a smart investment.”
KEEP THE HUMAN TOUCH
Wholesale seeks to maintain balance between technology and people. “As wholesalers implement technology to save time and labor, it’s also crucial to still do business in a personal way,” says Robin Brett, purchasing manager at Kimberton Whole Foods headquartered in Kimberton, PA, with seven stores. “It’s important to allow for the human element, asking questions and learning from a sales rep, because they have the experience.”
The nature of this industry means wholesalers need to be hands-on, agrees TJ Fleming, vice president and director of sales at Strube Celery & Vegetable Co. in Chicago, IL. “Technology needs to focus on making our physical job more efficient and fit the way the wholesaler, especially a market wholesaler, does business,” he says.
Itule emphasizes technology adoption with the goal of reducing the need for human resources is the wrong reason to implement it. “If anything, every evolution we’ve made in our business has reminded us that the people who make up Willie Itule Produce are the most important assets we have,” he says.
Focusing on the human element is necessary, agrees Bonnie Fuson, vice president of customer experience at Pacific Coast Fruit Company (PCF) in Portland, OR. “Key to our success in the implementation of new technology is communication, involvement and education for both our employees and customers.”
“It’s critical to prepare people about upcoming changes, and involving them early creates stronger support as they understand the benefits,” Fuson says.
HARNESS TECH FOR EFFICIENCY
Wholesalers use a host of technology, including digital supply chain improvements, warehouse distribution and transportation efficiency and effectiveness, data analysis, marketing content and content delivery to improve their business and service to customers, explains Four Seasons’ Steffy.
“Technology can improve operational effectiveness and efficiency, which makes the wholesaler a better partner for customers,” he says. “People are a precious resource and throwing labor at inefficiency is not sustainable.”
Technology has improved many steps of procurement and distribution tasks for Procacci Brothers Sales Corp. in Philadelphia, PA. “Our inventory accuracy and traceability from seed to shelf is unmatched,” says Rick Feighery, vice president. “Our archived historical data for movement and pricing is helpful in making pricing decisions daily. Our WMS increases both accuracy and speed with selection.”
Having a powerful ERP system lets Willie Itule Produce to fine-tune buying and pricing. “The benefit here is two-fold: profitability for our business and predictability for customers,” says Itule.
The company works with Produce Pro, and Itule says they “have been thrilled with the insights and efficiencies it has given us. Integrating digital practices in our warehouse enhances efficiency for packing orders and ensures our ability to respond to recalls and confidently remove products from stock and alert customers. We use inbound and outbound scanning on all items received, giving us real-time traceability.”
Heartland Produce Co. in Kenosha, WI, is constantly looking for ways to improve the customer experience, streamline operations and minimize costs through technology, according to Ryan Dietz, president.
“A few examples include Omnitracs active alerts so our customers know where their delivery is, Produce Pro’s web/mobile ordering and, most recently, myQ’s dock management system to help provide accountability on our shipping and receiving docks.”
Heartland has utilized Android tablets on its receiving dock for a number of years to perform quality control inspections. “We worked with Produce Pro to develop their QC app,” says Dietz. “It does a great job of helping us score product upon arrival, and document issues with a detailed QC report including pictures.”
Several years ago, PCF committed to a digital transformation as one of its key strategic initiatives. “Central to our objective was to deliver an innovative new e-commerce experience,” says Fuson. “Additionally, we implemented other new technology to improve upon the already established processes of a wholesale distributor, such as picking productivity, warehouse storage capacity, and making routing more efficient thus reducing the company’s overall carbon emission.”
Riggio Distribution in Detroit, MI, implemented custom software in 2012 with countless upgrades since. “We use our software for everything in our operation, from inventory management to food safety to accounts payables and receivables,” says Dominic Riggio, president. “We’ve managed to stay ahead of customer demands in technology.”
Nickey Gregory Company (NGC) in Atlanta, GA, uses live tracking of its large fleet of trucks so employees can keep customers updated on deliveries.
“Another feature we use enables us to manage our three bagging machines via a mobile app,” says Andrew Scott, Nickey Gregory’s director of business development and marketing. “We currently use Produce Pro as our operating system, which enables functions in order taking, purchasing, inventory, receivables, payables, and detailed sales analysis for reporting.”
MORE ACCURATE INVENTORY
Technology enables wholesalers to better manage the difficult job of inventory and fulfillment for customers.
“The Four Seasons warehouse is streamlined with pick tags and use of technology to trace back lots,” says Kimberton’s Brett. “They regularly do an accurate job on our orders, which is a benefit to us. Our produce distributors actually do a much better job of avoiding mis-picks than our grocery distributors.”
D’Arrigo New York employs technology to receive and inventory product. “At our two newer, off-market facilities, we scan everything with scan guns,” says D’Arrigo. “It’s really helped us better implement FIFO and find the exact product our customers want, rather than finding it manually.”
Riggio’s real-time inventory allows it to service customers with accurate information on what products are available now as well as inbound. “We have drastically reduced our ‘oversold’ situations, and in a matter of seconds can identify and adjust as needed,” says Riggio. “Our daily physical inventory has become a lot more efficient.”
J.E. Russell Produce in Toronto, Ontario, ensures the customer knows the availability of what they’re ordering. “The implementation of real-time inventory at the point of sale has given our customers a new level of comfort that when they leave our warehouses, their order is done,” says Hutch Morton, senior vice president. “All our ordering, receiving, warehousing, inventory, sales, accounting and food safety are handled by a single system.”
Strube installed a new computer system a few years ago to provide greater efficiency with incoming product. “We track inventory easily in real-time,” says Fleming. “It helps us serve the customer better because it makes our operations more efficient.”
Adding additional elements to inventory scanning has been a plus for S. Katzman’s inventory team. “We use tablets to incorporate location and other pertinent information,” says Katzman. “One of the most beneficial aspects has been the quality control application. It allows us to inspect product, take pictures, and update right on the tablet. Then, it syncs with our computer system so everyone in the office has immediate access to the information.”
With the increasing cost of labor and the number of SKUs flowing through higher volume distribution centers, the use of slot optimization software is becoming an essential tool, explains Ted Hendryx, PCF chief operating officer.
“These tools use advance mathematical algorithms to assess product cube dimensions, weight, velocity and physical attributes of the warehouse to optimize slot configurations, leading to streamlined receiving, expedited letdowns, shorter pick paths, less restacking during pallet build, and reduced product damage,” he says. “As the cost of facility construction continues to climb, slot optimization can stave off the need to add on or move to a new facility.”
Technology enhances a wholesaler’s management of logistics. “Wholesalers are using TMS for all things transportation, and in-truck cameras and ELD for compliance, safety and efficiency,” says Four Seasons’ Steffy.
Hendryx relates what is rapidly changing is the amount of information and quality of information available to aid in fine-tuning the transportation process.
“Routing optimization software is not new, but some of the newest versions are hosted in our ERP, making integration simpler and outputs easier to use,” he says. “AI features in the new routing software continue to absorb real-time data and fine-tune future solutions. Integrating payroll, dynamic routing and truck GPS data is getting easier and providing a clearer vision of areas of opportunity for saving and reduction of carbon emissions.”
Being able to see produce in transit helps ensure a better customer experience at J.E. Russell, says Morton. “As much as we would like to ensure each day’s trucks arrive in advance of our 4 a.m. open, sometimes trucks arrive late,” he says. “Being able to plan around delay in real-time with up-to-the-minute location tracking is a helpful tool.”
Cameras in trucks and mapping help D’Arrigo New York manage transport, whether in delivering product or receiving. “For example, if you’re tight on berries and you know your truck will be here in four hours, you can communicate it to the customer, so they know they can expect it in their order,” says D’Arrigo.
Transportation tracking applications are crucial, particularly in inclement weather or if transportation comes to a standstill. “Normally, we get our deliveries at 7 a.m.,” says Josh Alsberg, owner and principal of Rubinette Produce Market, an independent retailer in Portland, OR. “But on those rare occasions when it snows here in Portland, the routes get set back and trucks take extra time. So having that logistical data really helps.”
Facilitation of logistics saves valuable time. “The speed of unloading with paperless applications is an improvement we see coming, which will allow carriers to progress through multiple deliveries without delays,” says Procacci’s Feighery.
Customers increasingly request online platforms. “Now, more than ever, the idea of placing orders online through an intuitive easy-to-use system is an expectation of doing business,” says PCF’s Fuson. “To remain relevant and provide the highest level of service to customers, we recognized the need to provide a more personalized online experience and build an online ordering platform for the future.”
In July, PCF launched its new digital shopping system. “It has intelligence that makes it more powerful, providing an unbeatable level of control and personalization for customers,” says Fuson. “The ability to anticipate our customer needs and allow them to order in a way that fits their business is important for better customer service, product management and innovation.”
Rubinette works with some wholesalers that have interactive technology for online ordering. “These systems, such as PCF, have made it very convenient,” says Alsberg. “It’s still important for us to talk with our sales reps to ensure the quality we want, but it does streamline the process. I love that there are options. Someone who wants to go online can go ahead and order that way, or if I need more detailed information, I can call my sales rep and ask questions.”
Brian Gibbons, produce director at Highland Park Market in Farmington, CT, with three stores, emphasizes the importance of wholesalers offering online ordering. “It’s great to be able to order from your computer, tablet or smartphone,” he says. “Also important is being able to see what’s in stock and look at prior or existing orders. Adding pictures and better descriptions of new items that hit the warehouse would be beneficial. Sometimes, we are guessing when ordering a new product.”
In the past year, D’Arrigo New York has enacted an online ordering platform for customers, and “it saves time and time is money,” says D’Arrigo.
“We’ve seen an uptake in sales for us and efficiency for the customer with our portal. We make sure we still have those human touch points of speaking to the customer to talk about quality, availability and attributes. Probably around 85% of our customers still have the conversation on the phone, and then order after.”
Katzman sees more customers increasingly using electronic ordering platforms. “We’ve arrived at a place where their systems and our systems exchange information with very little human interaction,” she says. “A lot of the retailers order on their own portal and it syncs with our system. We still have salespeople and buyers talking about the products, but the actual data entry becomes more efficient.”
One of the greatest efficiencies in online platforms is price accuracy, says Feighery. “In the past, we spent a great deal of time researching and correcting pricing errors,” he says. “That is eliminated with each transaction being confirmed and accepted by both parties.”
The quest now is to provide an excellent customer experience. “Our newly released website, with an integrated online ordering platform, provides improved customer ordering management, while making the process easier and more reliable,” says Jim Reynolds, PCF vice president of sales.
Reynolds says new shopping lists allow for personalizing and expediting order placement. “Pre-loaded delivery days prevent ‘lost’ shipments that are mistakenly set for off days,” he adds. “The system also identifies products requiring lead times and automatically schedules their addition to the next delivery day upon receipt.”
Using data to improve customer insights has been happening behind the scenes for quite some time, explains D’Arrigo, but now technology allows it to be more uniform.
“We can look at customer buying habits — what are the brands, when and where is it getting delivered, what is the quality,” she says. “We can better target what we offer or discuss with customers based on what we know about them from the data.”
Wholesale distributors armed with data insights are in a position to deliver more than produce, suggests Itule.
“They can really start to act as consultants to their customers,” he says. “In working with regional and national-level buying groups, we have more strategic conversations, ranging from trends we see with similar customers to store-level operations. Our sales and service teams can help customers refine their buying strategies, too. Especially for smaller customers, incremental savings means a great deal to their bottom line.”
Part of why PCF embarked on a digital transformation was to better position the company for improved data analysis by creating custom middleware that acts as a bridge between systems, explains Fuson.
“This bridge allows us to better understand customer data from the CRM, e-commerce purchasing, and even product and operations data for fulfillment, as well as direct interactions with customers,” she says.
Riggio’s custom-made software has drastically improved its ability to have accurate data. “This helps our purchasers understand inventory needs, our salespeople allocate product to their accounts, and our customers understand their own personal history on certain commodities,” says Riggio.
Itule shares the three categories customers regularly ask about when it comes to technology: ordering, security and traceability.
“Whether it’s API connectivity or applications, customers want to know they can order easily and seamlessly, and that it will work with the device and software standards operating in their technology environments,” he says.
Customers are looking for EDI capabilities and other ways to transmit data more efficiently, says Heartland’s Dietz. “They are looking for mobile ordering, including visibility of orders, deliveries and invoice history.”
Retailers without large infrastructure are also asking wholesalers for help in designing digital marketing content, according to Steffy of Four Seasons.
“Multi-store operators are looking to connect their Point-of-Sales-Register-Inventory systems with their wholesaler via EDI or other methods to manage orders, pricing and PLU/UPC info,” he says. “All of this drive for connection to the supply chain is on the quest to solve a problem or improve a process or reduce cost-waste in the retailer’s operation.”
Strube’s Fleming mentions how some customers use tablets when they’re buying. “They can do on-demand price adjustments and keep all their managers in the loop,” he says. “If I give them an opportunity buy, they go on their tablet and alert all their produce managers about what is coming.”
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Tech Term Glossary (Learning the Lingo)
API — Application Programming Interface: any software component that serves as an intermediary between two disconnected applications.
CRM — Customer Relationship Management: a set of integrated, data-driven software solutions that help manage, track, and store information related to your company’s current and potential customers.
EDI — Electronic Data Interchange: the electronic interchange of business information using a standardized format.
ELD — Electronic Logging Device: an electronic solution connecting to the vehicle’s engine and automatically recording driving activity and updating driver logs.
ERP — Enterprise Resource Planning: a type of business management software offering many of the same features as accounting software including tools for accounts receivable and payable, general ledger, expense management, reporting and analysis and more.
TMS — transportation management system: a logistics platform that uses technology to help businesses plan, execute and optimize physical movement.
WMS — warehouse management system: software that helps companies manage and control daily warehouse operations.