STRATEGIC MOVEMENT GIVES WHOLESALERS AN EDGE
As transportation and labor become more problematic and buyers look to mitigate risk and expense, wholesalers have developed a new playbook of services to meet customer needs, including cross-docking, forward distribution and other logistics services as well as ripening, repacking and serving as importer-of-record.
John Vena Inc. in Philadelphia continues to grow its operating service departments, JVI Ripening and JVI Repacking.
“The contract ripening and repack work we do outside our core JVI Wholesale business is indispensable to the success of those investments,” says Emily Kohlhas, director of marketing at John Vena. “Next year, we’ll continue to increase the amount of direct importing we do through a new subsidiary, JVI Imports. It really is essential that as a wholesaler you thoroughly vet and stand behind every grower you represent. We are only as great as our growers.”
General Produce Co. in Sacramento, CA, offers cross-docking, forward distribution services, acts as importer-of-record for imports and repacks produce. “All this is becoming more commonplace, particularly as trucking challenges persist and the cost of distribution continues to rise,” says Linda Luka, director of marketing and communications. “The more services we can offer in this arena helps build our partnerships with customers.”
Geography, product line and service are all areas of evolution for MC Produce in Montreal. “We distribute all across Canada,” says Maria Cavazos, president. “We’re also doing more packaging to provide more value-added, and we’re adding more items to our lines.”
TJ Fleming, vice president and director of sales at Strube Celery & Vegetable Co. in Chicago, reports a growing emphasis on cross-docking. “There is great cost associated with trucks especially if a truck sits for 6 to 7 hours,” he says. “We have scheduled appointments for customers we serve every day, so we find more and more grower/shippers send us their product to deliver to the final customer. This service is growing because we do it well, and it’s easier for us to do than our shippers.”
Business on both sides of the field drives new services, as evidenced by Indianapolis Fruit Company’s growing logistics and cross-docking ventures. “There are multiple retailers across the country who have fantastic facilities, but their customers are asking them to carry twice the items now, which is complex,” says Daniel Corsaro, vice president of sales and marketing. “They’re asking us to manage some of their more challenging items.”
Corsaro explains as larger retailers in the country put pressure on growers to offer delivered programs, it can be complex for growers to comply.
“Delivery for a grower can be cumbersome and expensive,” he says. “We’re making an effort to work with our grower partners to do ‘last-mile’ freight and storage because we’re already in those areas. This allows our shippers to service their customers, and we continue to play an extremely relevant role in the supply chain.”
The Four Seasons Family of Companies, Ephrata, PA, engages in cross-docking for retailers and grower-shippers, LTL freight service inbound and final-mile service through the Northeast and Mid-Atlantic.
“We also provide freight brokerage, cold storage, banana and avocado ripening, repack and bagging, and importing services,” says Jonathan Steffy, vice president and general manager. “The demand has been so strong for this menu of services using our talents and assets that two well-established sister companies emerged a decade ago and are doing quite well.”
Additional services focused on repack, fresh-cut and ripening continue to cater to targeted customer needs. “Wholesalers had invested in professional ripening rooms primarily used for bananas in the past, but with the growing popularity in Hass avocados, wholesalers are starting to get involved with large-scale avocado ripening programs,” says Steffy.
Repacking and breakdown is a growing part of Strube’s business because many stores don’t want a 60-count cilantro, according to Fleming. “They’d rather take a fresher 30-count and replenish by coming back in,” he says. “Our customers are more conscious of the amount of produce they buy at one time.”
Nickey Gregory Company in Forest Park, GA, enjoys growth in processing/fresh-cut.
“We created Family Fresh Foods as our own in-house fresh-cut processor,” says Andrew Scott, vice president of business development. “Our customers have a need for value-added products they can order one day, and we deliver the next.”
Facilitating The Local/Organic Huddle
Many wholesalers align themselves with local and organic growers, serving as a hub to help maintain and grow these programs. TJ Fleming of Strube Celery & Vegetable Co. points out during the local season, customers may send someone around to two or three farms and bypass the market completely, but there is a cost involved.
“You have to hire a driver, and you lose a guy for the day,” he says. “Instead, they should take an account of what it costs them, what’s the real value. The perceived value is there, but what’s the real value. And, if there is an issue, can they go back to the farmer and get a credit? Probably not.”
As an alternative, wholesalers offer coordination and planning for the local deal. Four Seasons, located in Lancaster County, PA’s rich growing region, plans for product to be grown specifically for its customers at neighboring Amish and conservative Mennonite family farms.
“Such planning with regional growers throughout Virginia, Maryland, Delaware, New Jersey, Pennsylvania and New York is essential to our shared success in the late spring through fall,” says Four Season’s Jonathan Steffy.
Strube also enjoys strong local grower/shipper representation. “We have local farmers who grow exclusively for us,” says Fleming. “We sit with them in the winter and plan the season, talking about what they can grow to give us both an advantage. For example, whether we can be the first ones in the season with gypsy peppers.”
Georgia’s Nickey Gregory aligns with local growers and is a big supporter of Georgia Grown and Fresh from Florida. General Produce’s California location yields a great network of small and large local growers.
“We provide grower profiles for point of sale so customers can appreciate who’s growing their local pears, persimmons and melons,” says General Produce’s Linda Luka. “These farmers participate with us to provide retail support when possible for outdoor farmers market events and product education and tastings.”
Wholesalers also act as an organic distribution center for stores limited in buying organic directly.
“We have our own line of packaged, bagged and break-case organics,” says Indianapolis Fruit’s Daniel Corsaro. “This provides an opportunity to customers who want to sell organics but are shy about unknown customer demand. Our Garden Organic program allows them to minimize the exposure for shrink, damage and rotation. Our break-case program allows customers to carry more variety than they would if they had to buy full cases. Our packaged product allows for extended shelf life and easy merchandising. Customers love that it’s all UPC, so they don’t have to worry about a cashier ringing it up correctly.”
Certified Organic represents about half of Four Seasons’ sales volume, reports Steffy. “Natural foods retailers and other retailers with 100% organic produce departments benefit from our broad organic offerings.
“The organic program also helps Four Seasons support retailers who are self-distributed in conventional to grow or supplement emerging organic programs.”