Business isn’t booming at every produce operation in the Los Angeles area, but most companies seem to be keeping their heads above water, and some report significant sales increases.
At the Los Angeles Wholesale Produce Market, sometimes called “the new market,” executive director Richard Gardner said through an associate that “business is the same” this year.
The market has welcomed a new grower-shipper, he said, Avondale, Pa.-based Cardile Bros. Mushroom Packaging Inc.
It’s tough going for some tenants, though.
“The industry is a victim of the economy,” said Steve Cantor, partner and director of sales and produce for Produce International, Los Angeles.
He attributed some of the sluggishness to the low growing temperatures that slowed production of strawberries, which the firm is known for. But he said the weak economy and changes in major retailers’ buying patterns have put a crimp in the market’s business.
“Business isn’t there like it used to be,” he said, since large supermarket chains started bypassing the market and dealing directly with shippers.
“We’re basically catering to the ethnic groups,” he said, “who have smaller, independent markets.”
Meanwhile, even though the parent company of the nearby Seventh Street Market filed for bankruptcy last year, that market continues to make improvements and has embarked on a construction program, said Steve London, property manager for Los Angeles-based Meruelo Maddux Properties.
The market added seven units in an area that was closed off after a fire in 2006 and plans to add eight more, London said.
The company reduced the base rent at another produce market that it owns at Eighth and Alameda streets after the facility began to experience high vacancy rates.
Since then, “It’s been building back up,” London said.
The company did not have to reduce rates at the Seventh Street Market, but it did put a freeze on rents at that location.
“We’re being responsive to the economic issues,” London said.
At Commerce, Calif.-based Consolidated West Distributing Inc., which specializes in apples and handles some cherries and pears, marketing manager Joel Young said business is better this year than it has been for the past two years.
However, he said the cherry business “has been a struggle all year” as sellers — not growers or packers — bring subpar cherries into the market and sell them for cash to wholesalers and small retailers.
This, he said, has “affected the commercial aspect of the cherry business in Los Angeles.”
Commerce-based Fruit Distributing Corp. of California had its biggest sales year in 2009, said owner-president Jeff Weisfeld, “which in this down economy is really saying something.”
Business is up 30% at Perimeter Sales and Merchandising, Los Alamitos, Calif., said Pat McDowell, vice president of produce.
He attributed the increase to new product lines and a system that enables members of its staff to enter orders on the spot with scanners during store visits when they see voids on the shelf.
Scott Lehman, director of sales and marketing for AMS Exotic LLC, Los Angeles, which markets the Earth Exotics line of baby vegetables, said he is pleased that business is holding steady at AMS at a time when some companies have seen sales decline.
“We’re seeing the category continue to show double-digit growth,” he said.
“Once the global economy starts to turn around a little bit more, I think we are going to see an explosion in our little niche of the category.”
The organic segment also remains strong, said Nikki Nagel, sales manager for Better Life Produce Inc. in Los Angeles.
“There are more people choosing to buy organic food,” Nagel said. “I think we’ll have our busiest summer to date.”
While some firms are experiencing more slow pays than in the past, others say their customers are paying their bills on time.
“(Produce International) got stung by a couple of customers,” Cantor said, to the tune of hundreds of thousands of dollars.
“You have to be selective about who you sell to,” he said.
But at Fruit Distributing Corp., Weisfeld said the number of payments 60 days or more past due was down by one-third in 2010 compared with 2004.
Some companies are using the weak economy as an excuse for late payments, said Wes Liefer, partner in Pura Vida Farms, Brea, Calif.
“The dollar is at the cash register when they sell (their product),” he said. “They should be able to pay their bills on time.”