TORONTO — Though the Canadian dollar seems stuck at par with the U.S., and more competition looms from U.S. retail giants, the Toronto market remains strong.
“I think the wholesale industry is doing well,” said John Russell, president of J.E. Russell Produce Ltd., which operates from the Ontario Food Terminal.
“We’ve done what we had to do over the last three years to stay competitive and maintain good relations with growers throughout the world and locally,” Russell said, “while providing levels of quality and service the independents need to survive.”
Even the chain stores are starting to visit the terminal a little more often, said Anthony Pitoscia, vice president of Fresh Advancements Inc. He credits the wholesalers themselves with becoming more creative in the past few years.
“We’re starting to find things that the chain stores aren’t necessarily doing on their own or can’t do, and we’re traveling the world to find unique items,” he said, using his Canadian exclusive on French Honeycrisp apples as an example.
One of the biggest challenges for importers has been the “wild” weather in growing areas, said Dan Martin, Sysco Canada’s director of produce for eastern Canada.
He said the cost of freight and fuel continues to add pressure to Sysco’s distribution, both inbound and outbound.
On the foodservice side, Ontario is still a little sluggish, Martin said, but it remains stronger than the U.S.
“We continue to grow our sales in a tough market,” he said, “so it means we’re picking up some market share.”
A high minimum wage and a dollar flirting with par puts Ontario producers at a market disadvantage, said Peter Streef, president of Streef Produce Ltd., which sells fresh vegetables from his family’s farm as well as other local and Florida growers.
“There’s a lot of buzz about supporting local,” said Streef, who’s bringing in new Ontario growers of sweet potatoes, peaches, corn, peas and squash to market, “but at the end of the day it still boils down to quality and competitiveness.”
He said f.o.b. prices in Michigan or Ohio are usually the benchmark for what Ontario growers can get.
“We try to get a premium on local produce — and we do in some cases,” he said, “but usually the price is based on what’s happening in North America. If the f.o.b. on asparagus is $34 in Michigan, for example, we’re not going to get $50 here.”
When the Canadian dollar is above par, as it has been recently, Streef said it creates more pressure on prices and makes it harder for local producers to make a profit.
Within the past two months, Ontario has been rocked by two major announcements from south of the border.
First, U.S. discount retailer Target announced it is purchasing 220 Zellers stores from the Hudson’s Bay Co. and plans to open 100 to 150 Target stores in Canada.
There’s no word yet on the location of the stores or if they will have produce departments.
Late last month, Wal-Mart Stores Inc. announced it will add 40 Canadian supercenters this year, all with full grocery aisles.
The company said the new stores, part of a $500 million investment, will be created by renovating some existing stores, relocating others and building new stores. Wal-Mart opened its first Ontario supercenter in 2006.
“It’s going to be a battle of the giants,” said Steven Weinstein, vice president of Canadian Fruit & Produce Co. Ltd., “and the consumer will end up being the winner.”
To compete, Weinstein said Toronto wholesalers will have to work harder to expand their product lines and maintain their product expertise.
“Large companies want to streamline their supply, and that means cutting out the middleman,” he said. “In the meantime, we have to be a reliable source of product. If they need it, we have 20 to 30 trailers on hand. It’s a tightrope walk.”