In years past, produce companies in the Los Angeles area were happy to report that business was on the rise.
This year, companies still are happy, but their expectation level has lowered significantly. They’re happy that they and their customers still are in business.
After 22 years, Bandwagon Brokerage, Los Angeles, still is around, and so are most of its customers, said president Dennis Berman. However, their orders are smaller, buyers aren’t ordering as often and they’re not buying as much product on speculation as in the past.
“For some unknown reason, our receivables have been better than they’ve ever been,” Berman said.
That’s not the case at Fruit Distributing Corp. of California, Los Angeles, where owner-president Jeff Weisfeld said collections are slower, and that “slows the process down.”
Weisfeld said he’s had to put some of his own money into the company to keep things current.
His customers aren’t going out of business, he said, but they have been cutting back.
Weisfeld is pleased that the local housing market is showing signs of improvement, but he doesn’t think unemployment is even close to bottoming out.
“Things will get worse before they get better,” he said.
Even in cases where movement is up, gross revenues are flat or down, said Paul Vogel, managing member at QSI LLC, Los Angeles.
“We actually have had an increase in business over the past year,” he said, but he has found that the cost per carton is down sharply. “That is one thing that is concerning absolutely everybody.”
The sprout-growing operation and packaged processed vegetable business at Caldwell Fresh Foods, Maywood, Calif., is booming, said Maurie Thomas, general manager.
The sprout business has benefited from some salmonella outbreaks at other companies, he said.
Caldwell Fresh Foods conducts extensive laboratory testing that would detect any problems before they hit produce shelves, Thomas said.
“We guarantee that we’re not going to have a recall,” he said.
Business also remains strong at Frieda’s Inc., Los Alamitos, Calif., where the company refuses to participate in the recession, said Jackie Caplan Wiggins, vice president and business development manager.
“It’s all in the attitude,” she said.
A number of the firm’s customers are putting more emphasis on the specialty category and selling more specialty produce at a time when one might think that they would be cutting back, she said.
That may be because some consumers are splurging on affordable luxuries — like high-quality produce — rather than taking fancy vacations or indulging in other expensive pastimes, she said.
“We’re still selling our product,” she said. “There is a market out there.”
The economic picture is especially “horrific” in California because of excessive fees and taxes on businesses, Weisfeld said.
“It’s murdering,” he said. “Here in Los Angeles, we’re losing all sorts of production. They’re running away from California.”
Although Gov. Arnold Schwarzenegger seemed to have some good ideas when he was first elected, his original agenda seems to have fallen by the wayside, Weisfeld said.
“We need a businessman in office immediately,” he said.
Meanwhile, competition is getting intense, Vogel said.
“Everybody is hustling a lot harder and looking for an edge,” he said. “Everybody’s fighting for the dollar.”