(May 20) MINNEAPOLIS — A young, educated consumer base and a strong emphasis on local and organic produce have helped the Twin Cities stay strong despite economic pressures facing the U.S.

How long the local economy can stay immune to the effects of consumers tightening their wallets is keeping the local produce industry on its toes.

“It’s slowing down,” said Kevin Hannigan, director of operations, purchasing and marketing for J&J Distributing Inc., St. Paul. “You go from aggressive to neutral very fast.”


The first sign of retailers cutting back has come from pack sizes, he said.

“Five-pound clementines have turned into 3-pound clementines,” he said. “Consumers are buying less. They say the produce business is recession-proof because everybody’s got to eat.”

That may be true for potatoes and onions, he said, but not all products are immune.

“When stores are filled with high-end stuff like organic pluots from Argentina and clementines from all over the world — those aren’t recession-proof.”

Paul Piazza, Sr., president of Minneapolis-based Minnesota Produce Inc. said it’s harder to deal with extras lately.

“Everyone is doing the bare minimum of business and keeping the bare minimum of inventory,” he said. “It used to be that if you had something extra to sell you could call people and use your ability as a salesman and make something happen, talk someone into carrying a little extra inventory. Nowadays, that’s been eliminated.”

Hannigan agreed.

“We’re very cautious about what we’re buying,” he said.

The hometown giant, Eden Prairie-based SuperValu Inc. leads the market with its Cub platform, which makes it difficult for smaller businesses to find outlets, Piazza said.

“Cub is dominant and SuperValu takes care of a lot of it so we have no access,” he said.

Hannigan said it’s a tough market for small independents, unless you’re in the natural food co-op sector.

“Two out of three guys I know that tried to open a 25,000-square-food independent store didn’t make it,” he said. “Cub is so dominant. SuperTarget is so dominant and Wal-Mart is right on their heels. Lunds and Byerlys also do a phenomenal job.”

Bentonville, Ark.-based Wal-Mart Stores Inc. so far hasn’t been able to open a supercenter within the Interstate 494/694 loop that encompasses the majority of the Twin Cities metro area.

“I heard it may happen this year,” Hannigan said.


Frank McCarthy, vice president of marketing for Bridgeport, N.J.-based Albert’s Organics Inc., said the Twin Cities market differentiates itself with a strong focus on local produce.

“The advantage of wholesaling produce in Minneapolis is that local demand for produce is very high,” he said. “The disadvantage is the proximity of the Chicago Wholesale market that provides stiff competition when local product is not available.”

The Twin Cities, despite the economic slowdown, is a haven for produce, he said.

“The combination of affluence, a cooking culture and a large population of educated young people with money to spend eating out makes the Twin Cities a produce town,” McCarthy said.


The local economy could get a nice boost from an unfamiliar source — the Republican National Convention.

The RNC is scheduled for Sept. 1-4 at the Xcel Energy Center in St. Paul. An estimated 40,000 delegates, media representatives, volunteers and lobbyists are expected to descend on the Twin Cities.

While Internet bloggers have had fun with the fact that Minneapolis/St. Paul hasn’t been known as much of a convention town, jokingly referring to it as a “Cold Omaha,” the local trade is looking forward to extra mouths to feed, said Tom Bergin, Jr., vice president of St. Paul-based Bergin Fruit Co.

“We just had a briefing about it today,” he said on May 2. “It’s pretty exciting. We’ve never hosted an event like this.”

In fact, the Republican Party hasn’t been strong in Minnesota since the state last went red in a presidential election in 1972.

September will be a busy time, Bergin said.

“It coincides with the start of the school foodservice season, and the end of the state fair,” he said. “Foodservice and retail both will be strong.”


Recalls and food safety aren’t taken lightly by Twin Cities shoppers. Some of the first reported bags of tainted spinach in the E. coli outbreak of 2005 were sold in Twin Cities stores.

“Consumers in the Twin Cities have become savvier about recalls and food safety,” said Dean Balzum, produce specialist and merchandiser for Woodbury-based Kowalski’s Markets.

That doesn’t mean they are quick to judge, he said. During a recent FDA inspection of cantaloupe in March, Balzum said he received few inquiries.

“The whole recall thing has gone full circle,” he said. “Two years ago, we’d have customers calling during the night or the next morning, but now they kind of roll with it.”