Chicago is an undisputed center of trade and commerce for the Midwest. As a hub for commodities from across the nation, Canada, and Mexico, business is never boring.
Brian Doyle, late author and onetime resident of Chicago, described the city as “rising out of the plains like Oz.” When you factor in over 8,000 restaurants, world-renowned chefs, over 200 supermarkets, and the expanse of the Chicago International Produce Market—it is indeed a magical place for buying and selling fresh food, especially fruits and vegetables.
A Market Fueled by Optimism
With economic recovery solid after the recession, unemployment in Chicago was at a record low last year, with the metro area adding more than 10,000 jobs in myriad fields, all of which are good for foodservice and by extension, the local produce industry.
Purposeful growth
Companies on the Chicago International Produce Market (CIPM) and nearby are almost, without exception, optimistic about the present state of business and the immediate future.
“We were very pleased with 2017,” reflects Mark Pappas, president of Coosemans Chicago, Inc. “The economy was strong and the street is more active than it’s been the last few years. We’ve acquired some quality shippers,” he adds, “and have hired new sales staff that has provided customers with fresh perspective.”
Tom Cornille, president and owner of George J. Cornille & Sons on the market, also believes business is on an upward swing. “Economics drives our business; the bullish stock market of 2017 did a lot toward building consumer confidence. When people are confident, they spend more.”
The wholesalers and shippers on the Chicago terminal market are also quick to credit positive growth to an ongoing commitment to customer service. Anticipating and fulfilling customer needs, then building and maintaining relationships, is the way to keep their businesses moving forward.
Daniel Suarez is president of Blue Island Wholesale Produce, located adjacent to the CIPM. He credits his company’s growth in the last year to a hands-on approach of carefully monitoring product coming in and getting it back out fast. “We take care of our 150 customers daily,” Suarez says. “They call in an order in the morning and we deliver in the afternoon; that keeps our customers loyal.”
Although Brian Holzkopf, senior procurement specialist at Ruby Robinson Company, Inc., is not on the actual terminal market but 30 miles away in the suburb of Buffalo Grove, the sentiment is the same.
Chicago is an undisputed center of trade and commerce for the Midwest. As a hub for commodities from across the nation, Canada, and Mexico, business is never boring.
Brian Doyle, late author and onetime resident of Chicago, described the city as “rising out of the plains like Oz.” When you factor in over 8,000 restaurants, world-renowned chefs, over 200 supermarkets, and the expanse of the Chicago International Produce Market—it is indeed a magical place for buying and selling fresh food, especially fruits and vegetables.
A Market Fueled by Optimism
With economic recovery solid after the recession, unemployment in Chicago was at a record low last year, with the metro area adding more than 10,000 jobs in myriad fields, all of which are good for foodservice and by extension, the local produce industry.
Purposeful growth
Companies on the Chicago International Produce Market (CIPM) and nearby are almost, without exception, optimistic about the present state of business and the immediate future.
“We were very pleased with 2017,” reflects Mark Pappas, president of Coosemans Chicago, Inc. “The economy was strong and the street is more active than it’s been the last few years. We’ve acquired some quality shippers,” he adds, “and have hired new sales staff that has provided customers with fresh perspective.”
Tom Cornille, president and owner of George J. Cornille & Sons on the market, also believes business is on an upward swing. “Economics drives our business; the bullish stock market of 2017 did a lot toward building consumer confidence. When people are confident, they spend more.”
The wholesalers and shippers on the Chicago terminal market are also quick to credit positive growth to an ongoing commitment to customer service. Anticipating and fulfilling customer needs, then building and maintaining relationships, is the way to keep their businesses moving forward.
Daniel Suarez is president of Blue Island Wholesale Produce, located adjacent to the CIPM. He credits his company’s growth in the last year to a hands-on approach of carefully monitoring product coming in and getting it back out fast. “We take care of our 150 customers daily,” Suarez says. “They call in an order in the morning and we deliver in the afternoon; that keeps our customers loyal.”
Although Brian Holzkopf, senior procurement specialist at Ruby Robinson Company, Inc., is not on the actual terminal market but 30 miles away in the suburb of Buffalo Grove, the sentiment is the same.
“We’re very blessed to have experienced an increase in business over the last year,” Holzkopf shares. “Our staff is focused on taking care of our customers, whether it’s locating that hard-to-find product or consultative selling. As far as we’re concerned, if you’re not growing, you’re dying.”
The Center of the (Produce) Universe
In its current location since 2001, the CIPM remains the largest terminal market in the Midwest and is just minutes from three major interstate highways. It is comprised of a million cubic feet of refrigeration space, enclosed docks, and ripening rooms, and offers plenty of services like custom repacking and load consolidation to customers.
Merchants continue to source produce from all over the world, as well as seasonally from local growers. And despite all the technological advances and use of the internet, email, and texting, several produce suppliers commented on the importance of getting out of their respective offices and stalls to walk the market on a daily basis.
Advantages and improvements
“The advantage of being on the market is that you have a captive audience,” quips Pappas. Both he and Cornille agree that competition with their fellow merchants makes them better purveyors of all things produce.
“You have to know what your competitors are doing,” contends Pappas. “We’re customers as well—we buy a lot from the other vendors and have good relationships with all of them on both sides of the sale. We’re sitting at the hub of the Midwest—the center of the universe.”
Although Ruby Robinson’s warehouse is not on the CIPM, the company maintains an office on the premises. Holzkopf enjoys doing business on the market and lauds the many advantages. “Our distributors buy from the market and even with all the available technology, there is nothing like seeing and touching the product and talking to everyone. There’s a great mix.”
Better yet, Holzkopf observes, “Scheduling deliveries in and out of the market has improved in recent years. Trucks used to just show up; now it’s much more organized thanks to technology. Everyone knows when products are coming in and much of it is presold, so it moves fast.”
He does lament one disadvantage: the hours. “I have to get up so early!”
Suarez, whose company is just a block down from the CIPM says, “If I were younger, I’d want to set up my business on the market. Big buyers from out of state come to the market itself, but being nearby is convenient and manageable. We can keep better control.”
Keeping Up with Trends
Though Chicago cuisine has long been associated with artfully presented hot dogs, legendary steakhouses, and its well-known deep dish pizza, today’s food scene is a patchwork of ethnic and lifestyle choices with anything and everything a foodie could desire.
Millennials have taken health, wellness, and sustainability to new levels and can find plenty of fruits and vegetables as well as vegetarian and vegan fare. There are restaurants and hole-in-the-wall eateries with creative fusion dishes, and still plenty of steakhouses, hot dog houses, and Michelin-star rated establishments.
Awareness and attitude
Holzkopf believes government campaigns to raise awareness about healthy eating and the half-the-plate initiative is helping too. Along with more awareness, there are a number of trends affecting demand, which include local production, sustainability, organics, demand for more ethnic items, and meal kits.
“All of these factors are influencing what consumers want today,” continues Holzkopf. “With television shows, articles, blogs, and the internet, once obscure items such as turmeric and bok choy are becoming (popular) commodities.”
Vince Gregosanc, Jr., produce buyer for Battaglia Distributing Company, Inc. on the market, observes, “Baby lettuce mixes and mesclun have become commodities due to millennials’ penchant for healthy eating. We’re also seeing people finding new uses for more traditional ingredients—such as spinach on burgers and arugula mixed into pasta or as the green on sandwiches.”
José Luis Vega of La Galera Produce, LLC, located on the market, acknowledges the influence of consumer trends and their effect on demand: “Different ethnic cuisines, promotion of locally grown produce, and organics are all factors; people are also finding that meal kits are cost effective and convenient, and that’s moving more volume.”
Ron Pomerantz is president of Benny’s Farm Fresh Distributing Com-pany, located in Wilmette, a northern suburb of Chicago. The company also has a location in Nogales, AZ to source directly from Mexico. He cites the example of heirloom tomatoes. “We first came across them eighteen years ago; we found some small organic growers in San Francisco and would ship tomatoes by air—they were very expensive at the time,” Pomerantz remembers. “People thought I was daffy when I encouraged greenhouse growers to grow them. After a while, people grew to demand heirlooms with their extraordinary flavor and variety.”
Ethnic, specialty produce, and availability
Chicago has always been a melting pot, but even more so in the last twenty years with the influx of Latino, Asian, African, Middle Eastern, and East Indian immigrants joining the traditional mix of Italian, Polish, Irish, and other ethnic populations. Consumers and chefs want foods from their homelands, so the CIPM’s offerings have changed to meet the demands of diversity.
Hispanic foods, once fairly exotic in the Midwest, are now staples. Suarez, who does a robust business in Mexican imports says his customers won’t settle for anything but the best in each category. This means sourcing Mexican-grown jalapeños, tomatoes, and bell peppers; onions and potatoes from Idaho; and as much local, seasonal produce as possible.
FRESH FORUM Do you think the Trump presidency is affecting your business or the industry as a whole?
Mark Pappas – Coosemans Chicago, Inc.
The country is divided and I don’t want to divide our customers. … [We have] a friendly business environment and people will always need to eat; U.S. business and growth are stronger than any administration.
Vince Gregosanc – Battaglia Distributing Company, Inc.
I don’t see it affecting us directly; even in the bad economy, we did okay. We saw more focus on price—people are a little more frugal.
Brian Holzkopf Ruby Robinson Company Inc.
America is not just one person; we change with every president. America has always been great.
Tom Cornille – George J. Cornille & Sons
Officials have the responsibility for the safety and well being of constituents. The last administration really pushed produce; traceability…made growers more accountable. We’re a better, safer, healthier world for it.
Daniel Suarez – Blue Island Wholesale Produce, Inc.
We’ve been doing this for thirty-eight years. We all still have to eat. The president has scared some of our customers–some are concerned about the [border] wall.
He goes on to explain that high demand for avocados in Europe and Japan has impacted import pricing and domestic volume. “For some time last year, avocados were $100 per box,” Suarez recalls. “Instead of fifty loads a year, we brought in forty,” he says, and conditioned the fruit on the premises in ripening rooms.
One unwelcome trend is growers going direct and eliminating wholesalers. “One big grower we worked with for twenty years started going directly to our customers,” comments Pomerantz. “They lose sight that distributors take the burden off growers by putting orders together. Smaller customers don’t try to circumvent distributors as much; they realize they can get a better deal in most instances and especially when they run short.
“We can drop-ship most things and can access warehouses in Nogales, AZ and McAllen, TX,” he continues. “These are just some of the services we provide as a distributor.”
Shifting Retail Landscape
The departure of Dominick’s and bankruptcy of Central Grocers along with the growth of online ordering continues to reshape Chicago’s bricks-and-mortar retail scene.
Change is the only constant
Last August, the Chicago Tribune reported there were 262 grocery stores in the Windy City and its surrounding suburbs, the lowest number since 2009.
With closures, consolidation, and more consumers trying online shopping, retailers have had to step up their game to stay in business. Remedies have included renovations and adding cafés (becoming a ‘grocerant’ or combined grocery store and restaurant) with wireless capabilities, getting into delivery or curbside pickup, reducing square footage, or adding or removing certain types of products.
But like a cleared patch of old growth forest that allows new young trees to flourish, some in the business see the consolidation and disappearance of big players like Dominick’s as an opportunity for smaller retailers or newer entities to get into the marketplace. “Stores have not so much dwindled,” opines Vega, “but increased in numbers and strength.”
Kroger made news by announcing its intention to stock hardware items from Ace on its shelves, while other retailers want to reduce SKUs or streamline the shopping process with scan-and-go technology—putting a new spin on self-checkout. Illinois favorite Jewel-Osco is retooling stores and has added delivery to attract new shoppers and retain loyalists.
Amazon, Whole Foods, and 365
The elephant in the room is Amazon’s purchase of Whole Foods Market, which may affect grocery shopping in many different ways. Though Amazon has said online sales of Whole Foods private label products have soared, it’s unclear how the acquisition will impact the retail scene in other ways such as curbside pickup or the in-store experience.
Further muddying the waters is Whole Foods’ fledgling 365 or less-is-more concept, which has had success in other states and is due to open in Evergreen Park, a southern section of Chicago’s metro area.
These stores are smaller than traditional Whole Foods locations, have fewer employees, lower prices, and a lack of bells and whistles—like German retailer Aldi (which has 20 stores in Chicago neighborhoods and more in the outlying suburbs). And although Amazon is not abandoning the 365 concept, it appears to be a lower priority at this time.
Food as entertainment
A powerful example of the grocerant concept, straddling the line between retail and foodservice is Eataly, Mario Batali’s multiunit Italian-style marketplace.
Designed to “cook what they sell, and sell what they cook,” locations in Chicago, Los Angeles, New York, and San Francisco boast upwards of 60,000 square feet of restaurants, takeout counters, and groceries, with well stocked meat, bakery, and produce departments.
CHICAGO INTERNATIONAL PRODUCE MARKET AT AT GLANCE Contact Information:
Address: 2404 S. Wolcott Avenue, Chicago, IL 60608-5300
Email: info@cipm.org
Website: www.chicagoproducemarket.com
Hours: Monday through Friday: 8 am to 12:00 pm
Most merchants have reduced hours on Saturday, and are closed on Sunday (individual business hours may vary)
Merchant Directory: Atom Banana, Inc. 312-226-4669
CeeBee Cartage 312-243-3205
City Wide Produce Distributors, Inc. 312-666-6190
Coosemans Chicago, Inc. 312-226-6972
Dietz & Kolodenko Company 312-666-6320
Everyday Fresh Produce, Inc. 773-446-4930
Evergreen International, Inc. 312-421-6434
George J. Cornille & Sons, Inc. 312-226-1015
J.L. Gonzalez Produce, Inc. 312-433-2335
JAB Produce, Inc. 312-226-7805
Jack Keller Company 312-243-4019
Jack Tuchten Wholesale Produce , Inc. 312-226-4536
La Galera Produce, LLC 773-446-6161
Mandolini Produce Company, Inc. 312-226-1690
Mission Produce, Inc. 805-981-3655
Original Chicago Produce Company 773-376-5454
Panama Banana Distributing Company 773-446-1000
Strube Celery & Vegetable Company 773-446-4000
United Fresh, LLC 773-446-6820
Another theme, food halls, are creating a food-and-fun atmosphere in Chicago. The latest, built by Time Out, the leisure publication and website, is a 50,000-square-foot facility in the Fulton Market district. Vendors will line the walls adjacent to a 600-seat dining area. Here, customers can eat, plan, and shop for meals as entertainment.
Lastly, the prevalence of subscription meal kit delivery services like Blue Apron, Hello Fresh, and Plated (which was purchased by Albertson’s and can be picked up in its stores) is also gaining steam.
Are all these fresh food-related incarnations good or bad for wholesalers? Holzkopf, for one, views the entities as an extension of foodservice, and as such, consistent with growth in the industry.
Recalibrating Organics
The rate of growth for organics is always a topic of some controversy, especially between the East and West Coasts, and the CIPM is in the middle. Some merchants sell plenty of organics, others have experienced very slow growth.
“The organic category has grown in the last 20 to 25 years,” confirms Cornille. “Not only are more growers using organic cultivation techniques, but many growers have found that going fully organic has become more cost effective and therefore is more affordable to customers.”
“On the retail side, stores are devoting more shelf space to organics and promoting them more,” weighs in Holzkopf. “Even foodservice operators, where organics have been less of a factor, are starting to realize they need to menu organic items. Organic spring and salad mixes are becoming increasingly prevalent in that environment.”
Pomerantz sees organics as important, but says growth is modest. “Our business in organics is increasing, but not as quickly as it was—from about 25 to 33 percent.”
The rise of aquaponics?
Jack Marchese, vice president for V. Marchese, Inc., a wholesaler in nearby Milwaukee, says, “About 5 percent of our business is in organics, mostly spring mix, arugula, and baby spinach. What I do see as the wave of the future is aquaponics,” he says, “a system of cultivating vegetables using the water from aquaculture—the raising of fish, crayfish, or prawns in tanks utilizing a symbiotic environment. In the next 20 years, 25 percent of greens may be produced this way,” Marchese predicts. “There’s a company called Superior Fresh [in Northfield, WI] that has been able to cultivate freshwater salmon and tiny vegetables in the same system.”
Marchese says companies in California and Canada are already growing hydroponic strawberries. Like aquaponics, hydroponics use highly oxygenated, nutrient-rich water to continuously bathe the roots. Both systems boast better plant growth rates than soil.
“That’s going to be a bigger part of the industry in the future,” asserts Marchese, “and we’ll do as much as we can to support that—it’s a clean, sustainable way to produce food.”
Greenhouse goodies
Whether suppliers agree with Mar-chese about aquaponics, many already source greens, peppers, and cucumbers from controlled environments that extend the growing season, knowing their customers appreciate not only the consistency in size, shape, and flavor, but overall quality.
Cornille agrees with the need for more sustained greenhouse-grown produce, as it can provide more consistency in supply as well. “Between flooding, hurricanes, heat, drought, and frost—a greenhouse serves as a substitute environment.
“Hurricane Irma in Florida knocked out the tomatoes we would’ve had in the fall of last year,” Cornille continues, adding, “the use of hothouses helps ensure supply. However, when it comes to hothouse vs. field farming, the farmer/forager is (still) the most important part of our business.”
Meeting & Overcoming Challenges
The common threads of doing business in the fresh produce industry are optimism and problem-solving. Chicago optimism, as evidenced by steadfast faith in the beloved Cubs (who finally won the World Series in 2016 after a decades-long drought) could well be the mantra of those who deal in produce for a living, The “there’s always next year!” attitude prevails, as being resilient is simply part
The common threads of doing business in the fresh produce industry are optimism and problem-solving. Chicago optimism, as evidenced by steadfast faith in the beloved Cubs (who finally won the World Series in 2016 after a decades-long drought) could well be the mantra of those who deal in produce for a living, The “there’s always next year!” attitude prevails, as being resilient is simply part of doing business.
Shortages and contingency plans
According to Gregosanc, the industry’s top ongoing challenges include “weather and crop shortages—last year, we weren’t able to get peppers out of Florida—there weren’t enough trucks. It’s complicated by the fact that we don’t bring in directly from Mexico, but have to buy through a third party when we need to. Our usual customers will get the nod first; that’s how we keep them loyal.”
Gregosanc continues, “To overcome the challenges we face, we stay on top and in front as much as possible. We carefully watch Mother Nature and book before extreme conditions like snowstorms. We have one plan, then a contingency plan.”
Cornille implements a similar strategy. “If it’s really important, ship it two ways,” he says. “Be redundant and flexible; turn over the next stone,” and lastly, he emphasizes, “NEVER let the chef down.”
The next (big?) thing
For Pappas, it’s about forward thinking. “Business is good but different; we can’t operate in 2018 like we did in 2017. For example, we have to provide core items like portabella mushrooms, fingerling potatoes, and mesclun which were once specialties but are now commodities, while always keeping an eye out for the next future commodity, like arugula.
“To be successful in 2018,” Pappas observes, “we must identify what customers want and who they are. With mergers and new players in the area, our customer base is always changing. We have to identify that business, and keep looking ahead.”
When it comes to doing business in Chicago, Cornille sums it up this way: “We’re reaping the benefits of a market with better accessibility. These days we can reach every nook and cranny of the business and all pockets of ethnicities. We’ve learned to change and thrive in a diverse, changing industry.”
And part of rolling with this ever-evolving industry is looking to the future. “The new generation has been adapting well in the business by implementing faster communication, faster shipping, and more efficient technology—and this will take them and our industry forward.”
