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Bright Lights and Big Business

The growing allure of Dallas for the industry
Dallas

A New Kid on the Block
The region has also been invaded by Barrington, IL-based Aldi (short for ‘Albrecht Discount,’ a name established by its German corporate parent, Aldi Süd), which has significantly increased its fresh produce items, reportedly offering more than 70 varieties of conventional and organic fruit and vegetables.

In December 2013 Aldi announced an aggressive expansion program to open as many as 650 new stores nationwide over the next five years, adding to the nearly three dozen in the Dallas-Ft. Worth area.

The less-is-more approach of Aldi is in rather stark contrast from the hip, artsy attitude of its step-sibling, Trader Joe’s, Inc. (owned by Aldi Nord), which only has three stores in Dallas.

Despite the plethora of stores, Juan Manuel Ibarra, CEO of Marengo Foods Company, LLC, a grower and supplier specializing in greenhouse vegetables, doesn’t believe the retail market is overly competitive. “From what I can tell, there is stronger competition between the larger traditional retailers, expansion by Kroger, and a consolidation (or buyout) in the case of Albertsons and/or Tom Thumb.”

As a newcomer, however, Aldi may prove to be the exception. Overall pricing, Ibarra explains, hasn’t been too aggressive with most grocery chains, though Aldi is changing the game. “They operate at such a low cost they’re able to gain market share due to the prices they can offer.”

The good news for Dallas consumers, and shoppers across the state, Ibarra notes, is quality: “the quality is very good in general, being so close to the shipping points in McAllen and only two days away from Nogales in Arizona.” On this point, he believes Aldi falls short, “as far as freshness and assortment of products.”

Ups and Downs
A new Dallas Farmer’s Market and plenty of new retailers aren’t the only developments on the metroplex’s horizon. According to Ford, one of the biggest changes he’s noticed in the Dallas produce industry is the competition.

These days, he’s not just competing for business with other brokers, he’s up against anyone who can make a phone call. “Growers, small brokerage companies, shippers—everybody tries to sell direct now,” he says. “That makes our job more difficult.”

Ibarra finds transportation can sometimes be an uphill battle: “The biggest challenge we have right now is the availability of transportation out of southern Texas due to increased costs,” he explains, adding, “there seems to be a shortage of drivers and trucks, especially with the opening of the port of McAllen receiving a larger portion of winter shipments coming out of northwestern Mexico-that traditionally would have been exported through Arizona.”

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