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Miami

A tropical produce paradise where trade sizzles
Miami

In Florida, particularly South Florida, much of the M&A action revolved around banks and financial institutions in 2014, and though this has not directly affected the growing, selling, or shipping of perishables, all suppliers and receivers have relationships in the financial community. For brokers and those who trade internationally, banks are a crucial piece of the puzzle in securing shipments and guaranteeing payment from foreign buyers or sellers.

Upward Mobility 
Despite the challenges they face, many Miami produce suppliers have enjoyed a surge in business in the past year.

“We’ve been on a very steady upward trend,” says Tannehill, who recently celebrated the three-year anniversary of Global Perishable Services. “Our current customers have also grown their businesses, so it seems as though the economy is in a stronger uptick.”

Cabrera says business has been booming for Bayshore Produce as well. “Business was very good in 2014. We are on pace for double-digit growth,” she enthuses. Because the company has recently started some new import programs, Cabrera expects sales to increase significantly in 2015.

A Bright Future
The majority of Miami produce professionals remain optimistic about the future. After all, Miami enjoys one priceless benefit over other regions: location, location, location (not to mention a plethora of sunshine and consistently warm temperatures).

As a gateway to America, Miami has quick and easy access to perishable items from around the world, and variety, as they say, is the spice of life. “Consumers within this market value a wide range of produce items available year-round from a variety of growing regions,” Jost comments. “They also have a strong appreciation for a good mix of offerings from both national chain stores and small regional markets.”

Further, handling such a broad range of products can help suppliers increase their customer base while maintaining a steady flow of both product and profit. “As these particular consumer trends continue to shape Miami’s produce landscape,” Jost adds, “suppliers who provide comprehensive and flexible business solutions will be able to remain competitive in this market despite the changes.”

In other words, the forecast for the Miami produce trade is a lot like the typical South Florida weather: sunny and hot.

Image: Shutterstock

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Miami, nicknamed the “Magic City,” is a tropical produce paradise. A little more than a century ago, this colorful metropolis seemed to appear out of thin air. Since then, the Miami metro area has grown from a mere 1,000 residents to more than 5.5 million.

Miami-Dade County, which spans more than 2,400 miles, is home to 2.6 million residents with Hispanics or Latinos representing nearly 67 percent of the population. More than half of the county’s residents are foreign-born. With such a diverse population, an ever-expanding port, and a strong focus on global economies, this vibrant city has quicklygrown into a critical hub of international trade—and a major player in the produce trade.

Miami-Dade isn’t the only South Florida area on the rise; neighboring counties are also booming. For example, Broward County’s population increased by 5.2 percent between 2010 and 2013 to more than 1.8 million residents. Monroe, Palm Beach, and Collier counties also continue to grow at a rapid pace.

“The South Florida marketplace continues to be a melting pot of cultures and backgrounds,” comments Dan Jost, southeast region general manager for Robinson Fresh in Miami. And this distinction is why it’s so important for the area’s suppliers to “offer this diverse group of consumers plenty of choices.”

Growing Trends
Thanks to the region’s tropical climate, year-round growing season, and colorful assortment of crops, South Florida’s agricultural industry is flourishing. Miami-Dade agriculture employs more than 20,000 people and produces more than $2.7 billion in economic impact each year.

Located about 20 miles southwest of downtown Miami, Redland is one of Florida’s most prominent growing regions. This area has become increasingly famous since the “Redland Raised” branding program launched in 2009 to promote locally grown produce throughout the state.

The Redland region and other growing areas throughout South Florida produce a cornucopia of tropical fruit—from mangos, carambola, passion fruit, and papaya to lychee, guava, dragon fruit, and plantains. With more than 12,000 acres in production, tropical fruit is an economic powerhouse for the entire state of Florida.

Miami-Dade County is also the primary production region for fresh-market snap beans, representing over 21,000 acres and 57 percent of the state’s crop. Production usually peaks in March and April, with ample supply well into May. Other major vegetables grown in the county include okra, cabbage, sweet corn, cucumber, eggplant, summer squash, bell peppers, and tomatoes.

Much of this produce is sold under the “Fresh from Florida” retail program, part of the Florida Agricultural Promotional Campaign, created in 1990 and maintained by the state’s Department of Agriculture and Consumer Services. Participants have access to a variety of promotional tools, including the program’s increasingly well-known logo and point-of-sale materials. According to “Fresh from Florida” figures, more than 60 retail chains and 13,000 stores took part in the 2013 campaign, and though numbers have yet to be released for 2014, state officials hoped 2014 and 2015 would bring even more exposure to the program.

Some of this locally grown product is sold at the Miami Produce Center. Primarily a wholesale operation, the center opened in 1938 as the Dade County Market. The site encompasses nine acres, including a motel, parking lots, two truck stops, and restaurant. However, the market has been steadily shrinking, and most of Miami’s large wholesalers and shippers have moved out of the market in favor of more updated facilities. Although the produce center no longer draws business from major foodservice companies and supermarket chains, it still includes a few smaller produce suppliers.

Citrus Update
Despite devastating losses in the Sunshine State’s citrus industry due to citrus greening or HLB (Huanglongbing disease), Florida still outperforms all other states in citrus production, accounting for 65 percent of total U.S. citrus domestic supply.

Oranges, grapefruit, and other citrus fruits are still a billion-dollar business for Florida growers, despite the nearly century-old HLB disease, which was first discovered in China back in 1919 according to a 2006 article found on the University of Florida Extension Service’s website. And although Asian citrus psyllids were found in Florida as early as 1998, the first confirmed case of citrus greening was not found until seven years later in August 2005, in southern Miami-Dade County.

Within two months, the contagion spread from Miami-Dade to Broward, Palm Beach, and Hendry counties and by June of the following year, 2006, a total of 12 counties had confirmed cases of HLB in citrus groves. Incidence continued to climb, and by 2009, a total of 33 counties had tested positive for citrus greening cases, dooming thousands of trees across the state and dramatically affecting production.

Since 2006, citrus greening has cost Florida’s citrus industry 7,000 jobs and $4.5 billion in lost revenues. Yet University of Florida scientists recently discovered a chemical used to treat gout in humans that may be able to halt the spread of the disease. Although some believe this could be the “silver bullet” to rid the state of citrus greening once and for all, it could take five to seven years of testing before the treatment is approved for commercial use.

On a more positive note, in addition to the Sunshine State’s continued dominance of citrus production (despite the scourge of the Asian citrus psyllid), Florida also takes first place in production value for snap beans, sweet corn, watermelon, cucumber, tomatoes, squash, and sugarcane. The state also ranks second in overall U.S. vegetable and melon production ($1.67 billion), tomatoes ($268 million), and strawberries ($201 million).

Booming Trade
As foreign trade surges in South Florida, Miami produce businesses reap the benefits. At the state level, fruits and vegetables are always among Florida’s top agricultural exports, and the state continues to be a leader in grapefruit exports as well as oranges, orange juice, strawberries, blueberries, and watermelon. Some of Florida’s fastest growing exports are tomatoes, peppers, potatoes and snap beans.

In 2013, the Sunshine State’s agricultural exports jumped by 2 percent to $4.1 billion, generating a total economic impact of more than $13 billion and supporting more than 108,000 jobs, according to the Florida Department of Agriculture and Consumer Services.

In 2013, total trade through Miami International Airport and PortMiami was $93.1 billion, including $41.4 billion in imports and $51.7 billion in exports, according to Miami-Dade’s Department of Regulatory and Economic Resources.

South America is by far the most important trading partner for Miami-Dade, and exports to the world’s fourth largest continent rose 7 percent in the last year. In 2013, the county’s trade with South America stood at $40.6 billion, accounting for 44 percent of all trade through Miami-Dade ports. The total value of Miami-Dade’s trade with Central America and the Caribbean, the county’s second largest trading region, was $23.1 billion.

These global trading partnerships are the lifeblood for Miami produce importers and exporters.

“As consumers in South Florida become more familiar with exotic flavors and are more open to trying new items, continuous and year-round supply from various parts of the world has become extremely important,” Jost explains.

International Reach
Frank A. Ramos, president of The Perishable Specialist, Inc., a licensed customs broker in Miami, says the fruit and vegetables they clear for clients arrive primarily from Central and South America, the Netherlands, and some European countries.

The late fall months find the brokerage busy with the start of the Argentinian blueberry season, the peak of the blackberry season from Guatemala, along with substantial and consistent volume of asparagus from Peru, and the onset of Brazil’s mango season. All this coincides with “gearing up for the Chilean blueberry season,” Ramos says.

Bayshore Produce LLC also has an extensive international reach. Rosann Cabrera, in produce sales at the Miami importer, exporter, and distributor, comments, “We currently have great working relationships with growers in Costa Rica, Chile, and Guatemala.”

Jost says Robinson Fresh imports a large amount of produce from Central America, primarily Costa Rica and Guatemala. “There is also an influx of volume coming from Chile, Peru, and Ecuador,” he adds. “Many Chilean growers are looking to Peru to eliminate gaps during the year, as the Peruvian climate is good for growing tropical or deciduous fruit when those items are otherwise unavailable.”

An Ever- Improving Port
Located in the heart of downtown, PortMiami is the second largest revenue producing department in Miami-Dade County. The Port contributes nearly $27 billion annually to local and state economies and supports 207,000 jobs in Florida.

FRESH FORUM
If you were going to relocate your business or open up a branch outside of Miami, where would it be? Why?

Frank A. Ramos
The Perishable Specialist, Inc.
We currently clear product all over the United States; our headquarters is where it needs to be: Miami. Known as the ‘Gateway to the Americas,’ Miami is where anyone relevant to produce needs to be.

Rosann Cabrera
Bayshore Produce LLC
We have considered opening new offices in California and Chile. We ship hundreds of trucks and containers from those areas and feel it would be beneficial to have an office in those locations.

Dan Jost
Robinson Fresh
C.H. Robinson and Robinson Fresh currently manage several offices strategically located throughout the state of Florida. Given the large volume of export, import, and global freight-forwarding activities the company engages in, it is necessary to be in close proximity to Port Everglades, the Port of Miami, and Miami airport. It is critical from both a logistics and customer interaction standpoint that C.H. Robinson maintain multiple operations and an active presence in Miami.

Douglas Tannehill
Global Perishable Services LLP
Down the road, we would probably look at a West Coast location, such as a California office, to export to the small islands in the Pacific. We still have great upside opportunities here in South Florida, and we have a very strong team. Developing here in South Florida is our primary objective. 

Known as the “Perishables Gateway to the World,” PortMiami is the closest U.S. port to both Latin America and the Caribbean—which results in shorter shipping times and extended shelf life for PortMiami’s two largest trade partners. Among the Port’s top imports in 2013 were fruits and nuts (191,725 tons) and vegetables (125,946 tons).

Since 2009, the Port’s cargo traffic has increased by more than 13 percent. This growth is expected to continue with some major port infrastructure improvements, including the Deep Dredge (set for completion in early 2015) and the Intermodal/Freight Rail Restoration. PortMiami’s goal is to double its cargo throughput before the end of the decade.

For the intermodal project, PortMiami, the Florida East Coast Railway, the U.S. Department of Transportation, and the state invested $50 million to connect the Port with the improved Hialeah intermodal rail yard and the national rail system. This will offer customers more reliable port-to-door service with lead times that match those of trucking—but at a lower cost and with greatly reduced carbon emissions.

Digging Deep
PortMiami’s Deep Dredge project will increase the Port’s existing channel depth from 42 to as much as 52 feet in preparation for the Panama Canal Expansion, scheduled for completion in 2016. The Deep Dredge will make PortMiami the only U.S. port south of Norfolk, VA that can accommodate the new, mega cargo vessels that will pass through the expanded Panama Canal.

The Tunnel is yet another improvement at the Port. After a decade in the making, the PortMiami Tunnel officially opened on August 3, 2014, successfully removing thousands of vehicles from Miami’s downtown streets each day.

The Tunnel links port facilities with the state’s interstate highway network, providing cargo and noncargo traffic with a direct toll-free route without a single traffic signal.

“The Port Tunnel project is the culmination of an effort that took many years and partners to complete,” commented Juan M. Kuryla, PortMiami director, in a recent press release. “The new direct access to the interstate highway system boosts PortMiami’s competitive advantage, while eliminating traffic congestion off downtown Miami streets.”

Miami’s produce importers and exporters believe all of these port improvements will be beneficial for the industry. “The ability to receive cargo on these super ships will mean more containers into Miami,” Ramos says of the Deep Dredge project. “This will definitely contribute positively to the growth of our business.”

Jost, however, points out how these port expansion projects could affect day-to-day operations. “As a result of the tunnel construction, there will likely be a heightened demand for carrier drayage fleets needed to haul container cargo from the Miami port, which may impact both cost and available equipment.”

While Cabrera says PortMiami is doing a wonderful job, she has one concern about these major improvements. “We may lose some of our competitive advantage since more companies will be shipping into Miami.”

Road Blocks
From weather and transportation to food safety and labor, Miami produce buyers and sellers face their fair share of obstacles.

Food Safety & Inspections
Cabrera says import FDA inspections have the largest impact on their business. “The occasional delay can cause quality issues, not to mention excessive stress,” she says.

Constantly changing regulations also pose an enormous challenge for Miami importers. “In the government world we work in, change is inevitable,” Ramos says. “There are always new regulations and procedural changes to keep the consumers of the United States safe.”

For example, he points out one recent U.S. Department of Agriculture (USDA) regulatory requirement that has created yet another obstacle for importers: fumigation as a condition of entry for blueberries from three growing regions in Chile, due to the Egyptian grapevine moth.

Wild Weather
Of course, weather is always a concern for grower-shippers across the nation—and Miami produce professionals aren’t immune. One overly rainy season or unexpected frost can spell disaster for these businesses. Then there are the tropical storms and hurricanes that can wreak havoc for the entire state or Eastern Seaboard.

“When I look at the produce industry, I think about all the challenges that Mother Nature brings us,” comments Douglas Tannehill, president of Global Perishable Services LLP, a Miami-based importer/exporter that provides load consolidation and warehouse services. Surprisingly, Tannehill refers not to Florida’s often challenging weather patterns, but the larger crisis affecting growers in California, Arizona, and Texas, due to the ongoing drought and “water challenges out West.”

Another twist on the weather is exports. Tannehill says Global Perishable Services exports produce to small island destinations throughout the Caribbean. As the economy improved over the last few years, vacation and leisure time to the many islands of the Caribbean has perked up. This, in turn, has driven the need for fresh produce imports as guests seek a broad range of fruits and vegetables.

Further, he notes, the Caribbean also benefits from cold winters in the United States and Canada. “Last year was a bitterly cold winter,” Tannehill explains, “so that created an uptick in business. We feel very good that we should see a strong [tourism] season this year in the Caribbean as well.”

Transportation
Jost points out that transportation is a major issue for Miami grower-shippers, wholesalers, and retailers. “Today’s transportation market is very different than that of the past few years, and the onset of additional regulations has changed the landscape significantly.”

He adds that new federal regulations related to the transportation industry are creating challenges for Robinson Fresh and its customers.

“For example, the new hours of service regulations that went into effect [in July 2013] directly affected several customers’ already time-sensitive perishable supply chains,” he explains (though the recent rollback of some restrictions will help ease these concerns).

As supply chains continue to change, Jost believes it is imperative for logistics providers and produce suppliers to be flexible and offer a wide range of delivery modes and services to their customers.

Jost is not alone in his thinking, as many in the industry echo such reservations for 2015 and beyond. For more information and industry viewpoints on a variety of transportation-related and other challenges, see this quarter’s feature article, “Future Forward.”

Tannehill weighed in on the cost of freight, which can also be problematic. “We bring product in from all over the world, but I think a big part of our focus over the next few years is going to be finding alternative sources for the same products,” he explains. “We do a lot on the East Coast now with some of the row crops. The freight is so high that there are better opportunities from Canada than from California for some months of the year.”

Mergers & Acquisitions
In today’s unpredictable economic environment, mergers and acquisitions (M&A) have become increasingly common with both national and global companies, affecting almost every business sector. Purveyors of produce have felt the impact too as retailers, transporters, and suppliers consolidate, some with major repercussions for the industry.

“Mergers have definitely had an impact on our business, as some of the buyers we have worked with in the past are no longer in charge of the category,” Cabrera points out. “We had to make new connections and prove ourselves all over again.”

In Florida, particularly South Florida, much of the M&A action revolved around banks and financial institutions in 2014, and though this has not directly affected the growing, selling, or shipping of perishables, all suppliers and receivers have relationships in the financial community. For brokers and those who trade internationally, banks are a crucial piece of the puzzle in securing shipments and guaranteeing payment from foreign buyers or sellers.

Upward Mobility 
Despite the challenges they face, many Miami produce suppliers have enjoyed a surge in business in the past year.

“We’ve been on a very steady upward trend,” says Tannehill, who recently celebrated the three-year anniversary of Global Perishable Services. “Our current customers have also grown their businesses, so it seems as though the economy is in a stronger uptick.”

Cabrera says business has been booming for Bayshore Produce as well. “Business was very good in 2014. We are on pace for double-digit growth,” she enthuses. Because the company has recently started some new import programs, Cabrera expects sales to increase significantly in 2015.

A Bright Future
The majority of Miami produce professionals remain optimistic about the future. After all, Miami enjoys one priceless benefit over other regions: location, location, location (not to mention a plethora of sunshine and consistently warm temperatures).

As a gateway to America, Miami has quick and easy access to perishable items from around the world, and variety, as they say, is the spice of life. “Consumers within this market value a wide range of produce items available year-round from a variety of growing regions,” Jost comments. “They also have a strong appreciation for a good mix of offerings from both national chain stores and small regional markets.”

Further, handling such a broad range of products can help suppliers increase their customer base while maintaining a steady flow of both product and profit. “As these particular consumer trends continue to shape Miami’s produce landscape,” Jost adds, “suppliers who provide comprehensive and flexible business solutions will be able to remain competitive in this market despite the changes.”

In other words, the forecast for the Miami produce trade is a lot like the typical South Florida weather: sunny and hot.

Image: Shutterstock

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Amy Bell is a freelance writer with more than fifteen years of experience. She writes for publications and companies across the nation. Visit writepunch.com to learn more.