“Consolidation has been going on for a long time at the market,” observes D’Arrigo, “and I don’t think we’re done yet. Okun’s sale of 16 units was the largest in history, and that will probably stabilize or slow down the trend for a while.”
DiMaggio says it’s hard to determine what causes one company to close while others are doing well, but most merchants don’t mind having fewer rivals to deal with on the market. According to D’Arrigo, the top five firms at the market are responsible for about half of the business, and many customers appreciate full-service shopping versus having to visit multiple vendors.
The downside of squeezing out smaller merchants may, in part, be balanced by the ever-climbing demand for local produce, which in turn supports nearby growers, shippers, packers, and handlers within the New York-New Jersey region.
Local Produce Still in Vogue
This year, local was boosted in the early season by price spikes on California produce, much of it due to the ongoing drought. “Local is a very strong trend,” agrees Gordon. “When you go into a supermarket in the greater New York area, there will always be a local produce section, and more and more people are looking for it.”
Gordon continues, adding, “Whether it’s the romance of keeping small farms in business or the perception that local is healthier, people want local produce.” In the New York area, she’s seen the eat-local trend taken even farther, such as “the ‘locavore’ movement where people are doing urban foraging—collecting dandelion greens in parks or growing produce on restaurant rooftops, for example.”
“People like to buy local, in part, because of the perception that it’s eco-friendly and less of a carbon footprint,” offers James Hunt, Jr., president of D.M. Rothman Company, Inc. “The quality isn’t always comparable to California produce, but when you add in the freight, local can be a couple of dollars cheaper, and you can work with it daily—the trigger time is a lot quicker.”
Hunt explained that last year, Salinas, CA produce started high and stayed high priced all year, which opened the door for more Canadian produce to fill the market. This year, even with the ongoing drought, California prices have softened a little, possibly to stay competitive with local (New York and East Coast) and Canadian commodities.
“Produce is a funny industry,” reflects D’Arrigo. “It is very resilient. In a bad economy, it marches right along; in a good economy, no one notices. We’re more impacted by weather and water shortages than by larger economic trends. The local movement is a very sizable part of our business and our thinking about how we do business.”
“We do a lot of local, about two-to-one local-to-California produce,” states Thomas Tramutola, Jr., vice president of marketing at A&J Produce Corporation. “The cost of transportation is cheaper, and we can get just about everything—lettuce, celery, cucumbers, peppers —from New York or New Jersey.”
