Like Los Angeles itself, the Produce District is simultaneously seductive and off-putting; crumbling and dynamic; a relic of the past with a vision for the future. One indisputable fact, however, is that it serves as an invaluable link to California’s fresh fruit and vegetable industry. California produces over a third of the country’s vegetables and two-thirds of its fresh fruits and nuts.
The Los Angeles Wholesale Produce Market (LAWPM) and the adjacent, older Central Market sit firmly in the epicenter of the nation’s second largest population, with proximity to three large ports as well as rail and truck hubs. This means that despite uncertainties and gentrification, the Los Angeles produce market is essential to the distribution of California’s bounty.
An Evolving Marketplace
The Los Angeles Produce Market is a curious combination of old and new, comprised of two markets and surrounding businesses. The Central Market, aka the ‘Old Market’ or Terminal Market, is a collection of historic buildings along Southern Pacific railroad tracks that have been in use since the early twentieth century. Most of the businesses are small vendors that rent their spaces on a month-to-month basis.
While still a thriving marketplace for produce trade, significant changes have been afoot. Rents have increased by 20 to 25 percent recently. Row DTLA, a development company, has been repurposing many of the buildings on the 30-acre site for trendy businesses and creative office space. The conventional wisdom is that the Terminal Market will cease to function as a produce market sooner rather than later.
Jeffrey McLellan, service and support manager for QSI, LLC, comments, “It’s getting harder for the vendors on the Old Market. Once neglected, now the property is becoming highly valuable. If your business—whether wholesale produce or hip restaurant—isn’t successful pretty quickly, you can’t afford to stay.”
McLellan mentions rising property values, gentrification of the warehouse district, and thinks the city should do more to clean it up. “We’re handling food here! We’re an important tax base and shouldn’t be taken for granted.”
The adjacent LAWPM, which opened in 1986, is a bustling center for produce distribution. Unlike the terminal market, the vendors share ownership of the property, so the future is more secure. According to one source, the LAWPM is very well capitalized, making the partners more in control of their own destiny. With the exception of a few sub-leasing tenants, the businesses there are large and vertically integrated. The LAWPM encompasses 550,000 square feet of warehouse space on 30 acres, generating $2 to $3 billion a year in revenue. “Land values may be increasing, but hundreds of businesses are dependent on the market in its present form,” notes the source.
Like Los Angeles itself, the Produce District is simultaneously seductive and off-putting; crumbling and dynamic; a relic of the past with a vision for the future. One indisputable fact, however, is that it serves as an invaluable link to California’s fresh fruit and vegetable industry. California produces over a third of the country’s vegetables and two-thirds of its fresh fruits and nuts.
The Los Angeles Wholesale Produce Market (LAWPM) and the adjacent, older Central Market sit firmly in the epicenter of the nation’s second largest population, with proximity to three large ports as well as rail and truck hubs. This means that despite uncertainties and gentrification, the Los Angeles produce market is essential to the distribution of California’s bounty.
An Evolving Marketplace
The Los Angeles Produce Market is a curious combination of old and new, comprised of two markets and surrounding businesses. The Central Market, aka the ‘Old Market’ or Terminal Market, is a collection of historic buildings along Southern Pacific railroad tracks that have been in use since the early twentieth century. Most of the businesses are small vendors that rent their spaces on a month-to-month basis.
While still a thriving marketplace for produce trade, significant changes have been afoot. Rents have increased by 20 to 25 percent recently. Row DTLA, a development company, has been repurposing many of the buildings on the 30-acre site for trendy businesses and creative office space. The conventional wisdom is that the Terminal Market will cease to function as a produce market sooner rather than later.
Jeffrey McLellan, service and support manager for QSI, LLC, comments, “It’s getting harder for the vendors on the Old Market. Once neglected, now the property is becoming highly valuable. If your business—whether wholesale produce or hip restaurant—isn’t successful pretty quickly, you can’t afford to stay.”
McLellan mentions rising property values, gentrification of the warehouse district, and thinks the city should do more to clean it up. “We’re handling food here! We’re an important tax base and shouldn’t be taken for granted.”
The adjacent LAWPM, which opened in 1986, is a bustling center for produce distribution. Unlike the terminal market, the vendors share ownership of the property, so the future is more secure. According to one source, the LAWPM is very well capitalized, making the partners more in control of their own destiny. With the exception of a few sub-leasing tenants, the businesses there are large and vertically integrated. The LAWPM encompasses 550,000 square feet of warehouse space on 30 acres, generating $2 to $3 billion a year in revenue. “Land values may be increasing, but hundreds of businesses are dependent on the market in its present form,” notes the source.
On- and Off-Market
In this era of electronic communication, buyers still personally make their way to the LAWPM. Alan Pollack, president of Coosemans Los Angeles, Inc., which has been on the market since 1980, says, “Buyers still like to look at the product instead of purchasing f.o.b. [free on board]. A lot of ordering is formulaic, but many ethnic retailers, specialty chains like Whole Foods, Gelson’s, and Bristol Farms will physically come to the market.”
Partners Jesse Garcia and Matthew Clark set up shop at the LAWPM as the aptly named LA Produce to have access to the wholesalers, foodservice companies, and retailers drawn to the fresh food mecca. “It’s not just a numbers game where people simply take orders,” Clark says. “By being on the Market, we’re able to tap into the great relationships we’ve built with buyers as well as gain a feel for market trends. Also, by being on market our margins are better. It’s like selling out of a mall vs. a warehouse.”
Continues Clark: “Real estate prices around the LAWPM are about $400 per square foot (they were $80 not long ago). If you consider that in New York the price per square foot can be as high as $2000 to $3,000, [that’s a long] way to go in terms of higher property values. There’ll always be a need for a wholesale produce market and we’re optimistic about the future of the industry in Los Angeles.”
Near the LAWPM but not on it, Donald Souther, senior vice president of sales and marketing for Vision Produce Company, says, “The LAWPM is a vital link for growers, wholesalers, distributors, and retailers. A large majority of products that consumers purchase at retail touches the Market in some way or another. It’s an important gauge for the West Coast for pricing, availability, and trends.”
Francisco Clouthier, vice president of Maui Fresh International, LLC, praises the LAWPM’s prime location for putting his vendors and customers in the center of the produce universe—in one of the largest markets in the country.
“We have access to wholesalers with sources all over the world,” enthuses Clouthier. “We’re less than a two-day truck ride to British Columbia, less than one day from Mexico, and it’s just a few hours to our dock from the Mexico/Arizona border. We’re in easy proximity to Los Angeles International Airport and have access to major freeways to distribute all over the country.”
Coosemans LA Shipping, Inc., sister company to Coosemans Los Angeles, is a few miles south in Vernon. Jill Overdorf, formerly head of business and culinary development for Coosemans and now with Naturipe Farms, shared her favorite aspects of the market: “First, it’s the variety of product. Second, the strength of relationships. The people who buy and sell at the terminal market continue to work with verbal POs [purchase orders].
“Reputation remains as valuable a commodity as the products being exchanged,” Overdorf continues. “Product availability on the marketplace is a reflection of our city’s enormously broad ethnic diversity. The market also remains an outlet for smaller farmers who are testing the marketability of their crops.”
Carole Shandler is CEO of Shapiro-Gilman-Shandler Company, a receiver just off the Market. “We’re close to the Market, but it’s more relaxed where we are and easier to get trucks in and out.” Labor, however, is an issue. “We’re union for all positions covered by our collective bargaining agreement,” Shandler explains. “We even offer similar benefits for the nonunion employees like pensions and 401(k)s that we contribute to even if the employee doesn’t. We like doing business this way and consider our employees family, she says. “The trouble is that it’s not an even playing field—like a highway, if everyone stays in their lane, we’ll all get where we want to go.”
Green Measures
As the produce industry strives to reduce waste and promote sustainability, food recovery organizations play an increasing role in the life of the Market. Rick Nahmias, founder and executive director of Food Forward, the largest of such organizations at the LAWPM, says the concentration of produce vendors is the advantage.
“Walking dock to dock, talking to people is the most efficient way to work with the community. We pick up an average of 250,000 pounds of produce per week,” he points out. “We’re a connecting organization, providing just-in-time distribution to agencies that donate food to people who need it.”
Reducing waste and leaving a smaller carbon footprint is clearly good for business, especially in environmentally-conscious California. Most of the companies in the Produce District find ways to incorporate green practices. “We installed solar panels on top of our building several years ago to help offset our power usage,” says Souther. “It’s really contributed to our sustainability.”
McLellan says QSI is doing its part too. “We recycle plastic, aluminum, glass, paper, and e-waste like old computers and phones. We encourage our vendors and customers to send invoices and other correspondence electronically to reduce paper.
“In the last year we changed all our lighting to LED, which has reaped big savings in our 40,000-square-foot warehouse. And I’m proud to say we’re one of the Los Angeles Regional Food Bank’s top-ten donors,” emphasizes McLellan.
Shandler believes her late father, Morrie Shandler, was a pioneer in his approach to the environment. “It must be in my DNA,” she remarks. “Our company is committed to reducing our carbon footprint; we’ve found ways to accomplish this without sacrificing efficiency.”
Measures undertaken by Shapiro-Gilman-Shandler include the installation of solar paneling, hybrid company cars, and CARB [California Air Resources Board] compliant trucks. Last, but not least, is use of an organic trash bin to reduce waste going to landfills.
Drought & Rains
California’s five-year drought was officially declared over in April of 2017. While suburbanites rejoiced at the return of verdant lawns, growers struggled with heavy rains that disrupted planting schedules.
Another Shandler, Talia, is vice president for fruit sales at Shapiro-Gilman-Shandler and weighed in on the wet weather. “All the rain last winter was great for fruit and nut trees. This was a superior season for California cherries for the first time in years. On the other hand, the wet weather led to record prices for lettuce and other vegetables.”
Pollack says weather from all over the world affected their business. “Rain pushed back crops by many months causing shortages. We’re used to it, but this year was more challenging than normal.” He cites several examples, including lesser quantities of peppers, endive, artichokes, and tomatoes. Worse yet, quality was affected by the excessive rainfall, with romaine hearts bruising more easily and tomatoes less flavorful than usual.
McLellan agrees that while most people in California were relieved by the rainy season, it played havoc with the industry. “The rains made planting vegetables difficult and as a result, prices became volatile. We saw lettuce at $50 to $60 for 24-count throughout spring and into summer.”
Other commodities were affected as well. “Usually, celery is only expensive at Thanks-giving, but we were selling it in early to mid-May at $60 to $65 per box and in short supply. Winter and early spring vegetables were impacted most,” McLellan adds. “As of early June, we started to see more stability in lettuce and broccoli. The big retailers and processors made out okay, because they had contracts. But sales were hurt because customers were cautious and purchased just what they needed.”
Lynette Keffer is president of customs broker J&K Fresh, LLC, in El Segundo. “Chile had the same crazy weather as California, so their quality wasn’t good,” she shares. “That’s partly why their citrus season ended early and the United States started early.”
Port Report
The bankruptcy of Hanjin Shipping in late 2016 negatively impacted the volume of containers handled through the Port of Long Beach. As one of the port’s largest tenants, the collapse of the Korean shipping giant left ships on the water for extended periods, especially disastrous for perishable cargo.
While many refer to the Port of Long Beach and Port of Los Angeles as one entity (the San Pedro complex), and the two do collaborate, they are two distinct ports and competitors. Overall volume for the ports combined climbed slightly last year, with fresh fruit and vegetables part of the uptick, but not without challenges.
Global West Transportation, Inc. of Long Beach handles containers of mostly dry goods such as toys and computers, but is also involved in shipping produce. Company president Fernando S. Torres observes, “Many of the so-called improvements to the ports have actually slowed down service.
“For example, cranes are now operated by remote control, not by clerks. If a truck isn’t lined up perfectly, they don’t release your container. Our trucks will make an appointment, have to wait for an hour or two in line, then miss the appointment. We can’t pass along the costs for standby time to customers. As a result, it’s very expensive to pull loads out of the ports.”
Fees can be an obstacle as well. “Because of rising fees, particularly the Los Angeles/ Long Beach port complex, more business is going to ports in Baja Mexico and Galveston, Texas,” adds Torres.
Another port in the vicinity, Port Hueneme, also imports and exports fresh produce. “Los Angeles and San Pedro account for 40 percent of U.S. produce imports, but with all the container traffic, sometimes it’s difficult to maneuver produce through it efficiently,” explains Keffer.
“If we can shorten deliveries by one day, we can save clients money,” Keffer continues. “Because it’s smaller and easier for ships with produce cargo, Port Hueneme is a viable option. It’s very near the Oxnard Plain and other growing areas, so it’s a niche port, especially for agriculture. It’s the main point of entry for Del Monte’s and Chiquita’s vessels. Hueneme is really marketing its produce-handling capabilities.”
Beyond Borders
Although Mexico and Canada are still the U.S.’s largest trading partners, Asia and both Central and South America are playing greater roles in providing the consistent supply of fruits and vegetables consumers expect. “We’ve increased our imports from Brazil, Guatemala, and Ecuador to fill in gaps in our current grower-direct programs,” confirms Souther.
“We’re doing increased business with Thailand and South Korea to bring in coconuts, rambutans, mangosteens, and chestnuts,” shares Talia Shandler.
“Our biggest volume item is bell peppers from the United States, but we also import them from Mexico, Canada, and Holland,” notes Clouthier. “Our next biggest import is cucumbers, mostly from Mexico but also from Holland, Spain, and Canada. Everything from Europe is ship-ped via air freight, which is why we appreciate being close to LAX (Los Angeles International Airport),” he says.
For LA Produce, the bulk of the supplier’s imports come not from Europe, but a southerly direction. “We purchase high volumes of pineapples from Costa Rica, melons from Guatemala, and Mexico is a big source for avocados.”
Coosemans Los Angeles sources from a broad range of suppliers, including peppers, leeks, and celery root from Holland, and citrus, passion fruit, and specialty vegetables from New Zealand, according to Pollack. “We bring in rambutans from Guatemala, Mexico, and Thailand,” he notes, but there is a downside to bringing in cargo from far-flung places. “It’s a challenge because they have to be fumigated for insects and this can ruin the fruit.”
Looking Forward
By nature, Los Angeles has always been a place where dreams are pursued. This is true for buyers and sellers of fresh food as well. “The last 30 years has seen a huge influx of chefs from all over the world,” explains Pollack. “They come here for the opportunities and bring new ideas, but they all want to find a bit of their home culture here. We bring it in for them. As a result, there’s more diversity, which is the most distinctive characteristic of the city.”
The future of produce in Los Angeles also lies in reducing waste and sharing the amplitude of California’s agriculture. Just last May, a pop-up food hub was created when staff at the Watts Labor Community Action Committee learned that Food Forward could provide mixed pallets of fresh produce on a regular basis. The group realized they could create a food distribution center in what was always a food desert.
“We started with 109 families and within a few weeks, we were serving 240,” says Nahmias. Food Forward picks up the LAWPM’s surplus produce in the early morning and by 10:00 am it’s delivered to Watts. By 1:00 pm, it’s distributed to those in need. From growers to wholesalers to retailers or food rescue operations, Los Angeles is a land of plenty that continues to share its bounty with consumers near and far.
