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Chicago terminal market adjusts to consolidation

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Most merchants agree it’s been business as usual on the Chicago International Produce Market (CIPM), with no changes to the actual infrastructure of the market.

Internally, however, it’s a different story.

Among the big news at the CIPM over the last couple years, and sporadically throughout its history, is notable departures and ongoing consolidation among its merchants.

Vince Gregosanc Jr., buyer at Battaglia Distributing Company, Inc., BB #:125850 considers the consolidation of businesses on the market as a huge change.

As the years pass, the CIPM is seeing more and more consolidation.

“Some of the old-timers, the original market people, have gone by the wayside,” he said. “It’s really sad to see them go; these companies really were the market, everybody knew their names.”

According to Gregosanc, there are various reasons behind the shuttering of these companies.

“There are many factors, and it’s not always financial. These are family businesses, and different generations have different priorities,” he explains. “But nonetheless, it’s changed. The infrastructure of our industry as a whole is changing, and the market is shrinking.”

Nevertheless, a few businesses have certainly benefited from the changes.

Panama Banana Distributing Company took over United Produce, its market neighbor, in 2018.

“United Produce is a complete Mexican house that was next door to us,” said Tom Durante, in sales for Panama Banana BB #:101999. Part of the acquisition included bringing over United Produce’s personnel.

Another receiver, City Wide Produce Distributors, went out of business in May 2018. City Wide’s CIPM neighbor, La Galera Produce, bought out the vacant space.

Moving on
Not only are businesses on the market closing, but others are leaving the market for larger, more affordable offsite facilities.

“There are businesses moving off the market going into their own big buildings,” Gregosanc said, adding that the market is not as necessary as it was in the past. Some distributors may leave the market premises to “do their own thing, because the market is too expensive. As a buyer, it gives me a great many avenues to shop.”

While some suppliers say the terminal market is no longer as essential as in the past, others argue that the CIPM will always have a place.

“There will always be a need for a terminal in every major city, but especially in Chicago, to service all the independents,” said T.J. Fleming, director of sales with Strube Celery & Vegetable Company BB #:102030.

Many national retailers and suppliers buy direct, Fleming said, “but all the small independents and different foodservice people we supply, they can’t go direct, so we’re their warehouse in a sense.”

Although Fleming believes the size and scope of the market may change in the future, with some wholesalers growing and others downsizing, the market will survive and thrive. “There will always be a Chicago terminal,” he said.

This is an excerpt from the most recent Produce Blueprints quarterly journal. Click here to read the full version.