Apr 29, 2020
CONTENT SOURCED FROM THE PACKER
Written By: Amy Sowder
The world’s largest wholesale produce terminal market is not experiencing supply shortages of any kind, leaders say, although city and state mandated closures due to the COVID-19 pandemic have caused demand to fluctuate wildly.
Between a third and 40% of Bronx, N.Y.-based Hunts Point Produce Market’s business is from foodservice customers, and most of the rest is from retailers, said Joel Fierman, co-president of Hunts Point Terminal Produce Cooperative Association Inc., and Matthew D’Arrigo, CEO of D’Arrigo New York.
Since stay-at-home mandates have closed schools, venues, events and many restaurants, overall market business has dropped to about 60% of the business they had at the same time last year, said Fierman, also president of Fierman Produce, one of 31 companies on the market.
“We lost a big part of New York — that tourist trade, theater, the part that makes New York, New York,” Fierman said. “I think everybody’s buying patterns are more cautious. It’s hard to go long on it. We’re on a shorter leash because money is not as easy to come by right now.”
The market's overall foodservice business, which had stopped, is now at 10% to 15%, compared to more than one-third of sales before the pandemic, D’Arrigo said. Retail business doubled during the panic-buying stage, but now it’s leveled to 20% to 30% higher than it was pre-pandemic, he said.
In a city with booming sidewalk and subway traffic, consumers typically visit the grocery store three to five times a week, but now with social distancing and lengthy lines, they’re going once a week, so produce sales have dropped, said Stephen Katzman, the other co-president of the cooperative association, and president of S. Katzman Produce and Katzman Berry Corp.Stores are ordering less produce, partly because “there’s only so much room on a truck, and people are hoarding toilet paper and frozen pizza,” Katzman said.
Stores are ordering less produce, partly because “there’s only so much room on a truck, and people are hoarding toilet paper and frozen pizza,” Katzman said.
People are not overbuying and letting produce go bad in the back of their fridges like they normally do, D’Arrigo said.
To that end, Katzman has been discussing with larger California growers how to drive consumers to the produce aisle during this crisis, asking: “What will it take for people to choose their produce instead of buying frozen pizza? Crazy deals, like two-for-$4 or $5 (berry clamshells) or buy-one-get-one-free.”
Even with the drop in sales, there have been no layoffs, these business leaders say. Employees who feel sick are sent home, and those who can, are encouraged to work from home, like buyers. Some incoming truck drivers were hesitant at first, but Katzman said he solved that by paying them more.
Fierman said he understands that anyone older or with a health condition, such as heart disease, diabetes and obesity, may be hesitant to come to New York City and the market due to their increased risk. But most people want to work.
“I’ve had guys here in their 70s I’ve told to stay home, and I’ve got a guy in his 70s not in the best of health, calling me every day asking, ‘When can I go to work?’ I tell him, ‘— , stay home,’” Fierman said.
Anyone coming through the guarded market gate since March 22 — warehouse staff, salespeople, foremen, executives and drivers — is given a mask, Fierman said. Many warehouse workers wear gloves and face shields, provided by Union 202 in mid-April. People are walking in circles around each other. Salespeople are divided into two floors to create more space between them.
OUTLOOK
Katzman expects demand to increase when summer fruits, such as berries, cherries and stone fruit, arrive.
“It’s really hard to walk away from the right strawberry. People will go back to stores. We’ve learned to manage our inventory a little better than normal, and we don’t even know what the new normal is,” Katzman said.
D’Arrigo said he thinks the tried and true methodology — “old-school and reactionary” — of doing business in the market will remain the same in the coming months.
“It’s traffic-based. It’s always going to be this release valve. This is kind of a last-resort market for oversupply. This pandemic isn’t going to change us that much,” D’Arrigo said.
Produce still drives people to stores, Katzman said. The message that COVID-19 isn’t spread through food is public knowledge.
“I do believe sales will come back. It’s just a question of time,” Katzman said.
Further Reading
HOW NYC'S FARMERS MARKETS ARE SUCCESSFULLY SURVIVING COVID-19
HOW NYC URBAN FARMS ARE PIVOTING TO STAY IN BUSINESS DURING COVID-19