PWPM Wholesalers Stand Strong Under Trial

Originally printed in the September 2020 issue of Produce Business.

The most modern produce wholesale market in the country demonstrates continued resiliency amidst chaos.

For the past nine years, the Philadelphia Wholesale Produce Market (PWPM) merchants have prided themselves on their state-of-the-art refrigeration, food safety, logistics and space benefits. This year has thrown quite a few curve balls, yet the PWPM merchants persisted through all the trials to the benefit of their shippers and customers.

Mark Smith, PWPM general manager, reports the business has been holding its own, although experiencing a shift in some types of business since the pandemic. “The value of our wholesale market is its role as a lifeline to our region,” he says. “Our state-of-the-art facility is easy to access, and our 19 merchants are always happy to welcome new businesses.”

The soul of a wholesale market, as evidenced at PWPM, is the ability to succeed even in pandemonium. “One thing we take for granted, and it’s actually what differentiates us from other industries, is our ability to adapt,” says Rick Feighery, vice president of sales for Procacci Brothers Sales Corp. “We’re used to a flood, hurricane, drought and making a quick change and adapting rapidly – but it’s what makes it fun too.”

“Our biggest concern with the long-term affects of COVID is what is the supply line going to be like.”

— Rick Feighery, Procacci Brothers

The industry, and PWPM in particular, has been able to adapt quickly to the new normal precisely because it is so dynamic, explains Dan Vena, director of sales at John Vena Inc. “Dealing with disaster, last minute changes and constant replenishment are all the ‘norm’ in this industry,” he says. “So while the customer mix has shifted and the hurdles have gotten a bit higher, our experience with working in a chaotic environment has served us well.”

Produce wholesalers shine through unanticipated changes. “Produce guys are nimble,” says Mike Maxwell, president of Procacci Brothers. “We dodge and weave every day. We are used to going into stores on a daily basis and that benefitted us this year.”

Tom Kovacevich, general manager at T.M. Kovacevich (TKM), shares what merchants have often told their spouses – “produce is essential and critical to our customers success” – proved so true this year. “It’s why we’ve always taken our business so seriously, why we answer calls at all hours, and always do our best to say ‘yes’,” he says. “When the country shut down, things changed immediately on the demand side, in our case, one-third of our business evaporated but retail demand exploded. Successful produce wholesalers are best at adapting to a changing environment.”

Though market wholesalers thrive on chaos, this year was a whole new level of chaos, asserts RJ Durante, sales director of food safety at Nardella. “One of the benefits of working in a generational business is that I learned from my grandfather and my father,” he says. “That’s a lot of knowledge and experience passed down.”

Enduring Value

While PWPM merchants have long stood strong in the value of their facility, this year demonstrated their conviction. “The facility has really proven its value,” says Todd Penza, salesman with Pinto Brothers. “The product holds up, and we can store more. Customers are here and are coming here, and we can deliver out of here. All the benefits we’ve always talked about have really paid off this year.”

There is always a need for a middleman, states Tracie Levin, general manager at M. Levin and Co. “We fill in when supermarkets run short,” she says. “We take the overflow of produce when growers have an oversupply. We also have the ear of many different growers and shippers and, therefore, the ability to be a great source of information for ad purposes and what produce is available at the time. The independent supermarkets take advantage of all this information, which helps them to remain competitive.”

PWPM offers customers variety and value in all circumstances. “The wide variety of product and the high frequency with which it is arriving make it an unbeatable one stop shopping experience for any business of any size,” says Vena. “The wholesale market is the perfect place to match the right customer to the right product. If you are looking for the best tasting fruit or vegetable, it is here. If you are looking for the best looking fruit or vegetable, it is here. If you are looking for the cheapest fruit or vegetable, it is here. If you don’t know what you are looking for…don’t worry, it is here.”

With 19 companies competing for the business, buyers have the benefit of competition. “Where can you get a better scenario than that?” says Kovacevich. “You get the best quality at the best price, driven by competition, and great selection. There could be over 200 different choices of apples on our market. Our customers have the ability to get the exact quality level and price point to fit what they need. That’s what makes the market really special.”

A buyer benefits from having so much to look at and compare at the market, asserts John DiFeliciantonio, owner of North American Produce Co. (NAPCO). “They can walk around, collect all the information and get the best price on the best merchandise,” he says. “When buyers order over the phone and get a price, the price may seem cheap but they don’t get to pick it out. They might come here and see boxes that are better than what they got over the phone. Or if they go to a cash-and-carry place, there may only be two labels of lettuce, whereas here there is a greater selection.”

Counting on Freshness

Freshness is crucial in good times and bad. “The biggest advantage of sourcing at PWPM is the refrigeration,” says Filindo Colace, vice president operations for Ryeco. “The shelf life of the product is going to be better than anywhere else.”

“We’ve spent decades creating an atmosphere of trust in servicing customers and we see the results. Customers trusted us to pull what they wanted.”

— Filindo Colace, Ryeco

PWPM keeps product in better condition, agrees Rick Milavsky, president of B.R.S. Produce. “It’s coming off a cold truck into cold,” he says. “Even if you can’t get it in the cooler right away, everything is still cold. This really benefits our shippers too. Their product is being taken care of better. It’s not sitting in an open market. With all the heat waves we had this summer, our product kept its quality.”

Levin confirms the cold and sanitation advantages of the facility. “Our produce never breaks the cold chain once it’s unloaded,” she says. “Food safety is most important. Not only do we have the ability to keep product at optimum temperature, we have hired additional staff to ensure our market is always clean. Health and safety are of utmost importance.”

Quick product turnover and abundant space are other positive factors according to DiFeliciantonio. “Here, again, buyers can see whose product is freshest,” he says. “Our facility provides a lot of space for them to see and stage things, and it’s easy to park and load regardless of whether you have a large truck or small van. You don’t have to worry about your product getting damaged.”

Smith notes the PWPM is keenly aware that the maintenance of the facility is paramount to fresh quality product. “This is why we have HVAC tech crews around the clock to ensure appropriate temperature and air quality throughout the market’s air system,” he says. “In addition, we have trained security and maintenance teams to ensure a safe and well maintained environment for our customers and employees.”

Adapting and Innovating

As the past year presented unprecedented challenges, market companies did their best to keep up with the changing needs of customers. “We have, in some cases, lowered delivery minimums, increased and decreased the frequency of deliveries (depending on the needs of the customer) and tried to be understanding with our accounts receivable,” says Vena. “We also repacked foodservice size items to retail manageable sizes and generally tried to do whatever we could to keep people operating in these very uncertain times.”

At NAPCO, DiFeliciantonio reports they’ve been very understanding with their foodservice customers on credit and payment. “It was tough to make sure we got everybody paid on time, but we pushed through and came out okay,” he says. “Everybody was just doing what they could to stay afloat. All in all, we managed to crawl through.”

Pinto Brothers has been working on reacting even more quickly to customer needs. “We want to provide a superior service in a shorter amount of time,” says Penza. “We provide the flexibility buyers need right now, having the product, giving answers, loading and delivering with less notice, things to meet what the uncertainty brings.”

“We provide the flexibility buyers need right now, having the product, giving answers, loading and delivering with less notice, things to meet what the uncertainty brings.”

— Todd Penza, Pinto Brothers

As merchants saw requests for delivery increase, they responded in kind. Ryeco has added more trucks with lift gates. “We are servicing more independent supermarkets without big loading docks so we’ve adapted our trucks to be able to deliver to those places,” says Colace.

TMK’s Kovacevich also reports increasing demand on delivery. “In the same way Amazon is thriving, we’ve seen more orders for delivery than ever before. It puts more pressure on the trucking/logistics. It’s been a trend over the past few years but we’ve seen an acceleration this year.”

Merchants also employ more technology in an effort to serve customers in the future. The single biggest difference at Ryeco over the past year is its Warehouse Management System (WMS), according to Colace. “Because we’re carrying so many more products, we installed a WMS to help us locate the products faster and have greater traceability,” he says. “It’s really helped us be more efficient.”

M. Levin has employed technology to manage information. “We have the ability to send more information more quickly about availability and pricing and in turn give our customers sufficient time to react to current market changes,” says Levin. “We have also increased our delivery business in the past year, and it’s something we see continuing to increase in the coming years.”

An Atmosphere of Trust

Yet, beyond the refrigeration, freshness and innovation offered at PWPM, the core of the business really remains about relationships. “There is a lot of uncertainty in almost every sector of life these days,” says Levin. “Due to this, we have put an extra emphasis on our personal relationships with our customers. We have 114 years in business and have been doing business with a lot of our customers for many of those. We want them to know we understand what they are going through and that we’re here for them. These are the times when common sense may not make business sense. The success of our business is based on the success of the many valued relationships we have forged over the years. For these, we are thankful.”

Ironically, at the beginning of 2020, Durante had set out greater customer interaction as a goal at Nardella. “Then COVID happened and forced us to back away from face-to-face interaction,” he says. “However, it has made our relationship with our customers more important because they rely more on us. It’s not just the buying, it’s the financial aspect. It’s the mom-and-pop shop that may have been closed for a while and is backed up on invoices, but they need the product to make the money to pay you back. It’s all in good faith because these are the guys who have been buying from you for 10 to 15 years. You’re trying your best to be in a position where they can succeed and you can succeed.”

Procacci has been in business for 70 years, and Maxwell asserts when times get tough, people go to the people they know. “In difficult times, you want people who are long-term partners,” he says. “You’re always trying to build new relationships, but in trying times you take care of your long-term customers first. It solidifies bonds on both sides.”

Relationships built over time help merchants take care of customers during crisis. “You develop a knowledge of your customer’s business, and they trust you to do what’s right by them,” says NAPCO’s DiFeliciantonio. “For example, our phone sales trust us to give them the right stuff they’re looking for.”

Colace reports Ryeco’s relationships made it easier for customers to call and ask for their order instead of coming down during the crisis height. “We’ve spent decades creating an atmosphere of trust in servicing customers and we see the results,” he says. “Customers trusted us to pull what they wanted.”

Attitude and transparency play a big role in building trust. “We try to be honest and fair with anybody we do business with,” says B.R.S.’s Milavsky. “Whether they’re looking at it personally or buying it over the phone, I don’t want any surprises on their end. We employ friendly staff and treat every customer the same. People are our biggest asset. I have a great group of people working for me. As hard and trying as it is at times, they make it easy.”

“We know our customers, and we know where they fit,” adds Kovacevich. “All we want to do is grow our customer’s business because the more they sell, the more we sell,” he says. “There’s no reason to play games.”

Looking Ahead

Companies hope for a less-chaotic fall season and are looking at some key product trends they expect to continue including product diversity. “We currently handle over 900 items,” says Levin. “We source produce from around the world because our customer base is forever changing. The Hispanic, African, Asian, Indian population in our demographic area has grown extensively. It’s challenging to make sure we have on hand what all our customers want.”

Increased interest in packaged produce is another marker. “Customers influence how we buy,” says Levin. “We see a higher demand for bagged and packaged produce. It makes the end consumer feel more at ease with what he or she buys. Less handling seems to equate with a healthier product.”

Because of COVID, notes Maxwell, retail packaged products are up. “Shoppers would rather grab and go than pick through,” he says. “We anticipate that to last for a good while.”

Colace notes definitely seeing a trend in demand for packaged product. “Especially bagged lemons, oranges and potatoes are popular,” he says. “It makes consumers feel there is less of a chance of exposure.”

The big movement Kovacevich expects in the fall for fruit is increased emphasis on bagged apples. “Bagged apples have been selling like crazy,” he says. “Consumers like the idea that you get a 3-pound bag of apples at retail, and it’s in a nice bag. We’re also selling bagged pears and we never did that before. We expect bagged items to continue growing as a proportion of sales.”

Merchants expect the fall lineup to be fairly typical. “We expect to handle more of the normal fall items such as apples, pears, potatoes, cooking vegetables and hard squash,” says DiFeliciantonio.

In fall, Procacci is wrapping up the South American import season and moving into other areas. “We’re looking at continued repack and forward distribution as we get into other items for October, November and December,” says Procacci’s Feighery. “Our biggest concern with the long-term affects of COVID is what is the supply line going to be like. We’re looking at planting issues and packing issues. Also, we’re watching the long-term affect of the USDA boxes on the supply of carrots, potatoes and onions.”

The experts at John Vena Inc. continue to be on the search for the best new products and the best new, or old, growers. “While the mix of foodservice business versus retail business has certainly shifted, consumer desire for flavor and freshness remains constant, and we constantly strive to give that to them,” says Vena.

Making New Investments

PWPM Merchants continue to invest in keeping their businesses current. Ryeco has purchased a new warehouse in South Philadelphia. “We modernized it and are using it to support our main store here at the market,” says Filindo Colace of Ryeco. “We hold the bulk of key items there and send them to the market as needed. It enables us to carry more variety of product.”

Nardella’s big commitment this year is its new website. “We are moving to the digital age, having our price list available and doing more via email, including a newsletter,” says RJ Durante. “We are younger in the sense of the digital world but it’s good we are ‘older’ and more seasoned operationally because it enabled us to stay solid in a way we would not have had if we had not had that leadership.”

Ryeco is also working to combine social media and Internet platforms. “We want to give customers online ordering,” says Colace. “That’s our next big project toward differentiating ourselves even more.”

The market itself plans on continuing its Zero Waste initiative in partnership with Natural Upcycling, based in upstate New York. “This company collects organic food waste and turns it into a renewable resource, such as electricity or natural gas, through a process called anaerobic digestion,” says PWPM’s Mark Smith.

PWPM partnered with Natural Upcycling in November of 2019 with the shared goal of using various landfill diversion methods to reduce the PWPM’s waste stream to effectively zero. “To date, we have improved landfill diversion by 50% over last year,” says Smith. “We are striving to reduce carbon dioxide pollution and eliminating the need to send food waste to the landfill, while saving money.”