New York Off-Market Wholesalers: Doing Hard Things Well

For New York area wholesalers, it’s all about providing outstanding service amid an increasingly difficult business environment.

Jeff Bezos once said “a brand for a company is like a reputation for a person. You earn a reputation by trying to do hard things well.”

Doing hard things well is the very definition of the wholesale business. Over the years, New York off-market wholesalers have faced a tough and competitive business climate by providing services beyond just a simple buy-sell transaction.

Wholesalers increasingly see themselves as service providers. “Wholesalers understand it’s no longer a ‘you wanna buy tomatoes, I’ve got tomatoes’ business,” says Anthony Serafino, president of EXP Group in North Bergen, NJ. “It’s more than that; it’s expecting more service from your wholesaler.

“We’re not in the produce business serving people, we’re in the people business serving produce.”

This business has always been built on service and quality, says Bruce Klein, director of marketing for Maurice A. Auerbach in Secaucus, NJ. “It’s what we do,” he says. “We offer a quality product, backed by a host of services to get the product to the customer when and how they want it.”

As business has become more competitive, wholesalers have grown into new roles. “The produce business environment has become increasingly cutthroat, as suppliers battle to capture new business,” says Angela Aronica, vice president of sales at Vision Global Group in Wyckoff, NJ.

“Pricing expectations are competitive from both a customer and vendor standpoint. As supply chain costs increase, outward pressure to decrease commodity pricing ensues. Our goal is to foster success for both customers and grower partners, acting as the middleman to ensure all parties involved mutually benefit from all business transactions. It’s a symbiotic relationship.”

People may think service is simple, but service today involves a lot more and is increasingly challenging, asserts Ami Ben-Dror, chief executive of BDA/Dorot Farms headquartered in Melville, NY.

“Everything, in the end, is about partnership,” he says. “Service means getting involved in anything we need to be involved in to keep our customers happy. Consistent supply and service is extremely important today, maybe just as important as price.”

Retail customers find value with different aspects of their wholesaler. City stores, such as Morton Williams Supermarkets in New York City with 17 stores, benefit from item availability, variety and service. “The services offered by our wholesalers help us stay competitive,” says Marc Goldman, produce director.

“We can get items from our off-market wholesalers that we can’t get from Hunts Point, such as organics, juices or other specialties. And, we also get delivery on Saturday or Sunday when Hunts Point is closed.”

Independent retailers and natural food stores, many of whom don’t have their own refrigerated warehouses and delivery trucks to self-distribute, appreciate full-service wholesalers as a reliable produce supply chain partner, explains Jonathan Steffy, vice president and general manager at Four Seasons Produce in Ephrata, PA.

“They need partners who can provide custom solutions and scale to support their nimble and unique businesses,” he says. “They want to be able to concentrate on their store teams, their customers, and go-to-market strategies. Having a relationship-based partnership with their wholesale distributor partner allows them to focus on those things more.”

Even though Twin City Supermarket in Plainfield, NJ, operating 10 stores, has its own warehouse and buys direct, the company also finds value in the service wholesalers provide.

“There are some things it doesn’t make sense for us to get direct,” says Lamberto Jose Martinez, head of produce. “We use our wholesalers to fill in specific, but important, product needs.”

ENSURING SUPPLY

Consistency of product availability is a crucial aspect for stores. “Clients are very concerned with ensuring availability of merchandise,” says Serafino. “They need reliable supply so they can bring customers in the door. If they don’t have the product, their customers will go to someone who does have it.”

Product availability is an elemental part of what Baldor in Bronx, NY, does, but customers see it at as a service, according to Scott Crawford, vice president of merchandising.

“Our customers see the advantage in our ability to pivot in the case of unavailable or lesser-quality product from one source and provide them with a product from another source. The depth of vendors we use translates to a benefit for our customers and that means it’s a service.”

Service means the product will always be on the shelf, agrees Ben-Dror. “We do what we need to do to get the customer what they need.”

“Dealing with growing and logistics from overseas is tough, but we work hard to make sure our customers aren’t affected by any issues,” he says. “They rely on us, on our commitment, and on our ability to plan ahead.”

Aronica explains Vision Global Group specializes in providing a consistent source of top-quality produce and industry-recognized brands, and offers “a variety of program commitments to our customers to help stabilize pricing,” she says.

“Communicating with growers so they know how much product we’re looking for during the season is a crucial part of our role.”

– Bruce Klein, director of marketing, Maurice A. Auerbach, Secaucus, NJ

The ability to source hard-to-find or unique items is another benefit. “Specific sourcing for customers is a key service,” says Auerbach’s Klein. “Sometimes, a customer tells us about a specific item they’re looking for, and we’ll find it for them. That’s how we started with rhubarb. We were selling Washington asparagus, and a customer asked us if we could get them rhubarb as well.”

Martinez says Twin City uses different wholesalers to help source products that might be hard to find. “This is especially true with some of the specialty Latino products.”

At Riviera Produce in Englewood, NJ, a customer needed charcoal from a specific source in Pennsylvania. “Nobody could get it for them,” says Ben Friedman, president. “We talked through the details and now, once a month, we go pick it up and inventory it for them so they have it. We do that for other customers as well. We’re a fixer for anything they need in their kitchen.”

EXCELLING IN LOGISTICS

Many off-market wholesalers have capitalized on their available space to develop a menu of logistics services, from warehousing to cross-docking to repacking.

“Logistics services are invaluable for clients right now,” says Serafino. “We saw how premium logistics became during and after COVID. Now it’s shaken out, but people still value its importance. Customers want to be sure the supply chain doesn’t get interrupted.”

Serving the New York mega-metro area has its logistical quirks and added costs, but Four Seasons embraces those challenges, according to Steffy. “We have top-notch facilities to protect the cold chain, manage inventory accurately, ripen bananas and avocados, and a fleet of refrigerated trucks to get it all delivered.

“Our sister company, Sunrise Logistics, provides freight brokerage and dedicated services, as well as produce know-how for fast-turn forward distribution, cross-docking, and 3PL programs.”

Warehousing and cross-docking services are gaining in demand, adds Serafino.

“We cross-dock some items and we emphasize our quality control,” he says. “We have beautiful receiving facilities and can showcase how we monitor and maintain quality. We have almost 100 trucks and are able to get stuff out that same day if customers call in the morning.”

Delivery has become a crucial aspect of wholesaler service. “We get most of our store deliveries six days a week because we just don’t have space. It’s basically from truck to shelf because we don’t have much of a back room, and it’s fresher for our customers, too.,” says Goldman of Morton Williams. “We also take advantage of weekend or holiday delivery.”

Buyers also value flexibility and reaction time. “Our ability to react quickly to the customer’s needs is an advantage and gives customers flexibility,” says Klein. “Depending on where the customer is, they can place an order in the morning and we can get to them in the afternoon. For others, it is only a day away. We deliver up to seven days a week.”

Baldor’s Crawford relates the service of logistics is about getting the order to the restaurant or space when they need it and consistently.

“We pride ourselves on getting it right, within the correct time and with the correct quality and order,” he says. “We use our logistics arm to help build our sales relationships. It becomes more of partnership rather than transactional.”

Being flexible is increasingly important since customers are ordering less and inventorying less, explains Friedman.

“Our second and third deliveries of the day to some of our customers are invaluable,” he says. “We never say no to the customer — no minimums, no cut-offs. I call us the ‘flower in the desert,’ providing something blooming even in a harsh environment.”

Wholesalers serve as a flexible additional source for Twin City Supermarket. “Sometimes what we have is not sufficient, so we can call our wholesaler to get stuff last minute,” says Martinez. “If we sell out, they can get us a delivery right away. Our direct deliveries are programmed, but with our wholesalers, we have flexibility.”

ENSURING THE PERFECT PRODUCT

Demand for ripening, packaging and higher quality is expanding. “Ripening services have evolved to more products beyond just bananas,” says EXP’s Serafino. “We now do avocados, papaya, pears and tomatoes. Consumers want fruit ready to go, and retail space is such a premium, customers want fruit ready to put on display and immediately sell.”

Customized packaging is another crucial area of service, as customers seek to differentiate their product line. “We provide the service of offering different pack sizes to fit customer needs,” says Klein of Auerbach. “We have a bagging machine that can bag a half-pound up to 10 pounds. Customization of packaging helps customers be more competitive.”

Providing value-added through cut manufacturing is a crucial service at Baldor. “It’s where we really shine,” says Crawford. “Our facility in the Bronx does a lot that’s a high value-added product. We can cut and chop just about anything. We also work with ripening service providers who ripen according to our specs to provide that service to customers.

“It’s an area we’re very interested in and investigating more. We know our customers value these types of service and we continue to think about all value-added services.”

Quality control plays an imperative role in a competitive marketplace. “Good quality and good taste are key,” says Dorot’s Ben-Dror. “We must keep everyone satisfied on the quality of our product. Customers cannot afford to deal with less than top product right now. That’s why we handle everything from step A to Z to ensure quality.”

“We must keep everyone satisfied on the quality of our product. Customers cannot afford to deal with less than top product right now.”

— Ami Ben-Dror, BDA/Dorot Farms, Melville, NY

Auerbach checks product when received and also when it goes out, according to Klein.“All our pickers double check that orders are properly fulfilled. In this competitive business environment, customers need to have confidence the orders they receive are correct.”

Friedman notes how service in QC has been an integral part of Riviera’s business.

“We can track every package from the time it hits our building until it is delivered. Customers need to know what they get is what they ordered,” he says. “And, we stand behind our products 100%. If they get something they don’t like, we send another delivery immediately. They can even call us when someone else messed up, and we’ll fix it.”

COMMUNICATING EFFECTIVELY

Wholesalers are essential information brokers — a fundamental part of their service business. Vision Global’s Aronica says that information includes “thorough and accurate communication regarding market updates, seasonality trends, crop forecasts, and any other necessary information needed for our customers to make the best possible purchasing decisions.”

Crawford notes a major benefit Baldor brings is its knowledge base. “Our depth of knowledge goes from the product all the way through logistics, market conditions, and expertise of harder-to-find items.”

“Customers are looking to us for information from how do I solve a problem, to when are certain products in season, to what are the local farms on these items, to how should I think about taking a delivery on a certain day because my kitchen is closed,” he says.

One of Baldor’s strengths, explains Crawford, is the 100-plus salespeople it has out with customers daily. “Sometimes it’s not about selling product, it’s just being a thought leader. The amount of people we have on our team who have been in the hospitality industry allows us to bring a level of service that’s different and special.”

Four Seasons’ retail services team provides merchandising support for resets, openings, retailer staff trainings, and display builds to partner customers.

“Ad writing, promo support, and reporting analysis go hand-in-hand with our assortment of thousands of high-quality SKUs to help any produce department stand out,” says Steffy.

EXP values efficiency in its customer service ability, says Serafino. “You want that little edge that can take you over the mark,” he says. “Every PO is not given, it’s earned. The client is entrusting us with their business and in having our products in their stores or warehouse. We are very client-focused.”

Wholesalers serve as an information source and guide for customers. Friedman explains how Riviera supports customers in rethinking products for menu selection due to increasing costs.

“Our customers are trying to cut their cost of goods to be able to maintain their profit margin,” he says. “We see them looking more now for items offering a better value for their needs.”

Friedman says they’re also advising customers about menu items with less variance.

“For example, suggesting regular Brussels sprouts instead of baby Brussels sprouts. They can still have an interesting product on the menu, but without so much fluctuation in price.”

Serving as an information broker between growers and customers is another vital service.

Communicating with growers so they know how much product we’re looking for during the season is a crucial part of our role,” says Klein. “It helps them plan, to know what product to put aside for us, and ensures our customers will have the supply when they need it.”

MOVING INTO THE FUTURE

To serve customers and growers into the future, wholesalers keep evolving.

EXP, for example, continues to invest in technology. “How you organize your business is crucial for being able to move into the future, so ERP is huge for us,” says Serafino.

“For instance our QC is all done with state-of-the-art tablets and guns on the floor. We use a lot of cloud-based software. We’re also starting to look at how AI will affect the industry. This industry is moving forward as the next generations take over the businesses. We’ve embraced technology in a very fast-forward way.”

To stay relevant, Four Seasons Produce invests in people and technology capability. “As one of our transportation and logistics leaders, Kevin Bender, likes to say, ‘Automate what you hate, and elevate what you automate,’” says Steffy.

“Whether a new warehouse management system (WMS), new routing software, back-end office process improvement, or digitally connecting with partners, it’s about finding ways to use technology to be more effective and efficient. This allows our associates more time to invest in communication, relationship, decision-making, and innovation to help our customers and suppliers.”

Auerbach is in the process of upgrading its computer system as well as harnessing new generations of staff, says Klein. “Computer system upgrades will help us provide more, and better, information to customers. We’re getting younger people involved in the company to take it into the next generation.”

Last year, Vision Global Group underwent a joint venture with William H. Kopke Jr., Inc. “As this industry continues to evolve in response to socio-economic impacts, environmental factors, and technological advancements, our purpose from a business standpoint must remain relevant,” says Aronica. “Partnerships such as this allow us to expand our vision and resources, not only domestically, but globally, as well.”

Looking forward, Riviera is expanding its produce line to include proteins, explains Friedman. “We started offering meat for the first time in June,” he says. “We’re also bringing in a line of different bottled waters and other items that are high velocity, high usage in foodservice. This gives us an opportunity to put more items on a truck and increase sales per order. I don’t want to be a Sysco or US Foods, but there are some products that are a good fit.

“COVID changed the produce-only foodservice companies forever — line extensions and offering more is the evolution of the future.”