Controlling the Controllable in Wholesale
April 1, 2017 | 4 min to read
Operating a business is truly like life on a treadmill — no matter how good the previous month or year was, the meter resets to zero at the beginning of each accounting period.
Most industries have seasonal peaks and valleys. For example, the candy and confection folks have Halloween, Valentine’s Day and Easter; the beer industry has the 4th of July and Labor Day. Likewise, produce wholesalers look forward to holiday bumps, but it’s never a sure thing.
During a busy season, a produce wholesaler may deal with supply issues. Though still faced with the challenge of strategically managing raw materials, other industries face a different set of concerns. Barley and cocoa prices may rise because of light crops, but there will still be plenty of candy and beer to be sold when it’s promotion time. In our world, a cherry crop can be wiped out by a devastating hailstorm, which can result in the virtual elimination of a given product line.
In my 40-plus years of running a wholesale produce company, I’ve been through plenty of ups and downs. I’ve seen red-hot markets crash and burn in a matter of a day or two, and I’ve watched as an item you couldn’t give away one week became the one that everyone’s looking for the next. One gets used to the occasional wild ride and learns to never get too excited about the ups, or too upset about the downs. You can’t change a lousy market, but you can fight for a bigger share of the pie.
The last quarter of 2016 into the first part of 2017 was tough for many produce wholesalers. Over-supply, and the resulting price deflation of many key commodities, turned a good start to 2016 into a mediocre fiscal year. I spent some time with industry friends this past January, and one described 2016 as having a 13 to 2 lead in the eighth inning, and barely hanging on to win the game. Times like that are never fun, but you learn to push forward and prepare to take advantage when things turn around.
I’ve always tried to focus my energy on things I could change, and not waste time or resources on things I could not. Managing employees, keeping customers satisfied, dealing with banks, investors and government regulations was always enough to keep my mind off of the things I couldn’t control.
The things that kept me up at night weren’t everyday issues like markets or operational problems. Though day-to-day problems can be aggravating, and if left unattended, costly, they are not going to change your world forever.
Simply put, food safety programs must be the No. 1 priority of your organization, as there is too much at stake.
The thought of a catastrophic event is what kept me up at night — what happens if one of your trucks runs into the proverbial “school bus full of lawyers’ kids?” Imagine a serious outbreak of E. coli or salmonella with the implicated product linked to your facility? Think it can’t happen? Think again.
Most wholesale distributors run a fleet of trucks that are driven hundreds of miles a day. There are bound to be a few incidents each year involving your company’s vehicles, but how do you minimize the accidents, while at the same time making sure you’re prepared to deal with a possible tragedy?
First and foremost, proper training for all your drivers is paramount. New hires’ competencies should be assessed before putting them on the road alone. Don’t assume someone who has a commercial driver’s license and has passed all the background checks is ready to roll. Institute ongoing training updates even for your most experienced employees. We don’t often think of continuing education for drivers and warehouse folks, but it helps to keep skills sharp and everyone up-to-date on the latest changes in regulations. Consider consulting your leasing company or equipment supply company, as they often have training programs at little or no cost.
Simply put, food safety programs must be the No. 1 priority of your organization, as there is just too much at stake. Consumers have died, companies have been ruined and executives have gone to prison because of improper handling of fresh produce. Quit thinking about what you need to do to pass your next audit, and start doing whatever it takes to run a safe operation. Make sure every member of your organization understands what his or her role is in maintaining a safe food environment.
Involve your insurance carrier with corporate safety programs, as no third-party cares more about preventing accidents and eliminating claims. Also, consider reviewing your coverage, particularly your liability umbrella — in today’s litigious society, you can never have enough coverage.
The wholesale produce business is unique; dealing with a perishable commodity in a fluctuating market keeps operators on their toes. An uncertain future means every day is different, and that’s what makes it fun to go to work every day.
Alan Siger is chairman of Siger Group LLC, offering consulting services in
business strategy, logistics, and operations to the produce industry. Prior to selling Consumers Produce in 2014, Siger spent more than four decades growing Consumers into a major regional distributor. Active in issues affecting the produce industry throughout his career, Siger is a former president of the United Fresh Produce Association.
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