Mayra Arias, Joselyne Niebla and Tomas Aramburo of Aramburo produce, Inc

Nearly half of all the residents of Los Angeles County were of Hispanic origin in 2010, according to the U.S. Census, and an additional 200,000 Hispanics took up residence in the county in just four years following the Census.

At the same time, there was also more than 1.5 million people in the county of Asian descent in 2014, as immigrants from Korea and Vietnam joined longer-term residents whose ancestors came from China or Japan. According to chef Jet Tila, the food television personality who leads a Flavors of Thai Town Tour, there are more Thais in Los Angeles than anywhere in the world — except Thailand.

“The LA market continues to be a melting pot of cultures — even more so today than a decade ago,” says Karen Caplan, president and chief executive of Frieda’s, Los Alamitos, CA. “There are more ethnic grocery stores cropping up, and neighborhoods with concentrated immigration populations like Koreatown, Little Tokyo and Little Saigon continue to grow.”

Frieda’s has been offering specialty produce items since Caplan’s mother, Frieda Rapoport Caplan, introduced kiwifruit to the United States in 1962.

Fernando Pantoja of Rain Forest Produce

This quilt of many colors defines the world of produce in Los Angeles, as markets (small and large) offer fruits and vegetables from Latin America and Asia and wholesalers introduce them to the rest of the nation.

Diversity defines the LA marketplace more then any other metro market with its close proximity to Mexican growers and one of the largest variety growing areas for the U.S. located in Central California,” says Robert Schueller, director of public relations at Melissa’s/World Variety Produce, Los Angeles. “Los Angeles offers the most diverse marketplace — Hispanic and Asian produce categories are continuing as a growth trend.”

Melissa’s/World Variety began introducing many Hispanic produce items to mainstream supermarkets nationwide more than three decades ago. Los Angeles provides the United States a view of where its people, and its produce, are headed.

“The market has become more diverse than it was a decade ago — as more people become fascinated with food and become real ‘foodies’ they are apt to explore many different food cultures and flavor profiles,” says Lindsay Barthold, marketing manager for Harvest Sensations, Los Angeles.

John Meert and Jeff Osugi of Maui Fresh

Hispanic and Asian foods often enter the culinary mainstream in Los Angeles, as younger consumers become aware of produce from many places and cuisines.

“A shift in our population seems to be a driving factor,” says Caplan. “Pew Research Center published a report last year showing that immigrants and their descendants will drive most of the U.S. population growth in the coming 50 years. Also our collective palates are changing — we’re seeking out more authentic flavors and ingredients, and we’re becoming more adventurous with our cooking and dining.”

The ethnic diversity of the population feeds a produce sector that is unusually varied in both its fruits and vegetables, and in the size and type of its food stores.

“The diverse, multi-ethnic population makes Los Angeles an ideal market,” says Alan Hilowitz, company spokesman for Ready Pac Foods, Irwindale, CA. “This separates Los Angeles from a lot of other major cities. The choices that consumers have of where to shop in LA are very large, from big chain stores, to big box stores, to the smaller ethnic independent markets.”

Francisco Clouthier of Maui Fresh

Hilowitz finds the area has a tremendous market for healthy foods in general, and, in particular, the salad products that are the foundation at Ready Pac.

“There’s a greater emphasis on eating healthier, and on eating ethnic foods and produce,” he says. “Along with that comes a fabulous selection not easily found elsewhere of fresh foods, produce, both organic and conventional. Our company began in the LA market, servicing foodservice customers with fresh-cut produce and salads. Today, we grew into a fresh foods company, featuring not only fresh-cut produce, but also convenient, single-serve salads, complete salad kits and bagged salad blends.”

Another national demographic trend also comes into focus in Los Angeles County, as residents are increasingly divided into a relatively affluent minority and a stubbornly large number of impoverished, or near impoverished residents.

Nearly 30 percent of the households in the county make more than $100,000 annually, according to the U.S. Census 2014 estimate. At the other end of the spectrum, more than 21 percent of families with children were living below the poverty line, which was up from 18 percent in 2010, even without taking into account the high cost of living.

This economic division gives birth to produce retail segmentation that allows relatively high-end specialty markets, and ethnic stores serving low-income communities, to both flourish.

Strategically Located

The location and proximity to the highway and air transport infrastructure make Los Angeles a hub, receiving produce from significant growing areas both within the state and outside the country.

Just as the region is situated to serve as a port of entry for immigrants, it is also a hub in the increasingly global system of produce production and distribution.

“Los Angeles is a good location for consolidating and shipping produce as it is near the California, Arizona and Mexico growing regions, as well as a large international airport and two commercial ports,” says Barthold.

Many produce distributors and processors find Los Angeles to be an ideal location. It is both close to some of the most productive agricultural areas, and within easy access of shipping facilities to anywhere in the world.

“We distribute all across the U.S. and beyond,” says Ray Davis, owner of Pacific Sun Distributing, Inc., Los Angeles. “We consolidate and ship produce. We’re close to the growing areas like Oxnard, Santa Maria, Salinas and Mexico; we have access to the produce. Los Angeles is a great hub for trucks, it has the port, and LAX is one of the biggest airports in the world.”

The area is a natural hub for tropical fruits coming from Mexico and Central America, and heading to the rest of the country and beyond. As a global hub for highly perishable fruits and vegetables, the Los Angeles area is a natural for produce logistics companies. “We provide real-time visibility on supply and demand on a daily basis, which is critical when you consider the very short shelf life of many fruits and vegetables,” says Robert Frost, Group chief executive for Linkfresh, Ventura, CA. “Los Angeles is an ideal location for our U.S. operations for several reasons.”

“Los Angeles has a large and thriving Fresh Produce Terminal,” says Frost. “California alone produces more than 50 percent of the U.S. fresh produce production. Los Angeles provides excellent transport links with multiple local airports to the most fertile production regions within California and other states.

“Los Angeles has a diverse population which embraces many cultural tastes,” he says. “It is also well educated and strives toward healthy eating and understanding the benefits of knowing exactly what you are eating and where it comes from, including the carbon footprint.”

Retail Customer Demands

According to Chain Store Guide’s 2015 Market Share Report, Kroger, with Ralph’s Supermarkets and Food 4 Less, has nearly 25 percent market share in the greater Los Angeles area. Kroger, Costco and Safeway combine for almost half of all the retail produce sales in Los Angeles County. “We have expanded,” says Mark Carroll, senior director of produce and floral at Gelson’s Markets, Encino, CA. “We’ve grown this year from 18 to 25 stores. We mainly expanded by acquiring some of the former Haggen stores that closed. We go all the way down to northern San Diego County, and we’re as far inland as Rancho Mirage, out in the Palm Springs area. We offer top quality. We think we have the freshest produce and top-notch service. We’re probably not associated with serving ethnic groups, but I wouldn’t exclude them,” says Carroll.

There are numerous smaller independent chains or stores, many of them catering specifically to the 60 percent of the residents who are either Hispanic or Asian. As ethnic fruits and vegetables have gone mainstream — which likely happens earlier in Los Angeles than most other locales — there has been a blurring of the distinction between produce departments in independents serving Hispanic or Asian neighborhoods, and in large mainstream supermarkets.

“The biggest change in the retail landscape is that retailers who used to be referred to as ‘ethnic retailers,’ such as Northgate González Markets, which primarily appealed to a specific ethnic demographic, now have selections in their stores that rival the conventional and gourmet retailers such as Ralphs, Vons and Bristol Farms,” says Caplan of Frieda’s. “These former ethnic markets now attract gourmet shoppers and foodies because of the vast selection of hard-to-find and specialty ingredients.”

Specialty importers that wholesale a relatively short list of products handle some produce items at the wholesale level. “Do we get calls for chili peppers?” asks Chuck Anunciation, division manager for Giumarra Bros. Fruit Co., Los Angeles. “No, because there are specialty chili houses. We also don’t get calls for bananas. We have departments for fruits, melons, wet vegetables, dry vegetables, tropicals and tomatoes.”

“We do a lot of tropicals — like bananas, mangos and limes,” says Jim Alvarez, president of Olympic Fruit and Vegetable in Los Angeles. “We are wholesalers, ripeners, shippers and growers. In LA, we’re mostly wholesalers shipping from Oxnard to South Orange County. We sell to retailers, wholesalers and foodservice. We sell to big, small, and in between retailers.”

Alvarez finds the wholesaling and shipping business has become more competitive, and more subject to food safety record-keeping requirements. “In the last 10 or 20 years, people are working on lower margins,” says Alvarez. “The food safety and labeling laws are changing all the time,” he says. “We can’t really buy from people who don’t have the right labels.”

Giumarra’s 96-year-old wholesale division has a 50,000 square-foot warehouse just two blocks from the Los Angeles Terminal Market and uses a network of growers from California, Mexico and South America to receive and ship a long list of fruits and vegetables, many of them available 12 months of the year.

“Our business is a mix,” says Anunciation. “We are going to a few retailers, but not all of them. We have walk-up trade as well as our backdoor established customers who come to us as secondary suppliers or consolidators.”

A major part of Giumarra’s business is consolidating produce for relatively large retailers.“We do cross-dock consolidation,” says Anunciation. “We receive their product, and then it is dispersed out of our facility. We put together a consolidation department. We are a secondary supplier for a major retailer. Whatever shorts their distribution centers have, they call us, and we deliver directly to their stores. We also do consolidation for other retailers in Hawaii.”

As evidence of an expanding higher end market this spring, Giumarra added an organic vegetable line including lettuce, cabbage, broccoli, celery, cauliflower, beets, chard and kale, along with a variety of specialty vegetables, greens, and herbs. “We became certified as an organic facility in May, and we are a handler of organic produce,” says Anunciation, who worked previously as a head produce buyer for Whole Foods Market. “There’s been a large increase in demand for organic since we became a certified facility.”

Large Hub For Organics

Photo Courtesy of Frieda’s

Long-time organic wholesalers agree the demand is still doing nothing but increasing. “I was talking to an established retailer with a large organic program who said, ‘With all the organic produce we buy, we are only satisfying two-thirds of our demand at the store level. We need more than we can find,’” says David Weinstein, marketing director at Heath & LeJeune, a major Los Angeles-based organic produce wholesaler. “The supply cannot keep up with the demand.”

Weinstein believes the next surge in organic produce will be in some of the tree fruits that have not yet developed mature markets. “For the longest time, everyone was buying organic vegetables, and it became a mature category,” he says. “On the fruit side, it’s still developing. But with most tree fruit, we only have two or three established organic shippers, when there is probably room for four or five.”

Los Angeles is traditionally the place where California’s many organic farmers send their fruits and vegetables for shipments. “Los Angeles has been the place in California where farmers sent their produce,” says Weinstein. “LA has been the consignment location. San Francisco wholesalers pay cash; San Diego wholesalers pay cash; Seattle wholesalers pay cash. But Los Angeles has always been the consignment center.”

This tradition made LA an ideal candidate to serve as the original large hub — receiving and shipping organic produce. “LA developed the infrastructure to ship mixed loads,” says Weinstein. “When people started distributing organic in the 1970s, they just piggybacked on this ability to ship mixed loads. Now you have large, sophisticated distributors in Southern California with the ability to ship loads of organic produce. Probably a majority of it goes outside the state.”

“The diversity of Los Angeles helps us move different qualities, quantities and pack styles,” says Francisco Clouthier, owner of Maui Fresh, Los Angeles. “We have access to different types of customers, so we can use produce from growers in California, Mexico, Canada and Holland. If you are dealing with just one or two types of customers, then you can’t do that. We sell to local foodservice and national foodservice, to high-end stores and discount stores, to national chains and local ethnic chains.”

Clouthier witnessed the inventory he handles grow more complex as additional varieties of familiar fruits and vegetables become relevant. “Ten years ago, tomatoes were Romas, Cherries, and Beefsteaks,” he says. “Now there are 20 different items, and I don’t know how many different packs.”

The New World of Foodservice

In this modern digital world special intermediaries handle most of the restaurant produce trade that was once conducted face-to-face in the wee hours between wholesalers and restaurateurs.

“We do a fair amount of business with the purveyors, such as Nationwide Produce, Sunrise Produce Company and California Wholesale,” says Anunciation of Giumarra Bros. “They are the ones that are going to the restaurants and foodservice. We have several different things going on here at Giumarra. We sell to large retailers, purveyors who supply restaurants and foodservice, small chains of one to five stores, and single-store grocers.”

A huge volume of produce goes from the wholesalers, to the purveyors and on to foodservice establishments. One-third of all the restaurants in California are located in Los Angeles County, according to the Sacramento-based California Restaurant Association, which improves the business environment for restaurants, advocating on a slate of national, state and local issues.

The 2010 U.S. Census counted far more full-service restaurants in Los Angeles County than any other in the country, with nearly as many as New York and Chicago’s Cook Counties combined. And nearby Orange and San Diego Counties were also both in the Top 6 nationally, as each of them have significantly more full service restaurants than San Francisco.

There is a network of middlemen, or purveyors, who buy produce from the wholesalers for this legion of restaurants. “The restaurant purveyors still do the lion’s share of the purchasing,” says Jeff Weisfeld, president of Fruit Distributing Corp. of California, Los Angeles. “We don’t see many restaurants down here at the market. It’s not convenient if you’re buying a box of this, and a box of that. You would need your own truck or refrigerated van. You would also need a guy who’s willing to get up at one in the morning.”

Fruit Distributing handles a significant amount of produce that goes to restaurants. “My brother is a purveyor, and I do business with him,” says Weisfeld. “Maybe 15 percent of our business goes to restaurant purveyors.”

New Age Business Environment

Many of LA’s wholesalers are helping to improve both efficiency and freshness by consolidating produce from numerous California shippers. “Companies that are moving to single consolidation points, like Harvest Sensations, are saving between $50 and $100 per stop simply by asking their vendors to quote them off of a consolidation dock, or asking us to provide that service for them as opposed to having a truck make multiple stops for multiple products,” says Lindsay Barthold, marketing manager for Harvest Sensations, Los Angeles.

“It also maintains the freshness of their product better when their truck doors are not opened at every stop.” One Los Angeles wholesaler built its entire business around sourcing produce from the nearby Central Valley and consolidating shipments for retailers in the Eastern United States.

“We’re based in Los Angeles, but most of our customers are not,” says Jawaid Ismail, chief executive of JM International Produce, Los Angeles. “We buy from California growers, but we ship to ethnic stores on the East Coast. Our niche is Asian stores — Chinese, Korean, and we have one Indian customer. Rather than deal with a lot of different suppliers, they can just deal with one wholesaler.”

JM International’s location is ideal to offer smaller retailers across the country logistical services the giant chains can do for themselves. “Our customers would not be able to buy a few boxes of something from a grower, but if their total order is two to six pallets, we can put that together for them,” says Ismail. “The large supermarkets pretty much have their own distribution chains. Our customers tend to be smaller stores that don’t have the infrastructure to do that. We can buy in volume. We try to buy as much local from the Central Valley as we can.”

Some area wholesalers found consolidation, regulation, and lower margins make for a more difficult business environment. “The market is less diverse now than a decade ago,” says Jose Robles, president and managing partner at Diversified Distributors, Vernon, CA. “As retailers keep consolidating and taking into account all new regulations and safety protocols, I believe it’s driving out and literally abolishing the smaller and independent start-up companies that once flourished in the Los Angeles area. This results in a much smaller pool of competitors that now unsuccessfully try to dabble in many more fresh commodities rather then specialize in the product that they do best.”

Diversified built a quarter century of relations that it relies on to survive in this more difficult atmosphere. “We are in a unique situation in that we have been in this industry for more than 25 years, and we have at one time or another sold to most retailers,” says Robles. “But we have seen many retailers consolidate, and it has been our good fortune that on the ones we don’t directly sell to now, we somehow end up selling to the vendors that do sell to them. So our product is still indirectly reaching those retailers. The ethnic markets are growing rapidly, and it happens to be the basis of our success as they are the core clientele whom we catered to for the past 25 years.”

Despite these connections to the area’s retail community, Diversified is looking for a better territory to continue produce wholesaling. “My brother, Frank Robles, who is also my business partner, and I concluded that LA is no longer the place for our business,” says Robles. “We noticed that throughout the years, the major players in the produce industry have not hesitated to leave the LA area, and have done so successfully. Whether it is the government agencies and high taxation in Los Angeles; or the simple fact that new technology and less expensive lease rates are available outside the area; or a simple combination of these and many other factors; Frank and I concluded that it is in our best interest to look elsewhere for our future endeavors.”

Another way that Los Angeles reflects the changing produce times is the switch from face to face encounters to digital transactions. “It’s always changing, whether it’s for better or worse, is hard to say,” says Alan Pollack, general manager at Coosemans LA Shipping, Los Angeles. “We don’t have the walk-in traffic we did years ago. Every year it’s less and less. This new generation doesn’t walk in so much. They do more with texting and emailing. The requirements of computer inputting and outputting is taking more time — so they don’t have as much time to get out to the market.”

Pollack has been part of Coosemans since the company began flying Belgian endive into Los Angeles International Airport in the late 1970s and delivering it to restaurants and specialty markets in the area.

For the past 30 years, Coosemans maintained a prominent spot at the Terminal Market not far from the airport and continues to wholesale specialty produce items from around the world, as well as from nearby Central Valley fields.

Pollack is not particularly enamored by the new digital way of doing business, but Coosemans has been able to more than hold its own. “Sales are brisk. There are always new items, or different ways of packaging old items,” says Pollack. “It hasn’t cost us business, because we picked it up in text, email or phone business. It is a lot harder to show them new items, and it’s harder to communicate. This has been going on for 10 years or more.”

“Produce purchasing has become more electronic,” says Dale Firman, president of Cooseman’s LA Shipping, Los Angeles, CA. “There’s not as much contact face to face, not even as much contact on the phone. I’ve got a lot of younger people coming in to purchase for companies,” says Firman. “I’m not sure how much they know about even what produce should look like. That varies from house to house; some of them are hands on. We are hands on; we even eat the produce.”

“For existing companies the new technology has made it easy,” says Firman. “Our business continues to grow. We’ve worked hard on talking to our customers about quality, seasonality and flavor, and we’ve used our website.