A variety of shoppers and food venues make this city prime for produce.
Originally printed in the March 2022 issue of Produce Business.
As Canada’s second largest city, Montreal boasts a population of 1.75 million, according to World Population Review, encompassing a diverse cross-section of food consumers. “Though our largest demographic are of European origin, according to population statistics, about 31% of our population belong to a visible minority,” says Maria Cavazos, manager at MC Produce in Montreal.
Montreal is a multicultural society, states George Pitsikoulis, president of Canadawide Fruit Wholesalers in Montreal. “Canada as a whole is multicultural but Montreal is particularly so. Because of the French language there is more immigration from countries that speak French including our large Lebanese community as well as Vietnamese, Cambodian and Haitian communities. We also have large Italian, Greek, Portuguese and Hispanic communities.”
Montreal is a young and prosperous city. “The median age is 40, average family median income is $82,000, and singles make up the majority of population followed by married couples,” says Stephan Schmekel, executive vice president of sales and marketing for North American Produce Buyers in Toronto, Ontario, with facilities in Montreal.
The amalgamation of these demographics results in good produce consumers. “Many of the ethnic groups use fresh ingredients and a lot of produce,” says Pitsikoulis. “And, the French-Canadian population represents good produce consumers too. In general our per capita consumption of fresh produce is the highest in North America.”
Retail Keeping Steady
Montreal’s multicultural nature results in a plethora of retail formats. “Montreal has the full gambit of retail representation,” says Schmekel. “Retailers who prosper are those offering new and exciting items as well as added services such as ready-to-eat and home delivery platforms. The hard discount stores are also prospering in the current environment of sky high inflation and limited disposable income.”
Every type of retailer is in Montreal, agrees Pitsikoulis. “We have big box, warehouse style such as Costco to major retailers including Sobeys, Metro and Loblaws. They all operate under multiple banners and do very well.”
The region boasts numerous independents catering to specific neighborhoods or demographics. “We have a number of independent chains from two to ten stores,” says Pitsikoulis. “There are also medium and small-sized owner operators and several thriving public markets – all providing great formats for produce.”
Schmekel reports the independent grocer base in Montreal has remained relatively stable with modest growth. “They have relied on importer/wholesalers such as ourselves to help them navigate through supply chain challenges,” he says.
The variety of formats serves various consumer needs, explains Cavazos. “Consumers shop different places to meet their needs or to find specific product they want,” she says. “For example, if shoppers want a really good mango they might go to a particular store known for handling tropicals.”
Foodservice Bouncing Back
Though restaurants re-opened only a few months ago, Cavazos reports people are enjoying restaurants again. “We lost many restaurants due to Covid, but Montreal is a great restaurant city and we expect to see good restaurants coming back,” she says. “It will take time though.”
As restrictions lift, Schmekel agrees the vibrant restaurant industry should start to bounce back to its pre-pandemic glory. “Having this cultural and ethnic diversity offers us interesting and ample choices,” he says. “The industry is very produce oriented and there has been a push by the government to encourage the Eat Local message. We have seen an increase in local produce throughout the restaurant industry.”
The city’s restaurant diversity includes a wide variety of restaurants from ethnic restaurants to trendy up-starts, according to Pitsikoulis. “This market is dominated by chef/owner-operators or local chains,” he says. “We see very few national chains.”
Montreal’s foodservice distribution industry focuses on independent operation. “We have a lot of very strong independent foodservice operators who account for the majority of business in our area,” says Pitsikoulis. “The national distributors haven’t made the inroads into our market like they have in other areas.”
Strength In Variety
The marketplace pushes a constant evolution of items because of the city’s ethnic diversity as well as other factors. “Our residents vacation in tropical climates and find tropical items which they look for when they get home,” says Pitsikoulis. “Item diversity makes what we do fun. Our retail customers are looking for the next new, interesting item and they look to us to be first-to-market on these.”
Schmekel reports seeing an increase in specialty offerings. “As Canadians spent more time at home cooking during the pandemic, we saw households experimenting with new products and enjoying these new experiences,” he says. “Consumers will continue on this path after the pandemic and are willing to spend to receive these positive experiences, ultimately increasing revenues for the retailers.”
Having variety and diversity of product is something customers continue to look for, states Pitsikoulis. “I remember 30 years ago basil and romas were specialty items. A current similar item is tomatillo. We used to buy 20 to 30 boxes and now we’re buying 15 to 20 pallets at a time. Many items initially introduced as an obscure ethnic item eventually become mainstream. Our strength is our variety. Within each item we have multiple choices. The more choices we have, the more it benefits our customers.”
The quality of assortment of produce reflects the need to support the retail initiatives in offering new and exciting items, describes Schmekel. “Again, with the logistical issues seen in the supply chain, offering just in time service has been incredibly challenging as wholesalers face the same challenges as retailers,” he says.
Meeting Challenges And Opportunities
The industry has indeed experienced overwhelming challenges in recent years. “Increasing costs, labor challenges and other supply chain issues make business more difficult,” says Cavazos. “I’ve never worked so hard in my 22 years of business. We have to constantly evaluate the situation every day to keep our customers and growers informed of what is happening.”
Yet amidst the challenge, wholesalers also find opportunity. Packaging went through some shifts during COVID as people preferred to buy products that were prepackaged, explains Pitsikoulis. “The packaging trend will continue though bulk has also picked up again,” he says. “What is going through a shift is the type of packaging. You have to have viable alternatives to packaging for something that is ecologically friendly. And also we see more conversation about the carbon footprint.”
Pitsikoulis also reports organic and local trends continue. “The whole organic market just keeps growing,” he says. “All the regular retailers carry organics but now we see smaller mom and pop stores even having growing organic business. Local was always part of our DNA because of all the local production of vegetables and summer berries. But now winter hothouse stuff is becoming more a part of the regular conversation as well as hothouse lettuce.”
Growing, Expanding And Customizing
Montreal’s wholesalers continue to look for ways to better serve customers. Import programs continue to prosper. Canadawide’s import programs have grown over the years. “We source citrus internationally as well as grapes, tree fruit, tropicals and exotics,” says Pitsikoulis.
North American Produce Buyers continues to expand its imports of Southern Hemisphere deciduous fruit, shipping products coast to coast. “New and exciting varieties of grapes, whether it be green or red grapes as well as the Candy varieties, are creating positive experiences for consumers who look to repeat those experiences,” says Schmekel. “We are also heavily involved and continue to expand in our Israeli citrus programs which have brought strong success with our retail partners.”
Canadawide continues to develop packaging options for customers. “We have an area in the building devoted to packaging with the latest equipment,” says Pitsikoulis. “Our goal is to be flexible to whatever the need is with our customers.”
To accommodate this area of growth, Canadawide acquired another building. “We retrofitted it and have started using it as of a few weeks ago,” says Pitsikoulis. “We will be using full capacity within a month or two. The new building doubles our storage from 7,000 to 14,000 pallets. It also doubles our fruit ripening rooms and quadruples our packaging area.”
Other initiatives at North American Produce Buyers revolve around looking for new packaging solutions. “These include recyclable and compostable trays which we are working in conjunction with partners all over the globe to bring to market,” says Schmekel.
MC Produce meets customer needs by designing specific packaging. “We did a new design for boxes for one of our big-box customers,” says Cavazos. “They wanted to have uniform boxes so everything is packed in their specially-designed box. There were a lot of considerations but we worked with them to ensure we put together what met their needs.”
Wholesalers Remain Integral Part Of Montreal’s Food Business
Montreal’s wholesalers reflect the dynamic of the city and the uncertainty of recent years has reinforced their worth. “Although we were still navigating through the pandemic, we saw wholesalers expanding their businesses in different areas, whether it be in the packaging segment, or growing sector,” says Stephan Schmekel, executive vice president of sales and marketing for North American Produce Buyers in Toronto, Ontario, with facilities in Montreal.
The wholesalers bring invaluable support, points out Maria Cavazos, manager at MC Produce in Montreal. “We ensure supply all year-round and have decades-long experience in the market,” she says. “We know the business on both sides and have a solid relationship with our growers and our customers.”
Certainly, all the independent retailers, mom and pops and foodservice distributors rely on the wholesalers, says George Pitsikoulis, president of Canadawide Fruit Wholesalers in Montreal “We all have our different levels of business we do with different customers. Some buy a majority from one wholesaler, others tour the city to buy from various wholesalers.”
Wholesalers play an important role in supporting the retail community, whether at the local produce store all the way up to major retailers, states Schmekel. “In a year of logistics disruption, wholesalers have been vital to making sure store in stocks saw minimal disruptions in the supply chain,” he says.
Cavazos notes the importance of having a hand on the pulse of the market. “We can advise our suppliers and our customers,” she says. “We are in a center position and we can advise both sides of the chain. We put together good deals for when product is long to help promote. It will be a good deal for the end consumer; it will help the retailer make money by selling volume; and it will help the supplier move the product.”
Many wholesalers act as importers, explains Schmekel. “As such, they are able to provide support to the retail community through direct import programs which limits out of stocks due to the logistical challenges faced,” he says.
