Supply Chain Constraints Showcase Philly Wholesaler Value

Philadelphia merchants meet sourcing, logistics and transportation issues head on.

Originally printed in the September 2022 issue of Produce Business.

The challenges of the past several years emphasize the value of the Philadelphia Wholesale Produce Market (PWPM).

“Since COVID, the market has become even more relevant,” says John DiFeliciantonio, co-owner of North American Produce Company (NAPCO). “Our value has been brought to light because we have so much product here every day. COVID showcased what we can do for customers.”

The importance of PWPM to established distributors, retailers and other buyers along the East Coast has increased over the years, asserts John Vena, president of John Vena Inc. (JVI).

“In addition, the facility has a social and civic significance that cannot be understated,” he says. “It is an anchor institution and resource in Philadelphia and the surrounding counties, particularly for our ethnic and underserved communities. It not only contributes to improved health outcomes and provides high quality jobs, it facilitates entrepreneurship and supports the local economy by keeping dollars in the community.”

PWPM customers range in size from large to small and those in between. “We service retailers large and small, large-box format stores, foodservice organizations, restaurants, independent retailers, small chains, bodegas, all the way down to people buying for their communities,” says Tracie Levin, controller for M. Levin and Company. “Because of our extensive line of ethnic produce, we have many buyers from different countries purchasing from us; it’s a good cross-section of what makes up the population in Philadelphia.”

Tom Kovacevich, president at TMK Produce, credits PWPM merchants as being super sharp, knowledgeable, and hard working. “Every day, I am amazed at the creativity and flexibility exhibited throughout the market,” he says. “Recent improvements in the handling of waste and produce rescue is a great example. Faced with a complete disappearance of flea markets and street hucksters typically willing to ‘work’ product, the market adapted and formed a partnership with nonprofit Sharing Excess.”

CONSOLIDATION AND CONVENIENCE

The market provides benefit for both sides of the supply chain. “We are an outstanding distribution channel for our farmers and a terrific source of quality and value to our customers,” says Kovacevich. “PWPM merchants offer over 5,000 items of fresh produce, with over 30 million pounds on-hand.”

The market’s ability to consolidate loads helps lower costs. “We make shopping easier and cost-effective for our customers,” says Todd Penza, salesman with Pinto Brothers. “They don’t have to work as hard to source the many different items they need. Also, it lowers risk due to supply and transportation issues.”

Immediate availability and flexibility are additional advantages. “We bring in straight loads of product, so it’s easier, less expensive and we have the product,” says Rick Milavsky, president of B.R.S. Produce.

Louis Kean, general sales at E.W. Kean, explains they help customers find alternatives and options, whether it’s more reasonable pricing or filling in something missing. “Lately, we have been able to sell more #2 or unclassified items,” he says. “It’s been good to find a home for those products.”

It comes down to listening to the needs of customers, explains Rick Feighery, vice president of sales for Procacci Brothers Sales Corporation. “It’s about providing them with solutions to their challenges. We work constantly to remind customers of all we offer, and listening and talking through their needs.”

MOVING BEYOND MOVING PRODUCE

PWPM merchants continue to look for innovative ways to keep business thriving. “By continuously upgrading our environment, it allows the merchants to move into value-added areas of produce, such as fresh-cut, repacking and meal kit services,” says Mark Smith, PWPM general manager.

Ryeco already operates an off-site facility for repack and is preparing to break ground on a new 25,000 square-foot warehouse next to it. “Our objective is to increase the amount of items we store from the pier,” says Filindo Colace, vice president operations for Ryeco. “The added packing space will allow us to pack oranges and lemons in bags, whether Ryeco or customer branded.”

Procacci does a healthy business in repacking, including offering reduced pack sizes using its off-market facilities. “This relates to our service for our retail customers,” says Mike Maxwell, president. “We want to help minimize backroom labor and deliver product ready to put on the shelf. There’s a lot of value-added packaging, such as mixed bell pepper packs. We bring things in bulk for the synergy of freight and then repack to meet customer needs.”

JVI has always done a lot of sourcing to order, and it’s something the company still does for some customers. “That’s a major benefit for buyers finding themselves with special orders or non-stock requests they just don’t have the time or resources to fulfill,” says Emily Kohlhas, JVI director of marketing.

The team at JVI has built unique custom services and programs for customers, explains Kohlhas.
“For instance, one client we work with provides mixed boxes of produce and CPG items for delivery direct-to-consumer,” she says. “When maintaining their own facility became a burden, we worked collaboratively to build a program in which we act as their exclusive sourcing and packing partner. It’s been a few years now and has actually grown significantly in that time.”

EASING THE TRANSPORT CRUNCH

The logistic and cold-chain aspects of PWPM and its wholesalers are significant in today’s supply chain environment. “We’re all looking for synergies of how to be the most efficient,” says Feighery. “With high transportation costs, third base to home is more important than ever.”

The market’s infrastructure, according to Smith, makes it easy to receive produce locally, nationally and internationally. “We are perfectly situated near neighboring farms and we enjoy the benefits of highways, rail, airports, and the Port of Philadelphia,” he says. “We are a central hub in the produce supply chain, so growers and shippers have a reliable destination, and buyers of all sizes know we are a trustworthy source.”

Shippers also benefit from efficient logistics at PWPM. “Getting trucks in and out quickly is an advantage for shippers,” says B.R.S.’s Milavsky. “It frees up their trucking and gets the product in our coolers more quickly, into areas where the product will hold up nicely with less spoilage.”

Colace points out, when shippers do business with Ryeco, they get 23 trucks delivering from Virginia to New York every day. “My West Coast vendors send me product and I’m spreading their products to the greatest concentration of population in the U.S. Six years ago, we didn’t have any trucks; I see us having 28 to 30 trucks by the end of the year.”

It all comes down to moving product. “Our great shippers and brokers worked with us through the challenges of past years because they know we’re continually selling the product,” says R.J. Durante, sales and director of food safety at Nardella. “We’re not in the storage business, we’re in the selling business.”

Procacci’s Maxwell notes the importance of continuing to reinvent and innovate in the supply chain. “Our customer base is changing and the ways of getting produce to them is changing, too,” he says. “We’re evolving with the times.”

DIVERSITY IN PRODUCT

Market merchants look to continue diversifying product mix. For example, BRS is expanding its category offerings. “Anthony Carbon has built up our mushroom category over the past years and expanded into specialty greens, clamshell spring mix and baby spinach, as well as other products,” says Milavsky. “My nephew, John Miklosey, is building the exotic and tropical area. We’ve seen great results and demand for those products.”

JVI continues to energize JVI Imports. “In the fall, we will start the Israeli season with Sweeties, Sunrise grapefruit, Orri mandarin, and Wonderful pomegranates,” says Vena. “We are also exploring suppliers in South America and elsewhere to add to our lineup. It’s a tough time to grow an imports program. Brandon Tran, our imports manager has the skills needed to build partnerships with growers and customers. We expect to add some exciting new programs in the coming year or two.”

Nardella added some higher value products back into its lineup. “Cherries were a surprisingly successful product this summer,” says Durante. “And, we had beautiful orange and yellow cluster tomatoes. It’s now something unique to offer in the store and the customer takes it because it’s just too pretty not to take.”

Local is another growing segment. “This summer we sold more local product than in other years — a lot of herbs, potatoes and onions,” says Kean at E.W. Kean. “The cost of transportation makes local very attractive.”

When you’re in the heart of locally grown, it provides a lot of efficiency, adds Procacci’s Feighery. “This year, we expect to be still working locally grown through the fall,” he says. “It’s where we can provide some solutions and savings.”

INVESTING IN PEOPLE

PWPM merchants are also making strides through personnel. NAPCO has had a few new hires, such as new night manager/sales James Cottrel. “He’s been in the business a long time and has worked for me before,” says DiFeliciantonio. “He’s a good addition.”

Ryeco recently hired director of training Michael Fryberger. “We wanted to focus on training our people so we can become more productive and increase the level of technology in our warehouse,” says Colace. “We’re moving to handheld scanners for picking orders, to improve speed and accuracy with new technology.”

Ryeco also expanded its team last year with the addition of G&G to its family of companies. “We’re expanding G&G’s product line to more specialty items we don’t carry at Ryeco,” says Colace.

TMK innovated by adding salesman, Frank Primerano, at a mobile desk on the concourse walkway. “He sells all the produce we call ‘must move,’” says Kovacevich. “This is very ripe product or what we can’t sell through our other channels. He’s become extremely popular and always has a line of customers. It’s also a benefit to the grower to sell this product — it’s another example of how the wholesale market has alternative sales opportunities.”

Most of these customers, according to Primerano, are smaller operators looking for a good price point. “They use the produce within a day,” he says. “We get a lot of smoothie and fruit salad businesses. This allows us to support and service some of those smaller businesses that need a really good price point.”

TMK also utilizes two interns. “A.J. Meyers is working on an inventory project analyzing how our products turn,” says Kovacevich. “Devin Hunt is working in the warehouse and supply chain management as well as some marketing work.”

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A Legacy of Sharing

The Philadelphia Wholesale Produce Market (PWPM) has always been involved in giving back to the community.

“As long as there have been produce merchants in Philadelphia, they have found a way to help those in need through contributions of fresh fruit and vegetables,” says Mark Smith, PWPM general manager.

When Philabundance began in 1984, a natural partnership was born. “PWPM was an early advocate to rescue as much food as possible and send it out to food insecure populations,” says Smith. “This mutually beneficial relationship grew throughout the years and the merchants continued support to many other nonprofits, including Feeding PA, Blessings of Hope, Little Sisters of the Poor, area hospitals, and various food pantries.”

In 2017, Philabundance began a gleaning pilot program in the PWPM every Friday, where volunteers would sort through produce donated by the 19 wholesale businesses.

“Then the pandemic hit, and the program stalled,” says Smith. “In 2021, PWPM partnered with Sharing Excess to begin gleaning usable produce as a daily operation.”

Since July of 2021, the partnership has led to over 5.3 million pounds of produce donated to the Sharing Excess team, which has strong relationships with all the area nonprofits, including Philabundance and Feeding PA.

“The partnership has grown to such an importance for PWPM that we’ve been allocated dedicated space to operate out of,” says Alex Havertine, sourcing director at Sharing Excess. “Our goal is to be a zero waste program. We’ve collected 5.8 million pounds of produce and repurposed 5.3 million pounds to local food banks — a 91% yield rate.”

PWPM continues to innovate and forge partnerships that eliminate the disposal of food. In 2022, PWPM partnered with Do Good Foods to further ensure food is not wasted. Do Good currently collects inedible food and converts it to animal feed, thereby diverting food from the landfill and reducing carbon emissions.

“Not only is our program providing philanthropic benefit, but it also saves the market money since produce is reused instead of discarded,” says Havertine.

Market merchants appreciate the work being done. “Sharing Excess is an easy way to save us from throwing out produce,” says Tom Kovacevich, president at TMK Produce. “It’s great that we can be a partner with them and really make the most of our donations.”

Baldor Opens Philly Distribution

One development for business at the Philadelphia Wholesale Produce Market (PWPM) is the opening of Baldor’s Philadelphia facility.

“Being a new player here and learning, it’s nice to have the market down the street,” says Glenn Messinger, vice president of branch operations for Baldor Specialty Foods, including Philadelphia, Boston, and Washington, D.C.

“We have the ability to shop the market and potentially save some money for customers because of the opportunity buys there. We’ve been buying from the market every day. It’s so convenient for us. Some commodities I don’t want to put on a truck for a longer haul, so I’d rather buy those from PWPM.”

The Baldor Philly facility is a 227,000 square-foot, state-of-the-art warehouse with five different temperature zones, right off Interstate 95. The company, which started shipping out of the new facility in August 2021, is currently using 104,000 square feet and leasing the rest.

“We wanted to provide a better customer experience by being closer and our operating costs out of Philly are more cost-effective,” says Messinger. “Our carbon footprint is also better with a local facility.”

Messinger looks forward to more business with PWPM. “We’re really not competition for them, we’re a significant customer for them,” he says. “We look forward to our relationships with the guys who partner with us and to have them grow with us.”