Time To Call A Wholesaler-Distributor?

A Farmer's Story

Rich Collins uses a produce wholesaler-distributor these days. He used to sell his Belgian endive himself--to restaurants, hotels, and banquet halls. But he decided the time involved in delivery could be better spent at his farm. He considers the 20 percent he pays for the service well spent.

Collins described his farming operation and distribution methods at a recent marketing seminar in Sacramento, co-sponsored by the Small Farm Center. Before going to a distributor he found his own buyers--chefs who specialize in food that is fresh, light, and prepared simply. He talked to them, demonstrated his product, gave away samples, took orders, established price, payment, and delivery schedules. He was consistent with quality, quantity, and delivery times. The chefs trusted him to do what he said he would do when he said he would do it. Another seminar speaker, Tom Chan of General Produce, commented, "nobody loves your product more than you do. You planted the seed, you nurtured it, you know more about it than anyone else ever will, and that is communicated when you sell directly to restaurants."

When Collins hired a distributor, he was able to hand over a list of his buyers, the schedule they had established, and the quantities they expected. The distributor added Collins' customers to his list of clients and deliveries proceeded without a ripple. Look under "fruits and vegetable wholesalers" in the telephone book yellow pages for wholesaler-distributors, or ask farmer neighbors for recommendations.

A Wholesaler-Distributor's Story

Tom Chan and George Poulus of General Produce in Sacramento explained how produce distributors work. General Produce sells and delivers all kinds of fresh fruits and vegetables. Chefs usually do not have time to seek out farmers. They rely on distributors to find products and deliver them. Modern distribution means a product can be picked, cleaned, processed, loaded, unloaded, to the consumer, and on the table in less than 24 hours.

Distributors communicate with their producers and customers by telephone. This involves a tremendous amount of trust on all sides. The customers rely on the distributor to tell them what they have for sale, the quality and quantity of it, just as the distributor depends on the farmer to deliver what is promised. It is important that the relationship is fair and that everybody wins. If the grower doesn't feel it is advantageous to sell a product through a distributor, the relationship will fail.

George Poulus told the attendees: "We are on your side. We are part of the process to get your product from the ground to the consumer, whether it be food service or a retail outlet. You are important to us. Without you we don't exist. The competition is intense. When you come to visit us, bring your product with you. Let us get it out to the public. Let us show them how to use it. Educate us with what you have. We need to know what it is--variety, type, where it is from, how it can be used by the consumer. We need to know when we can get it, how long we can have it. We emphasize consistency. Make an appointment to visit the warehouse, see how products are packaged and handled, how you need to present it to the wholesaler and to the general public."

Financial Arrangements

Some distributors pay more quickly than restaurants do. General Produce pays within 14 days. Small business people have cash flow problems, so it helps to have a guaranteed payment on a regular basis. They buy at a specific price, which they can help establish because they deal with a large number of sellers. If the grower has a price in mind, the distributor will tell him what other people are selling the same product for. For organic produce, people will pay 20 to 30 percent more, but the price difference cannot be too extreme. Few organic growers sell all their produce at the organic premium price.

Packaging

Packaging is important. Bob Cummins of the California Department of Food and Agriculture (CDFA) explained, "Fresh fruit, nuts, and vegetables sold in the channels of trade are subject to regulations established in the California Code of Regulations. Size, count, and containers are specified for numerous products; i.e., standard stock sizes are established for asparagus; standard containers and counts with corresponding minimum average diameter are established for oranges, grapefruits, and lemons." The box needs to be strong, perhaps waxed. Organic produce must be registered and certified. UPC codes help at the retail level. It is ideal to have the product come in a saleable package, because less handling means better shelf life. George Poulus advises, "People want to know how to cook it, how to handle it, how to store it. People have a romantic idea of what a small grower is. They think of the white house and the picket fence and the generations of family and the children being raised to be workers and so on. Emphasize that." David Visher, of the Small Farm Center, added, "Point of purchase information cards are also a good marketing tool."

Volume

Chan and Poulus will work with small volumes of a product ("five cases may be okay") because they feel that "small gets larger."

More information

Small Farm Center

"Marketing through Wholesalers and Shippers" and "Selling to Restaurants."

Federal-State Market News

Federal-State Market News is a compilation of market prices, supply, demand, quality, etc., collected from major terminals and other handlers. Subscriptions are available for daily, weekly and monthly issues. Market information can also be obtained by telephone. For information or to subscribe, write: Federal-State Market News Service, 1220 N Street, Room 216, P.O. Box 942871, Sacramento, CA 94271-0001.

Fruit, Vegetable, and Egg Quality Control--Standardization

CDFA sells the publication listing container regulations. Contact them at: 1220 N Street, P. O. Box 942871, Sacramento, CA 94271-0001, (916) 654-0919.

Sell What You Sow: A Guide to Successful Produce Marketing

By Eric Gibson, New World Publishing, 3701 Clair Dr., Carmichael, CA 95608.

The Packer

The Packer is a newspaper for the produce industry. It lists current prices of produce, buying trends expected, and has related articles and advertisements. An annual produce and availability merchandising guide shows buyers by commodity and their states and cities. Available by subscription from: The Packer, attention: Circulation Dept., P.O. Box 2939, Overland Park, KS 66210; (800) 255-5113.