JC Produce will close its doors
JC Produce will close its doors
West Sacramento, CA-based JC Produce, an independent statewide distributor of fresh produce and other perishables in California, is going out of business.
John Tedesco, who was formerly the chief financial officer of the company, confirmed to The Produce News an Oct. 15 story in the Sacramento Bee newspaper that the company would make its final delivery on Friday, Oct. 17. Mr. Tedesco, who retired several weeks ago, has returned to assist JC Produce in closing the business, which he hopes will be completed by the end of the year.
The statewide wholesaler had truck depots throughout the state and two major distribution locations, one in West Sacramento for Northern California deliveries and one in Pico Rivera for Southern California deliveries.
JC Produce made 700 deliveries a day to customers that included restaurant chains Olive Garden, Denny's, Outback Steakhouse and P.F. Chang's.
Mr. Tedesco cited a struggling economy, rising fuel costs and a Salmonella scare this past summer that led to millions of dollars in losses in tomatoes throughout the industry as contributing to JC Produce's closure. The company took a "big hit" in tomato losses, he said.
Mr. Tedesco said the final blow occurred in late September when two large, longtime customers informed JC Produce that they were refusing the company's price increases of less than 2 percent, effective immediately.
"When you lose a major chain, it's a major impact," Mr. Tedesco said. JC Produce's 2 percent price increase was an effort by the company to defray its rising fuel costs. JC Produce's trucks get only about six miles per gallon, with the price of diesel around $5.35 per gallon delivered, he said.
JC Produce gave its customers a 10-day notice that it would cease deliveries. It was about the best the company could do under the circumstances and allowed its customers time to try to line up deliveries from other sources to avoid a disruption in service, Mr. Tedesco said. The company intends to honor its obligations to its suppliers, he added.
JC Produce was founded in 1980 by Jim Catchot, now president and chief operating officer of Rancho Cordova, CA-based Renaissance Food Group LLC. The company was one of the original founding members of Monterey, CA- based Pro*Act LLC.
Through Pro*Act, JC Produce contracted volume produce commodities directly with growers. Mr. Tedesco said that the majority of JC Produce's business was done independently of Pro*Act.
Max Yeater, chief operating officer for Pro*Act, said that Pro*Act has lined up short-term distribution from two distributors -- one in Northern California and one in Southern California -- to meet the immediate needs of its customers who relied on JC Produce's deliveries. Those distributors were set to make deliveries by Oct. 16-17, he said. Either or both of those distributors could end up being a permanent replacement to fill the void left by JC Produce, he said.
One of Pro*Act's larger affected companies is the P.F. Chang's restaurant chain, a national chain with stores in California.
"This is a sad thing for Pro*Act and the industry," Mr. Yeater said.
JC Produce is owned by the family of former Sacramento entrepreneur and developer Jim Lennane and has nearly 200 workers.
John Tedesco, who was formerly the chief financial officer of the company, confirmed to The Produce News an Oct. 15 story in the Sacramento Bee newspaper that the company would make its final delivery on Friday, Oct. 17. Mr. Tedesco, who retired several weeks ago, has returned to assist JC Produce in closing the business, which he hopes will be completed by the end of the year.
The statewide wholesaler had truck depots throughout the state and two major distribution locations, one in West Sacramento for Northern California deliveries and one in Pico Rivera for Southern California deliveries.
JC Produce made 700 deliveries a day to customers that included restaurant chains Olive Garden, Denny's, Outback Steakhouse and P.F. Chang's.
Mr. Tedesco cited a struggling economy, rising fuel costs and a Salmonella scare this past summer that led to millions of dollars in losses in tomatoes throughout the industry as contributing to JC Produce's closure. The company took a "big hit" in tomato losses, he said.
Mr. Tedesco said the final blow occurred in late September when two large, longtime customers informed JC Produce that they were refusing the company's price increases of less than 2 percent, effective immediately.
"When you lose a major chain, it's a major impact," Mr. Tedesco said. JC Produce's 2 percent price increase was an effort by the company to defray its rising fuel costs. JC Produce's trucks get only about six miles per gallon, with the price of diesel around $5.35 per gallon delivered, he said.
JC Produce gave its customers a 10-day notice that it would cease deliveries. It was about the best the company could do under the circumstances and allowed its customers time to try to line up deliveries from other sources to avoid a disruption in service, Mr. Tedesco said. The company intends to honor its obligations to its suppliers, he added.
JC Produce was founded in 1980 by Jim Catchot, now president and chief operating officer of Rancho Cordova, CA-based Renaissance Food Group LLC. The company was one of the original founding members of Monterey, CA- based Pro*Act LLC.
Through Pro*Act, JC Produce contracted volume produce commodities directly with growers. Mr. Tedesco said that the majority of JC Produce's business was done independently of Pro*Act.
Max Yeater, chief operating officer for Pro*Act, said that Pro*Act has lined up short-term distribution from two distributors -- one in Northern California and one in Southern California -- to meet the immediate needs of its customers who relied on JC Produce's deliveries. Those distributors were set to make deliveries by Oct. 16-17, he said. Either or both of those distributors could end up being a permanent replacement to fill the void left by JC Produce, he said.
One of Pro*Act's larger affected companies is the P.F. Chang's restaurant chain, a national chain with stores in California.
"This is a sad thing for Pro*Act and the industry," Mr. Yeater said.
JC Produce is owned by the family of former Sacramento entrepreneur and developer Jim Lennane and has nearly 200 workers.
