Maui Fresh adds fruit department, makes other changes to keep business growing
Maui Fresh adds fruit department, makes other changes to keep business growing
LOS ANGELES — It has been just under 14 years since Francisco Clouthier, vice president of Maui Fresh International LLC, here, first began working in the Los Angeles produce industry. That is not a long time by the standards of many who have been part of the Los Angeles produce scene for decades, some for well over half a century. And yet in just those short 14 years, Mr. Clothier observes that he has seen dramatic changes in the business.
In fact, the business has changed a great deal in just the last four or five years.
Furthermore, the produce business in Los Angeles continues to change, and in some ways it appears to be actually coming full circle, Mr. Clouthier said, noting that after years of not patronizing the Los Angeles Wholesale Produce
Hector Florez and Jeff Osugui run the new fruit department at Maui Fresh International LLC.Market, some major chain produce buyers are beginning to come down to the market again, recognizing the need to respond more quickly to compete with local independents.
Keeping a company’s business growing in the midst of change requires making constant changes to one’s business to adjust to the changing times, and by doing so, Maui Fresh has been able to continue growing even in tough economic times, Mr. Clouthier said.
One of those changes at Maui Fresh has been the addition of a fruit department a little less than a year ago. Previously, the company’s main focus has been on tomatoes, melons and vegetables.
Hired last August to run the fruit department, are Hector Flores, formerly with Valley Produce in Los Angeles, and Jeff Osugui, formerly with Brostoff-Celle Inc., also in Los Angeles.
“Where our growth keeps coming here in Los Angeles” is primarily “from the service that we provide for the independent chains,” which continues to be “the number one customer for us here,” he said.
Because the business climate is continually changing for the independent supermarket chains Maui Fresh services, providing service to supermarket customers also involves making changes.
It is “a whole different ball game” than it was “when I opened up Platinum Produce nearly fourteen years ago,” and different than it was when Platinum, a division of San Rafael Produce, partnered with Calavo to form the Los Angeles division of Maui Fresh, Mr. Clouthier said.
At one time, it was commonplace for a produce house to work on margins of around 20 percent. Now, because customers have to work on tighter margins, “we have to work a lot more closely on our margins. Our margins are very different now with them than what it used to be,” he said.
The last two years in particular, “we have gone through tough economic times where the margins are low,” he said.
It is no longer possible to move volume at a 20 percent margin, he continued, “so we have had to change” and move more volume on lower margins. “We are selling a lot more produce than we were before” and that involves more work for lower margins.
In addition, he said, some customers are slower to pay, “and some customers are not paying,” which “makes it a lot tougher.”
Maui Fresh has been fortunate not to have been hit with a major loss from a big customer going out of business, “but we’ve had a lot of little ones that have closed down” or “are not paying their bills” or “are late,” he added. Because Maui Fresh is “very focused on making sure that our vendors get paid,” being paid by customers becomes high priority.
To make matters worse, the past winter’s Nogales season was “probably one of the worst seasons they have had in a long time, price-wise,” which makes business in Los Angeles more difficult because so much excess product is sent to Los Angeles on consignment.
“It has been interesting times, and I think we still have a little ways to go before we get out of this one,” he said. Meanwhile, “you have to stay on top of your receivables and your margins and make sure that you know where you stand.”
Mr. Clothier grew up in Mexico, where his family for four generations had been growers in the Culiacan Valley. “We have always been involved with business in the United States,” he said, referring to San Rafael Distributing, the Clouthier family’s distributorship in Nogales.
Mr. Clouthier went to college at California State University Fresno and then “went back to Nogales to sell our deal” at San Rafael for a while before opening Platinum in Los Angeles.
The commodities handled at Platinum are basically the same as those now handled at Maui Fresh, although some additional items were added to the mix when the company formed a partnership with Calavo, he said.
Another major area of growth for the company has been its consolidation business, offered as a service to customers who are trying to control soaring freight costs.
“We service a lot of customers in the summer that don’t want to have a truck going all around California picking up produce,” Mr. Clouthier said. “We do it here for them.” The consolidation component of the company’s business “is growing very rapidly.”