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Coastal Inc. undeterred as economy continues to challenge industry

by Lora Abcarian | December 06, 2010
Dennis Baird, vice president of Coastal Inc., said that the softening U.S. economy has been tough on distributors of fresh produce. But he told The Produce News, "I think the economic problems we've had show us we can survive. Business has been steady-as-you-go."

Coastal distributes commodities to outlets in its home base of Portland, OR, as well as Seattle and Spokane, WA. Volume sold in Seattle and Portland has remained relatively stable, while volume has increased in Spokane.

Tomatoes continue to comprise 65 percent of Coastal’s overall product line. In addition to tomatoes, Coastal also handles a full range of commodities such as conventional apples, pears, cherries, lettuce, celery, melons, potatoes, asparagus, spinach and apricots.

Coastal sources mature greens and vine-ripe tomatoes from California from June to November. Sourcing for mature greens then moves to Florida through mid-June. Vine-ripe tomatoes and Romas are sourced from Nogales, AZ, and Baja California, Mexico, in December. Cherry and grape tomatoes follow in their normal cycle.

Several years ago, the company implemented a full track-and-trace program to meet the highest food-safety standards. “Everything has gone really well,” Mr. Baird stated.

In 2010, Coastal expects to upgrade its program, allowing the company to perform digital scans at the warehouse, thereby streamlining traceability.

Mr. Baird said that Coastal has a long history of participating in third-party audits. “We’ve kind of been on the cutting edge of that,” he stated. “We’ve been doing this for 13 or 14 years.”

Third-party audits are conducted by Silliker, Davis Fresh Technologies and the U.S. Department of Agriculture. Although the audits increase the cost of doing business, Mr. Baird said they are important because of the guarantees that can be provided to corporate customers.

Foodservice accounts for 65 percent of Coastal’s business. The company also sells to mainline retailers.

Mr. Baird was asked to look into his crystal ball and share his observations about the retail environment. “Everyone is affected by the bad economy,” he said.

Freezes, droughts and hurricanes have taken a toll on fresh crops in recent years. While some domestic pricing may increase next year, he said that Mexico may have overplanted certain crops and may have an oversupply.

“Smart retailers will say 'we’re in an economic crunch, and we should go for volume sales’,” he observed, saying this will help balance pricing and keep customer bases strong.