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Panama Banana acquires former Auster space on the Chicago produce market

CHICAGO — When the Auster Co. closed its doors on the Chicago International Produce Market on Jan. 6, 2011, the firm’s next-door neighbor, Panama Banana Distributing Co., jumped on the opportunity to expand its operations.

Auster formal name was Auster Acquisitions LLC, as reported in The Produce News Jan. 16.

After taking a short-term lease on the five units owned by Auster on Feb. 13, Panama, as the company tags itself, bought Auster’s units, according to Todd Pappas, who owns the firm with his brother Deke Pappas. The brothers purchased the business from their father in the 1990s. The Pappas’ grandfather started Panama in 1938.

Over the years, the company expanded is product line to specialize in tropicals. This primarily involved bananas, pineapples and mangos. With the acquisition of the Auster space, Panama not only added a great deal of warehousing but hired two of Auster’s experienced employees, Tom Durante and Nick Florek.

Tom Durante told The Produce News that he and Mr. Florek “brought a full fruit department” to Panama.

“Tom and Nick bring a lot of apple, orange and grape business we couldn’t handle because of space issues. This was a big move, but with the common wall, it was a perfect fit.”

Mr. Durante added, “We had a good business at Auster” but the company failed despite strong sales. Mr. Durante and Mr. Florek lead for Panama “very successful lines and brands. We brought new customers to Panama as well.”

Among the strong commodities now sold by Panama is a full line of tomatoes, handled by salesman Mike Perez.

Panama’s main brand for bananas and pineapples is “Dole.” The firm also handles Turbana, Chiquita and a high-quality Mexican banana, sold under the “Carmelita” brand by Le Best Banana Supply Co., based in Hidalgo, TX.

Panama has 16 ripening rooms, according to Todd Pappas. Since Panama moved to the current market in 2002, the firm has enjoyed the latest banana ripening technology. This is critical to the firm’s banana marketing strategy, which is to supply customers — many of them in foodservice — with precisely the proper level of ripeness to maximize their profits. “We shipped six colors of bananas today,” Mr. Pappas noted in a May 11 interview. “Most of our competition is in and out” in moving bananas without such personal attention to customers. “People try to undercut us” on price “but eventually they come back because we know what they want.”

He added, “If people call and we don’t have what they want, we let them make the decision” on whether or not to buy an alternative product. “We don’t want them to get a color they don’t want.”

He said that his firm tends to buy bananas arriving into Delaware River ports. There is some fruit that is shipped from Gulf of Mexico ports, which are 1,100 miles from Chicago. The Philadelphia and Wilmington, DE, ports are 750 miles away, providing Panama Banana with a transportation cost savings.

Panama has Midwestern customers as far away as Kansas City.