As with most produce companies in Nogales, AZ — and in many other parts of the country and in other industries as well — the last couple of years have had their challenges for Thomas Produce Sales Inc. But with “a couple of challenging seasons under our belt here, I am hoping for a better one this year,” said Chuck Thomas, president of the firm.
“It looks like we are pick up some new business, so that is encouraging,” he said.
At both the Produce Marketing Association Convention in Anaheim, CA, in October and at the Fresh Produce Association of the Americas Convention in Nogales in November, were beneficial to the company in terms of “making some new contacts that could possibly develop into some good customers,” Mr. Thomas said. “Time will tell, but … hopefully that will turn out well.”
The company has cut some expenses in the last couple of years, including travel expenses, but is “still attending conventions so we can do face-to-face interactions with both existing customers and shippers and potential new customers or prospects,” he said. “We are always looking for new opportunities.”
Thomas Produce is primarily involved in brokering and distributing tomatoes and vegetables from Mexico during the winter and California during the summer. One of the main services offered by the company is to serve as the customer’s eyes at shipping point, whether that be in California or Nogales, to be sure that the right product is shipped to the customers, Mr. Thomas said.
“As far as our company as a whole, I think we are pretty much the same” this year as in previous years, he said. “We haven’t expanded anything” this year.
Going into the 2011-12 season, Thomas Produce revamped its entire warehouse to better accommodate the food-safety and handling requirements of customers and qualify for U.S. Department of Agriculture food-safety certification, including installation of a new cooler. Because the cooler requires a great deal of energy to operate, the company put in a solar power generation installation with solar panels located on the roof.
“Our solar is paying off,” Mr. Thomas said. “That cuts some of our expenses.”
The 2012-13 season was already underway, although not yet in volume. “We are waiting for this thing to get kicked off good,” Mr. Thomas said. “Most items have already started down here. the bell pepper thing is getting going in the northern areas” [of Mexico],” although a cold snap about a week earlier “slowed things up a little bit for the Thanksgiving pull. But we don’t really get this thing rocking and rolling till mid-December anyway, and of course tomato volume doesn’t come on until mid-January,” and tomatoes are “a big item” in the Nogales deal.
The expansion of the new border facility in Nogales will facilitate truck crossings during busy periods, Mr. Thomas said. But it was “late coming. They should have been proactive and done it five years before.” That delay pushed a lot of business “over to south Texas.” As a bridge and some tunnels currently under construction in the Sierra Madres are completed in the next year or so, that will make transportation to the McAllen, TX, crossing even easier. “It is not ideal for the Los Mochis or Culiacan areas” in the state of Sinaloa, where most of the Nogales produce is grown, he said. But it will give probably a six-hour time savings to trucks coming out of southern Mexico heading for markets in the eastern United States. That is “a substantial freight savings.”
Because of that shift in transportation patterns, “we have looked at maybe setting up some type of office” in the McAllen area, “or just having someone down there” to look at product. “I don’t think it is there for us yet, but it is something we are going to have to look at for the future,” he said. When the improvements to the Nogales port are completed and the construction on the route to Texas is completed, he will look at “how much product is actually going to go that direction.”
The produce business gets more competitive all the time, Mr. Thomas said. “There are more rules and regulations than there used to be. You have to stay on your toes. Profit margins aren’t what they used to be. You have to get down to bare bones to keep your customers going and just do a good job as far as service for them goes.” for Thomas Produce, that service involves inspections of products in Nogales — “having good eyes on the products” — and coming up with “the right price for everything.”
More and more orders are being contacted these days, he said, “and we have to do some of that type of thing, too. But we are staying on top of it.”
More and more buyers are seeking to bypass brokers or distributers in Nogales and buy direct from shippers in Mexico, but so far that has not had much of a negative impact on business in Nogales, he said. “You’ve got more trying all the time, but once a lot of them try that, they figure out it is worth paying an extra few pennies a box” to have a broker look at the product for them in Nogales before it is shipped.
“It is such a small percentage we charge, normally, to be their eyes on the ground and make sure they don’t run into many problems, or any hopefully, that they find it is worth it,” he continued. “That is where our niche is, doing that service for the customers and making it pay off for them. Hopefully, we will continue to be a viable option. As long as we keep doing a good job, they should stay with us.”