The meat and potatoes of managing fresh fruits and vegetables is logistics. To get the most freshness, purity, and taste, produce and fruit have to be picked at the right time, handled gently, transported promptly, maintained at their lowest safe temperature, stored in the right way, and then carefully and expeditiously delivered to the customer. And all the while you have to be aware of such factors as what is growing where, who is selling and buying what fruits and vegetables, what trucks can be used to pick up the product, and addressing food handling safety issues, among others.
That's what Federal Fruit & Produce in Denver, Colorado, does, every day, and does well. The state's largest wholesale distributor of fresh fruits and vegetables, it serves the fruit and produce needs of hundreds of customers throughout Colorado, New Mexico, Wyoming, North and South Dakota, Utah, and Nebraska.
It supplies a broad spectrum of items: from common apples, bananas, tomatoes, and lettuce, to specialty items such as Quinces and Cactus Pears, to imported fruits from Chile and Peru, to a complete line of organic fruits and vegetables. Customers include the large grocery chains, specialty grocery stores, local and national food service distributors, school districts and universities, large restaurant chains, small “mom and pop” type restaurants, prisons, and military commissaries.
Federal Fruit & Produce is a seven-day a week operation with no off-season, as some type of fresh fruit or vegetable is being grown somewhere all year round. Along with fruits and produce grown in Colorado, it handles products brought in from farms and producers in California, Mexico, Texas, Florida, Georgia, New Mexico, Chile, and Peru, among other places. The products, all brought in by outside carriers, are stored short-term in coolers before they are shipped to customers.
“To be really successful in fruit and produce business, it helps to grow up in it,” said Mike Martelli Jr, a son of one of the owners who serves as a buyer. “Time and experience is the best teacher because you've got to have a good feel for what is growing where; remain aware of daily, weekly, and seasonal forecasts; keep track of market and weather conditions; know who is selling and buying what, and when; and have established relationships with brokers, shippers, and farms. We have a lot of people who have been in the industry for a long time.”
The roots of the company took hold more than 70 years ago. The business has grown steadily by following its founding principle: “To provide a quality product at a fair price and to deliver on time.”
Because of all the variables, especially the weather - which affects quality and quantity, pricing is done once a week on Friday mornings for the next week, he said. “It's like the stock market. Our markets are constantly changing as well.”
None of Federal Fruit & Produce's 600-some products are pre-sold. Its continual challenge is to bring in what it figures it will need for each week. No easy task when you consider that fresh fruits and produce have a short shelf life. “We have a pretty good feel for what we use every week of the year,” Martelli Jr said, “because we've been doing it for so long.” Inventory is turned twice a week.
Family tradition
The company began in 1935 as Amatos Fruit & Vegetable, operating as one of the many small fruit and produce distributors in Denver's Denargo Market. In 1965, Joe Naimen bought the company and renamed it Federal Fruit & Produce. Salvatore Martelli, who worked at Amatos Fruit & Vegetable, became general manager shortly after the purchase.
In time, Martelli brought his son, Mike, into the business. Then John Domenico, whose family operated farms in Colorado and also had a produce route in Estes Park, Colorado, joined the business. A short time later so did Stan Kouba. He had worked for Jewel Food Stores in Chicago, Illinois, before going to Dean Foods and then Vienna Beef.
When Naimen decided to retire in November 1987, these three men bought the business.
As youngsters, the sons of the new owners began helping out at Federal Fruit & Produce. After finishing school, they came on board fulltime: Domenico's son, Jason, for a time before going to work for Chiquita Banana; Kouba's son, Ted, in 1991; and Martelli's son, Mike Jr, in 1996.
Varied fleet
Federal Fruit & Produce owns and operates a delivery fleet of 25 refrigerated straight trucks, 11 tractors - eight of which are sleepers, and 13 refrigerated trailers.
The diesel-powered straight trucks, with a range of horsepower ratings, are outfitted with both manual and automatic transmissions. There is a mix of Sterlings, Internationals, and Freightliners with 32- and 36-foot Kidron, Supreme, and Timpte insulated van bodies, and both Carrier Transicold and Thermo King refrigeration units. Only two of the 25 trucks require a commercial driver license.
The tractor fleet is composed of eight Freightliners sleepers, one Peterbilt day cab, and two Kenworth daycabs. Spec'd for driver comfort and productivity, all have 500-hp diesel engines. There is a variety of transmissions.
All tractors are equipped with a GPS system that includes messaging, allowing the company to maximize the productivity and customer service of its road fleet.
The typical trade cycle for the straight trucks, which average around 35,000 miles per year, is four years. Tractors are traded every five years.
The fleet's 13 refrigerated trailers include 48-foot and 53-foot Great Dane and Utility models, with both Carrier Transicold and Thermo King refrigeration units. The trailers are on a six-year trade cycle.
High dependability
“The thing we look for most in our vehicle purchasing is reliability,” said Angel Mondragon, Federal Fruit & Produce's operations manager. “Breakdowns are very costly, not just to our company, but more importantly, to our customers.
“Our goal is to buy trucks and trailers that provide maximum uptime so that our customers are assured on-time delivery with as little time on the road as possible. Transporting perishable products is difficult enough without having to deal with on-the-road vehicle difficulties.”
All vehicle maintenance and servicing is jobbed out to companies near Federal Fruit & Produce's facility. Fueling is done by an on-site fueling service because “it gives us better control of our fuel costs and our drivers' productive time,” Mondragon said.
The fleet's straight trucks are used for local deliveries, done every day but Sunday. For the most part, product is hand-trucked into the customer's place of business.
The tractor trailers do the large local deliveries, as well as over-the-road work. There are no team operations. All power units are assigned.
Federal Fruit & Produce supplements its fleet with Domenico Transportation, a private carrier headquartered in Denver, Colorado, that specializes in long-distance and truckload operations.
“Since a lot of the areas we deliver to don't have fruits or produce to bring back, our rigs will backhaul products so as not to run empty,” Martelli Jr. said. “We bring a lot of mulch back from South Dakota, for example.”
The business Federal Fruit & Produce does with the large grocery chains is “shorts.”
“Chain stores have their own distribution operations, but they sometimes run short on vegetables or fruits because of special sales or product issues. In such instances, they call on us to fill in the shortages. It could be several semi loads or just a couple of cases.
“Usually, we deliver to their distribution centers and they distribute the product,” said Martelli Jr. “However, there are times when they have us deliver to their individual stores.”
Because of the large diversity of products and the labor intensive natural of the local delivery work, Federal Fruit & Produce has the challenge of driver turnover. “While we do have a solid group of drivers, there is some churn,” he said. “That's just the way it is. We have found that posting a help wanted sign in the front of our building (located on the main road of an industrial area) and using the Internet are good ways to find drivers.”
Specific coolers
Federal Fruit & Produce is housed in a custom-built 48,000-sq-ft facility that has 14 docks and advanced refrigeration systems from Century Manufacturing and climate control systems by Dade Service Corporation. Along with office space, there is a cooled repacking area, two 750-sq-ft coolers designed specifically for storing tomatoes, and one 330-sq-ft hot room wherein the temperature can be controlled to quicken ripening.
There are six banana rooms. Each holds a trailer load - 20 pallets (960 boxes) of bananas. These two-tier, pressurized rooms are actually 300-sq-ft perishable food storage systems used to help control the ripening process of bananas.
Unlike a cooler, where bananas would just sit in a temperature controlled-environment, an electronic controller manages uniform conditioned air flow through the bananas in the pressurized rooms. This helps yield better quality bananas, Martelli Jr said.
Federal Fruit & Produce typically receives 8 to 10 loads of bananas each week.
In addition, there are three large coolers for storing fruits and vegetables. Each has a metal racking system with three-to-five high racks. The largest cooler, 8,500 square feet, is kept at 45° F and houses such products as onions, potatoes, peppers, citrus items, avocadoes, and watermelons.
The second cooler, 4,300 square feet, is maintained at a temperature of between 35° and 36° F. It is used for storing apples, mushrooms, cantaloupes, pears, berries, peaches, plums, and the like.
The third cooler, also 4,300 square feet, has an automatic humidifying system. All vegetables are kept in here.
The three coolers are configured next to one another, with accessibility from one to another, done to speed stocking and order picking.
Food safety
While organic fruits and vegetables may be stored with non-organic produce, the law requires that organic products be stacked so that they won't be exposed to water runoff from the misting of conventional produce, said Martelli Jr. This could contaminate organic items with pesticide residue. “We are very careful about this, as well as other food safety procedures.”
He noted that Federal Fruit & Produce has received HACCP (Hazard Analysis and Critical Control Point) certification from the US Food and Drug Administration. HACCP is a food safety program designed to improve the safety of fresh or minimally processed fruits and vegetables by reducing microbial food safety hazards through specific handling standards and procedures. The program includes provisions for tracking and traceability of products.
All company employees, including truck drivers, receive HACCP training, in addition to training about identifying fruits and vegetables.
“One of the things many people don't realize is that there are many different sizes of fruits,” Martelli Jr said. “A 40-pound box of apples could have 113 apples or 70, depending on the size of the apple. The same holds true for lemons, limes, oranges, and other fruits.”
When product is received, the first thing that happens is an inspection and temperature check. Using a hand-held non-contact infrared thermometer, a warehouseman measures the temperature at the front, middle, and rear of the truck. All check-in information is recorded.
If there is a problem with a product, such as damage or improper temperature, it remains on the truck until the issues are resolved. Whenever possible, damaged product is repackaged.
Product tracking
Every pallet receives a label that denotes the date, purchase order number, item number, number of boxes on the pallet, and slot number (where it will be placed in the coolers) before being inventoried. This same information is then entered into the computer. Stock is always rotated: first in, first out.
Orders are generated by computer, with order pickers receiving a pick sheet that details the item number, quantity needed, and slot number. Orders are built on pallets and then loaded onto trucks.
“For the most part, orders are case only,” said Martelli Jr. “It is very rare that we will sell products in piece quantities.”
Warehouse personnel have at their disposal 20 electric pallet jacks and five forklifts — four are standup models; one is a sit-down unit.
Orders are pulled at night and the trucks are loaded for the drivers. All the driver has to do when he arrives to begin his route is pick up his paperwork. “We do the routing by hand,” Martelli Jr said, “but we're evaluating routing software systems as a way to help to reduce transportation costs, increase productivity, and improve service.”
Market opportunities
The company has a division in Colorado Springs, Colorado — Federal Food Service — that also does wholesale distribution of fresh fruits and produce.
But unlike the Denver operation, it is also involved in the sale of canned and dry goods, cheese, fresh and frozen meat, frozen seafood, and non-food items. It places its business emphasis on servicing restaurants and hotels.
Federal Food Service is headquartered in a 24,000-sq-ft building that also contains advanced refrigeration systems. It employs 40 people and has sales of $10 million annually.
Some 110 people work at Federal Fruit & Produce in Denver. Its sales are approximating $60 million annually.
Looking ahead, Martelli Jr sees growth coming from three areas. One is a greater use of fresh and seasonal fruits and produce by restaurants. Chefs are capitalizing on using seasonal ingredients because they convey optimum freshness, quality, taste, and appearance, he said. This helps them stand out from their competition, and they are developing the menus accordingly.
“Another growth area is organics. More and more people are eating organic food as a way to eat healthier. Organic food, which is produced without using pesticides or bio-engineering, can reduce exposure to chemicals that can be found in conventionally produced food.”
A third season for growth, said Martelli Jr, is the lesson parents teach their young children: “Eat your fruits and vegetables because they're good for you.”
