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Markon Looks To Produce Specialist ProPacific Fresh To Increase Service

Jim Prevor’s Perishable Pundit, February 22, 2008

We’ve spoken with Tim York, president of Markon Cooperative, many times, including here, here and here.

Now Markon has announced a new member:

MARKON ANNOUNCES
FIRST CALIFORNIA MEMBER

Produce Specialist Expands Markon’s
Geographic Reach & Service Capabilities

Markon Cooperative today announced the addition of a new member, ProPacific Fresh, a produce specialist based in Durham, California. ProPacific Fresh is Markon’s first California member and the first produce specialist to join the cooperative.

Tim York, president of Markon, said the addition reflects increased demand for Markon’s proprietary brands and added that it will help Markon improve service to its existing and prospective multi-unit account customers. “ProPacific Fresh fits our core criteria for membership: privately owned, handling quality products, and focused on customer service,” York said. “And it’s an ideal complement to our group in terms of its geographic reach and high standards.”

Commenting on being the first produce specialist to join Markon, ProPacific Fresh President Terry Richardson emphasized the benefits to all parties — from existing members to current and future customers. “We are delighted to join forces with such a respected and innovative group. It’s an exciting opportunity to put our respective approaches on the table, learn from each other, and together tackle the challenges of a rapidly evolving marketplace.”

Because Tim York and Markon have been so integral to the trade’s food safety efforts since the spinach crisis, we asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:

Tim YorkTim York
President
Markon Cooperative
Salinas, California

Terry Richardson
President
ProPacific Fresh

Q: What is the importance of ProPacific Fresh joining the Markon Cooperative? How does this help you tackle the challenges of a rapidly evolving marketplace?

A: TERRY: In summarizing the marketplace in terms of the competitive landscape, chains are expecting supplier consolidation, especially the customers we’re pursuing through Markon — the large regional and national chains. The chains prefer to deal with fewer suppliers that can cover a much greater geographical range. They can enjoy economies with fewer distributors. They’re also looking to leverage their purchases through a concentrated supply base. We can work together through Markon to leverage the overall program so economies are beneficial to all involved.

Q: The issue of consolidation has been bantered around for years. What’s different now?

A: TERRY: It’s more than just a catch phrase. Consolidation in customers, suppliers and product line is occurring at increasing speed and for different reasons. Regardless of what portion is undergoing a transformation, companies must recognize it and quickly adapt.

Q: Tim has been an aggressive leader in driving food safety initiatives both within Markon and industry wide. Did food safety play a role in your decision to join Markon?

A: TERRY: Food safety definitely comes into play. Several key areas attracted us to Markon, and food safety was at the top of our list. We became third-party certified and implemented a HACCP plan long before many in the industry moved on it. We recognized the importance of food safety. We realized how highly evolved Markon was with food safety.

Q: Are customers placing more importance on food safety when selecting suppliers? Is consolidation in part related to tightening control of food safety throughout the supply chain?

A: TIM: Food safety issues are creating a new urgency for consolidation. In the past, chains typically left produce purchasing decisions to individual units or buying was done on a regional basis where some chains had over 100 distributors. When chains looked at food safety and vulnerabilities in that area, it became clear since September 06 there were major risks in continuing to do business this way.

After the spinach E. coli crisis, chains started to get more and more concerned about getting their arms around suppliers and what products were coming through their back doors. It’s a shift from where food safety was important, but chains didn’t demonstrate it through their purchasing practices in produce. Chains look at us as a critical component in this food safety system. This shift is a key part of why ProPacific Fresh is such a good fit for us.

A: TERRY: We find that in the large national chains there are more food safety requirements and more concerns. We take a top-down approach to food safety; we live by it. We have a strong obligation and can’t take it lightly.

Q: By teaming up with Markon, then, you’re making a statement demonstrating your commitment to food safety?

A: TERRY: We are already hearing that feedback.

TIM: We look at food safety as a cornerstone of our business. It’s where we get the name for our 5-Star Food Safety program. In produce there are five touch points; first is the field where it’s grown and harvested; the shipping/processing facility is the second part; third is transportation, moving typically by truck; four is the distributor warehouse; and fifth is the operator kitchen.

We believe all these touch points are critical. Who we choose as a distributor is equally as important as the grower/shipper we choose. ProPacific Fresh specializes in fresh produce but they are a distributor.

Q: What food safety requirements does Markon require of its suppliers, and do those standards also apply to distributors?

A: TIM: There are two different levels of food safety requirements we demand depending on our suppliers. We have baseline requirements for any grower/shipper that provides us with fresh produce, involving a third-party audit. Those that pack our brand for us — over 50 suppliers — have more stringent demands and require third-party audits conducted by Markon that are reviewed with any shortcomings remedied.

Our distributors all have third-party audits done because national accounts require it. We review those audits and we have our own standards on food safety and quality.

When we first looked for California members, and the ProPacific Fresh name came in the mix, it was not only the quality of products and growers/shippers they used that impressed us, but their history in food safety. We looked at their audits and met with their food safety people. It showed us they wanted a strong food safety program by joining Markon.

Q: Produce specialists are becoming good, hard competitors to broadliners. Could you discuss this dynamic and how it influenced your strategy?

A: TIM: This is the first time we’ve actually added a produce specialist. Our profile traditionally is broadline distributors. We’ve long wanted a distributor in California to fill a niche for us. Hands down, ProPacific Fresh is the best company to work with in this capacity.

They’ve got a tradition of high quality products and people, both in retail and the food service business. It helps open opportunities to service retailers, not as our primary focus but as a way to expand our business. With ProPacific Fresh, our proprietary brands and positioning will be strengthened from a quality and food safety standpoint.

      

We have really three core brands: Ready-Set-Serve; that is plate-ready products like prepared salads, coin-cut carrots, diced onions. Then traditional commodities under the Markon First Crop brand. Then we have MVP, USDA #2 grade items, like #2 Idaho potatoes and onions. In potatoes, these would typically be misshapen, or with onions double centers, but still very usable products. If mashing potatoes, there is no sense in paying more for plate presentation.

Q: What differentiates a produce specialist from Markon’s broadline distributor base, and what advantages does this bring your customers?

A: TIM: Our bylaws have been organized to serve broadline members — they’re all we’ve served for 22 years. Produce was a portion of their business but well under 20 percent and, in general, averaging under 10 percent. ProPacific Fresh is virtually 100 percent produce. A produce specialist would be able to do smaller drop sizes and more frequent deliveries. It boils down to getting a higher service component from a produce specialist. They’re completely focused on the produce piece. That is what is unique.

Several of our distributors have a produce express program in which the produce specialist function falls within the broader business.

A: TERRY: Bringing in produce specialists is part of the overall strategic initiative of Markon. I can speak on behalf of ProPacific Fresh… one advantage as a specialist is we dedicate ourselves to fresh fruits and vegetables and understand the relationship between quality, freshness and frequency of delivery. We’re primarily focused on the national foodservice accounts, and frequency of delivery is a very critical part of servicing these national chains.

The broadliners that are part of Markon are exceptionally evolved in their [produce] capabilities and are much more experienced than what you’d see as relates to typical broadliners. Considering the current broadliner availability of Markon, coupled with produce specialists coming in, Markon not only bolsters a quality produce program but increases frequency of delivery.

This is very important due to the perishability of the product as well as the fact that some operators don’t have enough capacity for storage. Typically, foodservice operators need deliveries at least three times a week. Our location is important. We service customers from distribution facilities in Durham, Sacramento, Redding and Ereka.

California is a very significant market, by filling in California, we’ll be able to service national businesses.

Q: Is Markon looking to add more produce specialists? Do you have any more gaps you’re trying to fill?

A: TIM: We still have gaps in national coverage. We have full coverage in Canada coast to coast. Geographic gaps in the U.S. remain in the Northwest and the Baltimore, Washington D.C. corridor. Those are the ones that really stand out. In the future, we plan to address those areas.

Leadership has its benefits, but it also carries a price, and it is worth noting that Tim could have expressed his zeal for food safety by trying to turn it into a competitive advantage for Markon. Instead he tried to help the industry.

In so doing, he wound up accruing for Markon a reputation for leadership in food safety that wound up rebounding the benefit of the Markon Cooperative.

Maybe there is some kind of cosmic karma that causes companies and individuals that do good for the industry to also do well for themselves.

We hope so.

Good luck to Tim York, Terry Richardson and all the folks at Markon Cooperative and ProPacific Fresh. We wish you many years of productive association.

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