Distributors Forge Alliance To Serve Gulf Coast Region
March 18, 2016
Two produce distributors from Texas and Mississippi are entering a joint venture to serve a large portion of the Gulf Coast region — including the lucrative New Orleans foodservice market.
Houston-based Produce Brothers Inc. and Gulf Coast Produce Distributors Inc., Biloxi, Miss., later this spring plan to open Gulf Coast Brothers Produce in an 90,000-square-foot distribution facility in Picayune, Miss., executives of both companies said.
From the building, the two companies plan to operate a processing plant for some fresh-cut vegetables and fruit, a tomato repacking operation and 50,000 feet of cold storage space, said Mike Alise, who co-owns Gulf Coast Produce with his wife, Christi.
The building also has rail access for potato and onion shipments, Alise, a 43-year veteran of the produce industry, said.
“We are working hard to get it open in the first two weeks of May,” he said.
The joint venture will offer growth opportunities for both companies, Brent Erenwert, president of sales and procurement for Brothers Produce, said.
The Picayune location will represent Brothers Produce’s first office outside of Texas. The company has offices in Houston, Austin, Dallas and Harlingen. Gulf Coast Produce has offices in Biloxi and Foley, Ala.
Erenwert and Alise said combining the two companies’ distribution networks would allow Gulf Coast Brothers Produce to cover a large section of the Gulf Coast, from northern Florida to the center Gulf region and down the coast of Texas.
The Picayune facility will afford the companies accessibility to several major interstates serving the region, Alise said.
“We go as far north as Jackson, Miss., and east to Destin, Fla.,” Alise said. “We reach four states from our Foley location.”
The Picayune location, on the Mississippi-Louisiana state line between Mobile, Ala., and New Orleans, will provide the combined company with a strong presence in the Louisiana market, with a focus on the New Orleans and Baton Rouge areas, Erenwert said.
“It’s a plan that’s probably overdue — it was just a matter of finding the right building and the right timing,” Erenwert said of the joint venture.
Bringing the $200 million Brothers Produce company and the $50 million Gulf Coast Produce company together for the joint venture will create synergies for both businesses, Alise said.
“Together, we’re a $250 million company,” he said.
The joint venture was enticing for Brothers Produce, Erenwert said.
“It’s going to open up a lot of synergies for both companies and create a distribution network with a large enough range to serve that southeast corner of the U.S.,” Erenwert said.
“There’s been huge (population) growth in that region, with a lot of restaurants and not a lot of distribution choices.”
Gulf Coast’s customer base is entirely foodservice — restaurants, casinos, hospitals, military bases, schools and other outlets, Alise said.
Gulf Coast Produce sources product through Produce Alliance LLC, which specializes in fresh produce procurement and distribution services to foodservice clients across North America and other markets. The alliance manages a group of 50 independently owned distributors of fresh products, with combined annual produce sales of more than $4 billion, according to its LinkedIn page.
“We are the ‘poster child’ for Produce Alliance group — that’s our nickname,” Alise said of his company’s strong association with the alliance.
Brothers Produce’s customer base is heavily oriented to commercial and institutional foodservice, Erenwert said.
“We are about 70% foodservice, 20% schools and 10 percent retail,” he said.
With several regional grocery chains in the venture’s targeted area, the company should be positioned to expand its retail customer base, Erenwert said. Alise agreed, saying he’s hopeful the venture will provide Gulf Coast Produce with an entry into retail.
The two companies are making staffing decisions and preparing the building for opening, Erenwert said.
“The No. 1 priority is food safety,” Erenwert said of the distribution, repacking and processing facility.
The industry has changed and price is no longer the top consideration in choosing a produce supplier, Erenwert said.
“The three most important things we focus on are food safety, quality and service,” he said.