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    INDEPENDENTS REPORT: Knowledge broker

    Caito Foods feeds more than fresh produce into the supply chain, with seminars that teach retailers how to compete better.

    Never during my exhaustive food industry career have I known a company to be as passionate about produce -- and people -- as Indianapolis-based Caito Foods. Founded in 1965, the family-owned company distributes produce to supermarket retailers operating in 15 Midwest states. Through its ancillary transportation company, Blue Ribbon, Caito Foods also provides cold chain logistics services to noncompeting food wholesalers and suppliers.

    Caito Foods has during the past five years cultivated extraordinary growth, adding more than 300,000 square feet of capacity to its distribution centers, doubling sales in the company's FreshLine cut-fruit and vegetable division, and growing its forward distribution and third-party logistics business fivefold. Leading the company today are two generations of the Caito family, plus a solid team of senior managers including director of merchandising Joe Himmelheber.

    Ask any member of the Caito Foods team to share the secret of the company's success, and the answer may surprise you -- or it may not. Interestingly, it has little to do with selling fruits and vegetables.

    "It's through people that we've become successful -- not just any people, but the right people," says Himmelheber, a 20-year Caito Foods veteran.

    Matthew Caito, v.p. of marketing, concurs. "We've understood from day one that people are our business," he says. "Caito Foods is successful because we're accountable, adaptable, and accessible not only to our retailers, but also to our suppliers and growing partners. We're simply a family business serving other family businesses."

    "Just like many of our retailers," he added, "our name appears on our building. Sure, every day we battle tough competitors on the wholesale side of the business, but we continue to focus 100 percent on our retailers and what they need from us to win."

    Helping the Caitos to score big with their loyal retailers for over a decade has been the company's investment in, and commitment to, education. Every February, retail customers are invited to participate in an exclusive seminar, which is meticulously planned by Himmelheber, along with his creative team of merchandisers and the company's executive assistant, Sheryl Mosier.

    "Our annual seminar is a tremendous labor of love for everyone at Caito Foods," notes Himmelheber. "Throughout the year we listen intently to the comments of our customers to clearly understand their training and education needs. We personally witness their daily competitive battles, and work to develop strategies, most of which are presented at our seminar, that will make them more successful not just in the produce department, but also throughout their stores."

    He adds: "We're awfully proud that our education program has, with the support of our suppliers and growers, earned an incredible reputation throughout the industry. Each year's seminar, which provides our retailers with the latest product innovations, display techniques, consumer trends, and other relative information, joins those of past years and becomes a living, breathing merchandising strategy that our associates draw upon as they visit and work alongside of our customers."

    Participating in this year's event, "The New America," were approximately 500 supermarket associates ranging from produce managers and clerks to corporate executives and marketing v.p.'s.

    "Our goal each year in selecting a theme is to strike a universal chord that resonates through all levels of the industry," explains Himmelheber. "Today we truly are experiencing a 'New America' that's vastly different from the era of once-a-week shoppers planning 21 meals for the family. We now witness consumers seeking more organic and ethnic products, and they're weaving these items into a style of eating that provides long-term health benefits."

    He notes, "At the same time, consumers in all geographic areas of the country continue to be more convenience-driven and price-conscious, plus they consider cooking more as recreation than drudgery."

    Rise of organics

    According to Caito's director of procurement, Bob Kirch, well-advised independents understand that the whole health movement, combined with an increased demand for organics not just in produce, but also in the dairy, frozen, and meat departments, is hardly a fad.

    "Granted, organics represent today just 2 percent of total food dollars, but sales continue to climb at a rate of 20 percent per year, and price sensitivity in this area is becoming more and more important," says Kirch. "Part of our overall strategy at Caito is to help our retailers to become sourcing and information agents, by helping them to educate their customers and employees and promote the better-for-you foods."

    The majority of the seminar's high-profile guest speakers, including Dr. Elizabeth Pivonka of the Wilmington, Del.-based Produce For Better Health Foundation, shared their ideas on ways to capitalize on emerging health-and-wellness opportunities. Still, much time was devoted to teaching retailers about the implications of a growing Hispanic population in the United States whose annual purchasing power by the year 2010 will surpass the $1 trillion mark.

    "Hispanics living throughout our country, 60 percent of whom are of Mexican descent, 30 percent of whom are South American and Latin American, and 10 percent of whom are Puerto Rican, spend on average $133 per week at the grocery store," reports Caito's director of whole health and organics, Steve Harrold. "Compare that number to the average customer ring of $114 per week, and the opportunity is clear."

    Adds Harrold, whose combined retail tenure at Cub Foods, Big Bear, and Kroger prior to joining Caito Foods surpasses two decades: "Every person working in the store, from top managers to entry-level associates, must understand the specific needs of the Hispanic shopper. It's the family matriarch who does most of the grocery shopping, and she places great emphasis on freshness, quality, and cooking from scratch. Our produce merchandising and displays, if they're to appeal to this customer, must do the same."

    Winning formula

    Harrold confirms that to keep pace with this segment, along with fresh produce Caito will soon begin distributing a variety of Goya, San Miguel, and other ethnic grocery brand offerings. "Our customers range in size from single-store operators to chains of 50 or 60 stores," he notes. "The smaller companies often find it difficult, if not impossible, to be regularly serviced by specialty food brokers. As a convenience we can deliver the ethnic grocery items to them at the same time we deliver their weekly produce orders."

    It's passion for people that dictates every move at Caito Foods. And that passion, coupled with integrity, service, and innovation, has created a winning formula for the company over the past 50 years.

    Listen to words spoken by Indianapolis Colts president Bill Polian, who at Caito Foods' latest seminar shared his thoughts on achieving success both in business and on the football field.

    "It isn't the flash and dash, or going for the occasional long bomb that counts," said Polian. "It's how we perform every single day that determines who wins the game. It's about offering no excuses, walking in the other person's shoes, having that sense about what's right or wrong, and doing business on a handshake."

    "Most importantly," he concluded, "when your employees inherently know that you'll treat them right, you can be guaranteed one thing: They will always go that extra mile for you." At Caito Foods, that credo goes for both its employees and its customers.

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