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    INDEPENDENTS REPORT: Wholesale commitment

    Caito Foods has made a habit of giving retailers quality, variety, and service. But what's most outstanding is its dedication to family-owned supermarkets.

    When you love what you do," says Philip Caito, "you never have to work a day in your life." Such is the philosophy on which the family-owned Caito Foods was built. What began in the 1940s as a hobby for two young boys has today been transformed into a nationally respected corporation, a family legacy, and a commitment to providing the finest customer service in the food industry.

    When Caito was just 4 years old, he and his younger brother, Joe, then 2, first ventured into the produce business. The energetic sons of a banana vendor, the pair often enjoyed visiting their father at the Indianapolis produce terminal not far from their home. There they gathered loose bananas that had broken off their stalks and carefully placed them into 10-pound bushel baskets. Off they went, traveling either by foot or bicycle, selling only the best bananas to neighbors and friends. So began their labor of love.

    Five decades later, Philip and Joe, along with their brother, Fred, are still selling bananas—and a lot more. Established in 1965, the Indianapolis-based Caito Foods today services 500 supermarkets, the majority of which are independently owned, operating in 11 Midwestern states. Nestled in the heart of the city's industrial district, the company ships a total of 10 million pounds of produce each week from its two sophisticated distribution centers—a 200,000-square-foot facility at Indianapolis headquarters and a new state-of-the-art warehouse that opened last fall in Newcomerstown, Ohio.

    Through the years, Caito Foods has experienced tremendous growth and has meticulously earned its reputation as one of the finest full-service produce distributors in the country. Quality, variety, and service are hallmarks of the organization, but perhaps most appreciated is the wholesaler's commitment to family-owned supermarkets.

    Philip Caito, president and c.e.o., views independent operators as the lifeblood of his company. "We have never forgotten those who believed in us from the very beginning. It was the family-owned supermarkets who gave us a chance in the 1960s, and without them there would be no Caito Foods. Twelve years ago, we were approached to service Wal-Mart and we turned them down. Our passion is for independents and they will always be our No. 1 priority," he says.

    One of many independents who admires Caito's devotion is John Alge, v.p. and c.o.o. of Lofino Foods, which operates a group of Cub Food Stores and Save-A-Lots in Dayton and Columbus, Ohio. "A couple of years ago, there was a buzzword floating around the industry called 'partnering.' As far as I'm concerned, the Caitos invented this concept over 40 years ago," says Alge. "The rest of the industry has tried to figure it out, but they haven't come close. The Caitos just get it."

    'Amazing partnership'

    He continues, "Years ago, we connected with Phil Caito and his team and together developed a formula to improve our produce operations. No longer do we have buyers sitting and staring at invoices all day trying to figure out if we got a good deal. We leave that up to the Caitos. Today, our companies continue to work together to create synergies for both organizations. We look out for each other and it's an amazing partnership."

    What also makes Caito Foods the enviable leader in the produce industry is its commitment to training. Each year, the company sponsors a comprehensive education conference for retailers and industry executives. Director of merchandising Joe Himmelheber coordinated the two-day event held in late February in Indianapolis. Attending were 450 retail associates, from store owners and operations execs to produce managers and their assistants. Surprisingly, they didn't care to talk much about Wal-Mart or about Kmart's bankruptcy. They were more interested in discussing their relationship with Caito Foods and how the wholesaler delivers more than produce.

    "I've been doing business with Caito for eight years," said Bob Sowers, president of Bob's IGA stores in Athens, Ohio. "They really care about our company and our employees." He continued, "One day, a driver named Gilbert Zook was delivering produce to my back room when he learned that our pallet jack was broken. Knowing that our delivery was the last stop of his route that day, Gilbert insisted on leaving his pallet jack at my store until we could get ours repaired. Two weeks later, he picked up the equipment and returned it to the Caito warehouse."

    Sowers' story and countless others made me want to learn more about the Caito organization. I persuaded the brothers to break away from retailers discuss their business philosophies and views on a changing industry. Following our visit, I reflected on my own experience as a supermarket retailer. While I was privileged to work with several outstanding suppliers, in retrospect most pale in comparison to Caito Foods. Why? The answer is quite obvious: The Caito family and their associates, including drivers like Gilbert Zook, have managed to never lose sight of people.

    "Mentally, we are very different from other wholesalers," says Joe Caito, v.p. and c.o.o. "Our sole mission is to help independents drive sales through merchandising, marketing, and education. We don't just deliver product to the back door and leave; that's not who we are."

    Fred Caito, executive director of the company and youngest of the three brothers, explains, "Caito's team of professionals works directly with our retailers on a daily basis. Together, we study individual markets and, more importantly, we react. Our purpose is to strategically develop produce departments that are in all ways superior to the competition."

    Competition from mass merchants has forced many independents to call it quits. It appears that many Caito customers are doing just the opposite. During the past year, several of them, including Dorothy Lane Markets, Scozio's, Reisbeck's Markets, Buehler's, Lofino Foods, and Marc's Deep Discount Stores, to name a few, have expanded their operations by building new stores or remodeling existing locations.

    "As the food industry landscape continuously evolves and consolidations continue to take hold, opportunities for exceptional operators and suppliers do exist," says Fred Caito. "As a wholesaler, we are constantly repositioning ourselves to seize these opportunities. Our retail counterparts are doing the same. They continue to meet consumer demand by educating employees and offering enhanced perishable departments. As a result, increased distributions in meat, produce, deli, and bakery are serving as the calling card for those consumers who expect quality and outstanding service."

    Does its constant repositioning give Caito Foods an edge over competing wholesalers? Asked about his competitors, Philip Caito assures me that his company faces none greater than itself. "We've established very high standards for Caito Foods and our next generation of leaders. Every day we compete with ourselves to meet and exceed those standards."

    The eldest Caito continues, "Honesty, integrity, concern for others—these are the foundation on which our company was built. Over the years, we've found that being honest sometimes means that you'll lose business. We've learned to accept that because we know of no other way to operate. Unfortunately, this industry often lacks integrity and that is difficult for me to accept. There are those who will say or do anything to entice a customer, but that's not Caito Foods. Dealers who look out only for themselves have no ethics; they are peddlers. Those who consistently look out for their customers? They are the true professionals."

    The culture of Caito Foods and its passion for customers make a fascinating story. Asked by my editors in New York to describe the Caitos, I was not at a loss for words. Professional? Absolutely. Shy? Not hardly. To that, add innovative, intelligent, and extremely patriotic.

    Fifty-four years ago, a man named Philip Caito Jr. encouraged his sons to sell bananas to neighbors and friends and inspired a work ethic that is today beyond compare. "Our father taught us long ago that work is the most honorable thing you can do in life," says Joe Caito. "Every day, we pour our hearts and souls into serving our customers, associates, and ultimately our country. We're privileged to work in America because it truly is the greatest country club on earth. Yes, its dues are the highest, but nowhere in the world are there any greater rewards."

    Independent retailing editor Jane Olszeski Tortola can be reached at [email protected].

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