Produce Supplier Has $40M in Sales, Eyeing Growth

Fidel Guzman knows his fruits and vegetables.

Owning and running a restaurant and bakery in the 1970s left him wary of the ins and outs of doing business with produce distributors, he said.

After picking up that other restaurateurs also were unhappy with poor quality and inconsistent service, Guzman started Family Tree Produce Inc. of Anaheim in 1975.

Guzman’s company generates around $40 million in yearly sales distributing fruits and vegetables from all over the world to the Disneyland Resort, the University of California, Los Angeles, Benihana restaurants, San Diego’s Qualcomm Stadium, Los Angeles Zoo and Botanical Gardens and

others.

Since Family Tree’s start, it has become one of Orange County’s largest produce distributors, alongside Los Angeles-based Worldwide Produce, Costa Mesa’s Ingardia Brother’s Inc. and L.A. Specialty Produce of Santa Fe Springs, according to Guzman.

Family Tree carries a variety of fruits and vegetables it buys from growers in California, South America and other areas.

It sells everything from star fruit and edible flowers to onions and lettuce. The products are trucked in from the fields or picked up from the Port of Long Beach.

Keeping steady relationships with a large handful of growers allows the company to keep a diverse selection, even when weather affects the supply of a particular fruit or vegetable, said David Figueroa, vice president of operations and development.

“It’s all about having variety,” he said.

A good chunk of the company’s fruit and vegetables also are sold to restaurants, schools and hospitals.

Family Tree faced its share of struggles in the past.

Like many entrepreneurs, Guzman and his family had to learn how to manage costs, recruit workers and stay competitive in an industry that’s flooded with larger and smaller rivals that offer the same service Family Tree does.

Word of mouth and industry connections, built through associations such as Produce Alliance, a trade group for distributors, have helped Family Tree grow, Figueroa said.

The company outgrew three buildings before it settled in its current 38,000-square-foot Anaheim warehouse, which sits on 5 acres of land owned by Guzman.

Inside Family Tree’s headquarters, about 120 workers load packaged produce in the company’s 40 refrigerated trucks and deliver them to customers in Orange, Los Angeles, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura counties.

The company has had its share of offers from developers for the land its operation sits on, Figueroa said. But Guzman doesn’t plan to sell, he said.

Family Tree also has had buyout offers from companies and private equity firms.

The offers are tempting, Figueroa said. But the company isn’t ready to cash out yet, he said.

“A lot of hard work went into getting this business where it is today,” Figueroa said. “I don’t think we’re ready to go that route yet.”

The produce business has its share of challenges, Figueroa said.

The rising cost of insurance, labor and fuel are taking a toll, making it harder for distributors to eke out profits, he said.

A shortage of workers due to a crackdown on illegal immigrants is another issue the industry faces, Figueroa said.

“Immigration reform is affecting a lot

of industries, but it’s hitting the produce

business very hard,” he said.

Family Tree hopes to diversify. The company is eyeing grocery store chains as a potential source of new business, Figueroa said.

Earlier this year, Family Tree struck a pact with an undisclosed convenience store chain to sell its fruit and vegetables at 25 stores.

“We’re testing the waters right now,” Figueroa said. “If it works out, we’ll be able to target larger grocery store chains.”

Family Tree also is looking at government contracts so that it can sell produce to the Navy, Army and others.

New sources of businesses could help Family Tree grow its revenue by 20% next year, Figueroa said.

Another plan could be to create its own brand of produce, Figueroa said.

“We’re planning ahead so that we can stay competitive,” he said.

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