Russ Davis Wholesale is a 100 percent employee-owned produce wholesaler distributor and processor of fresh fruits and vegetables based in Wadena, Minnesota. The company was started in 1955 by Russ Davis as a one truck business. He called on local grocery stores in the lakes area of northwestern Minnesota.
Since becoming employee owned in 1991, the company has seen continuous growth year over year. It has made several strategic warehouse expansions, acquisitions and investments into state-of-the-art equipment and technology.
According to Jerry Arne, VP of strategy, becoming employee owned has been a catalyst of growth.
“If you look at our growth trajectory, when we’ve opened new operations or acquired companies, that really started when we became 100 percent employee owned,” he said.
RDW offers conventional, organic and specialty wholesale produce. It also offers fresh-cut fruits and vegetables, along with deli sandwiches, wraps, grab-and-go options, ready-to-heat meal solutions and fresh juice through its Crazy Fresh brand.
Arne said one of the trends in the produce industry today is consolidation. He cited as an example RDW’s acquisition of Liberty Fruit in Kansas City in December 2022, which connected its operations in the Upper Midwest with its operations in Colorado.
“Now we have continuous inventory throughout all of our operations.”
The company model is to grow regionally and connect more geographies to its existing operations.
“I think that we’re seeing more and more companies partner together in order to get the scale to compete on a larger level,” Arne said.
Another trend he sees is toward revenue diversification.
“I think one thing that everyone learned during the pandemic was that if your business is too heavily invested in one stream of revenue in one industry, like foodservice for example, in that case you haven’t mitigated risk. I think that there is a trend to have different types of revenue so that when these external threats happen, you’re more resilient.”
While the pandemic sparked a greater demand for fresh food in general, Arne said the effects of inflation now are being seen in the market.
“It feels like consumers are shifting their buying patterns a little bit more toward lower costs, more staple items,” he said. “I think that we’ve seen the demand shift, to some extent, away from value added to more affordable options.”
According to Arne, the combination of inflation and a decrease in discretionary income as a result of inflation “has caused consumers to think a little bit harder about what they’re purchasing.”
Looking toward the future, Arne said RDW sees controlled environment agriculture – in all of its various forms – as continuing to play a greater part in the produce industry.
“We would definitely have consensus at our company that more volume in certain commodities will shift toward controlled environment agriculture, like vertical farming, like greenhouse growing, like aeroponics, hydroponics. There will be more volume grown in those categories as a percent of the total in the coming years in certain commodities.”
CEA already is being used to produce leafy greens, tomatoes and cucumbers, along with berries.
“There are things about controlled environment agriculture, like reliability of supply – you’re not having to rely on Mother Nature as much. In some cases, like vertical farming, you’re not really relying on that at all,” Arne said. “Greenhouses still have the sun as a variable.”
He also noted there is a greater food safety concern in field-grown produce than what is produced through CEA.
Russ Davis Wholesale has 16 facilities, with operations in Minnesota, Colorado, North and South Dakota, Wisconsin, Iowa, Missouri and Kansas. The company distributes products in 16 states.
Read more produce news from The Shelby Report.