Fighting food costs: Discount stores turn 'jobbed' veggies into deals

Asparagus was priced $1 a bundle at Freestone Produce.

On the floor, Brhanu Brhanu's hands flew trying to keep the display counter full as customers grabbed at the deal. The parking lot outside was packed, even though it was mid-week, and the aisles were full of shoppers sorting through persimmons and half-price bananas. 

This is the world of discount produce, where excess produce in the system gets offered for cheap, and high inflation across the grocery sector means business is booming.

• WATCH: See how busy some discount grocery stores are.

Freestone Produce on 32nd Avenue N.E. is one of the oldest discount shops in Calgary. When we asked people where to get a good deal, they also pointed to Basha International Foods, H&W Produce and Fresh Produce in Sunridge Mall, all in Calgary's northeast.

That's where this type of independent discount store is concentrated. On the south side of the city, The Crisp Apple opened in Douglasdale partway through the pandemic.

Customers say the quality of produce at these stores is mixed. But the increasing cost of food put a squeeze on many Calgary budgets, so we interviewed the owners of three stores to understand where the food is coming from. 

Mike Soufan owns Freestone Produce. He says those asparagus were priced to fly off the shelves because it's a consignment deal with a supplier he knows down south. The supplier had way too much; he sent a load to Soufan with instructions to just move them before they go bad, and split the profits.

Soufan's cucumbers last week were a consignment deal, too — 20 pounds for $10.

But the bananas were on sale because another grocer in the city wasn't selling them fast enough; it rejected this shipment on arrival rather than accept them and have them turn brown on the shelf.

'We have to move it fast'

That's called "jobbed" produce in the industry.

"There's nothing wrong with them," said Soufan, pulling the lid off a 40 lb box in the warehouse. "The tips are green. Still a nice mix of yellow and green. The same bananas you could buy in any major store in the city."

"We sell them 49 cents a pound, sometimes 29 cents a pound, based on how much we have," he said. "Produce is under pressure. We have to move it fast."

Business consultant Martin Gooch says typically 1.5 to 2.0 per cent of all shipments get rejected for various reasons. He's seen small, nimble independent produce stores flourishing across the country as they take advantage of those kinds of deals.

But discount stores say rejected or "jobbed" produce is only a small part of their business. They also get deals on quality produce just by buying smart, focusing their energy and taking advantage of their small size.

The Crisp Apple just off Deerfoot Trail in Douglasdale gets some of its produce from local Hutterite communities, which can't supply enough to work with the larger chains.

They also turn produce into fresh salsa, guacamole and smoothies before it can go bad, and try to offer a range of price points and quality. Last week, they had a large bag of slightly wrinkled sweet peppers for $1.99 and oversized kiwi for $1.69/lb. But they also had perfect-looking plums for $3.49/lb.

At H&W Produce, Jonathan Harrison says it's about making decisions on the spot, paying bills quickly, building relationships with suppliers and targeting each purchase to exactly what customers in that neighbourhood are likely to buy.

That's the core of the business, what it takes for an independent grocer to thrive.

But that "jobbed" produce can be the fun stuff.

'Start the car!'

H&W Produce has six small stores, in Calgary and Edmonton, each with large walk-in coolers to handle the extra if a Walmart, for example, turns away 30 pallets of strawberries.

Officially, the original store will say there's something wrong with them. But often, says Harrison, they're just looking for excuses because business is slower than expected. His team loves getting those urgent phone calls from the stuck supplier.

"We can put (those strawberries) at a price point where Edmontonians and Calgarians are going crazy," he said. "It's what you feel is a steal. It's like: 'Start the car!' That kind of thing."

Watch for overripe produce

CBC Calgary has been inviting people concerned about the cost of food to join our text messaging community.

On that platform, some Calgary residents told CBC they no longer shop at discount stores because some produce gets overripe too quickly. They can get surprised by poor quality, and these places can be tough to get to for people who don't have a car.

But others swear by the deals they find here, sometimes shopping with friends to take advantage of bulk deals and budgeting their time to chop and cook it quickly.

Back at Freestone, Soufan says that's exactly the approach they encourage.

He jokes about a man who came in and got so excited to find watermelon for $1 a piece, he bought 20. Later, he came back to complain the price was actually $20 a piece since he only ate one before the rest went bad.

"Just buy a little bit," said Soufan. "We're not going away. This is just the beginning."

CBC Calgary is looking at the high cost of food this fall because of the steep increases at the grocery store.

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