Demand, costs high for frozen food firms such as Patterson Vegetable

PATTERSON -- Patterson Vegetable Co. struggles to survive in a frozen food sector that faces challenges but still has plenty of consumers.

The U.S. industry has high labor and energy costs that put it at a disadvantage with foreign vegetable producers, said Corey Henry, vice president for communications at the American Frozen Food Institute in McLean, Va.

"It really is a global marketplace, and the competition among suppliers and producers is very difficult," he said.

Demand has grown nonetheless, thanks to innovative products and packaging, along with messages about the health benefits, Henry said.

Several hundred jobs are at stake at Patterson Vegetable, which has operated in the West Side city since 1946.

The company as of Friday had not indicated whether it would go through with a plan to close Feb. 20. Union employees overwhelmingly have rejected the pay and benefit cuts management says are needed to pay for vital plant upgrades.

A closure would put 489 employees out of work, according to a letter sent by the company to the Stanislaus County Board of Supervisors. It has employed a few hundred more people during peak seasons.

Chief Executive Officer Eric Schwartz said Jan. 9 that the plant's status would be discussed with lenders "in the next couple of days."

He could not be reached for comment Friday, nor could leaders of Teamsters Local 948, which represents the workers.

The company freezes a wide variety of vegetables grown mainly in the Northern San Joaquin Valley. They are sold under various labels.

Patterson Vegetable, previously known as Patterson Frozen Foods, was among the pioneers as the industry took off after World War II.

That growth has continued in recent decades. The average American ate 24.9 pounds of frozen vegetables in 2009, compared with 14.9 pounds in 1970, according to the U.S. Department of Agriculture.

Fresh vegetable consumption was much higher during this time, but its growth rate was less than that of frozen. Canned vegetables were fairly flat.

Patterson and other producers have countered the fresh-is-better movement by pointing out that their crops are harvested and processed quickly.

"By freezing them at their peak, you lock in the maximum flavor and nutrients," Henry said.

Researchers at the University of California at Davis compared certain nutrients in a 2007 study of fresh, frozen and canned foods. They found that frozen and canned can be healthy if they are stored and handled properly.

"These processed forms offer added convenience to the consumer and offer diversity to the diet, while generally sacrificing little in nutrition," the authors wrote.

Freezing takes a large amount of electricity, and Henry said processors in California have some of the highest power rates in the nation. Patterson Vegetable is a customer of the Turlock Irrigation District, which has had increases in recent years but is still relatively cheap.

The frozen vegetable industry in Stanislaus County is small compared with its canneries, which process tomatoes, peaches and a few other fruits.

Another frozen vegetable company, Cebro Foods Inc., operates west of Newman. Its management declined to comment for this story.

Bee staff writer John Holland can be reached at jholland@modbee.com or (209) 578-2385.