Hilite Fine Foods Inc.: Following Dad’s Advice
Hilite Fine Foods Inc. (HFF) started as a simple fruit market in 1977 but has expanded into a wholesale produce company that sells hundreds of premium tropical/soft and hard fruits, vegetables, root vegetables and greens, as well as quail eggs, tofu and nuts to the Ontario region. In addition, the company sources organic salad greens, microgreen seedlings, unique vegetables with unusual colours, edible flowers, fancy garnishes, flavourful heirloom tomatoes, and colourful high Brix heritage root vegetables from Cookstown Greens.
The top-quality produce distributed by HFF can be found anywhere from restaurants to hotels, convention centres, golf courses and nursing homes, and has been featured on Canadian food shows such as “Cook Like a Chef.” Company owners Joe and Brian Siegal shop the Ontario Food Terminal twice a day, and the high inventory turn over ensures that HFF has the produce to live up to the motto “Nobody Does It Fresher.”
The company’s success is rooted in its story, which is one of two brothers taking on enormous risk, and at times living hand-to-mouth, but persevering by capitalizing on opportunities and adhering to core beliefs set by their father. It was Joe and Brian’s father David Siegal who loaned them the finances to get started, but the standards to which he held them proved to be far more valuable.
David’s values informed not only HFF’s practices regarding honesty, money and trust in relationships, but also the kinds of produce the company sells. The slogan that the business prominently displays on every page of the company website reads, “The bitter taste of poor quality lingers long after the sweetness of the low price is gone. – David Siegal”
Avoiding Debt = Trusting Relationships
Joe and Brian’s father strongly believed in never putting oneself into debt. “My father taught us that whatever we do, we pay in cash,” Joe, the president of HFF, says. David instilled in his sons the practice of always paying what you owe. This concept may seem either old-fashioned or obvious, but any business owner knows the value of someone you can continually trust to pay on time and in full. Joe and Brian truly implemented this valuable family philosophy, resulting in continuing success. “This is all because of Pop,” Joe says, referring to HFF. The business, which was started from scratch, now employs almost 50 people. “We listened to him and followed him, and he got us to where we are today.”
The story of HFF began when Joe was just 19 years old. He wanted to go into business, but with no credit or track record no one could give him any money to start off. “So I went to my father and he told me that if I could prove to him that I would be able to pay him back and do well, he’d loan me the money,” Joe says. So he started working for a food market nearby.
“The owner there was wealthy, didn’t really need to work,” Joe explains. Joe decided to make the most of this situation and presented the owner with a proposition: “I basically forced him to allow me to be the one going to the market, buying the produce, putting my price on it and selling it. Basically, I wanted to take over the whole thing. He finally said, ‘OK, fine’ and gave me the keys to the truck.
The first indication for Joe that he had a real knack for the food industry came when he bought expensive asparagus against the wishes of his boss. He bought one-pound bundles but reorganized the asparagus to sell it in half-pound units. He quickly turned a risky purchase into a money-maker for the retailer. When Joe first took over, the business sold $2,000 per week in produce. In just six months, he more than tripled the sales to $6,500. I went to my father and said, ‘Here, the proof is in the pudding. I think it’s time to go.’” I started looking for a store to rent and gave my boss notice.”
Despite misgivings from his wife, David re-mortgaged the house and loaned Joe the money to start a store on his own. According to Joe, his father said, “This is my oldest boy, he wants to go start his own business, and I can’t say no.” In 1977, with the money from David, Joe opened Humbertown Fruit Market and sold produce to customers in surrounding neighborhoods. Brian, Joe’s younger brother, joined him six months later, and a successful team was born.
Upon finding a space in the mall, Joe had a deal to rent the space at either $750 a month or five percent of their business, whichever was greater. This arrangement worked well for a few years and the business soon showed a profit. However, the mall eventually pushed Humbertown’s baseline rent up to $3,000 a month. This, along with the recession of the late ’80s and the advent of Sunday shopping, forced Joe and Brian to change their business model.
This was a very scary time for Joe and Brian. Retail was suffering, and while they saw the potential of wholesale, it meant closing the store and taking a big risk. For a while they supplied some restaurants out of the back room of the store, but that became more and more difficult. Brian kept hoping that retail would recover, but times were tough for the brothers. Remaining proactive, Joe started to look for a spot that would serve their needs for a wholesale operation.
“I thought enough was enough, so I rented a space on a whim. We didn’t have a dime, and I was wondering where I was going to get enough money to feed my kids, but I rented a 3,000-foot warehouse at $2 per foot,” Joe recalls. This is where David’s teachings came to help the company survive. Joe and Brian developed great relationships while running the fruit market and their refrigeration people knew them as people who they could trust to pay their bills. Based on that relationship, the refrigeration company installed the refrigeration units HFF required to get off the ground.
“When we first saw those two big coolers, we wondered how we would ever fill them. It was quite overwhelming. Within two months, though, I was short of space,” Joe says. Based on profits from an opportunity involving a California broccoli shortage, Joe and Brian could afford further coolers, and soon they quadrupled the size of their operation and created a medium-to-large business completely financed by the Siegal family. Joe sees this as the key to their business.
Staying True to Core Principles
“We, Joe and Brian Siegal, totally finance our own business. No banks. One hundred ninety percent is us because that’s how our dad raised us,” Joe explains as the reason why people prefer doing business with HFF. “When you pay for stuff in full and on time you’re never short of product, and the best items are set aside for you. I never have a problem getting product.”
A regret of Joe’s is that his father did not get a chance to see the business take off. “My father passed just before everything really kicked in for us,” he says. A dream of his would be to be able to join his father during the Father’s Day tournament at a private golf club for which HFF provides produce. “I can’t even go because I see everyone with their fathers there,” Joe says.
Despite a strong regard for the past, Joe knows how to keep his company looking toward the future. “If you don’t grow, you’re going to regress,” he says. “We upgrade all the time.” HFF does this using only its resources at hand, of course. HFF is founded on a strong belief in upgrading, but only when the business is able to pay for it.
Joe sees the United States operating on a different belief and worries about the effects it will have for Canadian businesses like his own. “The United States is our biggest trading partner,” he says. “If the U.S. goes further down, we’ll follow.” That market, however, is beyond Joe's control. What Joe can control is how he’s operating, and with the values that David Siegal passed on to his family through his generosity, Joe knows that Hilite Fine Foods Inc. has the solid core to continue being successful.