As we turn the calendar pages to a new year, we continue to appreciate the confidence and trust that our customers place in us to serve their needs. Our goal is to constantly improve the quality of our products and services so that your experience with Kingston is truly effortless. We are excited about our plans for 2005 and the many ways in which we will strive to help you succeed. Our plans include initiatives in new product development, food safety and security, customer service as well as industry issues.

Product Development

In 2004, we launched our tomato and green onion programs. These programs will be expanded in 2005, along with our nascent mushroom program bringing the total number of Kingston product lines to eleven.

A special thank you to our new partners who participated in the tomato program and helped make it a success: Heavenly Produce, Inc, Custom-Pak, Proffer Produce and The Produce Exchange. Your commitment and willingness to learn with us will make the expansion of this program even better.

We are currently testing red potatoes, and are actively exploring options for organic potatoes and will have a test of this new product line in 2005. We are also looking into offering Yukon Gold and Fingerling potatoes, contingent on our ability to source and supply a premium quality product to the market.

Food Safety and Security

Food safety is an important issue that continues to garner attention from consumers and industry advocates. We have expanded our quality assurance program to all new product lines, to ensure that our high standards are applied to all products we supply to you. In 2005, we will be providing you additional resources and communications about the need to manage food safety and quality from planting to plate.

Customer Service

We’re committed to making every customer delighted with Kingston, and will be working hard in 2005 to ensure you continue to see us as one of the best suppliers in the industry. Our goal is to expand our technology platform and begin testing online availability and ordering functionality. Your CSR will have more details as we begin developing the pilot program.

Industry Issues

The produce industry continues to face important issues from many sources. On the consumer front, we are striving to provide safe, nutritious products that meet the changing palates of consumers and demands of restaurateurs. Our food supply must continue to be safe, reliable, and consistent. We are continuing to meet the logistics challenges, made more difficult by high fuel prices and increased competition for equipment. Kingston is committed to working with and on behalf of our customers to make our industry better and more efficient. Look for more communication from us on these and other industry topics throughout the year.

In the Chinese lunar calendar, 2005 is the year of the Rooster. The sign of the Rooster indicates someone who is hard-working, honest, and clear about their decisions. Here at Kingston, those are traits we strive for every day. In 2005 we will continue to serve our customers with the highest quality products and most responsive service we can provide.

Phoenix, Arizona was the site of our first annual Kingston Golf Invitational, at the Duke at Rancho El Dorado Golf Course. We were thrilled to have everyone attend. Congratulations to the winners for Longest Drive, Gil Beckstrand (Gringos restaurants), and Closest to the Pin, Tom Butchard (Ole Tyme Produce) Dave Lightle (Gold River Project). The best overall foursome was Scott Masingill (Prime Trucking), Chris Whoo (Murakami), John New (Grand Avenue) and Allen Murphy (Cal Ranch stores). We are now working on the second annual Kingston Golf Invitational. Details to follow in future E-Letters.

Overall market conditions have been challenging for both romaine and lettuce. The transition to the Southwest for both romaine and lettuce was difficult due to early freezes down south in November and inclement weather in the Salinas Valley. Consider, Iceberg lettuce coming from the San Joaquin Valley, used to fill the gap during transition, had notoriously unpredictable quality and consistency. This resulted in a “double whammy” of higher prices and diminished quality.

We believe the tide is starting to turn as all transitions are complete, and the shipper base in the Southwest is getting caught up to demand.

The biggest concern this time of year is the lack of a dependable available labor force in the Southwest. There is plenty of product in the ground with no crews to harvest it. We should start to see this issue clear up after the second week of January.

Early freezes, as mentioned above, are impacting quality on romaine and lettuce in the form of blister and ‘peel’. We will continue to see this issue into January for iceberg lettuce and regular carton romaine. Barring future freezes, it should clear up by the end of January. Romaine hearts remain largely unaffected since the outer leaves are the primary areas exposed to frost.

For more information please email Jeb at jjohnson@kingstoncorp.com.

Effective Jan 1, 2005, Union Pacific is increasing rail rates 10% to all destinations. Please see your Customer Service Representative if you have questions regarding your new rate. This rate increase does not apply to UPDS One-Plus at the present time. This may be subject to change.

Union Pacific’s fuel surcharge is 9% for the month of January. This surcharge is based on the average November 2004 DOE Diesel Fuel Price, which was $2.147. For details, please see Union Pacific’s website at http://www.uprr.com/customers/fuel_surcharge.shtml. This surcharge is in addition to the 10% rate increase!

We anticipate truck supply to remain tight in January, and improve in February. Rail equipment supply has improved, and empty equipment to load is available.

For information please contact Chris Taylor at chris@kingstoncorp.com.

Brandon Snyder is Special Assistant to Dave Kingston, and works on a variety of projects for both Kingston & Associates and the Dave Kingston Companies, including new product development and business acquisitions.

Prior to joining Kingston in March 2004, Brandon worked for the Newell Rubbermaid Company as part of their western division office in Bellevue, WA. He managed sales for their national accounts including Wal-Mart, Lowe’s and Home Depot.

Brandon has also been involved with several not-for-profit companies, including Higher Ground for Humanity and Windfall International Ventures.

A native of San Diego, Brandon is a black belt in karate and also enjoys judo and kickboxing. He is a big movie fan, and enjoys the outdoors including golf, skiing, and mountain biking. Brandon is a magna cum laude graduate of Western Washington University with a BA degree in Finance and Anthropology.

A-One-A Produce is a recognized leader with a focus on understanding their customers’ goals and objectives. A-One-A is committed to a perfect delivery standard for quality and consistency. They are the largest produce distributor in South Florida, serving cruise lines, airline caterers, hotels, retail, business and industry, multi-unit and large independent restaurants, as well as exports.

Founded in 1987, A-One-A has built a business based on providing 100% customer satisfaction every day. They deliver to most of South and Central Florida, running from the upper Florida Keys to Ft. Pierce and Orlando, and from Naples to Ft. Myers.

A-One-A’s largest customers are the Royal Carribbean and Celebrity Cruise Lines. They offer a full line of products, partnering with the highest quality grower-shippers in the country. In addition to produce, they also offer a full line of specialty cheeses.

Since starting the company, Scott Davis and Virgil Scarbrough have built a team of 213 associates. All of them understand the company’s mission, to “earn today’s pay” with high quality produce, superior customer service, and a daily commitment to ensure that quality food is delivered as requested. Strong teamwork has resulted in recent annual sales growth of 25%.

Kingston is honored to have been a supplier to A-One-A since 1996. Like A-One-A, we have the same commitment to supplying high quality products and services to our customers, and putting the needs of our customers first.

You can visit A-One-A on the web at www.aonea.com.

If you see something you would like more information on, or if you have any ideas for next month's issue, please call or email April Barnes at april@kingstoncorp.com.

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