Originally printed in the July 2020 issue of Produce Business.
Foodservice purveyors rely on adaptability and supplier relationships to carry on.
As New York City’s restaurants and foodservice operations ground to a crawl in March, distributors and suppliers in this segment strove to evolve to stay afloat in an increasingly difficult environment. “On one day, distributors were selling products to restaurants and the next day the restaurants were closed,” says Ira Nathel, president and owner of Nathel & Nathel on the Hunts Point Market.
As foodservice purveyors faced decreasing sales and stared down existing inventory, the industry saw a variety of responses, including home delivery, retail wholesaling and charity fulfillment. “Some foodservice companies were able to pivot to home delivery or other avenues to generate sales,” says Evan Kazan, vice president of Target Interstate Systems in Bronx, NY.
Decreasing foodservice sales volume presented a challenge that was met with creativity. “Many have gone into food-box home delivery programs,” says Cary Rubin, vice president at Rubin Bros. Produce Corp. on the Hunts Point Market. “Some have turned to doing wholesale business, but the home delivery food business was key for many. As of late May, we saw some of those customers starting to buy more. For those companies in decent condition, long-term they will get through this.”
While about 80% of Bronx-based Baldor Specialty Foods’ traditional business took a hit when restaurant and foodservice customers were forced to adopt take-out and delivery models because of the pandemic, the company has had no problems fulfilling its orders and helping them stay in business. “We also service a number of institutions, such as hospitals and nursing homes, which definitely still needed us around,” says Michael Muzyk, president.
But that wasn’t going to be enough to keep Baldor afloat. “We had to challenge ourselves to fundamentally alter the way we conducted our own business,” says Muzyk. “Thankfully, one of our strengths was a strong online ordering platform. The challenge to the team was, could we use that online ordering platform to pivot to a direct-to-consumer home delivery model? It was really the only way to keep our operations viable during this crisis, and our team wholeheartedly accepted that challenge.”
It also helped that Baldor had made an investment to become an SQF (Safe Quality Food Program) Level 2-certification warehouse. “Because of that, ramping up to the COVID-19 cleanliness standards for an essential work space wasn’t too big a stretch for us and we could keep our warehouse going,” says Muzyk. “Thankfully, home delivery took off for us. Those families and individuals who didn’t want to needlessly expose themselves with a trip to the supermarket found our home delivery service a convenient and reliable alternative.”
Some restaurants were still doing take-out, so there was some active foodservice business explains Thomas Tramutola, Jr., manager at A&J Produce Corp. “But I’ve seen a lot of the food-service distributors and jobbers adapt by offering straight-to-door services of mixed boxes,” he says.
Every little bit helps, suggests Joel Fierman, president of Fierman Produce Exchange on the Hunts Point Market. “These various programs, such as home delivery, may not make up for what they’ve lost but they’re at least trying something to survive,” he says.
Many foodservice purveyors found support among longtime suppliers. “For many of them, we said ‘we understand it’s hard for you, pay us when you can’,” says Nathel. “What we’ve done has helped them stay afloat, and it’s helped me because they are customers.”
The foodservice industry is crucial for wholesalers, explains Michael Armata, buyer at E. Armata on the Hunts Point Market. “We need a healthy balance of customers and to not just rely on one type of customer,” he says. “To help the foodservice industry, we took on smaller orders for delivery as well as smaller packages so if business is slow, there is no waste. When customers don’t know when they will need certain items, the fresh factor is key.”
A new conversation may evolve during the long-term application of these new revenue streams. “Many of the foodservice distributors I sell to started doing home meal and food delivery,” says Paul Auerbach of Maurice A. Auerbach Inc. in Secaucus, NJ. “At least a few reported to me that when this ends, they may maintain this structure or some of it. It’s an interesting potential change moving forward and one of the future alignments that remains to be seen.”
