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Foodservice Distribution In An Ever-Changing Market

Tracking trends, new technology, top concerns
Foodservice_MS

With away-from-home meal consumption continuing to rise, foodservice is a golden opportunity for suppliers. It is an excellent venue for familiar or unfamiliar items to be prepared in new ways and introduced to the public.

Fresh kiwi, once an exotic specialty, is now found on menus across all segments and is a staple in schools. Brussels sprouts are another case in point. “Foodservice is where Brussels sprouts went from a seasonal side dish to year-round menu item,” explains Jeff Oberman, vice president for trade relations at United Fresh Produce Association.

On the other hand, getting onto menus in the foodservice sector can be challenging with a sometimes long, unwieldy approval process and lengthy contracts, especially among large chain operators. But by forging relationships with chefs, produce companies can find a wealth of new opportunities.

Salinas, CA-based Mann Packing Company, Inc.’s development team tries to come up with at least two new products each year. “The largest challenge or opportunity is identifying what is relevant and whether it makes sense for our customers,” explains Cody Ramsey, director of foodservice sales. One such example revolved around lettuce for burgers or sandwiches: Mann’s developers came up with an iceberg and leaf lettuce hybrid that stood up well to heat. This product, as well as single, washed whole lettuce leaves, provided just what their customers needed. “The trick is identifying a need and bringing it to market in enough volume to make it viable to produce,” Ramsey says.

Trends & Directions
One of the most significant trends among commercial and noncommercial establishments is the rising prominence of produce. Consumer interest in healthier eating and new, exciting flavors have contributed to a ‘vegicentric’ style of preparing and serving food.

Chefs may serve a few ounces of premium animal protein with nearly a pound of vegetables. According to United Fresh’s Fresh Insights for Foodservice newsletter, produce meat substitutes such as roasted cauliflower “steaks” and eggplant or beet “burgers” are appearing on more restaurant menus. By showcasing the many tastes, textures, and flavors of fresh fruits and vegetables in a creative manner, establishments stand out.

Alan Hilowitz, corporate communications director for Ready Pac Foods, Inc. in Irwindale, CA, observes, “Restaurant patrons are more willing to try new flavors and trendy produce ingredients as consumers look for naturally occurring benefits and functionality. In the case of the expanding grab-and-go segment, customers want something quick, but great tasting. Foodservice operators are also looking for solutions to compete with grocery chains offering fresh grab-and-go options,” he says, “which represents growing competition to restaurants.”

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With away-from-home meal consumption continuing to rise, foodservice is a golden opportunity for suppliers. It is an excellent venue for familiar or unfamiliar items to be prepared in new ways and introduced to the public.

Fresh kiwi, once an exotic specialty, is now found on menus across all segments and is a staple in schools. Brussels sprouts are another case in point. “Foodservice is where Brussels sprouts went from a seasonal side dish to year-round menu item,” explains Jeff Oberman, vice president for trade relations at United Fresh Produce Association.

On the other hand, getting onto menus in the foodservice sector can be challenging with a sometimes long, unwieldy approval process and lengthy contracts, especially among large chain operators. But by forging relationships with chefs, produce companies can find a wealth of new opportunities.

Salinas, CA-based Mann Packing Company, Inc.’s development team tries to come up with at least two new products each year. “The largest challenge or opportunity is identifying what is relevant and whether it makes sense for our customers,” explains Cody Ramsey, director of foodservice sales. One such example revolved around lettuce for burgers or sandwiches: Mann’s developers came up with an iceberg and leaf lettuce hybrid that stood up well to heat. This product, as well as single, washed whole lettuce leaves, provided just what their customers needed. “The trick is identifying a need and bringing it to market in enough volume to make it viable to produce,” Ramsey says.

Trends & Directions
One of the most significant trends among commercial and noncommercial establishments is the rising prominence of produce. Consumer interest in healthier eating and new, exciting flavors have contributed to a ‘vegicentric’ style of preparing and serving food.

Chefs may serve a few ounces of premium animal protein with nearly a pound of vegetables. According to United Fresh’s Fresh Insights for Foodservice newsletter, produce meat substitutes such as roasted cauliflower “steaks” and eggplant or beet “burgers” are appearing on more restaurant menus. By showcasing the many tastes, textures, and flavors of fresh fruits and vegetables in a creative manner, establishments stand out.

Alan Hilowitz, corporate communications director for Ready Pac Foods, Inc. in Irwindale, CA, observes, “Restaurant patrons are more willing to try new flavors and trendy produce ingredients as consumers look for naturally occurring benefits and functionality. In the case of the expanding grab-and-go segment, customers want something quick, but great tasting. Foodservice operators are also looking for solutions to compete with grocery chains offering fresh grab-and-go options,” he says, “which represents growing competition to restaurants.”

The rise of ‘superfoods’ is also indicative of the trend. Deeply colored fruits and vegetables high in vitamins and antioxidants are gaining space on menus across foodservice channels. Ramsey points out that new products infused with superfoods are driving a good portion of Mann’s business. Blends of broccoli, carrots, beets, Brussels sprouts, and kale “offer convenience for operators who would otherwise need to purchase large quantities of several raw products and apply significant labor hours to clean, prep, and process. Our goal is to make these great sources of vitamins and other nutrients easy to use.”

Even schools and convenience stores, which in the past only minimally showcased produce, are making fresh produce central to their offerings. Not long ago, it was unimaginable to see a salad bar in a convenience store, but now these healthy options are alongside hot dogs, chips, and novelty beverages.

Clyde Jenkins, director of produce for Labatt Food Service in San Antonio, TX, services hundreds of convenience stores.

“A number of Stripes stores added fruit and salad bars; now they’re testing precut vegetables. As far as schools, we sold kale to districts before it was big in retail. Five years ago, schools wanted something besides salad mix, so we came up with a spinach and romaine mix they now purchase at a rate of 400 cases per week.” Labatt also provides fruit and vegetable cups with zucchini or kiwi slices, jicama sticks, or chunks of watermelon, papaya, and mango.

Trimming Waste
Waste, of course, is not a new topic in the industry. The sheer amount of perishables thrown out each day is staggering—whether unharvested by growers, uneaten by consumers, or unmarketable by retail outlets—especially when much of it is still edible. For this reason and more, reducing waste has become a front and center issue.

Michael Muzyk, president of Baldor, a receiver and distributor in New York City, is passionate about sustainability within foodservice. “If local is the most current trend, sustainability is the next. I challenged my team to figure out what to do with all our trimmings.” The result was a program called “SparCs” (‘scraps’ spelled backwards), which makes use of leftover peels and skins.

“To demonstrate the viability of the program,” Muzyk continues, “we teamed up with Dan Barbar of Blue Hill Farm who created an entire SparsCs-based menu. We also dry and mill SparCs and turn them into a nutritious powder that can be added to soups and smoothies, as well as items like gluten-free croutons.”

Do Organics Matter?
While organic produce has a place in the hearts and minds of many consumers, it is not a headliner in foodservice.

“Organic is important, but only to a customer/operator with organic recipes or menu items,” notes Hilowitz. “Restaurant patrons don’t have visibility to what is being used to prepare their meal.”

For those institutions and restaurants that have built their reputation on locally sourced or organic items, there is a much firmer commitment. Brian Kane, chief operations officer of PRO*ACT, LLC in Monterey, CA, adds, “Organics have traditionally been the purview of the retail and wholesale industry, but we’re seeing a slight uptick in foodservice demand.”

The role of organics is always a hot button issue and some industry professionals as well as consumers see the choice as a matter of elitism, considering the higher cost. Jill Overdorf, director of business and culinary development for Coosemans LA Shipping, comments, “I know it’s a controversial statement, but the label of ‘certified organic’ indicates a growing process, not necessarily a more flavorful or healthier item. It’s an opportunity to ingest fewer ‘bad’ chemicals into one’s gastrointestinal system, and ideally, I’d like to see organics and conventional produce cost the same so the choice is more egalitarian.”

Packaging Options
When it comes to packaging—size, weight, and materials are of utmost importance. “Foodservice customers look for customization,” notes Hilowitz, “in addition to ease of use with minimal waste. With bulk products, it’s a selling advantage to use recyclable and eco-friendly packaging to promote sustainability.”

As far as reducing packaging waste, Ramsey agrees most suppliers are doing their part to minimize carbon footprints. “This is a priority for us—at our facilities, 90 percent of our wash water is reclaimed into industrial waste systems for use on golf courses and city landscaping. And the corrugated [containers] we use are both recycled and recyclable. One way we reduced the use of plastic in a party tray was by eliminating the lid and just using a film liner.”

Victory Packaging, now owned by KapStone Paper and Packaging Corporation, is located in Houston, TX. Cheryl Wilson, vice president for perishable packaging, points out, “It’s very important for customers to be able to recycle their packaging. We provide trays, film, bags, and specialty products such as PET [polyethylene terephthalate plastic] jars. The single layer polypropylene trays are the most recyclable; salad bar items like tomatoes, full size onions, and lettuce are in these trays.

“We’re also seeing more demand for customized packaging,” Wilson adds, “including combination packs of Mexican or Italian items for salad bars. Looking to the future, there’ll be more packaging that improves shelf life. However, so much of the acceptance of innovation comes down to price: you can come up with the greatest idea ever, but cost is a central issue.”

Jenkins of Labatt often sees ease of use and fresh enhancements trumping sustainability. “Most people want packaging that breathes better and tears less. Biodegrad-able and recyclable are not big factors.”

Challenges: Big & Small
The nature of foodservice makes food safety a significant challenge. According to Kane, “Concerns about food safety are more prevalent because of the linear way in which it affects the end user. Because foodservice has some of the highest ‘touchpoints’ when it comes to food handling, we work with growers, shippers, and our distribution network to apply up-to-date third-party audits, and the most advanced processes and procedures.”

Chris Kragie is an owner at Western Fresh Marketing in Madera, CA that sells figs, kiwifruit, Asian pears, pomegranates, Hawaiian papaya, and fresh ginger. “The bar on standards keeps being raised,” Kragie says. “Most of the pressure is on growers, and we’ve had to let some of the smaller ones go because the costs of meeting food safety standards are so high for them.”

“Food safety is always a concern,” reit-erates Overdorf, “no matter the venue. Obviously, throughout the processing operation, there are more opportunities for contamination. Once an item has been cut or handled, there is more exposure to oxygen and the cells will break down more quickly.”

“Distributors and operators have their own requirements and guidelines,” weighs in Hilowitz, “as well as those outlined by regulatory parties. Today, customers are more focused on sourcing bulk items that have been processed within good manufacturing practices to ensure food safety, instead of sourcing raw ingredients and processing them themselves.”

Other components affecting food safety include distance and weather. “We buy some product off the Los Angeles and San Francisco markets,” shares Baldor’s Muzyk, “then it has to be trucked and ultimately flown east. We pick up containers from John F. Kennedy airport all the time, and so many things can go wrong—yet we manage to do it successfully every day.”

Every level of the industry struggles with the capriciousness of weather, and foodservice is no exception. “Last year, Yuma experienced high temperatures early in the season—everything grew too fast, then there was cold and rain so the season ended early,” Jenkins recounts. “Salinas had to replant weeks late and that sent us scrambling for romaine. Since Salinas wasn’t ready, we had to buy from Mexico. Schools don’t tell you what they need until the last second—an order for strawberries can go from 800 cases per week to 2,000 cases. Hopefully, conditions will cooperate.”

Communication, of course, is pivotal. “Because of the constant changes in market conditions across all growing regions,” remarks Kane, “we work on keeping relevant information in front of our customers to keep them aware of how this could affect their planning.”

Wrap Up
With so much consolidation among foodservice distributors in the last decade, there is more opportunity for nimble, mid-sized, and specialty distributors to flourish. For Kragie, it’s about relationships. “Our company has been selling to foodservice distributors since the late 1990s. Our customers are loyal because we supply high-quality products on a year-long basis with aggressive pricing and integrity.”

Another key to success is creativity. “Innovate, innovate, innovate! Suppliers need to continually come up with new products to wow the consumer,” insists United Fresh’s Oberman.

Kane sums it up this way: “The foodservice industry has been through many dynamic transitions in the past decade, and there is little indication the changes will slow down. This is great for customers who are being given more variety in how to spend their foodservice dollars, and we’re working to make sure produce is delivered to them safe, fresh, and ready to serve.”

Image: hareluya/Shutterstock.com

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