Produce Alliance, BB #:159218 like many foodservice companies, had an inkling the coronavirus/COVID-19 outbreak would have a major impact on business.
The Chicago-based organization that is made up of more than 150 growers and 80 fresh produce distributors serving more than 40,000 foodservice partners has a Critical Decision Team in place. The team was having meetings and monitoring the situation as it was unfolding, said president Melissa Ackerman.
Contingency plans were in place, so employees were equipped and ready to work from home if and when that became the recommendation.
But the situation that unfolded on March 16 was so far beyond expectations.
“Given the absolute unprecedented nature of this event, and how it has unfolded, there was simply no way that we could have prepared any better than we have so far,” Ackerman said. “There was no way to see where this was headed in any material way ahead of when we took action.”
Mayors and governors across the U.S. have closed restaurants and bars—with a few offering dine-out and take-out options—schools across the country have closed. Hotels have closed.
Plea for relief
Foodservice distributors, in a matter of days, have lost 50% to 90% of their business, according to a joint letter from the United Fresh Produce Association and the International Foodservice Distributors Association to the Trump Administration, House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell.
This letter, and another letter from the National Restaurant Association, predict hundreds of billions in lost sales in the foodservice sector over the next three months, and five to seven million lost jobs.
The organizations are lobbying for the creation of a recovery fund at the Department of Treasury that includes foodservice distributors.
“Such a fund would help the industry meet the immediate needs of paying employees and suppliers while covering company operations,” the IFPA/United Fresh letter said. “We also strongly support enhanced loan and insurance protections to ensure that these facilities are able to stay in business over the long-term.”
The National Restaurant Association also sent a letter to the President Trump, Speaker Pelosi and Majority Leader McConnell asking for specific provisions including:
- A $145 billion Restaurant and Foodservice Industry Recovery Fund;
- $35 billion in Community Development Block Grants for Disaster Relief, similar to a program created after 9/11, which provided grants to businesses fewer than 500 employees compensation based on lost gross revenue;
- Assistance allowing small businesses to defer mortgage, lease and loan obligations;
- Federally backed business interruption insurance;
- Federal loans equal to lost revenue;
- $45 billion in expanded access to loans;
- $130 million in disaster unemployment assistance; and
- Tax provisions including temporary cuts to payroll tax, reduced credit card fees, tax credits for businesses retaining employee, and more.
For foodservice operations across the country, there has been a rapid shift in strategy to mitigate lost business.
Shifting business to retail, where possible, is one solution. Grocers across the country are facing massive out-of-stocks and transportation capacity issues, while foodservice distributors—and their fleets of refrigerated trucks—are available.
“This is a difficult time for all involved, and our creative eye is focused on bringing our whole network together to find bright spots to leverage, and help us all get through this tough time,” Ackerman said.
“We have amazing vetted foodservice distributors that have product, fleets and workers that are nimble and work to alleviate some of the stress that national retail DCs are feeling and deliver direct to stores or handle hot shots,” she said. “This is an immediate solution that we are currently seeing.”
Moving forward in uncertainty
Distributors across the country, like Baldor Specialty Foods BB #:121770 in New York, Sirna & Sons BB #:151141 in Ravenna, OH, and Hardie’s Fresh Foods BB #:105479 in Texas have opened their operations to the public, offering wholesale pricing, pickup and/or delivery for grocery orders as an immediate solution to fulfill consumer demand and stay in business.
Going forward, businesses are getting creative.
“We are going to be innovative and look at new options for our distributors to go direct to consumer as well as help in any way we can with meal kits, retail and foodservice,” Ackerman said. “Even under the most dire circumstances, people need food and we are uniquely positioned to help right away.”