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Foodservice: Fine-tuning operations

As produce suppliers work to find new revenue streams during the pandemic, they’re also looking at ways to simplify their businesses to focus on the best-performing items.

“We had to readjust, to supply the right products for the opportunities,” said Tim York, recently retired president of Markon Cooperative, Inc. BB #:123315 of Salinas, CA, whose members are foodservice distributors.

“This meant curtailing SKUs and narrowing the product line,” he said. “We cut specialty items like baby vegetables, things that appeal to white-tablecloth restaurants. We had six to seven or more SKUs of spring mix and we narrowed that to two. It turned out what operators thought they needed before, they didn’t.”

The Covid-19 crisis also led the industry to work together to ensure survival.

“One thing that has been really fascinating for us is watching how foodservice organizations are responding to our community,” said Brian Denton, director of brand marketing and development at PRO*ACT, LLC BB #:141746 of Monterey, CA.

Large distributors partnered with smaller ones and worked with restaurants to forgive or reduce some invoices for a time, he says. “They want the suppliers and the restaurants to be healthy.”

“The whole supply chain has always been dependent on one another, but now it’s for real,” said Lauren Scott, chief marketing officer at the Produce Marketing Association BB #:153708 in Newark, DE.

“They rely on each other at a level we may not have recognized before.”

There’s also more transparency and honesty about struggles, and a willingness to turn to each other and consumers for help.

“The good old days are gone,” said Harris Cutler, president of root vegetable distributor Race-West Company BB #:156704 in Clarks Summit, PA.

“We all need inspiration and ideas and we’re looking at how we can help each other.”

Many of the steps outlined here are allowing produce companies to weather the worst of the crisis.

Baldor initially furloughed 400 of its 1,200 workers, but cash flow from its direct-to-consumer and retail business enabled it to hire more than 300 back.

“We are in no way making money,” said Michael Muzyk, president of Baldor Specialty Foods, Inc. BB #:121770 in the Bronx, NY, a distributor of specialty produce mostly for foodservice. “But we’ve lost the least amount that could be expected and at some points are breaking even.”

This is a multi-part feature adapted from the cover story of the July/August 2020 issue of Produce Blueprints.