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Foodservice: An uncertain future

Even as states gradually reopen during the pandemic, there is plenty of uncertainty ahead.

A big challenge this summer has been accounts receivable, says Lauren Scott, chief marketing officer at the Produce Marketing Association BB #:153708 in Newark, DE. “Everyone owes everybody.”

Looking beyond this summer, companies such as Twitter, Facebook, and Shopify have announced employees would be working from home indefinitely. Some universities are planning to stick with remote learning for the fall semester. And big events look unlikely, at least for the rest of this year.

On the restaurant side, it seems capacities will be limited for social distancing for the foreseeable future, and costs for sanitization and other safety measures will remain high.

There will be no salad bars or buffets for a while. A recession is likely, making it impossible for many consumers to enjoy restaurants at all, whether dine-in, take-out, or delivery.

And, many operators will continue to go out of business even after the worst of the crisis is over. “If you’re at 50 percent capacity, you’re probably still underwater,” Scott says.

Even without limits, “it’s going to take a long time before people are going to restaurants again,” said Mike Shamberg, an account manager for RPE, Inc., BB #:105471 a grower and marketer of potatoes and onions headquartered in Bancroft, WI, who adds, “forecasting is difficult since there’s no baseline and you have to use your best guess.”

Tim York, recently retired president of Markon Cooperative, Inc. BB #:123315 of Salinas, CA, whose members are foodservice distributors, is more optimistic. “There’s pent-up demand for restaurants,” he says. “Even if there’s a shower curtain between the tables, people will want to go.”

Many of the new models that emerged during the early days of the crisis will continue, at least to a degree, many experts believe.

“The retail business was a profoundly positive experience for us and our relationship with Acme [supermarket chain], so I think we’ll maintain some portion of our business there going forward,” said Michael Muzyk, president of Baldor Specialty Foods, Inc. BB #:121770 in the Bronx, NY, a distributor of specialty produce mostly for foodservice.

And the direct-to-consumer business, which increased to 50 to 60 percent of Baldor’s business, is likely to remain a factor as well. “I think we’ll hold on to 10 to 20 percent. It’s a complement to our core business.”

Distributors see an opening during the crisis to change business for the better. “We’re not being responsive if we’re not looking at how we could alter our practices,” says York.

“The industry is never going back to what it used to be,” said Harris Cutler, president of root vegetable distributor Race-West Company BB #:156704 in Clarks Summit, PA.

“Innovative thinkers will see good opportunities. I think there’s more opportunity in the produce business than any time in my lifetime.”

Scott puts it this way: “We need to imagine a new future.”

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