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Foodservice: Back in Black?

bp foodservice

The foodservice industry is starting to come back from its pandemic-fueled lows of 2020, but the recovery has been slow, sporadic, and sector-specific, with some areas of the business seeing much more positive results than others.

Challenges, from inflation and labor shortages to ongoing supply chain disruptions and the war in Ukraine—not to mention uncertainty related to the continuing pandemic—remain top of mind and make accurate forecasting impossible.

The Turnaround

In general, things began to look up around mid-February 2022, suppliers say.

For Dan Robertson, president of Robertson Produce BB #:101876 in Monroe, LA, the bounce-back has been solid, with strong sales. He says all sectors serviced by his company, including retail stores, schools, restaurants, colleges, and other foodservice channels, are back to 100 percent.

“We’re seeing really good sales trends at all three distribution centers,” Robertson shares. “Revenues are not the issue—it’s on the expense side.”

Craig Fields, director of account management for the Northwest at RPE, LLC BB #:105471 in Bancroft, WI, paints a similar picture.

“The foodservice sector has made an excellent rebound since the devastating days at the peak of Covid shutdowns,” says Fields. “According to our numbers there’s still some work to do to get it back to pre-Covid, but it’s been a steady trend.”

David Kraus, senior vice president of custom distribution at Produce Alliance, LLC BB #:159218 in Chicago, IL, which is involved in four different foodservice sectors plus nontraditional retail (including convenience stores and delivery services), also reports that volume has been up.

“We’re seeing record numbers for our top 50 end users,” Kraus reports, noting growth is being driven primarily by the quick-service restaurant space, though the company saw a 32-percent increase over last year in January and February from its white-tablecloth restaurant customers as well.

Differing sectors
For others, the recovery was hit or miss. Some sectors suffered heavier losses and were only beginning to mend by 2022.

“Foodservice was absolutely obliterated with the onset of the pandemic,” recounts Steve Grinstead, CEO of FreshEdge, LLC headquartered in Indianapolis, IN.

“It’s often said the produce industry was all in the same boat—my response is always ‘not so’—we were all in the same storm but in very different boats.

“The retail-based companies flourished with their best years ever, while many foodservice growers, distributors, processors, restaurants, and other outlets were crushed.”

The same can be said for regions.

Some locales in 2021 gained speed quickly, like Las Vegas, NV and much of Arizona, but California lagged behind according to Jin Ju Wilder, director of marketing and business development at Vesta Foodservice, BB #:125924 based in Santa Fe Springs, CA.

Fortunately, since mid-February, business has been coming back.

Wilder says foodservice typically has predictable volumes and patterns, even with constantly changing menus—but this is no longer true.

“Sales teams are busier than ever,” she notes, but not quite back to pre-Covid levels. “But that’s because nothing fits a pattern—nothing’s settled.”

While foodservice overall seems as if it has turned the corner, as long as there are no more major disruptions ahead, fortunes vary, again, depending on the sector.

“Restaurants have bounced back faster than other areas, but the constant challenge of hiring, keeping, and paying employees will continue to linger over that part of the industry,” explains Fields.

“Institutional and other foodservice operators are coming back a bit slower as the country reopens.”

“The industry has been clawing back for the past year,” comments Grinstead. “It’s improved greatly but still has components that are only partially back, including convention centers, sports stadiums, hotels, etc.”

Wilder agrees. “Hotels are one of the slowest coming back. Many aren’t investing yet in opening up foodservice on their properties.

“I think it will come back—and you’re seeing signs of it, like more banquets and events—but it’s not there yet.”

Airports, universities, offices with employees still working from home, and sporting events have also been slower to recover.

This is an excerpt from the cover story in the July/August 2022 issue of Produce Blueprints Magazine. Click here to read the whole issue.