The Twin Cities is a haven for locally based networks of restaurants, as well as some single, independent eateries, all of which are ready customers for local produce suppliers, according to the Minnesota Restaurant Association.
“The trend here is interesting in that local-owned restaurant companies continue to add units,” said Dan McElroy, executive vice president for the St. Paul-based association.
The growth of homegrown restaurant groups has to do with Minnesota requirements that eating establishments pay all employees — including workers who receive tips — at least minimum wage, McElroy said.
Neighboring states like Wisconsin and South Dakota, by comparison, generally pay serving staff $2.18 an hour in wages, he said.
“The cost of doing business here is higher,” he said.
That often dissuades national chains from moving in, so local groups get a foothold in the market, McElroy said.
An uptick in the economy has helped to spur that growth, McElroy said.
“The real estate market is starting to recover, unemployment is down to around 5%,” he said.
That, and healthier home values and stock portfolios, create a “wealth factor” that prompts consumers to go out and spend more on restaurant meals that include produce, McElroy.
“We’re seeing growth in homegrown, home-managed, either single-unit or multi-unit restaurants,” he said, noting that such groups often include five to 15 units.
He listed the Eden Prairie, Minn.-based Nova Restaurant Group, the St. Paul-based Blue Plate Restaurant Co., and Minneapolis Parasole Restaurant Holdings among them.
That’s good news for Twin Cities produce suppliers, McElroy said.
“Produce is alive and well,” he said. “It is about healthy eating and good taste.”
Higher costs have taken their toll, but not necessarily where fruits and vegetables on menus are concerned, McElroy said.
In fact, higher beef and pork costs — and smaller meat portions — could represent an opportunity for produce, he said.
“I haven’t seen any data to support it, but intuitively, I’d say if you’re downsizing a protein from 7 ounces to 6 or 6 ounces to 5, you don’t want the plate to look empty, so you may put a larger piece of broccoli or a larger mixed vegetable or a larger garnish to make to plate look balanced,” McElroy said.
Produce suppliers describe the foodservice business as active and competitive.
“We’re seeing some good volume in the foodservice business right now,” said Adam Gamble, general manager of North Country in Inver Grove Heights, Minn.
Schools are becoming more active customers, too, some suppliers said.
“That’s strong,” said Tom Bergin Jr., vice president of Bergin Fruit & Nut Co. in St. Paul.
It’s all part of an active effort to fight childhood obesity, Bergin said.
“Kids are getting more of it in their programs,” he said.
Bergin said his company is distributing product to more school customers.
“We’re expanding our range of districts — pretty much covering two states pretty strong,” he said.
Bergin said his company’s distribution area to schools has expanded from about a 30-mile radius around the Twin Cities to about 200 miles in the past three years.
That growth should continue, he said.
“We’re trying to offer good programs and things that are smart,” he said.