While some consider the Baltimore/Washington, D.C., region recession-proof, suppliers of the two metropolitan areas said this year has seen a drop in foodservice and an uptick in retail.
The parallel rise in interest for locally grown produce has also created challenges and opportunities for suppliers competing with a growing number of farmers markets.
“Those companies that service the retailers are doing very well. Those that are only serving foodservice are finding it much more difficult,” said Don Darnall, executive director of the Maryland Food Center Authority, which oversees the Maryland Wholesale Produce Market, Jessup, Md.
Darnall pointed out that the Washington, D.C., region is still one of the better areas.
Joe Rahll, vice president of Edward G. Rahll & Sons Inc., Jessup, said despite the recession it is “business as usual” this year.
“As the weather came around, so did business,” said Rahll, who works with smaller wholesalers and foodservice.
“I think foodservice is maybe a little softer. Retail maybe a little stronger,” he said. “We’re pretty much on the money, so one balanced the other out.”
While calling the region “tremendously insulated,” Rahll echoed comments from many suppliers when he said many smaller restaurants have gone out of business under fierce competition for limited consumer dollars, and the dust is just beginning to settle.
John Gates, president of Lancaster Foods Inc., Jessup, said the effects of the housing market and unemployment are leaving people with very little disposable income.
“My feeling is that the economy is already starting to come back, indicated by the stock market … but employment and housing numbers are going to take more time,” he said. “I’m cautiously optimistic.”
In the organic business, Jerry Chadwick, vice president of marketing and business development for Lancaster Foods Inc., Jessup, said growth still exists, but it has slowed.
“Even with customers we have had a longstanding organic business with, we are continuing to grow sales over the previous year, just not at the double-digit growth,” he said.
For many suppliers in foodservice, like Rob Mumma, senior vice president of business development for Belair Produce Co. Inc., Hanover, Md., “spending is not in vogue now,” as he put it.
Belair provides exclusively to foodservice businesses including caterers and convention centers, fine dining and chain businesses, and he estimates business to be off 10% to 15%.
T.J. Rahll, office manager for Edward G. Rahll & Sons Inc., is also experiencing a drop in sales, leading him to “play it safe more than we’ve been normally.”