Fresh-cut produce processors and distributors admit to facing challenges in the foodservice sector, particularly with the restaurant business taking some lumps in a down economy.
But they’re not giving up.
They say they’re seeing receipts on the restaurant side pick up a bit.
“You’ve seen the sliced apples now have a foothold in some pretty big places like Subway,” said Steve Kenfield, vice president of sales and marketing with Kingsburg, Calif.-based HMC Group Marketing Inc. “You see them there in a meal, versus just an a la carte item.”
Last summer, the Wendy’s hamburger chain jumped into the fresh-cut fruit market when it launched a line of fruit bowls. McDonald’s for years has served sliced apples in its restaurants. Various salad mixes have popped up on menus across the quick-service restaurant landscape.
Ed Odron, president of Odron Produce Marketing & Consulting, Stockton, Calif., said he has noticed a comeback in other restaurant formats as well.
“I think they bottomed out and are starting to get the business back,” Odron said. “Many promotional and marketing ads with coupons for so much off meals, buy one get the other free or half price. I can see the restaurants here are doing a lot more business than they were a year ago.”
Bill Munger, fresh-cut sales director with Oviedo, Fla.-based Duda Farm Fresh Foods Inc., said restaurants have fought their way through the recession, and fresh-cut is helping them.
“They’re ahead of last year’s sales,” Munger said. “Foodservice is growing over last year, so that’s positive. They’re way ahead of two years ago when the economy first started slowing down. At that point, people were eating out less and eating at home more. Foodservice sales really went down. But since then, they’ve been on a steady growth.
“I can only judge by our sales, but it looks like people are starting to come back to foodservice a little bit.”
Analysts have said for years that restaurants can bypass labor costs in procuring precut fruit and vegetable ingredients. But that takes them only so far, said Jim Richter, Overland Park, Kan.-based executive vice president of sales and marketing for Rexburg, Idaho-based Wilcox Fresh.
“You send in product that is cut and cored and chopped, and there’s been convenience for the prep side, but they wouldn’t have as big a need for something like our Potato Jazz item,” he said. “They’d prepare the potato there.”
The more value suppliers can bring to the deal, the more business they’ll do with restaurants, Richter said.
“What I see there is the continued crunch for labor,” he said. “The more labor we can take out of the season, it’s going to continue to be key.”
Jeff Oberman, vice president of membership and trade relations with the Washington, D.C.-based United Fresh Produce Association, said fresh-cut produce continues to score big in foodservice.
“We are in the fresh-cut segment, and we’re seeing gains in foodservice,” said Oberman, who serves as a liaison for United Fresh’s fresh-cut processor board.