Rollercoaster ride continues for foodservice

If you ask a produce supplier how foodservice business has been these days, you’re likely to get a blank stare.

“Rollercoaster ride” is one term that is likely to pop up in the conversation. “Peaks and valleys” is another.

It seems that just as restaurant business starts to rebound, governors or local officials put the kibosh on reopenings and the doors slam shut again, furloughing workers and leaving operators with coolers full of unsold product.

By mid-July, most produce suppliers surveyed were reporting at least modest improvement in their foodservice sales, but no one believed that the impact of COVID-19 was anywhere near an end.

“I think it’s going to take a while to get back to somewhere close to where we were before,” said Jeff Olsen, president of The Chuck Olsen Co. Inc., Visalia, Calif.

Olsen said his foodservice business overall had come back to about 50% of pre-COVID-19 levels, though some regions, like Texas, Atlanta and the Carolinas, seemed to be doing a bit better — up to 65% to 70% of normal.

One Washington, D.C., customer of Santa Maria, Calif.-based Gold Coast Packing Inc. was back to 85% of his normal business, said sales representative Dave Johnson.

But business with customers in some other areas was “almost dead.”

California restaurants were allowed to reopen for dine-in service earlier this summer, but Gov. Gavin Newsom shut them down again in July after a surge in coronavirus cases.

“The uncertainty of being in business one day and being closed the next day is really impacting the business,” Johnson said.

His customers aren’t sure what or how much to order from one day to the next.

Foodservice business dropped precipitously after the first lockdown in March, Johnson said.

“We fell 50% overnight,” he said.

For the first 10 days, some customers who had ordered two or three times a week stopped ordering.

“When it first hit, it hurt real bad,” he said.

By mid-July, he estimated that sales were 75% to 80% of normal.

Summer typically is a slower time anyway, he said, with sales usually dipping 10% or so.

Spinach, broccoli and cauliflower florets are Gold Coast’s mainstay items. The company’s product line also includes Brussels sprouts, cilantro and kale.

Gold Coast is operating at a level that is sustainable, but that’s not a good place to be, Johnson said.

“Nobody likes to look at their numbers and say, ‘I’m only down 30% from last year.’”

Olsen said he’s hopeful that the new California closures won’t last too long.

The company has plenty of melons, citrus, grapes and berries along with some bell peppers and corn this summer, he said.

“Demand is decent right now,” he said, with foodservice demand “OK.”

Prior to COVID-19, foodservice had been the “most consistent, steady and predictable” business for Los Angeles-based 4Earth Farms, said Mark Munger, vice president of sales and marketing.

After the coronavirus hit, the company’s business plummeted to 5% of normal. By mid-July, business was up to about 70% of normal.

“We supply the foodservice industry with a lot of unique specialty items that tend to be more white-tablecloth oriented,” he said. “Our feeling was that we were going to be the very last ones to come back.”

There was one bright spot.

“We’ve been doing a lot more communicating with our foodservice customers than we have traditionally done,” he said.

“It has caused us to have to talk a lot more to figure out what items are resonating and what we can help our customers with from a service perspective and an education perspective.”

“It’s been a roller coaster for sure, or maybe a ‘corona coaster,’” said Jay Iverson, vice president of sales and marketing for GreenGate Fresh LLP, a Salinas, Calif.-based processor.

“Business was strengthening through June, then we took a couple steps backwards as states and counties began to close certain establishments again,” he said.

Business seemed to be improving by mid-July, however, despite depressing news reports, Iverson said.

Salads and slaws for foodservice are the company’s main focus. 

“We concentrate on the core items — iceberg, cabbage and romaine,” he said.

GreenGate Fresh also has an extensive “tender leaf” program that includes various kale products. 

Foodservice business “has fluctuated since March” for Nash Produce LLC, Nashville, N.C., said Rebecca Scott, grower accounting and marketing director.

The company offer several kinds of sweet potatoes, including covington, murasaki and bonita varieties.

Some eateries were starting to open up again this summer and business seemed to be improving by mid-July, she said.

“It’s been tough on a lot of families,” Scott said.

Foodservice operators seem to be taking advantage of the versatility of sweet potatoes and offering a number of menu options, like french-fried, baked, grilled or mashed, she said. 

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