Conversations with industry leaders at this year’s IFDA Partners Executive Forum here at the Ritz-Carlton earlier this week revealed that their “damn the torpedoes, full speed ahead” attitude is based on their belief that the industry is basically strong and resilient because it is composed of family-owned entrepreneurships that can adapt to any business climate.
Distributors’ positive approach to overcoming the economic doldrums began early last year as ID had reported with comprehensive efforts to help their customers stay in business. This year they will not surrender to expectations of their untimely demise, they concurred.
Mike Roach, president of Ben E. Keith Foods, Fort Worth, Texas, unflappably admitted that he is “gung ho” about capitalizing on sales opportunities this year. Roach, a former chairman of the International Foodservice Distributors Association (IFDA) and recipient of this year’s Cornerstone Award, said the distribution industry is strong and intends to emerge from the recession stronger that when it entered it.
“Downturns like this historically create opportunities which are most often seized by entrepreneurs and this is an industry that is made up of entrepreneurs. Many distributors are second and third-generation family-owned businesses,” he elaborated. “That’s why we’re optimistic and what’s why we know that we’re going to come out stronger. It’s not whistling past the graveyard. We’re a strong group of entrepreneurs.”
On the practical side, Roach said distributors and their sales reps will have to focus as much attention as they can on their independent operator-customers, which need more assistance with business and culinary issues than chain operators. He said he has tasked his DSRs to uncover solutions for independents that will not only keep them in business but also thriving. Sales reps will be able to fulfill this mandate if they maintain frequent contact with their customers, he said.
“As distributors, we have a tremendous amount of resources available to the operator and we have to make sure that we’re leveraging them for our customers,” Roach said.
Bill Barulich, chairman, BiRite Foodservice Distributors, Brisbane, CA, though not has expressly confident as Roach, nonetheless said that by “focusing intelligently on the operator,” the industry can “weather this economic situation.” One way is for DSRs to develop a “strategic approach to sales,” he said.
“Merely taking an order isn’t adequate in this environment. DSRs need to understand the special needs of customers and find ways to satisfy those needs,” Barulich advised.
Jim Spencer, vice president and general manager, Jordano’s, Santa Barbara, CA, enumerated several specific examples of how his DSRs are helping their customers: analyzing menu pricing, encouraging operators to add items to their menus that offer greater value, repositioning their menus, advising restaurateurs on how to successfully market and differentiate themselves against their competition, pointing out waste in the back of the house, verifying that their credit card programs are offering them the best rates available, employee retention, and being a conduit for culinary and food safety training.
“All of our salesmen have to do everything in their power to help the operator survive,” Spencer said.
Internally, Jordano’s is taking steps to eliminate costs and ineffectiveness from its supply chain, he said. The distributorship hired a logistics manager who sees to it that trucks unloading at the company’s docks are fuller than in the past. Spencer estimated that more than half of the regular 45-55 trucks delivering to the company have been less than half full, which creates costly logistical logger jams.
“If we reduce the number of less-than-full trucks delivering to us, then we make it easier for receivers to deal with extra palettes. To make the supply chain efficient, we’re working with suppliers to ensure that we do product rationalization, eliminating items that are under performing, and managing our freight lanes,” Spencer said.
Andrew Stroehlein, director of purchasing, Ellenbee Leggett, Fairfield, Ohio, agreed with Spencer that “distributors should always be more efficient in good times and bad.”
Operator sales are equally important, Stroehlein said, pointing out that “nobody saved themselves to prosperity.” The distributorship’s DSRs are helping their customers get more people through the door and not dwell on the hard times because it affects patrons’ behavior, which can be detrimental to business.
“Attitude is important in everything from raising children to building business,” he said.
Along the Hudson River in New York State, Suzanne Rajczi, vice president of merchandising, Ginsberg’s Institutional Foods, Hudson, NY, has been telling her DSRs that success is predicated on taking advantage of the value of its brands and making sure that the family-owned distributorship is competitive on the street.
“We have to keep our service levels higher than our competition and we have to go the extra mile every minute in touching our customers,” she said.
Beyond aggressiveness and a positive morale, Bill Mathis, president, Glazier Foods Co., Houston, believes distributorships must build tighter relationships with customers.
“We have to put our money where are mouths are. We have to do things for operators that really help and that doesn’t mean giving away things or lowering prices. It means helping them generate more profitable sales on their key items. Our menu management person helps operators realize where they’re really making money and what menu items sell,” he said.
Mathis added that suppliers should not stand on the sidelines but rather must participate with all trading partners in driving costs out of the supply chain, which will help all segments.
Jim Cremmins, vice president of sales, Pate Dawson Co., Goldsboro, NC, succinctly advised distributors to “penetrate existing business, take share away from somebody else, and economize everywhere you can.”
Penetrating existing accounts was a theme picked up by Peter Mouskondis, president and coo, Nicholas & Co., Salt Lake City.
“I think there is good opportunity for market penetration with our existing customer base. I think there is good opportunity to collaborate with our customers, help them financially and make sure they stay positive. We should point out that this too will pass and make sure that they are focused on success. Operators are relying on distributors and patrons are relying on operators to dine. Consumers may not be dining out as frequently but when they do it has to be an optimum dining experience. Restaurateurs get into trouble when they raise their prices and decrease their portions. The public gets very frustrated with that.”
When all else fails, Mouskondis quipped that “it’s important that as we move forward to tell everyone to watch ESPN and not CNN.”
Steve Potter, IFDA senior vice president, industry relations, confirmed distributors’ readiness to overcome the downturn, saying: “Participation in the Partners Executive Forum provides a unique ability for distributors and suppliers to discuss strategies and opportunities at a top-to-top level. Close to 100 companies took part in one-on-one meetings, and two things were clear to me from talking with attendees: Yes, these are rough economic times but we’re not going to use the economy as an excuse to slow down; and a collaborative effort is required to help trading partners weather the storm and to be better prepared for the future.”
IFDA Members Elect Board Members
In the course of the IFDA Partners Executive Forum, the distributor-members took time out to attend the annual membership meeting at which the following individuals were elected to three-year terms:
Leonard Bench, president and ceo
Jake’s Finer Foods
Jeff Braverman, president
Hawkeye Foodservice Distribution
Iowa City, Iowa
Blair Labatt, Jr., ceo
Labatt Food Service
San Antonio, Texas
Malcolm Sullivan, Jr., ceo
Pate Dawson Co.
James Crawford, chairman and ceo,
Clover Hill Foods
Barbara Callahan, president
J. Michael Roach, president
Ben E. Keith Foods
Fort Worth, Texas
Bill Mathis, president
Glazier Foods Co.
Andrew Mercier, president and ceo
The following were elected to fulfill existing terms:
Mac Pearce, president and ceo, Broadline Division
Performance Food Group
Larry Perkins, president
IFDA Supplier of the Year:
Tyson Foodservice Group
Mike Roach, president
Ben E. Keith Foods