29 Jun Avocado Kitchen – The Foodservice Industry’s Ripe Road to Recovery
Heading into the PMA Foodservice Conference and Expo, this is the perfect time to reflect on how events have transpired since Covid. Specifically how the foodservice segment has come full circle, reinventing itself for the sake of survival and coming back stronger and better in many ways. As foodservice looks to the future, the lessons of Covid are poised to open other doors and tap new opportunities never before realized.
When it all Started
When the shutdowns first happened, there was a screeching halt across the country as businesses shuttered and held their breath for the situation to pass. Foodservice, which includes restaurants, school and hospital cafeterias, sports and concert venues, and catering operations, and the distributors that serve them, is one industry that took a big hit. The pandemic especially sent restaurants scrambling to come up with ways to keep their doors open.
“During Covid, we really felt the scramble with foodservice operators and distributors,” mentions West Pak Avocado’s Jared Bray, who is part of the company’s Sales and Business Development team. “We all knew that things were going to get a little bit dicey out there. People weren’t going to be eating out, as there were various mandates on what restaurants could and could not do. As a result, restaurant operators had to reinvent themselves in a lot of ways. For example, places that don’t generally offer takeout made it a viable option. Wholesalers also had to reinvent themselves to offer direct-to-consumer products, and there was some retail work going on with the foodservice distributors as well.”
“All around, everybody lost volume,” adds teammate Josh Estebane. “Right at the beginning, it was about 80 percent of their volume, and as we progressed, some of these customers started to crawl back. However, today, it’s really picking up across the country as state ad counties ease restrictions.”
“Overwhelmingly from my end, the story coming out from our foodservice customers has been growth, growth, growth. Numbers are returning very strongly, and we see people getting back to pretty close to where they were before Covid in some areas, even being able to pick up some additional business,” Bray adds.
The Demand for the Green
Where was the avocado in all of this? The growth of the avocado category over the last several years continues as demand remains strong. In addition, retail sales of avocados increased during the shutdowns, which helped offset the lack of volume on the foodservice side. At the same time, the love of the avocado made people find different ways to get their guac and avo-centric or avo-add-on fix even with their pickup and delivery orders at restaurants.
When ordering pickup from a Mexican restaurant, for example, before Covid, many people would never think to add guacamole to go – it was just not part of their typical protocol. Instead, they’d simply grab their tacos, burgers, or burritos and take them to go. However, when sitting at a table in a restaurant, ordering chips and guac has always made sense – especially with operators that sell table-side guacamole. Without the ability to sit down and eat at the local restaurant, the pandemic forced consumers to adapt to a new mode and make guacamole part of takeout instead.
“Think about the high-end steakhouse or sushi restaurant where you would normally go sit down and have a meal; now they are offering to-go options,” Bray continues, pointing out how the behavior has changed on both sides of the aisle. “Consumers, as well as foodservice operators, really had to adapt during Covid.”
“However, seeing that consistent consumption of avocados through the hard times was encouraging to me. It proved to me that avocados truly are a staple in Americans’ diets, not a luxury add-on item per se. It’s a staple for a lot of folks.”
Moving Forward and Keeping Up
With the mandates beginning to lift, things have started to ramp up on the foodservice front. West Pak’s sales team continues to work closely with foodservice distributors to accommodate the volume, including add-ons, like when a restaurant needs additional fruit unexpectedly or has decided to offer sitdown service instead of just take out.
“Being there and being able to adapt at a moment’s notice is important. To be able to service our customers and keep them supplied with fresh avocados as the demand ramps up has proven to be critical to the success of this deal,” admits Bray.
“Many of our clients do not know what their folks are going to order, and when somebody hits them with an add-on, it can be make-or-break for that restaurant. They don’t want to be without avocados. So that’s a consistency that I am noticing working a lot closer with and understanding what customers’ needs are and what our abilities are to supply them with that.”
“Aligning our network with suppliers such as West Pak during and post-pandemic has been key to meeting our customers’ needs,” mentions Mike Magana, sourcing specialist from PRO*ACT, one of West Pak’s largest foodservice distributors. “When our teams were confronted with assorted challenges and new opportunities, West Pak has not only met our network’s needs, but their performance has exceeded them. As the crisis abated and our network has been gradually recovering, West Pak continues to maintain the same sense of urgency and attention our network requires as we navigate the ‘new norm’ post-pandemic.”
What the Industry Learned and How They Adapted
At a recent conference for a leading restaurant chain, West Pak learned that one out of every three orders placed is done online for pick up. The change in their business model is directly attributed to Covid. It’s how they addressed servicing customers during the shutdowns, but now they are looking to expand their online offerings even further. The popular eatery is starting with a backline, where all the online orders are kept in the back, so pickups don’t affect the customers dining in at the restaurant. They will also expedite and bolster the efficiencies of their curbside services and improve the customer experience online.
Marketing Support for Foodservice
For foodservice to come back, not the way they were before, but stronger, they’ll want to bolster their programs and opportunities by leveraging marketing.
Although initially implemented for retailers, West Pak’s Avo-Opportunities program is also available for the foodservice sector. West Pak Marketing Manager George Henderson points out that his team works both in support of and in collaboration with industry groups like the California Avocado Commission (CAC) or Avocados From Mexico (AFM) to help restaurants take advantage of the commissions’ strong consumer-facing marketing.
“It’s been exciting to be able to work in some promotions again. A recent Cinco de Mayo program for US Foods was the first ask that I’ve had in some time for anything holiday-centric,” claims Bray, who hopes for more collaboration in the very near future.
Estebane steps in to mention, “We offer marketing support because we know that other companies don’t. When we have direct contact with the restaurant – that’s when we can really show what we can do. We can use our marketing avenues, including social media, to help boost sales – it’s just a matter if they take the opportunity or not.”
Staying Steadfast and Growing Stronger
Before Covid, West Pak Avocado’s foodservice segment represented about 15-20 percent of the company’s overall business, with retail and wholesale making up the rest. According to West Pak Avocado Sales Manager Heath Shoup, during the early days of Covid, West Pak’s business dropped around 9-10 percent. However, an increase in retail made up for the difference and helped the company continue to grow.
“All in all, we saw and expected a decline in the foodservice segment – that was a given,” declares Shoup. What we didn’t expect was the increase with retail, but we managed that pretty well – we also had some new customers coming on board at that time.”
“Our sales team did a great job at coaching and staying very, very close to our foodservice customers while we all went through this whole Covid situation. They kept our customers informed on what was going on in the market and stuck with them the whole way. And because of that, our customers are actually bringing more business to us… proof that resilience, dedication, and great customer service truly do pay off.”