How Canadian wholesalers meet the food challenges of a pandemic.
The COVID-19 virus brought not just a health crisis but also unprecedented and unforeseen stress on the food distribution system due to consumer panic. On the front lines of this crisis stand Canadian wholesalers and the wholesale markets. “During a crisis like this, no retailer can conceivably anticipate and react to the sudden spike in demand for food,” says Ezio Bondi, vice president of Bondi Produce and New Toronto Food Co. in Toronto. “As a distributor, a crisis like this highlights the invaluable service we provide to our communities by supporting our retail partners to ensure their supply chain is not disrupted.”
These wholesalers present flexible and immediate sourcing options during this wild market ride. “The Ontario Food Terminal (OFT) continues to provide a source of fresh produce that can be purchased under current conditions, thereby ensuring the food supply chain is maintained—from farm to terminal to retailer to public,” says I.B. Nicholas, general manager, secretary and treasurer of the OFT Board.
Christian Sarraino, chief procurement officer at Fresh Taste Produce Limited in Toronto, maintains its value during an event like this by offering a high level of service. “We understand the challenges presented are unprecedented, but we continue to stay focused and concentrate on our work,” he says.
Without local wholesalers, Joe Lavorato, president at Gaetan Bono in Montreal asserts retailers would have never been able to keep their shelves stocked. “We were the key element for all sizes of retailers to keep supplied,” he says. “Providing them with the produce they need with this up-and-down demand was challenging. We had a huge demand explosion, and we as a company were able to sustain that volume and deliver in tough times.”
In a normally competitive industry, the crisis resulted in companies working even more closely together. “The whole concept of being in this together has definitely brought us together,” says Bondi. “I’m talking to other distributors, competitors and restaurateurs more than I ever had prior. I think it has allowed many typically busy owners to reflect and take stock of the bigger picture.”
At the OFT, Nicholas notes the crisis brought farmers, wholesalers and buyers together. “They have formed a common bond to take on this virus, keep the terminal operating and establish communication lines that will carry on beyond this crisis,” he says.
This situation brought circumstances no one had thought of, relates Corri Morison, marketing and sales for Benny D’Angelo Produce in Saint Remi, Quebec. “We know we can’t be who we are without the other pieces of the puzzle,” she says. “The industry recognized how everyone mattered, and it wasn’t time to take advantage of someone else’s disadvantage. We needed to struggle together and come out on top united.”
Beyond the direct safety and sanitation challenges presented by the COVID crisis, wholesalers faced astonishing market fluctuations, turning normal operating procedures upside down. “COVID-19 really disrupted the way consumers shop, so retail buyers really don’t have any base for buying,” says Lavorato. “Whatever base numbers they had from the past to predict buying habits, those numbers aren’t accurate anymore. More retail buyers turned their heads to the local/regional wholesalers to help with the supply.”
Stronach & Sons in Toronto has remained busy during the crisis. “We’ve been active,” says Danny Simone, manager. “We’re staying open and servicing all of our independent customers. We’re down because of the lack of restaurant business, but we’ve been able to maintain our business and payroll.”
Wholesalers have been faced with servicing customers while applying significant operating changes in their business.
Simone reports the biggest challenge in the marketplace was trying to figure out when it was going to be busy. “When this first started at the beginning of March, it went crazy,” says Simone. “We ended up buying a little too heavy, then it started slowing down when buyers realized the market was going to stay open so we got stuck with some product. However, Easter Sunday, which is normally slow, was huge this year; we’ve never seen that much business on Easter before. It’s taken us a few weeks to figure out what and how to buy. Now things are running smooth, not normal but smooth.”
When demand really spiked, explains Lavorato, the biggest challenge was replenishing customers, yet still operating and making sure employees were safe. “It was just 10 days of the markets going crazy,” he says. “Then we lived another seven days of markets dropping and low business. At least with nature, you see the rain or hurricane coming. But this was unprecedented; it hit without anyone being able to foresee what would happen with consumer behavior.”
For some companies, such as C. Isabelle in St-Michel, Quebec, an uptick resulted due to consumers demanding more staples. “Our employees and our growers still come to work and deliver potatoes every day,” says Gabriel Isabelle, vice-president. “It’s more important than ever to be able to have potatoes on the shelf of the stores. We are also giving a lot of product to local food banks.”
MC Produce in Montreal, Quebec, has tried to support both customers and growers by balancing rates and volume. “We had to adjust our volumes and market prices to keep our products attractive and available to customers,” says Maria Cavazos, manager. “Since the crisis began, we anticipated prices dropping, and our growers have been supportive.”
Though retail sales move up and down, Canada’s $93 billion foodservice industry has taken a significant hit, according to an April Restaurants Canada report. If conditions do not improve, the report estimates foodservice sales will be down nearly $20 billion for the second quarter of 2020. The report further revealed nearly one out of 10 restaurants have already closed permanently, and another 18% will permanently close within a month if current conditions continue.
NOT BUSINESS AS USUAL
Wholesalers have been faced with servicing customers while applying significant operating changes in their business. “We’ve had to adapt to different rules the food terminal set out,” says Stronach’s Simone. “Customers can’t come in and look at product. They phone in the order, so my salesmen spend more time on the phone taking orders, then half the crew builds it and the other half are outside to load it. Once it’s on the truck and leaves the terminal, there is no returning it. Since customers are all phoning in their orders, we’re really busy from 4 a.m. to 9 a.m., then business just dies. By 11 a.m. now my guys go home.”
Nicholas reports the OFT has implemented COVID-19 protocols to warehouse, farmers market, and office tenants to ensure compliance with Public Health requirements. “As an example, we are taking temperatures of all buyers and truckers entering the terminal, and the tenants are taking their staff temperatures each day,” he says. “Maintaining social distancing is a cornerstone of any protocol.”
Bondi describes being forced to make “too many” changes due to the crisis. “Aside from downsizing our staff, we’ve had to adopt new technologies to accommodate employees working from home,” he says. “We’re using messaging platforms such as Slack and video conference software such as Zoom to stay connected. The contraction of our business has also left us with more free time to be creative and innovate, which has led us to pivot into things like home delivery—something we would have never considered prior.”
One change at Benny D’Angelo has been to accept smaller orders. “We understand it’s all our customers can offer right now,” says Morison. “It’s also been challenging to deal with changing delivery dates and hours. Some warehouses only receive twice a week now, others only in the morning, so you need to be aware of that when organizing your orders. You need to ask those questions.”
Fresh Taste has made several changes predicated on social distancing. “We’re having less people in our facilities where possible, with increased frequency of hand sanitizing,” says Sarraino.
MEETING THE CHALLENGE
Despite the difficulties, Canada’s wholesalers have focused on their strengths to continue meeting customer needs. “The greatest strength in operating this terminal is the cooperation of our stakeholders who participate in a crisis management conference call to discuss how the terminal is doing in maintaining the facility in the crisis for the ultimate goal of providing a safe source of fresh fruits and vegetables,” says Nicholas.
Since customers can’t pick out the produce themselves, Simone of Stronach & Sons believes the wholesaler demonstrates its value in maintaining fresh product and meeting customer standards. “Our customers can trust us to give them the right stuff,” he says. “We’re getting bigger orders from people because they know they will get what they want.”
Bondi touts the value of the systems the company has put in place over the years as they’ve scaled up the business. “Those same systems have allowed us to scale down with relative ease,” he says.
Perhaps never has the personal relationship between wholesalers and their customers and shippers been more crucial. “I have relationships with customers I’ve known for over 20 years, and I hear how this has affected their family or business,” says Benny D’Angelo’s Morison. “At the end of the day, every business needs to make money to survive, but there are people and families affected behind that business; sometimes you just need to be the ear to listen. It’s so important.”
MC’s Cavazos sees strength in having patience. “We have to simply accept that this crisis must unfold itself and ride it out. We need to communicate every day, and keep our growers and customers informed,” she says.
COVID-19 has dramatically emphasized the need for, and value of, the wholesaler. “Buying direct isn’t the right formula all the time, especially in a crisis,” says Lavorato of Gaetan Bono. “These types of challenges, including natural disasters and weather issues, show the need for working with a partner who can supply with flexibility.”
Lessons learned through this experience have to be understood and put into protocols for how to handle any future event that may present itself, suggests Nicholas. “The key to succeeding in a crisis is to understand the issues and bring all affected parties into the mix to develop reasonable and practical solutions,” he says.
While foreseeing exact scenarios may not be feasible, planning is still possible. “Businesses may not be able to plan for a shutdown of this nature,” says Bondi. “But, for the future, it definitely helps to have protocols in place so the company can be run remotely if needed.”