From the pages of Jim Prevor's Perishable Pundit

In PRODUCE BUSINESS magazine, we published a column echoing the famous opening sentence of Charles Dickens’ historical novel, A Tale of Two Cities:

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.

The contrast in the story — the best of times, the worst of times — echoes what the produce industry and the broader food industry have been experiencing as retailers struggle to keep up with demand and most restaurants and other foodservice outlets — cruises, theme parks, hotels — are shut down or are trying to stay afloat on take-out and delivery.

For some, it barely matters as most produce items are almost exclusively sold at retail, but for many producers and vendors whose business is selling foodservice, the national closing of most foodservice operators or relegating them to take-out or delivery only has left them scrambling.

To help people understand the status of foodservice distributors, we also did an interview with Michael Muzyk, President of Baldor Specialty Foods and this year’s Chairman of United Fresh Produce Association, which we titled: Surviving Coronavirus: Baldor’s Trials, Tribulations and Michael Muzyk’s Goal To Keep Everyone Working.

Today we reach out to Babé Farms, a producer heavily focused on foodservice, to help the industry understand the impact of the current situation on producers focused on foodservice. Pundit Investigator and Special Projects Editor Mira Slott reached out to Ande Manos:

Ande Manos
Director of Sales/Marketing
Babé Farms Specialties
Santa Maria, California

Q: As a family specialty produce company focused on innovative, epicurean vegetable varieties, catering to chefs, higher-end restaurants and, at retail, very customized, niche products, your business must be turned upside down. How are you surviving the coronavirus upheaval? Thank you for stealing a moment to help others understand the challenges, and the strategies and actions you’re undertaking to pull through to the other side.

A: It's been really difficult, a complete blindside. Our business is 80 percent based on foodservice. For those not familiar with our product line — we’re known for our specialty and gourmet mini vegetables. We have 70 different varieties, all geared for the fine dining crowd. With the shutdown of restaurants and dining facilities basically all across the US, our business just took a nosedive, along with all other foodservice operators in all major cities.

So, it’s just been devasting. And quickly, everyone had to pivot, as you’ve often seen, into retail, and into CSA (Community Supporting Agriculture) Programs. Those are the only things really.

Q: Is there still a market for restaurant takeout/delivery?

A: You have a small amount going to some of those restaurants that are struggling to survive by doing curbside takeout or delivery, but it’s minimal.

We know that the certain produce items enduring are the storage items, like onions, potatoes, cabbage… all the big basic items. And Babé Farms is all about specialties, the beautiful vegetables that aren’t necessarily needed or essential for survival.

Q: Right. That’s quite a predicament. I assume many of these items also have a more delicate shelf life... How do you get around that?

A: Yes. Most are highly perishable except for beets and some root vegetables, things like that. So, now, we’re really focusing on the more marketable items, like beets. We’ve been moving a lot of red full-sized beets.

Q: The size is important?

A: Typically, we’re harvesting petite vegetables. That’s what our chefs are always looking for. But for today’s purposes, we are now harvesting the beets that are more oversized.  

We also do fennel, organic bunched kale, and we’re selling kohlrabi, another root vegetable that we’ve been successfully moving, and now any bulk carrots. Again, everything we grow has been geared for the high-end dining crowd, your petite vegetables, but now we’re allowing them to grow up a bit into that kind of bulk sizing range and harvesting them for the current needs and demands.

Q:  Being a layman when it comes to farming, what’s involved in your production process to switch over from petites to larger, more mainstream sizes?

A: We’ll leave them in the ground a little bit longer to allow them to get oversized, rather than our regular specs, and we’re taking some plantings that might have been disced, and we’re actually using them right now to harvest for different specs.

Q: It sounds like you’re being quite resourceful...

A: Well, yeah, you have to be very nimble in these times to make the proper changes and just go with what the public is demanding. Again, the items that we’re selling are a very small portion of what we normally sell because there’s just not the demand out there.

Q: Can this transition to different specs make a dent in the shortfall of revenue by branching out to more channels?

A: People are being very particular about their needs and buying more center-of-the-store than perishables. So, produce, while it’s doing pretty well, is not as strong as maybe your canned or frozen goods.

Q: When you say 80 percent of your business is foodservice, how does that break down, and what parts of the country are your sales concentrated?

A: Hotels, restaurants, caterers, you name it. We sell a lot across the country, in Las Vegas, New York and Los Angeles, all those areas that are so densely populated. And of course, Las Vegas, where the whole town is built on tourism and the hotels and the gambling industry, with all the high-end restaurants, and everything is shut down. That’s a huge part of our business.

Q: Unfortunately, it’s the perfect storm for your type of business.  

A: Yes. And your product line almost becomes obsolete, just because no one has a need for these types of items, unless you can kind of transform them and adapt, in order to cater to what’s most in demand from our customers.

Q: And with so many dining establishments shut down, how is that working with takeout and delivery, is there still business to be had there?

A: Yeah, you see that, but it’s very limited. It’s very small what they’re pulling. They’ve modified menus, in the same way consumers have modified their menus. They are looking to buy things that are appropriate, trained to get great value from the vegetables they’re buying and creating dishes that are more value-oriented.

You’re looking at these high-end vegetables, and maybe it’s not a fit for the menu right now. The takeout business is very small. People are in survival mode; everyone is trying to keep their head above water now, and remain relevant and get that community support rather than just closing their doors. It can’t go on forever, so it’s basically sustaining itself.

Q: How are the logistics with getting the products to where they need to be?

A: It’s been OK. We’re fortunate. We have trucks running to Los Angeles nightly, and customers have been able to get product and to pick up product here in Santa Maria. Things have been running pretty well.

Q: Are you involved in these new industry partnerships being formed, between foodservice distributors and retailers, for instance. Have you made inroads on that front?  

A: We are grateful to see how Kroger is working with Sysco, which has all these trucks and distribution, and it’s wonderful how the foodservice industry was able to step in and help the retailers fill the demand.

We have industry partners that really tried to kick up distribution to help us move our product line, and we reached out to them to see what they could do. Melissa’s World Variety Produce has really done a great job helping us get our products into the stores and onto the shelves at a lot of the retailers. And Frieda’s as well. They’ve been doing a great job too. We definitely have those connections and channels with retailers, so we’re very pleased with their support.

But a lot of foodservice distributors are working with retailers as well. We’re just trying to fill the needs right now.

Also, the CSA Programs have become extremely popular. These would be the veggie boxes that include meat and dairy, and olive oils… other fresh items as well. We ‘ve discovered some programs here locally in Santa Barbara and San Luis Obispo County that have been really popular doing these veggie boxes.

Their business has increased by 75-80 percent. And they’re looking for variety in these veggie boxes. So, we’ve been working with them to try to get some of our specialty vegetables included. This time of year, we’re coming into Easter, where people are looking for the brightly colored radishes and root vegetables to add to their spring menu. We may brighten up your day a little bit with some specialty vegetables!

Q: That’s very much needed at times like this.

A: It’s been pretty grim. It might be nice to just brighten up your plate, let’s put it that way. I have a nice example. Talley Farms works with us in Arroyo Grande and they have a wonderful CSA Program [Talley Farms Fresh Harvest] where they deliver to at least two counties I know of. We’ve also been able to work with Imperfect Foods. They have a wonderful program as well, nationally.

Q: Are there renewed opportunities with the meal kit companies like Blue Apron?

A: Yes. So, you’ve got local and then the national program. We work with Blue Apron, and Hello Fresh, meal prep programs that have also become very popular. And in these times when people are looking for specialty items, thankfully they have been looking to us to fill their needs on basic items like fennel and maybe some radishes, etc.  

There are a few things out there. You know people are guarded to go the restaurants, so they are looking for alternatives… you’re going to go to your grocery store, maybe you’ll sign up for a CSA Program or maybe you’ll look to Blue Apron or Hello Fresh or Gobble.

And farmer’s markets. Farm stands are popping up everywhere.

Q: In New York City, outdoor farmer’s markets have become so crowded that new social distancing rules were just instituted.

A: All these outlets, every little bit helps right now.

Q: As companies in the industry confront the coronavirus crisis from different vantage points, your perspective provides new light to people who are struggling...

A: No one is giving up. This is an industry where we’re all in it for the long term. That’s one thing about people in agriculture. We’re strong and deeply rooted, and we don’t give in. We are here to feed America, and in times like this we’re tough.  

On the business side, I would say, be ready and be a little bit more diversified in your product line. We’re heavily into foodservice, but throughout this experience, we’ve seen that perhaps we should be more diversified in our product line.  

I know these times are challenging, and they make you stretch. It’s definitely opened up our eyes. We’ll be stronger and we’ll emerge stronger for sure.

Q: That’s an uplifting message you’re providing when things can seem so dire. 

A: I’m pretty sure everybody else feels the same. We’re like a family, stronger together, and just rallying every day, and forming a game plan every day to see what we need to do to make this work because we’re survivors.

Q: And, of course, Babé Farms itself is a family business. I hope everyone’s safe and healthy.

A: Yes. Everyone’s OK. We haven’t had any issues with people getting sick. And we’re taking all the precautions and following all the government guidelines to the best we can. Knock on wood, nobody’s been diagnosed with this virus so we’re thankful for that, and we’ll continue to follow the guidelines and try to be here to support our industry and our community.

We’ve been hit in a different way than some others in the industry because of our product line and focus and our end users. It’s tough to see our fine dining restaurants close. It’s truly a sad time, but we all hope they can open their doors soon, so we can fill the pipelines full of fresh produce again.

Q: Is there anything else you’d like to add, or that I’ve been remiss in not asking you?

A: I think you’ve checked off all the boxes. I have to say, I’m really impressed with how our industry has reacted, and that PMA and United Fresh and all the regional produce organizations have done a really great job of keeping us informed and advocating for the industry. I’ve been so grateful for the flow of information.

We’re doing video conferences as needed and have offered employees in the office the opportunity to work from home, but most choose to be here.  We’re in a critical industry. When you work in perishables — and everyone will agree with me — there’s a certain amount of synergy happening in real time, and information is traveling fast, like the floor of the New York Stock Exchange. It’s better to be here together to make decisions and react quickly, whether we’re helping customers or getting calls from the field.

Q: Do you have any poignant examples of how you had to react quickly to a customer in this new reality?

A: First off, we had to get our harvest manager scouting for product in the field that would be appropriate. We got a customer call for beets, and we immediately needed product to fit the specs. In such a changing environment, people are looking for things with specs we don’t normally carry.

We’re working with our harvest manager, asking, ‘Hey, can you find carrots this long, our customer is looking right now, and we don’t want to miss the sale.’ We’ve got to get the sales to survive. We’re receiving lot of random phone calls lately looking for things we normally wouldn’t offer, or something out of the ordinary.

Q: People will remember that you came through for them, perhaps many years from now...

A: That’s true. We’re saving each other. If we can get the product to you and you can get it to your customer, we all win.

We’re just trying to adapt, and we’re thankful to people who are being more lenient because of all the fluctuation. Now there’s not enough product out there. At first, everyone was buying, buying, buying, and people were desperate for whatever they could get their hands on. Everybody was rushing to grocery stores and everything was happening very, very quickly. We were trying to quickly adapt.

Q: At the same time, on the foodservice side, there was all this excess perishable product deteriorating with no place to sell it...

A: Yes. Just think of the resources and the time invested in those items in the field. It’s our lifeblood. And we want to keep our harvest crews working and keep everyone on the payroll, even though sales dropped off.

We’re very fortunate. Our owners are such good people and they value each and every one of their employees. We all are like family here.

Q: How long have you been at the company?

A: Here at Babé Farms, we’re in for the long-term. I’ve been with Babé Farms for 26 years. I have to admit, there are a few others who have been here longer than I have. We’ve got great people on board. It’s a very strong crew, and everybody does their part.

Q: You’ve all been put the test, and you’re meeting the challenge.

A: We’re going to come through this OK. We’re all saying it’s temporary and we will emerge stronger. There will be a lot of lessons learned for everyone, not just us. And many of those lessons, extraordinarily collaborative ones.

******

So much that has been done so far has been executed without clear evidence that it will make things better. So much is still uncertain. For the moment, though, we have no choice but to soldier through the restrictions and make the best.

When panic-buying hit, many retailers constrained their supply chain to emphasize basics. Now that the panic-buying has settled down, maybe these same retailers can try to avoid food waste and help these specialized companies who employ people and pay taxes.

Why not set up a dedicated display of foodservice products? From single leaf romaine used in sandwich programs to a showcase of petite vegetables, consumers might enjoy the new products, and retailers would be heroes for helping out. Who knows? Maybe long term business could develop if customers get accustomed to these products?

We thank Ande and the people of Babé Farms for contributing to this industry survival project and wish them good health and good fortune. We hope the whole industry will try to experiment and see if we can’t help our friends in the foodservice supply chain.