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Everyone wants local food, but is the current distribution channel set up for it?

A recent CRFA survey of Canadian chefs revealed that the number 1 trend in foodservice today is local and sustainable food. But while chefs want to create local menus and customers want to order those dishes, there are significant challenges inherent in the current distribution channel that’s making it tough for everyone involved.

With that in mind, F&H asked some key industry stakeholders to talk about sourcing and distributing local food. Not surprisingly, all had strong feelings on the subject.

[Panellists are listed at the bottom of the page.]

F&H: Operators, is sourcing local food a priority for you?

Robert Hood: We’re not Burger King — we can’t offer the same menu in every location — but we absolutely encourage the use of regional ingredients. At the Victoria Marriott, we buy Cowichan Bay chicken, which is grain-fed, free-range poultry that’s native to the area. At the Westin Montreal, we buy artisanal Quebec cheeses. In Muskoka, we do a lot of work with regional ingredients. Our chefs source their own local stuff, to maybe five or seven per cent of their total purchases, and they make sure it’s well represented on their menus.

That said, it doesn’t mean our chefs don’t buy a huge amount of their mainstay steak, burgers, buns, bread, milk, cheese and everything else through a broadline distributor. They realize that every dollar they put on one truck is going to save them money.

Jordan Sturdy: Only higher-end restaurants source local food and only because they can afford it. It’s really part of the operator’s marketing strategy.

Scott Vivian: We have quite a few local suppliers, because there’s not one supplier out there who can get us everything we need. Chefs have hectic schedules, so we don’t always have the option of going to farmer’s markets or the farm gate. But companies like 100km Foods do a good job of making it convenient. They pick up the products for us right from the farm and deliver it to our back door.

F&H: Yes, we’ve recently seen the rise of small distributors who are helping farmers get their fresh product out quickly to operators.

Paul Sawtell: We’re a local-food distributor dealing exclusively with sustainable producers in Ontario. Depending on availability, my partner and wife, Grace Mandarano, and I work with about 30 growers and producers at the height of the season. On the restaurant side, we have about 40 clients consistently from week to week, with another 20 ordering less frequently. Our goal from the beginning was to provide something easy that goes through one channel, delivering reliable, consistent service and great products.

Chefs are given an availability list once a week, based on all the producers we work with and the products they currently have in season. We speak directly to the farmers, so we know what to put on the list, as well as what’s coming up. So maybe zucchini will be online next week, and green beans and yellow beans the following week. Based on that list, orders are placed and they get consolidated by farm. We send the orders to the farmer, where it is literally harvested to order. Then we pick them up and bring it back to the city to deliver to the chefs. And we just got another truck so we will be adding a second delivery each week.

SV: I am very happy with the quality and consistency of 100km Foods’ service. They’re also open to criticism. If we start to use a product and notice things that are not up to our standards — things that you wouldn’t be able to see from just looking at the product, like with onions — we let them know and they take that feedback and relay it to the farmers. I also use Mark Trealout’s service. He runs the Kawartha Ecological Growers.

RH: I love this idea, and some of the product they put together is great. I think a few of my guys already buy from some of these groups. They’re going to be successful as long as the economies of scale remain competitive and the variety and quality of the products are there.

Now, they’ll say that it’s cheaper for them to bring it in then have the chef go out and source it — I think that’s debatable. Depending on what kind of distribution or cost plus-minus margin they’re charging, I’m not sure that’s a done argument.

Lisa McNeil: 100km Foods has done really well. I have heard they’re great people, but they’re stuck in this situation where they are working all day and night. I would love to support them, but I can’t. They’re not big enough.

JS: Many of these small distributors succeed by grinding the producers, dropping them when they can find a cheaper one and, if successful, they get bought out by the big guys. The only way for a small producer to have hope is to sell retail, which comes with its own problems.

F&H: Is it much more expensive to buy locally grown product?

JS: The public needs to stop complaining about price. You try growing a head of lettuce for $3.50. Even at $40,000 in low-to-middle-income wages, that’s $20/hour and I doubt you could even grow a $10 head of lettuce.

PS: Some items are more expensive, but for some items we’re competitive, if not cheaper. It all balances out. But when we go to an artisanal farmer to get salad greens, it’s usually not mass produced. It’s a premium product, so it comes with a premium price.

SV: My customers don’t mind paying more for the premium local product I use. They like knowing where their food comes from, that it’s as fresh as possible and, if you’re talking about proteins, that it’s humanely raised.

F&H: Do you see a way for broadline distributors to start offering a greater number of artisanal and local products?

RH: In some respects they already are. They offer products regional to the West, East or Central Canada. Now, it’s not a great selection. Look, if a guy is hand-making goat cheese in his shed, he has to make a lot of it to be carried by a broadline distributor. He needs to supply everyone, and that’s difficult to do.

LM: Last summer at the Premier’s Summit, Dalton McGuinty talked about how they were going to pump all this money into supporting local producers, and for foodservice it was $24 million, which got my attention. After the summit, I went online and found out what the government’s definitions of ‘local’ were. They were fairly extensive. If you’re going to sell protein like beef, then the animal has to be born in Ontario, and raised, slaughtered and processed here. We discovered that a lot of our products and our suppliers’ stuff was local. For instance, our GFS pork products are. We had anywhere between 200 and 400 products that were local, when in season.

The challenge for a big company like ours is we need a way to get into the ‘boutique’ farms, because we can’t have small producers showing up at our back door. We’re too big. It’s like trying to bring a specialty house into a box store.

With that goal in mind, we partnered with a company called 100-Mile market. They understand corporate business. They go out to the producers and ensure they’re following safe practices, providing consistency in packaging, weight, boxes, et cetera. But one big issue we had was linking our IT systems. When we started out, they wanted to write on their boxes with marker. Can you imagine that in our environment? So they have been spending the past eight months getting their IT system together, and now our two systems are just about ready to talk.

F&H: How is this local program going to work?

LM: What I visualize happening is a sales rep will take an order from a customer on a Monday; we will get those orders over to 100-Mile by Monday afternoon; they will go and pick up the order from the farmer or have the farmer deliver it to their central distribution centre by Tuesday afternoon or Wednesday morning. When it’s produce, it will be freshly cut. And they will bring our orders here on Wednesday afternoon, so we can ship it to our customers on Thursday. It will be part of our ‘Just-in-Time’ system. Most of our JIT is next day, but this is how it will work: Monday orders delivered for Thursday; Tuesday for Friday; Thursday for Monday and Friday for Tuesday. So we think in the next four to eight weeks we will be able to ship our first case, after a year of planning.

F&H: Will it be much more expensive?

LM: I don’t know yet but it’s a good question, because I have to make money doing this. If a bag of something from the U.S. costs $10, and the same product from Ontario costs $12, as long as I can get the extra $2 from the customer, I’m fine with it.

F&H: Operators, would you be interested in using a service like this?

SV: Right now, I don’t use a broadline distributor or supplier, so to take on this program I would have to do my research and be really impressed. That said, I’m happy to hear GFS is making the effort.

Now, while many growers and producers aren’t looking to do large volume, there are producers in Canada growing onions, carrots and celery in large amounts. I would love to see the big guys support that first, before they start looking at garnishes and greens. I recently spoke to a farmer in the Holland Marsh, and he said he would love to supply 100 per cent of his product to Canadians, but 50 per cent of it is for export. Yet, we’re buying U.S.-grown onions. That doesn’t make sense to me.

RH: Here’s the deal — the fewer number of invoices you generate, the more economical you’re going to be. I’m glad to hear GFS is doing something along these lines, and it would be something our hotels would look into. But what the broadline distributors need to start working out is that it’s great to say you’ve got local products, but if I agree to buy one regular product and they say I have to buy five cases a week, how many cases of local product am I going to have to buy to make it worth their while? I think they have some bigger issues to solve first, in terms of what they’re currently carrying, before they get into any new businesses.

F&H: Manufacturers, are you looking locally to source ingredients for your products?

Nick Tomasic: Nestlé Professional manufactures locally (in Canada) and as such, we source the majority of our ingredients domestically. If you import, then local sourcing is not feasible. We prefer to buy Canadian any time we have that option.

F&H: What has to happen to make your products more accessible?

NT: Access is really about distribution. Overall, the distribution network in Canada that services the out-of-home market is extensive. For manufacturers, it comes down to selling your products because that increases the number of customers who need them. If the demand is there, the access will be there. We need to grow this demand through successful marketing.

F&H: What needs to happen in the distribution channel to make your lives easier?

JS: Restaurateurs, please order without having to be phoned all the time. Read the emailed fresh sheet so you don’t order what we don’t have and visit the farm several times over the season so you understand the cycles, the bounty, and the options available.

PS: There is an education process from a chef’s perspective — he can’t call at 1 a.m. to place an order and expect it the next day. Things are harvested to order. We don’t store things. So if you order a bag of carrots, it’s getting pulled out of the ground for you.

RH: We recently went the Food Buy distribution route, because with all the additional charges that were being put through our last contract submission, I didn’t see where the value was. The broadline distributor wasn’t servicing the properties correctly either. We had a contract for 85 per cent grocery distribution. Many times over the years in various business reviews, I was told they’d like to get that to 95 per cent. In reality, a certain percentage of the property is buying some local product, whether it’s cheese, specialty poultry, organic fruits and vegetables — the things that make their menus regional — which the broadlines were not able to do. Fair enough. But many times I said, “You have got to get your salespeople into the properties, start reviewing our buying and how we can make this grow further.” I asked the same question for eight years and nothing ever happened.

F&H: How will your business remain profitable in the post-recession area?

JS: Please pay producers first. My small business will regularly be carrying an operation 50 times my size to 90 or even 120 days, which is opportunistic and parasitical. It only hurts the producer. Farmers are generally overworked and undercapitalized; using them for credit is common, but it sucks the life out of a small business.

I didn’t intend to be completely negative in my comments, just realistic. Any investment in my farm must be made with the realization that I will not be eventually selling the operation to a fruit and vegetable grower but to a homeowner with an income unrelated to agriculture.   

NT: I’m thrilled the recession is over. When more people go to more restaurants and spend more money, everyone wins. Momentum and growth fix many, if not all problems.

RH: Food vendors need to realize who the end user is, and I am not sure they do. I am not the end user. My customers are.

 

THE PANELLISTS:

robert_hoodRobert Hood
Corporate Food and Beverage Manager,
Atlific Hotels (28 units with consolidated ’09 purchasing of $8.7 million)

 

 

scott_vivianScott Vivian
Executive chef/co-owner,
Wine Bar and Hank’s in Toronto

 

 

paul_sawtellPaul Sawtell
Co-owner of 100km Foods, Toronto

 

 

lisa_mcneilLisa McNeil
Director of Marketing,
GFS Ontario

 

nick_tomasicNick Tomasic
Director of Marketing
Nestlé

jordan_sturdyJordan Sturdy
Farmer/ owner of North Arm Farm in Pemberton, B.C.
(He’s also the mayor.)

 

 

 

 

 

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