At the end of 2008, according to the National Restaurant Association, 47% of restaurant operators in the U.S. said the economy was their top challenge, and 49% expected the economy to worsen.
The recession is a concern of berry marketing agents, as well.
“Foodservice has taken a hit, but it seems like people are eating the same quantity of food, and it has shifted to club stores and retail more,” said Keith Mixon, president of Winter Haven, Fla.-based SunnyRidge Farm Inc.
That bit of insurance helps to salve the fallout from the sagging restaurant sector, said Bob Von Rohr, marketing and customer relations manager for Sunny Valley International Inc., Glassboro, N.J.
“I’ve heard some of the foodservice business is down because people are not going out. That can only help for people who look for values when they shop,” he said.
Nevertheless, the potential for a big berry sales year in the foodservice category remains, sources said.
“It was a great channel until last year,” said Frank Bragg, chief executive officer of MBG Marketing, Grand Junction, Mich. “We’ve had some of our best fresh sales in foodservice in the last six months, in spite of the struggles that the foodservice channel is having, where you’re hearing some are off (up) to 40%.”
He said blueberry sales should continue to grow in foodservice, even with a weak economy.
“We’re seeing great growth on the fresh side and believe that will continue to build,” he said. We’ve locked into some of the largest foodservice providers for pricing that works over a longer period of time, so they can provide stability to the menu offerings in restaurants.”
That’s gaining some traction for the business, Bragg noted.
“The frozen side, though, is very slow,” he said.
Art Galletta, sales manager for Atlantic Blueberry Co. Inc., Hammonton, N.J., said foodservice is a “heavy concentration” for his marketing program.
“Foodservice is one of the areas we concentrate our promotional efforts through the U.S. Highbush Blueberry Council, and we do some promotional work on polybags and their availability during the offseason,” he said.
Galletta also is chairman of the council.
The Wareham, Mass.-based Cranberry Marketing Committee collaborated with restaurant chain Souplantation/Sweet Tomatoes, which has 111 units, to feature several cranberry-filled recipes on menus.
The chain provided literature about about cranberries’ nutritional benefits and featured Souplantation/ Sweet Tomatoes cranberry recipes on the marketing committee’s Web site.
The partnership was a success, said Toby Stapleton, the committee’s marketing director.
The committee also is sponsoring the National Festival of Breads, June 15-17, and one of the recipe categories is cranberry-themed recipes.
Some companies are more advanced than others in their relationships with the foodservice sector.
Houston-based Magnolia Fruit & Produce, for example, is only beginning to tap that market, said Bart Ramage, operations and marketing manager.
“We’re starting to develop it, especially the guys that are promoting locally grown produce,” Ramage said. “We’re seeing a lot of fresh berries showing up on menus, with all the health menus. People want to promote berries as one of the healthier fruits.”
“I wouldn’t say it’s been a dramatic falloff, but we’ve definitely seen it,” said Mark Munger, vice president of marketing for San Diego-based strawberry grower-shipper Andrew & Williamson Fresh Produce.
“It’s really clear that our foodservice customers are concerned about efficiencies. The only effect we’ve seen is that berry sales have gone down slightly or maybe are a little bit behind, maybe 15% from where they were during better economics.”
In some cases, foodservice clients are “aggressively trading down” to more “value-oriented” product, Munger said.
“There’s not much you can trade down with strawberries, except maybe take them out of certain menu items,” he said.
It’s not time to panic, though, Munger said.
“It’s something we’re watching,” he said. “We’ve got a pretty good balance of customers, so we’re not really relying on one segment of the industry. But I think, generally, we’re seeing foodservice take the biggest brunt on us.”