LOS ANGELES — Foodservice business seems to be inching upward in the Los Angeles area, especially at restaurants that offer reasonably priced meals. But sales still have a ways to go before they return to pre-recession levels.
Verne Lusby, president of Industry-based FreshPoint Southern California, a subsidiary of Houston-based Sysco Corp., is optimistic as restaurateurs start to experience some relief after a “horrible winter on food costs.”
But he’s concerned about the effect of rising fuel costs.
A distributor can only pass so much of a price increase to the restaurant and the consumer, he said. Those price increases made things difficult for the foodservice industry over the winter.
“Hopefully, we’ll see a great summer and continued growth,” he said.
Fuel costs were falling in early June, but skyrocketing costs during the winter and early spring added to the price of transportation and discouraged consumers from leaving home.
Growth of the foodservice category can be affected when a consumer has to make a decision between putting gas in the car and going out to eat, Lusby said.
Nonetheless, business was on the rise at FreshPoint.
“At FreshPoint of Southern California, we continue to grow in spite of the foodservice industry’s slow climb out of the recession — mainly at the expense of some of our competitors,” Lusby said.
The company’s locally grown program was especially strong, especially among colleges, health care and plant feeders, he said.
Chris Martin, president of VIP Marketing and general manager of Value Produce, both in Los Angeles, said he had noticed that restaurants no longer buy more product than they can use.
“People are speculating less. They’re just buying what they need,” he said.
Operators are waiting until they’ve sold what they have before they order more, he said. In the past, they would buy a little extra in advance to be ready for unexpected business.
“People are being more conservative and frugal,” Martin said.
Meantime, he said business was brisk in some areas — such as the West Side of Los Angeles.
“It doesn’t seem like there’s much recession — restaurants are full,” he said, though diners frequently pay with credit cards rather than cash.
VIP Marketing sells mixed berries, asparagus, grapes, stone fruit and mangoes in season, he said.
At Tavilla Sales Co. of Los Angeles, president Bill Vogel said he’d seen a lot of growth in the foodservice sector, especially in the salad category and in cut fruit for school lunches.
One item that seems to be catching on in foodservice is jalapeño-shaped finger limes, he said.
White-tablecloth restaurants and upscale steakhouses “may have been nicked a little bit” during the recession, said Jeff Weisfeld, owner-president of Commerce-based Fruit Distributing Corp. of California.
But some relatively inexpensive alternatives offer “gourmet-type food” at a reasonable price, he said.
Chains that have a reasonable price point, such as McDonald’s and Chipotle Grill, “seem to be thriving,” he said.
Even where business is up and demand is on the rise, the foodservice category can be difficult for organic distributors to penetrate, said Rick Lejeune, chief executive officer of Heath & Lejeune Inc.
That’s because organics is labor intensive and requires a high degree of service.
“We’re branching into that in a small way,” he said, by servicing small restaurants and caterers and selling to suppliers who supply large institutional accounts.