Thursday, December 10th, was the second day of the virtual New York Produce Show. To kick off the day, Jim Prevor chatted with Matthew D’Arrigo, CEO of D’Arrigo New York, one of the largest wholesale produce suppliers of New York, about how they experienced the pandemic.
Pictured right: Matthew D'Arrigo
Retail versus foodservice
For D’Arrigo New York, foodservice comprised approximately one-third of their business prior to the pandemic. “The dominant theme throughout it all is the loss of foodservice business and the spike in retail. While foodservice almost completely disappeared at the beginning, retail saw a 30% spike in volume, so that takes some adjustment,” says D’Arrigo.
For vendors whose main business was comprised of foodservice, the pandemic forced them to find new outlets for their products. “Early on, there was a very substantial disruption, and for several weeks people lost the majority of their orders from foodservice and they’re left trying to figure out what to do with that product,” D’Arrigo says, adding: “We took a lot of unspoken for loads and were able to sell them for our vendors. The extra business got absorbed by retailers. The bottom line is that there were still the same number of mouths to feed and we worked together to find a different path for getting the food to them. We were able to relieve a lot of the slack by taking extra product.”
The future of foodservice
For a major metropolis such as New York, the foodservice industry is an integral part of daily life. As the pandemic hit and foodservice establishments had to shut down, the effects were certainly felt and might reverberate for a long time. “10-20% of New York business died and will have to be reborn after the pandemic, and that will be a slow process. A lot of restaurants will likely go out of business permanently because there’s just not going to be the same amount of mouths to feed at lunchtime as working from home will likely remain prevalent. In contrast, there will also definitely be a roar of activity at first, when people can start returning to their normal lives, but it will level off at a point that will be lower than it was pre-pandemic, I think, and it will take a long time to get back to the original levels,” says D’Arrigo.
Despite this, D’Arrigo does expect that foodservice will eventually fully recover. “There will be a permanent subtraction in foodservice demand – only a sliver, but an unrecoverable sliver. But, as time goes on and more teens age into adults and are added to the consumer base, this will slip into the history books and become unnoticeable. There will be a stubborn sector of the population that won’t return to foodservice at all, but new bodies will make recovery happen,” he explains.
Recognition for the essential
Throughout the unprecedented times of the pandemic, one thing has become clear: the produce industry is essential. “When times are good, people take food for granted. Then, when a crisis such as this comes around, there’s a real concern that our food supply could be interrupted. Fortunately, it wasn’t. Sure, there were a lot of micro-interruptions happening, but overall everything kept going. Our vendors have a lot of appreciation for us, and I believe all the other terminal houses in the market have a lot of appreciative vendors, but whether that boils down to a cultural intra-industry respect for the terminal market system, I couldn’t say. The bottom line is that wholesalers gained a lot of respect early on, when we were able to take product that had no other outlet, and it’s nice to see that respect and appreciation,” he concludes.
Click here to register for the virtual New York Produce Show for free and attend the last day of the event.