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Strategies for tomorrow's business environment explored

by Rand Green | July 29, 2009
MONTEREY, CA -- Foodservice sales may be down overall, but some restaurant concepts continue to do well and there are some bright spots, according to Kim Rothstein, a principal in The Hale Group, a strategic consulting firm serving the food and agribusiness industries.

Speaking at a seminar here Saturday, July 25, during the Produce Marketing Association's Foodservice Conference & Exposition, Ms. Rothstein discussed the current state of the economy and its effect on foodservice as well as research-based forecasts on where the industry is going; she also talked about how foodservice operators and their suppliers can adjust their business strategies to take advantage of coming opportunities.

Consumers may be more careful in how they spend their money these days, but they are still going out to eat, she said. "What they are doing is ordering differently when they get there ... so the average check is lower."

On the bright side, breakfast is "still doing well," she said, speaking to the produce suppliers in the audience. "But when I think about produce and breakfast, I'm sorry, you're not getting your fair share of the plate there. That slice of orange or that little garnish is not going to get you your retirement in Arizona. ... You've got to figure out a way for produce to become a bigger part of breakfast."

Family restaurants that have "built their business on the baby boom generation" are not as relevant to the generations coming up behind, Ms. Rothstein said. "They are going to need the produce industry to have a voice in how they can change their formats to meet the needs of the next generation."

The younger generations are looking for flavor, color, aroma, variety and nutrition, and fresh produce "more than any other category" can help meet those expectations, she said.

The need for improved food-safety practices at the operator level provides an opportunity for produce suppliers who understand food-safety issues, Ms. Rothstein said. "The training component and how you can help an operator in the unit is huge. That could be your point of difference if your competitor is not doing it." That means not just handing educational materials to customers, but actually training the distributor "so the distributor can go in and train the operator."

The economy "is going to get better," she said, and when it does, "the foodservice industry typically rebounds first." When that happens, private- equity money will start freeing up," and small restaurant chains with great new ideas will see significant growth. "It is important to look at where this change is going to happen so you can position your products and services and ideas to the right players to help the operator with a value proposition," she said.