Shifting challenges unique to the food industry

Food and beverage companies are facing sweeping industry changes as consumer preferences shift to more local, specialized products. This evolution impacts all aspects of running the business, including supply chain, account management and manufacturing practices. Food and beverage processors must adapt to keep up with the needs of both their consumers and retail partners.

During a recent panel discussion, select executives of family-owned food and beverage companies that recently faced ownership transitions shared their succession paths and views on the current opportunities for middle-market companies: The panelists included:

• Tom Walzer – CEO – Saco Foods, LLC
• Dimitri Pappas – Founder/Owner – Orchard Solutions
• Jonathan Del Re – CEO – Lacas Coffee Company

In an excerpt from Challenges of growing and transitioning a private food and beverage company, the panelists discuss the unique challenges their companies have faced and how those complexities have shifted over the last few decades.

What are some of the unique challenges you have seen in the food industry, and how are they different today versus 10-20 years ago?

Jonathan Del Re: Decades ago, our company had restaurant and diner customers, which would buy 300 or 400 pounds of coffee per week. But now, most of our larger street accounts – DSD accounts – are roughly half that size. The average sales in pounds of coffee per account has shrunk.

Furthermore, there is an industry saying that “less coffee now goes down the drain” because there is a lot of technology, soft heat, air pots and even K cups that extend product life and reduce waste. While all this leads to more efficient use of coffee, which is favorable to the customer, the trends require roasters like us to produce and sell less coffee to our traditional customers.

More recently, the trend of a smaller slice of the population demanding premium products with a story is driving industry thought leadership. Millennials are driving broad market interest in where things are from, ethical and sustainable sourcing, fair trade, and organic products. All of these concepts used to be, I wouldn’t say fringe issues, but not mainstream issues. They have now become mainstream issues and they’ve changed the way our customers buy and what they ask from their vendors.