What’s Trending? A Food Wholesaler Shares His Perspectives

Consumers have wised up to what goes into their food – everything, including the ingredients and the processes, and even where it comes from and the conditions under which it is sourced. Two trends stand out: a desire for healthy, sustainably produced food and a shift toward buying locally. Consumers want to feel good about their food choices. Along the way, the foodservice industry has adapted to keep pace with these demands, which haven’t slowed. These trends create opportunities for retailers and restaurants to differentiate themselves from one another, and large chains. Pre-pandemic, some retailers struggled to balance these demands with business as usual. And on the foodservice side, there’s been huge growth in various cuisines, particularly meatless options. One thing’s clear: the industry continues to innovate. To learn more about these and other trends, I spoke with Dennis Silva of food wholesaler Julius Silvert. What follows is an abridged version of our conversation. The questions and answers have been edited for clarity and conciseness. You can listen to the full interview – How the Food & Beverage Distribution Channel is Changing – on my Food and Beverage Talk podcast.

Guest Bio

Dennis Silva is the Chief Operating Officer of Julius Silvert, a fourth-generation specialty food wholesaler servicing the Atlantic and Northeast regions. Dennis has private equity, board of directors, C-suite, and management consulting experience. He possesses a track record of scaling new business segments while delivering multimillion-dollar profitability improvements.

Key Questions:

• Is buying locally really having an impact in foodservice?
• Are there lots of changes on the consumption side from consumers?
• Is gluten free still a thing?
• What are some of the other foodservice trends?

Consumer Trends in the Food and Beverage Industry

Jacob: What trends are you seeing coming into play in the industry? 

Dennis: Buying local has been hot for a long time. Customers seem to have grown weary and formed a distrust of large, consumer-packaged goods companies and large chains. Both restaurants and grocery stores want to support their local communities and prove their point of differentiation. So, venues that can prove they’re procuring locally have an additional point of differentiation. That is, if they can cater to customers who want food products within a 20- to 50-mile radius of their location. 

Many times it’s an extremely high-quality product. There are farms we partner with to service our restaurants. It’s not so much farm-to-table, but it’s more sustainable and gives everyone something to feel good about. That seems to stand out the most among the trends. 

Venues that can prove they’re procuring locally have an additional point of differentiation.

Jacob: That’s a good point. Do you see this impacting the foodservice industry, because there isn’t a lot of transparency there? 

Dennis: Our sales team will go in and find out when something is locally sourced and when its QC has gone through rigorous trials. We’ve got a handful of fantastic local partners that are able to do both. When they have all the certifications and can take you through a tour of their restaurant or grocery store, which could be their farm or manufacturing facility, you get a feel for just how buttoned up and high quality the entire process is.

We did this months ago with, arguably, one of the best prime steak butchers in the nation, here in the Northeast. They walked us through their safe room and their dry-age room. And this is just a boutique firm that’s in our backyard, that’s got quality control, and that competes with the largest food processors.

Jacob: What’s driving the shift toward local food and healthier food? 

Dennis: It’s awareness. You can open up your phone and in 20 seconds get bombarded based on a conversation you were just having about ingredient lists. Or what you were thinking about making for dinner, or buying. In fact, we have more awareness – in some cases bad information awareness – than we’ve ever had. And there’s good and bad to that. 

Jacob: There’s probably been hundreds of different trends in the last 10 years? 

I think the factor drawing all that together is a genuine need for healthy foods. It’s come out of the large food corporations having over-processed their products – more and more we’re eating things our bodies just cannot digest. I get where this health consciousness is coming from. But I think when consumers just incorporate whole foods and moderation into their diets, it’s possible to do a lot of that without going crazy about measuring exactly how many grams of sugar or salt you consume each day. 

Jacob: Are you seeing lots of changes on the consumption side from consumers? Or do you not see those because it’s aggregated at the market level?

Dennis: It’s a little bit of both, depending on the time frame we’re talking about. On the retail side, pre-pandemic, there was a very real struggle to cater to all consumers’ tastes with the same amount of real estate in a store. Twenty years ago, you had two or three options for whatever you were looking at. But, fast-forward to 2019 and you’ve got 16 different versions of kombucha on the shelf, and stores still need to sell orange juice, bottled water, and everything else. 

So retailers, for the last decade, have really struggled with an explosion of the SKU base – four or five times what they had before. And the retail footprint isn’t getting any larger. They dealt with that just the same way as they’re trying to procure local to drive their point of differentiation and appease their customers’ growing sense of choice. But they got to a point where, in some cases, they were cannibalizing core SKUs that should have had two, or three, or four facings for something that was new, and sales were flat and going down. So what was going on the shelf was all you could supply or all you could receive. Retailers really took a look at what they were doing and saying, and we’ve actually seen a contraction of SKUs coming out of the pandemic. 

Now, more than ever, we have dietary restrictions. So actually, I haven’t seen that slowing; in fact, the opposite is true. There’s more room for different cuisines, different dietary allowances, and different lifestyles than there’s ever been. We’re serving more meatless options to restaurants than we ever have. We’re servicing more vegetarian restaurants than we ever have. On the foodservice side, it doesn’t seem to have slowed down. 

Pre-pandemic, there was a very real struggle to cater to all consumers’ tastes with the same amount of real estate in a store.

Jacob: Is gluten free still increasing or has it leveled out? 

Dennis: It still certainly has a huge presence. But traditionally, I feel like the gluten-free phase is truly there for folks who absolutely need it.

Jacob: And what are some of the other major trends you’re seeing at the foodservice level?

Dennis: From the restaurant standpoint, we still have a real need for, and a real demand for, new and different products. It doesn’t seem that demand has slowed. We’re bringing on cheese that’s derived from nuts, and it’s actually pretty fantastic; that’s going on charcuterie boards next to raclette, the French cheese. I don’t think it’s ever going to cease.

At the same time, over this past summer, we made our own ground beef with a super premium butcher. And it’s a dry-aged ground beef. We’ve seen innovation within proteins, and we’ve been able to partner with really nimble, small manufacturers and butchers to cater and bring to market a super premium, very tasty ground beef that months before didn’t exist. Now there’s a dry-aged ground beef burger that’s popping up on menus all over our customer base. And it’s been fun to watch. So, what does that all go back to? Innovation. As humans, we get bored, tired, and distracted quite easily. So as long as we are the way we are, I don’t think there’s ever going to stop being a need for innovation.

We still have a real need for, and a real demand for, new and different products.

Takeaways

• Restaurants and grocery stores rely on buying locally to differentiate themselves from larger competitors.
• Local producers invest in quality control systems and certifications to prove their claims.
• Customers’ growing awareness of what goes into their food is driving a shift to local, healthier options.
• Holding business-as-usual stock while keeping up with consumer trends has proved challenging for some retailers.
• Demand for new and different products shows no sign of a slowdown.