Suppliers suffer as eateries shut

NEW YORK • The Marhefkas were feeling optimistic about the future of their 15-year-old business, Abundant Seafood, when they opened their first processing plant this month in North Charleston, South Carolina.

Mr Mark Marhefka catches vermilion snapper, triggerfish, banded runnerfish and several kinds of grouper on two-hook lines he drops into the Atlantic from the side of his 11m boat.

He and his wife, Kerry, sell the fish directly to some of the most acclaimed restaurants in the southeastern United States – such as Husk, Fig and the Ordinary in Charleston, and the Grey in Savannah, Georgia.

The fish are sold whole. This has held back the company’s growth because few restaurants have a cook who knows how to clean and cut fish.

The new plant, built with money the Marhefkas had put aside over the years, was going to change that.

They hired eight people to carve fillets, clean whole fish that could go straight on the grill, pack seafood orders and work in a small retail shop out front. Their first day was Sunday last week.

Two days later, South Carolina governor Henry McMaster shut down all restaurants and bars in the state except for takeaway and delivery.

Orders from restaurants, normally 80 per cent of the Marhefkas’ sales, stopped almost entirely.

“There are some restaurants trying the takeaway thing, so they are buying a little,” Mrs Marhefka said. “We had two orders go out to restaurants this morning. I would never think there would be a time when I would be excited about two orders.”

As dining rooms in 15 states and some counties and cities have gone dark, the first to feel the impact were restaurant employees and owners.

In a letter to US President Donald Trump and congressional leaders asking for financial and tax relief, the National Restaurant Association said it expected five million to seven million restaurant jobs to be lost because of the coronavirus pandemic.

But the pain is also radiating out to thousands of small companies across the country that, like Abundant Seafood, rely on restaurants for most or all of their sales.

The size of this indirect economy is unknown, but independent restaurants can spend anywhere from a little less than 20 per cent to more than 30 per cent of revenue on food, alcohol and other goods.

Some businesses that serve restaurants have already laid off workers, driving a nationwide surge in new unemployment claims that labour experts predict will total between one million and 2.25 million for last week alone.

Others are scrambling and improvising, trying to convert their wholesale businesses into retail shops overnight. A few have closed for now, wondering how long it will be before it is safe for people to eat and drink together again.

As local and federal governments debate measures to help the economy, they are watching to see when relief will come, what form it might take and whether any of it will reach them.

Orwashers Bakery, one of the handful of independently owned bakeries in New York City that sells fresh bread to restaurants, has laid off 20 of its 110 employees.

Wholesale revenue, mostly from restaurants and the distributors that supply them, “was the economic engine of the whole company”, said owner Keith Cohen. Since early this month, he said, “it has been in a progressive downward spiral”.

In any other week, Orwashers would have been making daily deliveries of its tender but sturdy hamburger buns to restaurants such as Upland, Superiority Burger and the Dutch. Its Rustica and Campagna loaves, familiar by sight if not by name to many New Yorkers, would have been waiting at restaurant doors in the morning.

A few fast-casual lunch spots, including By Chloe, Chopt and Fresh&co, are still serving Orwashers bread to pickup and delivery customers. Many of their locations, though, cater heavily to office workers who have now been ordered to stay at home.

But retail business may be out of reach for vendors that provide highly tailored services to restaurants, such as linen services and florists.

“Now that there’s a shelter-in-place, we were going to put something on social media,” said Ms Heather Shouse, whose company, Bottle & Branch, designs and installs flower arrangements, planter boxes and outdoor landscaping for hotels and restaurants in downtown Chicago and the West Loop.

As she fielded phone calls and e-mails cancelling orders that equalled 95 per cent of her business, she imagined sales pitches she could make to people now working from home.

“‘Treat yourself to flowers’, ‘white glove delivery’, where it just gets dropped on your front step,” she said. “Or plant delivery: ‘Turn your brown thumb into a green thumb.'”

Almost as soon as that hope occurred, it collapsed. “No one is going to want these things in this time.”

Any other year, Bottle & Branch would have hired 10 or so seasonal workers last week to get ready for “patio season”. Instead, Ms Shouse has laid off all 10 year-round staff.

She said Chicago’s two wholesale flower markets, where the sales staff work on commission, had been brought to a virtual standstill when the restaurant trade died.

“We went from spending US$4,000 a week with one salesperson to nothing,” she said, “so that’s food right out of his mouth.”

NYTIMES

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