At the virtual edition of The New York Produce Show and Conference this past December we had an all-star collection of industry luminaries who were willing to share their knowledge and experience with the broader industry.
There were many robust discussions, and we are sharing some of these insightful conversations here on the Pundit. You can read the transcript below or watch the video below the transcript.
First up, in the midst of a pandemic that crushed the foodservice industry, the largest foodservice distributor in the world, Sysco, has displayed amazing resiliency. Truly a lesson for every company in the world.
We were fortunate that Juliet Olivarria, Vice President, Produce at Sysco, was willing and able to share the incredible experience:
Q: Good day and welcome to The New York Produce Show and Conference. Today we have a superstar of the produce industry joining us, and one who has really been at the epicenter of this pandemic year for produce. As we’ve been talking to retailers, many of the stories have been about how to handle the increased demand that they were experiencing. Julie has a different story for us. So Julie, why don’t you introduce yourself? Tell us your life story and how you came to be sitting where you are today, and then we can go from there.
A: Okay, good morning, Jim. Thanks so much for having me. It’s great catching up. I sure wish we were in New York City doing it in person, but next year I look forward to seeing you. So I am Julie Olivarria. I’m the vice president of produce for Sysco Corporation. I’ve been with Sysco now 21 years, but I started my career a little earlier than that for a supplier. So I worked for a shipper for about seven years before joining the team at Sysco. Then I came on as a buyer and just progressed and accepted this role of vice president nearly a year ago now.
So I’m fairly new at this position, and what a way to start this new role in leading a category for the largest foodservice company in the world!
Q: Yeah, well, you certainly have had a baptism of fire, as they say, in this year. So, you’re busy running this giant foodservice distributor, enormously successful in its operations in produce and many other things, and you’re here in say, March, and all of a sudden, the world changes. What was your experience? What happened? What did it feel like?
A: It truly did feel like the world changed overnight for us. March 19th, I think, we sent everybody home from the office and said, “We’ll see you in two weeks.” Now, here we are December and we still haven’t returned to that office environment. Overnight, our business just completely fell. At our lowest point back in March, we were at 60 percent of what our normal business is. And it really caused us to have to pivot and look at things differently and much more rapidly than we’re used to moving.
As you can imagine, we were focused on redirecting our excess inventory. We had a lot of inventory coming into the start of this, and we really kind of flexed and found avenues that we hadn’t explored before or had explored very lightly. So we sold product directly to consumers. That’s something we hadn’t done in the past. We sold to restaurants that converted into grocery markets and sold groceries rather than prepared meals, which was something very different.
And we sold to retailers and really produced or developed these relationships or strengthened some that already existed with these retailers that really, as you stated earlier, needed our help at that time. So it was a much different environment.
We also worked to stabilize the supply chain for our customers, strengthened processes to communicate more frequently with our customer to try to help understand their needs. Their needs were changing just as ours were. So, there were changes in demand and availability for certain. Things worked much differently than they had in the past.
Many of our customers had to narrow their menus, right? They could no longer have that gigantic offering that they’d had because the business wasn’t there for it. So we worked really closely with our restaurant customers, helping them develop new menus with different offerings and making sure that we were aligned with suppliers to be able to provide those.
Q: That’s fantastic. What about on the supply side? You obviously work with many, many producers of many different items. And some of them are hard to reposition into retail. Some are not sold traditionally in that way. How was the relationship with those suppliers? And I assume many of them you probably had commitments to take large amounts of produce you didn’t need right now. How did all that work out?
A: You know… it’s amazing what you see in times like this where people really, really step up and go above and beyond, and our supplier partners were no different. To say that they were patient with us or that worked with us, it was amazing. We had supplier partners working with us to help fill orders that were not our traditional pack sizes and help us to move product that we had. And it was amazing to see what they were willing to do. They all understood completely.
Q: You were at this kind of massive change that had to be made in one day, basically, because the whole world changed. Restaurants were closed in many areas. Well, now we still have this pandemic. It hasn’t gone away. But how has the business absorbed these changes and moved into some kind of new normal with this current situation?
A: Right. So today we’re focused on helping customers navigate this new normal. And from a produce perspective, we’re still offering the traditional foodservice packs of the larger sizes, but we’ve also increased our offering on smaller pack sizes because our customers really don’t know if they’re going to be open from one week to the next or one day to the next. So it makes it very difficult for them to plan what their purchases are.
We’ve also — I don’t know if you’ve seen — but we’ve also taken away our delivery minimum. So in the past, there were minimum orders and we’ve taken that away for now so that customers can order just what they need and aren’t ordering extra product in hopes that they’re going to remain open or that their business is going to remain strong. And that’s pretty exciting for us. We’ve become that flexible partner that our customers need from us.
Q: I know you have enormous capacity — warehouses and trucking and things like this — have you been able to redirect some of that to the retail need that grew or is this all sitting idle? What’s going on?
A: Initially, we redirected a lot of our resources to the retail segment and helping customers. We had a large inventory that we helped move to people in need as well. So if it wasn’t something that we could sell, we definitely helped with donating and making sure we were helping those that were in most need of it.
Q: Well, that’s fantastic. And we’ve heard of that story across the produce industry. Lots of efforts that have sprung up to try to help people in need. There is a lot of product that you have in your warehouse, or you have this ongoing relationship but there’s just no place to move that now because the world has changed…
A: Absolutely. Initially, for certain, there were products that were donated out. Produce… it wouldn’t be still sitting in the warehouse at this point or it would be a problem if it was. So absolutely. And like I said, we’ve had to change some pack sizes and our offerings a bit just to accommodate this customer today that their needs are much different than they were pre-COVID.
Q: What about your own teams of people? You obviously had a large staff devoted to being the largest foodservice distributor in the world. How has that interaction gone on with people? Are there issues with people who are delivering and things like that being hesitant because of COVID? Or are there ways you’ve had to take some short-term layoffs and things in the hope of rejoining later? What’s the overall people picture?
A: Our overall people picture of now is we have our full team in action so initially, there were a little bit of some layoffs or temporary. But everyone is back working, which is helping through this situation. We’re still working from home, at least the team in Salinas and my team in Salinas. We’re all becoming masters of the Zoom meeting and Skype and getting it done remotely as best we can.
Obviously, we are all looking forward to the day that can go back and have those face-to-face meetings.
Q: Well, now there’s word of several new vaccines out and some optimistic hope that this will come to an end. The exact schedule on which that will roll out is still maybe a little unclear. But there’s reason to think there’s light at the end of the tunnel and that we’ll get through this and move ahead.
What’s your thought on this? Do you have any picture…? I read in the newspaper that perhaps a third of all the restaurants may be insolvent or go out of business. What’s your thought about the foodservice sector bouncing back after this? I mean I know some of us want nothing more desperately than to be able to enjoy those nights out at restaurants as we always did. But I imagine there also will be people who are still afraid, and I also imagine the economics of things… if there are so many people who lost jobs and so forth, that doesn’t usually encourage more eating out. So do you have a picture of what you’re imagining it’s going to mean to be in this new normal?
A: I think that picture changes daily. It really does. Initially, we thought it would be past us much quicker. Obviously, Sysco is very strong. We’re stronger than any other foodservice company coming out of this, and we are going to continue to change and be there for our customers, continue to help them thrive in this environment.
But who’s to say? It would be very difficult to say what foodservice looks like post-pandemic. We don’t even know at this point, to your point, when will the vaccine be available to everybody and when will people be able to go back out and enjoy those restaurants? California just shut back down again. And truthfully, we were never really all the way open. We haven’t had indoor dining since March, so it’s very different, and I wouldn’t have a clue what it’s going to look like going forward. But know that we will continue to be that partner to our customers and help them with their needs when it is time.
Q: So we just don’t know how it’s all going to evolve. What would you think if you were talking to the supply base, the producers of produce who, of course, they can’t wait until the day before everyone orders to decide to plant items, things like this? How would you think they should be thinking about foodservice demand as we go through this next year and enter into a post pandemic phase?
A: We’ve been very, very closely connected with all of our suppliers. We are having weekly meetings with most of our core suppliers. If not, every other week or so, keeping them abreast of where we’re at, what we’re seeing, what we’re hearing in the marketplace, and then also helping them to find outlets initially for product that was already planted, to your point, and then talking about ramping up or planting going forward.
So it’s been interesting because it’s really difficult to predict, and to your point, they’re planting 90, 120 days out. And we’re talking about today what our needs are going to be in March or April now. And it’s difficult. So we worked close together. We’ve changed some pack sizes and done some things to make us a better partner to those suppliers, and that communication piece is really key.
Q: What’s your sense in terms of Sysco and these new relationships or newly emphasized relationships with retailers that developed during this pandemic? Is it your expectation that these things are just going to fall to the wayside when we reach post-pandemic stages? Or is this also part of a new normal that may have developed as they’ve experienced your competencies and abilities to help their own businesses?
A: I think, obviously, it’s a long-term. It’s a really good relationship. We complement each other very, very well. The traditional retail pack sizes are not the same as the foodservice, but really, the industry needs both because you need to be able to… somebody needs to take those large potatoes that the retailers don’t want or somebody needs to take those bigger pack sizes for the retail sizes to work. So we have definitely formed some solid relationships with retailers, and that’s been one of the greatest things to come out of this. I expect that it’ll continue long after we’re all back to work and things return.
Q: Well, what you’re saying is that you can be a more valuable partner to producers because now you can maybe take a larger range of sizes and things of that sort that before you wouldn’t have been comfortable doing.
Q: Well, it’s very interesting. Sysco, of course, is an incredible company with incredible capabilities. Some of the people haven’t had the ability to flex in the way that Sysco has. They haven’t had the same resources. And that Sysco is able to go into a situation like this and come out stronger because they went through it is really a testimony to you and other people on the team who managed to pivot so effectively.
Many, many distributors that we’ve spoken to around the country have not been able to make those kind of pivots. So it just shows the opportunities that exist when you’re really on top of the game and able to seize all the different ways of moving ahead. So we really appreciate your sharing some of that with us here at the New York Produce Show. It’s always been a pleasure to have you and your team live and in person at the event, and we hope that you’ll certainly join us again next year when we’re going to be live with an additional digital component.
Q: So we hope you’ll be part of it and I thank you so much for joining us and wish you great success in testing all these new systems you’ve developed through the holiday season.
A: Okay. Thanks, Jim. Great seeing you.
Survival is one thing and, indeed, had Sysco done nothing but survive a situation that crushed foodservice in America, that would have been all that was accomplished. But, in the midst of a pandemic, to reimagine the business so that it will come out of this with new competencies, new relationships and a new future is nothing short of extraordinary.
Of course, corporations do nothing… people have to make these things happen, and Juliet Olivarria and her produce team at Sysco were a crucial part of making the change that had to happen, actually happen.
When this is all over, we will remember the people and the moments when the future was created.
Many thanks to Juliet Olivarria and Sysco for sharing the transformative story.