Equipment Distributors Face a New, Uncertain Future as They Confront the Coronavirus Pandemic

By Michael Sherer
Contributing Writer

The ancient Chinese curse, “may you live in interesting times,” may be no more fitting than the present as the world battles a pandemic caused by COVID-19, the novel coronavirus first reported in Wuhan, China, last December. In the months since, the virus has spread around the globe causing country-wide quarantines, closed borders, and deaths in the hundreds of thousands.

Here at home, federal health and safety guidelines are augmented by statewide stay-at-home orders and phased reopening plans. Virtually every state ordered restaurants and bars to stop dine-in sales, with most allowing only drive-thru, takeout or curbside pickup service.

“The situation changes by the hour,” says Johnny Wong, president of Santa Fe, Calif.-based Duray/J.F. Duncan Industries. “The whole state shut down (in mid-March), and my first question is how I finance no layoffs and keep my shop open. I’m playing with ideas like advancing them vacation time.”

The closures have had an immediate effect on suppliers such as foodservice equipment distributors and dealers – but many FEDA members are doing everything they can to adjust and adapt to the new “normal” of doing business in an environment when a lot of that business has come to a screeching halt. And they’re doing so with an upbeat attitude and optimism for the future.

“Our business has been around for 80 years,” says Cary Amundsen, president, Amundsen Commercial Kitchens, Oklahoma City. “Lots of our customers are friends and it’s tough to watch them have to close their doors. But to-date, people really have a can-do attitude.”

Weathering the Storm

Changes have come at the industry fast and furiously, so adapting has been a challenge. “Things change daily,” says Jameel Burkett, president of Burkett Restaurant Equipment & Supplies, Perrysburg, Ohio. “What we’ve been doing is watching our governor’s daily press conference, then meeting [virtually] to talk about what we need to do.”

“There’s no playbook for this,” adds David Stafford, president and CEO, Stafford-Smith, Inc., Kalamazoo, Mich. “We’re just adjusting as we go. We’re considered an essential business; obviously, if someone’s equipment goes down we have to be there to repair or replace it.”

The first thing these dealers have done is to ensure their employees are OK and working in safe conditions. That means adjusting workplaces to meet state or federal guidelines and keeping employees informed.

  • Wellness checks. For employees still working onsite in the warehouse and showroom, for example, Burkett Restaurant Equipment checks their temperature and asks about symptoms daily when they arrive.
  • Social distancing. Making sure employees can maintain a six-foot distance from each other has prompted accommodations in offices, break rooms, cafeterias, and more.

At Amundsen, the lunch and break rooms are closed, and employees have to stay in closed-door offices, which has been tough on people mentally. KaTom Restaurant Supply, Kodak, Tenn., switched its office configuration from three people per pod to two. At Stafford-Smith, office employees already had six feet of separation to give them enough space to do their work, according to Stafford, but account executives are now all working remotely. Burkett’s office employees, meanwhile, are all working from home.

It’s human nature to want to socialize, though. So to make up for the fact that 50 percent of the table and chairs in the KaTom cafeteria were removed for social distancing, the company now brings in food trucks every Friday, so employees can get something to eat and socialize outside – from the proper distance, of course.

  • Hand-washing. Since frequent hand-washing is one of the recommendations in federal and state guidelines, some companies have put more emphasis on it. KaTom put up 10 additional hand sanitizing stations around its offices and added a portable hand-washing station in the lobby by the front door with a video to demonstrate the proper technique.
  • More frequent cleaning. Most companies have stepped up janitorial service schedules and have implemented frequent wipe-downs of work stations and restrooms.
  • PPE. Some, like Burkett, provide personal protection equipment such as facemasks and gloves to warehouse employees or others who request it.

Shifts in Business

Those with contract work for design, fabrication, or installation feel on more firm footing than companies that rely solely or primarily on equipment sales to restaurants. The decline in restaurant business due to dining room closures obviously has had an impact. But all companies are shifting and adjusting to a different mode of business during the crisis.

“We’ve seen a sizable increase in contract work in recent years,” Amundsen says. “We’ve done new construction and renovation work for clients like the Houston Astros, the new Texas Rangers ballpark, and 20 different school districts. Those are pre-paid contracts, so the work goes on. But we’ll monitor the situation closely. We need our customers to stay in business, so we’ll do whatever we can on our end to help.”

Some shifts the company has made to adapt to the changing business include eliminating overtime for employees in the field, such as project managers, installers, and service techs, and shifting some work internally. To help customers where it can, for example, the company’s in-house leasing arm is forgoing all April payments on leased equipment. KaTom also negotiated with its leasing partners for better terms for customers during the crisis.

“We’re on track for $40 million in sales this year compared to $30 million last year, so we’ve been running at 120 percent,” Amundsen says. “Now we’re pulling back to 100 percent.”

Some customers, like nursing homes, hospitals or specific chains, continue to do business with minimal effects from the pandemic. Those companies affected but continuing to do business still need products and services from dealers, just different ones.

“Looking at restaurant customers who still need our services,” Burkett says, “the front of the house is irrelevant. But for restaurants still open, health and sanitation are huge. Any products that help them mitigate those issues and help them transition to takeout and delivery are products we want to provide.”

KaTom also is moving in that direction as just one way the company is adapting. “We weren’t very deep in janitorial supplies,” says Patricia Bible, president and co-founder, “and as a company, we went back and forth about whether we should commit to the category. We’ve brought in and sold several tractor-trailer loads of products.”

The company also is focusing more on GSA contracts and becoming part of the government supply chain.

Duray/J.F. Duncan Industries, meanwhile, is considering how its customers will change as the lasting effects of the virus become clearer. “Some projects are delayed and some have been canceled,” Wong says. “Big projects like Dodger Stadium will move forward, but the future is a real unknown. For example, I don’t think hospitality and lodging business will come back soon. People will see they don’t need to travel as often to get jobs done, so hotels will suffer.”

Productive Downtime

Companies say they and their employees are making good use of the time they’d normally spend on day-to-day operations for other productive tasks.

“We’re taking this time to get our house in order,” Burkett says, “like cleaning up the tail end of a couple of jobs, and housekeeping chores like cleaning up the warehouse and our data system. We’re also evaluating what we can do better as a company, such as our e-mail marketing program.”

“We’ve accumulated a lot of used equipment in the past year or so,” Amundsen says, “so in the process of a big spring clean-up in the warehouse, we’re pulling all that equipment and having our service technicians refurbish it for resale.”

“Our sales staff is still busy prospecting and writing quotes in anticipation of the end of this stay-at-home period,” Bible adds. “We’re encouraged by the feedback from customers who expect things to break loose in 45 to 60 days. And our e-commerce team is spending even more hours researching and making available products that customers need now that we didn’t have before.”

Communication is Key

“A lot of downtime is used for talking with customers and working with employees to make sure they’re OK,” Stafford says.

Other dealers agree that keeping employees informed and feeling safe at work is their priority so they can continue providing great service to customers.

“We communicate primarily by text with service and field personnel,” Amundsen says. “Twice a day we send out updates and policy reminders to the staff.” COVID-19 infection cases are still very low in Oklahoma, and he hopes that by keeping staff informed they all can help keep it that way.

Burkett sees an end to the crisis as well. “We’re reaching out to customers to find out how they’re doing, and to remind them that this won’t last forever,” he says. “We communicate with emails and through social media, sharing lots of information both from the company and many of us as individuals.”

That personal outreach is what helps create loyal customers. Burkett also created a special coronavirus page on its website to share the latest information about the crisis and products that can help customers get through it.

Preparing for Future Demand

Though distributors have a realistic view of what the pandemic will do to the foodservice industry in the short term, they’ve adopted an optimistic attitude about their prospects as the country emerges from this period of shutdowns.

“The restaurants that are struggling will likely go under,” Bible says, “but I think we’ll see a lot of innovators crop up in their place, more healthy-eating concepts, more farm-to-table restaurants. And as we begin the recovery, I think there will be a lot of pent-up demand for getting back together with friends and traveling with more heightened awareness and caution.”

Stafford, too, sees pent-up demand building now: “When all this stops, there will be a lot of projects ready to start all at once.”