May 13, 2005
Distributor delivers the goods
Visalia firm caters to food service industry with efficient operations, attention to customers.
Source: Diwata Fonte / The Fresno Bee
VISALIA - Manuel Herrera spends his days delivering french fries, Pine-Sol and 6-pound cans of country sausage gravy.
"For me, this is the perfect job," he said from inside the cab of his refrigerated truck.
Herrera, a 12-year employee for Valley Food Service, is one of 25 workers who help the Visalia company distribute its 5,500 products to minimarts, restaurants and schools up and down the Central Valley.
||Manuel Herrera gathers goods for his delivery route Wednesday at the Valley Food Service warehouse in Visalia. Valley Food, which has seen double-digit sales growth in the past three years, distributes more than 5,000 products throughout the Central Valley.
In an industry that is considered competitive and low-margin, Valley Food has enjoyed double-digit sales growth for the past three years through fine-tuning, larger orders, technology and customer service, according to owner Steve Singleton.
In the past year and a half, Valley Food also has expanded its coverage area to include Madera, Merced and Stanislaus counties, Singleton said.
The company now sells $10 million of products a year, with about 30% of its business coming from 70 school districts. For instance, Valley Food delivers the bean and cheese burritos that Tulare Western High School students buy at their 10 a.m. break.
Like larger competitors such as Sysco Corp., the Visalia industrial park company supplies food to businesses that serve up hamburgers, tri-tip and deep-fried breaded gizzards ($1.89 for a small order at Stanley's in Tulare). It also supplies them with dry goods such as napkins, cups and cleaning supplies.
With more people eating away from home, food service distribution is a growing, but competitive, business. Many restaurants, cafeterias and minimarkets are supplied by multiple distribution companies with visits many times a week.
The industry, which includes companies that supply to chains, racks up more than $196 billion in annual sales, according to the Virginia-based International Foodservice Distributors Association. But like grocery stores, which are known for counting a small percentage of their sales as profit, "the food service business is a penny business," said Steve Potter, the association's senior vice president of industry relations.
Smaller companies must pay special attention to inefficiencies and possibilities for errors, he said. An eight-step process gone wrong can take 27 steps to correct.
"If they don't do it right the first time, it'll cost them three times as much to correct the mistake," he said. One industry study found that one error, such as delivering the wrong product, can cost from $60 to $240, he said.
As a way to compete, Potter said, buying groups, like Valley Food's Golbon, have become more popular in the last 20 years, helping small companies to compete with larger corporations. Because such groups buy more products, they get lower prices.
Companies big and small also have been paying special attention to technology, what Potter calls "the great equalizer."
Valley Food in the past year overhauled its computer system to better track inventory, analyze routes and project how much workers will need to order, said General Manager Erinn Taylor. The company also now processes reports of its operations, such as buying histories, which it can give to its sales team, he said.
Before the overhaul, it would take Singleton four hours to make out one of the company's larger orders for paper goods, disposable products and other dry goods.
Now, it takes the company 30 minutes, Taylor said.
||Valley Food uses computer technology to track its carbonated juice beverages and thousands of other products.
In reaching its long-term goal, Singleton said that Valley Food will be looking for a larger building as well as other technological improvements such as hand-held scanners that will be able to record inventory immediately when it arrives.
Company officials also are networking with the Visalia business community, and Valley Food recently was nominated for the Visalia Chamber of Commerce's Small Business of the Year award.
Another source of growth is expanding business from existing accounts, which is easier to do after a competitor makes a mistake.
Melissa Ward, owner of Mearle's College Drive-In in Visalia, recalled one incident when another food distributor forgot to deliver french fries to the landmark restaurant.
"We use a lot of french fries, a lot of french fries. … They didn't even send us a case!" she said. "I was in shock to be treated that way."
Valley Food brought over a supply of shoestrings on a Sunday, and now the Visalia company has about half of the drive-in's business, she said.
While the popular restaurant still buys products from competitors such as Sysco, Ward feels indebted to Valley Food for service like that.
"We have given them almost every bit of business that we can."