Food Servicers Launch Direct-to-Consumer Offerings

Most consumers have never purchased anything from a food servicer directly, but that has suddenly changed. This morning, PepsiCo launched two new websites, and, where shoppers can purchase food and beverages directly from the company with over $67 billion in annual sales. Food servicing giant Sysco has launched, its first direct-to-consumer offering since the company was founded 50 years ago. Sysco has a similar footprint to Pepsi, with annual sales exceeding $54 billion.

“In these uncertain times,” explains PepsiCo’s Gibu Thomas, “more consumers are using eCommerce channels to purchase food and beverage products.” The transition is extraordinary for even the industry’s oldest companies. Founded in 1946, Baldor is now offering home delivery services of its food products. Nicky USA is now offering delivery for the first time in 30 years. The same goes for Ace Endico, founded in 1982.

More examples abound among food industry giants. “In our entire 95-year company history, we’ve never seen anything like this happen to this industry,” said an executive at Cheney Brothers, a restaurant logistics company in Florida which is allowing customers to purchase food directly for the first time in almost a century.

Even previously exclusive, high-end food servicers have launched direct-to-consumer offerings. Black Box Meats, a meat supplier for Michelin-starred restaurants in Las Vegas, now offers home delivery for the first time in its existence. The changes comes amid a flurry of Michelin-starred restaurants offering curbside pickup, from El Ideas to Acadia to Alinea

Prior to COVID-19, The Chef’s Warehouse sold approximately $2 billion annually to New York City restaurants. For the first time ever, customers can now order directly from its website. In Ohio, Chef’s Garden has been supplying food exclusively to restaurants for 30 years. Today, customers can order directly.

The change from enterprise to consumer sales is a radical shift for many of these companies. Although experienced in logistics, most food suppliers have never operated supply chains targeting consumers. Even building a website can be a challenge, especially in such a short time. “We had our IT team working around the clock, but we have done it,” said John Magazino of The Chef’s Warehouse. Many of Magazino’s competitors in New York City have also added direct-to-consumer offerings, such as Pepper Pantry, Natoora and Pierless.

“In 15 years I’ve never seen anything like the last few weeks in the local food market,” said Simon Hartley regarding the enterprise food industry in Pittsburgh. Although Hartley expected demand to collapse as restaurants closed, his company’s new direct-to-consumer website more than made up for restaurant losses. His company’s total sales are “up almost 200% in the pandemic crisis.”

Photo by Brittani Burns on Unsplash

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