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Foodservice distributors ask for help to keep on trucking

The industry's food haulers say they don't have the cash flow and capital to continue supplying restaurants and noncommercial customers.
Photograph: Shutterstock

Foodservice distributors have asked President Trump for financial assistance to offset the blow of their customers’ free-fall in sales.

“The closure of restaurants, schools and businesses across the country has created severe financial hardship both for operators and the foodservice distributors that supply them,” Mark Allen, CEO of the International Foodservice Distributors Association, said in a letter to the president. “We are writing to you today to ask for your assistance to increase access to capital to help these critical businesses weather this difficult storm.”

Allen said that providing assistance now will help the foodservice industry return to regular operations once the crisis has passed.

He also noted that healthcare facilities and other critical customers continue to function, but sales overall have fallen below a level that enables distributors to service those accounts. “Distributors must continue to operate their warehouses and transportation operations in order to service their remaining customers yet experience a reduction in cash flow, available cash reserves and borrowing capacity,” Allen wrote.

He did not specify how much the distribution community would need in assistance.

A disruption of distribution functions could complicate the efforts of restaurants to offer delivery and takeout service.

Food companies that supply the restaurant industry have been largely mute about their abilities to continue supplying restaurants amid government directives to keep employees home.

Tyson, one of the industry’s largest suppliers, is an exception. “We are working to help ensure no disruptions to our food service customers.” Scott Rouse, Tyson’s EVP and chief customer officer, said in a statement to FSD's sister publication Restaurant Business. He noted that the company has shifted some of its production to its retail lines as a way of enabling retail consumers to stock up on supplies before they self-isolate in their homes. But the protein company’s leaders “are continually adjusting our approach in our plants as we learn more,” Rouse said.

Sysco declined RB's request for an update on what the industry’s largest distributor is doing to ensure restaurant customers receive supplies. US Foods, the second-largest distributor, did not respond to an inquiry about what it’s doing.

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