Caroline Perkins of The Foodservice Content Company recently caught up with Tom Zatina, president of McLane Foodservice Distribution, to talk about industry issues and the upcoming ’09 IFDA Distribution Solutions Conference. Mr. Zatina is the chairman of the conference, which takes place in Baltimore, MD, October 19-21.
CP: Why do you think it’s important for foodservice distributors — and other food distributors – to participate in this conference?
Tom Zatina: I think keeping track of change is a big aspect of why distributors should go to this conference. Things do not stay the same. Certainly over the course of the last year, we’ve seen that amplified. In order to keep pace with change, keep track of it and understand it, you really need to participate in outside events to see what is changing. You come, you look, you leave, you share with others. Through all of that, you get a little better at what you do.
CP: Do you think change is occurring faster now because of the economy or improvements in technology – or both?
Tom Zatina: I think it’s both. I think most recently some of the economic factors have had a bigger impact. Certainly fuel played a major role and had a lot of focus a year ago. Now it is not as major a player, but it will be again and it’s something we all need to be concerned about. It drives us toward efficiencies. It drives us toward figuring out how to get better mpg [miles per gallon], better cube on trucks, things like that. I think that the whole economy and what it’s doing to the restaurant industry needs to be taken into account.
At McLane, we do a lot of QSR and casual dining business. Those sectors have not been impacted as much as other sectors in the restaurant industry. But, all in all, traffic is still down. Understanding how the economy is going to change is a big part of what we do.
CP: It’s hard to predict sometimes?
Tom Zatina: It’s real hard to predict. Technology helps and it’s moving along, but I have to tell you, in the last year we’ve reacted more to economic changes – whether it’s commodity pricing or the cost of fuel or other things – than we’ve reacted to technology. We’ve kind of stayed the course with our plans to do things there.
CP: When you think about all the issues related to operations and logistics, what are the biggest challenges you see facing distributors in the near future?
Tom Zatina: First of all, costs across the board are going to continue to go up, whether it’s fuel or other things. Some of the biggest challenges are things like drivers. Right now, we’re not talking a lot about driver shortages because the economy has eased up on that particular aspect of the operation, but we’ll be talking about it again in a year or so. There just won’t be enough drivers to do the work and that’s going to be a huge impact for foodservice distributors or any kind of food distributors, really, because most of their goods are moved by truck.
CP: It seems like that was a big issue a year ago – driver shortages – because some prefer long hauls, they don’t want to stop and go and unload all the time.
Tom Zatina: It depends on the driver. Some actually like local runs. They like the idea of working for a company where they can be home every night. But you also have drivers that want the long hauls, too. So, the fact is there just weren’t enough drivers and just about any operation that used Class One CDL qualified drivers did not get as many as they needed. Generally, that’s not true right now. Business is off, which means there is less demand and there are more drivers around because of it.
That’s going to change and we’ll be facing the driver shortage. One of the challenges we have here is being competitive with our drivers, making it a great place to work and being a driver-friendly company. I’m sure other companies are doing the same thing.
Another thing we think a lot about is the overall energy cost in general, about what’s going to happen. I know we’ve talked before about some of the things companies are doing to cut energy costs, but I think we’re going to continue to focus on that and do that in the future.
Another thing I think is worth talking about is the whole ergonomic side of things. Safety is an expensive item for all companies. When people get injured, it’s extremely costly to the company. Some issues are tied to that that probably need even more attention.
For instance, what’s the maximum a case should weigh? If you run a chicken company or a beef company or a rice company, what’s the maximum your case should weigh? Some places like to make their cases as big as possible, but the larger they become the harder they are for distributors and restaurant workers to handle. One of the economies people go after sometimes is putting more in a case. That’s something we have to keep our eye on.
CP: Not necessarily a good idea?
Tom Zatina: Well, it’s a good idea from somebody’s point of view, but if people can’t handle them, it becomes undesirable work. You have too many injuries. Then you have a whole other challenge.
CP: What will happen to distributors who are not looking for ways to achieve efficiencies?
Tom Zatina: Well, to the extent that other distributors find those efficiencies first, they will find themselves at a competitive disadvantage. If you’re at a competitive disadvantage over time, that can hurt your standing in the business.
CP: Overall, are there any specific opportunities for improvement for the industry as a whole?
Tom Zatina: Technology is still an opportunity for us. The foodservice industry is just now focused on taking advantage of bar coding and things like that. Obviously, the traceability requirements are going to force us to do a little bit more in tracking cases. I do think that’s an area we’ll spend more attention on and spend more money trying to do the right thing. I think that technology will get more play.
One more thing we’re going to spend a lot of time and attention on – and a lot depends on what comes out of our legislation – is what they are going to do with fleet standards and related issues. That’s becoming a bit of a concerning challenge. We’re all spending time and attention getting green and making sustainability a part of our business. I think that’s something we have to pay attention to.
CP: Some companies will be coming to the 2009 conference for the first time and some are veterans who’ll be returning. How can they make the most of this Conference and Expo? Do they send more than one person? How should they plan their time?
Tom Zatina: I think they should send more than one person and send people from more than one discipline in the organization. When people go to something like this, it’s really only as good as they make it. It’s about talking, listening, learning and sharing. A lot of value comes out of talking to other people, getting your eyes on something. It’s a great opportunity to ask questions and to mix with your peers from other companies in the same industry. You find out what other people are doing.
Over the years, I’ve learned so much by asking the questions as opposed to waiting for someone to come to me with the answers. There are so many people who will be there. If you just take the time to say “How do you do this?” or “What’s different” or “What do you recommend?” you will learn invaluable information.
There are a lot of people willing to share. There are a lot of companies that exhibit at the Expo. Start asking questions about their products and about their services and why they do it that way. There is learning that can take place. People should take advantage of that.
CP: What about a company that hasn’t previously attended?
Tom Zatina: I say come and try it. You will find something worthwhile there. Why wouldn’t you want to at least try? Wouldn’t you at least want to explore how much you can learn by picking the brains of a few hundred other people?
CP: I guess that’s the basic question: Why wouldn’t you?
Tom Zatina: Yes, why wouldn’t you? Come and try it. It’s there for you. It’s a ripe peach just waiting to be picked and enjoyed.
CP: That’s a great image. Any other thoughts for our readers?
Tom Zatina: If you look at foodservice, with restaurants getting less traffic right now, I’m not certain how long that’s going to continue. It’s safe to say that throughout the rest of this year there will be some reduced volume. We’ll have to see what happens in 2010.
The Conference takes a great think-tank approach. You can figure out what others are doing and talk about critical topics. As long as volumes are under pressure, we’re going to have overcapacity in our industry. That overcapacity is going to lead to companies needing to react to it. The ones that are well capitalized are going to run at normal and ride it out. But some are going to be under duress. They have to figure out what they’re going to do. The IFDA Distribution Solutions Conference is a good place to do that.
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