Putting the warehouse on the road
Aug 1, 2005 12:00 PM, By Gary Macklin
Making a produce sale in the foodservice business often depends on the ability to show product to a chef. Produce purchasing is such a hands-on, what-does-it-look-like process that some customers hesitate to purchase from a simple product list, says Kelly Haden, sales manager for the Chefs' Produce branch in Dallas, Texas. “We're sure we can boost sales by making sure customers know what we have available, especially when we have something new and special,” he says.
The Dallas operation is a branch of Chefs' Produce, based in Houston, Texas. It is a company run by chefs for chefs, founded by two partners, Gerard J St Laurent Jr and Owen Torres, both formerly practicing chefs. St Laurent was trained at the Culinary Institute of America. “People outside the restaurant business sometimes have to think twice when we tell them I am a CIA graduate,” St Laurent says.
The company was founded as a value-added food processor to supply restaurants with chopped onions, celery, carrots, bell peppers along with salad items such as carrot sticks and broccoli florets. The idea was to make restaurant kitchens more efficient by removing labor from the process. The company was known as Any Way You Slice It Inc. That is still the official name of the corporation, but by 1981 it has evolved into a full-line produce house known as Chefs' Produce. “We had an idea, and we saw an opportunity,” St Laurent says. “This whole business started with about $5,000 and one truck apiece from Owen and myself.”
Demonstrating product has always been an important part of selling produce, Haden says. “At the simplest level, that means putting a couple of cartons in the car and driving around to customers,” he says. “If we're extremely lucky and find a chef with some extra time, we can get the customer to come to our facility and take a tour. Since February 2005, we've had what may be the best solution yet — we take the warehouse to the customers.”
That mobile warehouse is a custom-designed Dodge Sprinter commercial van, fitted with custom insulation, a Carrier Transicold Integra 30S refrigeration unit that cools the interior to 42° F, and 44 stainless steel display bins along the walls mounted on custom aluminum racks. The interior of the van is brightly lit to show produce to its best advantage. A built-in table allows Chefs' Produce sales personnel to demonstrate how to cut and display produce. Marketed through Dodge dealers, the Sprinter is a Mercedes-Benz product with Mercedes-Benz powertrain components.
Just one of the Sprinter vans is in service now, but Haden says he can envision using a number of them as actual route-sales vehicles, selling inventory as they travel. “Our purpose with the van right now is focused on sales,” he says. “We want to showcase the items mentioned in our weekly newsletter to potential customers. We set up appointments with customers, and I drive the van to meet our sales representative at the customer location. We schedule no fewer than 12 sales calls a day, running from 8 am to 3 pm. We give away a lot of samples during the day; although some customers want to buy right from the van.”
Short inventory cycle
In Houston, Chefs' Produce has expanded its warehouse to 35,000 sq ft. Even with added space, Chefs' Produce won't hold any inventory for an extended period. Leafy greens, exotic mushrooms, and berries are stocked in one-day quantities. Hardy produce such as carrots, onions, and potatoes are held a little longer. “We base our inventory levels on customer volume and past sales,” St Laurent says. “We also count on customers to inform us in advance of large functions they need to cater. We keep our inventory under such tight control that a late inbound truck has the potential to cause problems, depending on the content of the load.”
Not every product in the inventory is bought to order. As former chefs, St Laurent and Torres know the attraction of fresh, exotic products to creative cooks. In fact, customers have come to count on Chefs' Produce to offer exotic seasonal products such as fiddlehead ferns in late spring.
Chefs' Produce operates within a tightly controlled distribution area. The headquarters warehouse distributes to metropolitan Houston including Katy on the west side and, on the north side, to restaurants in Conroe and to the country clubs around Lake Conroe, but not Galveston to the south. The Dallas operation, with 14 trucks, serves Dallas, Fort Worth, the Metroplex cities between the two and Denton, north of Dallas.
Opening the Dallas branch in January 1994 added new flexibility to the Chefs' Produce operation. “For one thing, we quickly discovered that freight rates into Dallas are less expensive than service to Houston from the same point of origin,” St Laurent says. “As a result, we now have a lot of our inbound freight delivered to Dallas for final movement to Houston on our own trailers. We have loads in transit every day. We track those loads with our carriers. By the time the inbound loads get to Van Horn, or thereabouts, in West Texas, we have to make a decision whether to route the truck to Houston or Dallas.”
Tracking inbound loads
Chefs' Produce works with two primary inbound carriers. St Laurent is especially pleased with the ability to communicate with inbound drivers. “We like to communicate directly,” he says. “We deal with drivers by name, and they seem to work harder to please us when they are a real person to us, not just a load or a number.
“We really like the capability to follow a truck during the loading process at packing sheds in California. For instance, a shed may be holding up a load for one reason or another. If we don't need that product as badly as we need the items already on the trailer, we will send the driver to another pick-up or just start the load toward Texas. A lot of road drivers will call us about the quality of the product offered at the sheds. If a driver can give us advance information about produce that doesn't meet our standards, we save money and time, while the driver has saved the truck line a freight claim. Everybody wins.”
For some products, trucks don't offer quick enough transit time. Chefs' Produce brings in several products by airfreight on a regular basis. Field greens are one such product. They are packed in foam cartons for shipment and boxed for sale after arrival at the warehouse. Belgian endive is another product that moves by air. Wild mushrooms (traditionally thought of as wild but actually cultivated) have such a short shelf life that they are flown in. In winter, soft fruit and berries are flown from South America.
Changing restaurant trends
The evolution of Chefs' Produce can basically be traced by the changing face of the restaurant scene in Houston. “When we started, the produce business here was in the hands of a few families that had almost always been produce distributors,” St Laurent says. “At that time, Houston had a steak, roast beef, baked potato, and salad restaurant tradition. Suppliers to these restaurants stocked basic items. Specialty produce could be ordered, but most of them kept nothing special in stock, not even red bell peppers. However, things soon changed. Houston was awash in money from the boom of the 1980s. Some of the most creative chefs in the country were coming here to work. These chefs demanded the same variety of food that they could get in New York or Los Angeles. It seemed that money was no object. We set out to capitalize on that trend.”
Chefs' Produce set up an inventory that was heavy on baby vegetables before they became common grocery store items as well as exotic mushrooms. The company led the way to the use of special lettuce as opposed to more common items like iceberg, romaine, or butter lettuce. “We are convinced that Chefs' Produce was a ground-breaker, bringing high value produce to Houston,” St Laurent says. “Our customers came to count on Chefs' Produce for high quality products, a wide variety in its inventory, and impeccable customer service.”
Chefs' Produce was a groundbreaker with its delivery fleet as well. When the company started in 1981, many produce distributors in Houston still used non-refrigerated trucks to make deliveries during the early morning hours. “We have always had a fleet that is 100% refrigerated,” Torres says. “Highly perishable products such as berries and exotic mushrooms need positive temperature control. Because we felt that we needed refrigeration, we took things a step farther and used our refrigerated fleet as a selling point. We may actually have influenced some of the other distributors to speed up in their adoption of refrigerated trucks.”
Small truck fleet
Today the fleet has been standardized on two basic models with most of the new truck chassis purchased from Isuzu. Basic route trucks are Isuzu NPR models rated at 11,000 pounds GVW. These trucks mount 14-foot refrigerated truck bodies built by Morgan Corporation or Hercules Manufacturing Company. For big accounts with large orders, Chefs' Produce uses Isuzu FTR model trucks with 22-foot Hercules bodies.
The 14-foot bodies are cooled by various versions of Thermo King's City Boss, truck-engine driven refrigeration units. The newest of these are the CBci2 HFC units charged with R-134a. The big 22-foot bodies use the diesel-powered Thermo King MD-II refrigeration units. Insulation in all truck bodies is four inches all around. Standard thermostat setting when trucks leave the dock is 40° F.
“We bought the 22-foot boxes for transport work between Dallas and Houston,” Torres says. “Very quickly, we found that we were moving more volume than straight trucks could handle, so we put the big trucks on our supermarket routes. The transport work is handled by a pair of tractors and trailers purchased on the used market.”
Torres is particularly partial to the Isuzu chassis because of the service by the manufacturer. “Isuzu spent time working with us, talking to our drivers, and riding routes with them,” he says. “Over the years, we've seen the results of things they found. For instance, truck doors open wider so that big drivers can get in easier. They also beefed up the clutch for longer life between replacements.”
Expanding customer base
Customers still count on Chefs' Produce for those things that built the company; although, the restaurant business in Houston no longer seems to look at the product line as quite so exotic. The company still relies on fine restaurants and country club dining rooms for about 30% of its total volume. However, Chefs' Produce has broadened its distribution into restaurant chains, schools, hospitals, and retail stores.
Like most produce houses, Chefs' Produce ships at night and receives during the day. Receiving begins at 7 am and ends at 3 pm unless the inbound product is badly needed. Then receiving happens on arrival. If inbound loads are on pallets, Chefs' Produce does the unloading. Road drivers are not allowed to use warehouse equipment.
Most orders are in the house by 9 pm although some stretch out to midnight. A few customers don't order until morning, usually with the understanding that their produce will be shipped the same afternoon when a few trucks begin making second runs. Although regular orders can come in after loading starts, Chefs' Produce still begins loading trucks around 8 pm. “We know some of our customers so well that we can build an order for them even if they don't call,” St Laurent says. “We make up a standard order based on sales history, and the customer can choose what and how much they want when we get there.”
Chefs' Produce loads 14 trucks a night in Dallas and up to 26 trucks a night in Houston. Heavy delivery days are Friday and Monday, while the middle of the week requires lower volume. All the loads are finished by 5:30 am with the first truck leaving the Houston warehouse at 5 am. The last truck is on the street by 6 am.
Handling late orders
Even with orders coming in as late as midnight, the loading process runs smoothly. “The excitement starts when an order comes in at 4 am,” St Laurent says. “Our customers are loyal to us, and we are loyal to them, so we never turn down an order. If the customer can't accept delivery on a second run, we select the product for the late order and put it on the back of the truck for morning delivery. Although we would prefer not to do that, the driver just has to work around the late order until he reaches that customer.”
When loading is complete, the trucks carry 10 to 15 stops. The product delivered at any given stop can range from five to 75 cartons. If a customer orders, they get a delivery, because Chefs' Produce values loyalty. “If a customer buys all their produce from us and has been with us for a long time, we make the stop, no matter how small the order is,” St Laurent says. “Those are the customers we want. We call them 100 percenters.”
Routes are built geographically. Trucks and drivers are assigned to stable routes. That way, the driver gets to know the customers and what they need. Stable route assignment also gives the company the ability to monitor driver performance based on vehicle maintenance costs.
Drivers at Chefs' Produce are highly trained. They spend an average of four weeks in training before assignment to a route by themselves. The first two weeks of training are spent in the warehouse on the night selection crew to learn product types and appropriate handling. The next two weeks are spent with a senior driver learning how to handle the truck, how to deal with customers, and how to prepare paperwork.
“We would actually prefer to hire new drivers from outside the produce distribution industry,” St Laurent says. “We want drivers trained in our way of doing things. Training is easier if the driver doesn't have a lot of habits picked up from another produce company to unlearn. Our training program takes a long time, but it is completely worth every minute. When drivers learn to do things our way, they stay with the company. Fifteen years later, we still have some of the same drivers we started with.”
One result of the methods used by Chefs' Produce is that the product shipped gives the customer an almost 100% guaranteed sale. If customers accept the product at delivery, they almost never have a reason to complain afterwards. “We buy well, use high quality carriers to get produce to us quickly, inspect it carefully upon arrival, store it properly, turn the inventory quickly, and inspect it again before shipment to customers,” St Laurent says. “The likelihood of sending something unusable to a customers is very low. We keep that likelihood low by refusing to deal in distressed merchandise. If a load inbound to Houston has arrived at the wrong temperature or if another wholesaler has refused it, we certainly won't risk our reputation by buying it.”
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