Foodservice Equipment Reports

DEALERS PAST AND FUTURE

"The more things change, the more they remain the same,” is a useful old saw, because it’s often true. But some things do change and it’s critical to know what they are.

I did a fun presentation this past Saturday at PRIDE Marketing’s summer PING/PIKE Forum at the Hyatt Regency O’Hare near Chicago. PING/PIKE is an interesting and useful concept. PING stands for PRIDE Informing Next Generation and PIKE for PRIDE Informing Key Employees. They meet a couple times a year, sometimes together, sometimes separately. This was one of the joint meetings.

I was the kick-off speaker for three days of presentations and interaction. Because I’ve been hanging around this market for more than 30 years, and since I knew the average age in the room was probably early 30s, I thought a bit of history of foodservice E&S distribution and some guesses on where it might be going would be useful to this group of emerging leaders.

So I pulled out my copy of I.S. “Sam” Anoff’s Food Service Equipment Industry: Its Beginning, Its Growth, Its People. This very useful history of the foodservice E&S industry was published in 1972. Anoff was a very prominent person in this industry for almost 70 years. He knew things and he shared them in this book.

Did you know, for example, that the Food Service Equipment Industry Association (now FEDA) was founded through an initiative of Pres. Franklin Roosevelt’s National Industrial Recovery Act in 1933? And that part of the impetus for a foodservice E&S dealer group was to avoid being included with sheet metal fabricators? Or that in the ’30s, FSEI created an “honor roll” of favored manufacturers and set restrictive member rules that the Federal Trade Commission later found “restrained” competition? (FSEI entered into a consent decree in 1941, killed the honor roll and loosened member rules.) Or that a challenge for E&S dealers in those days was that gas and electric utilities would sell equipment at cost as a loss leader to get new customers to use their energy? FSEI gradually talked them out of the practice. So issues of “unfair” competition from what we now call “garage” dealers (they called them “curbstone” dealers) and the manufacturers that sell them have been around a long time. And utilities still work in parallel with dealers and other players in the market, but now it’s to reduce energy usage, not increase it.

But I also showed the group how there has been real change in this market. Nearly all of it has been the result of a single trend: the ever increasing dominance of multiunit operators, with their national and international needs and unique capital goods requirements. This trend has been the key driver of change since the early ’50s and continues to be.

I closed by telling the group that I believe their future is bright, though always dynamic and challenging. I’ve said before that the Great Foodservice Recession has accelerated changes that were happening already. As the U.S. foodservice market matures, many multiunit operators are finding it more cost effective and efficient to outsource their E&S needs to the distribution community. And to use another old saw, “Distribution always finds its most efficient means.”

If you’d like a copy of the presentation—it’s in PowerPoint—send me an e-mail.

Cheers,



Robin Ashton

Publisher

rashton@fermag.com

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