Foodservice Equipment Reports

KEEPING METAL FAB ALIVE

Early in November, we received an email from an industry friend of ours, a marketer who mainly works the manufacturing side of the equipment and supplies channel. “Who are the big fabricating dealers?” he asked. We should have asked him why he wanted to know, but we didn’t. He is a friend, after all. Plus he knew the secret handshake.

With the June 2011 edition of our sister publication, Foodservice Equipment Reports and its FER Top Dealers coverage in mind, we rubbed our collective hands together. Handy answers were right in front of us, and we heaved a huge sigh of relief. We hate the strange and outright bizarre queries we often get, such as, “How many egg beaters you figure there are in North America?”

So we passed along the information from the June issue about big dealers, and which ones fabricate wood and/or metal, and in the process, I ran our list through my own mental meat grinder again. I was alarmed and confused to find that the grid did NOT confirm something I thought was a timeless truth. One of the big dealers, whose metal-fab shop I had stood in some years ago, did not have that block checked off. Ye gads, was there an error in the grid? Or was the shop gone? Or was my mind gone?

After a couple of emails back and forth with one of my personal favorite guys, the answer came out. Sure enough, no more metal fab. It had succumbed to market pressures a while back.

“It’s pretty near impossible to make money fabbing metal these days,” he said, and I felt bad, knowing the family and the business for more than a couple of decades. “And it’s impossible if you’re union and selling to foodservice.”

So there’s a mouthful. Unions make costs higher, and foodservice makes revenue lower. That’s my take-away on that comment. We’ve all known both ends of that statement for a long time anyway, but once again it comes into focus. We here at FER Dealer Report know some big-name folks who make stainless tables, for example, and the only reason they can stay in business is that they make the same table for other industries, and those other industries pay better. So other industries are actually subsidizing our access to basic kitchen products.

Now it’s true that dealers with their own in-house metal fab have always been in the minority. And data crunching gets fishy because of the roll-up/consolidation effect. Today’s Top 50, considering decades of consolidation, is probably analogous to the 1991 Top 100. But even so, it’s clear that there are fewer in-house dealer shops fabricating metal than there used to be. It would sure be good to grow that number again.

Because actually making things gives your market flexibility—not to mention your shot at profits—a huge boost.



Chief Editor
bward@fermag.com