Hungry for business: North Bay food suppliers jump into retail after wholesale dries up with pandemic lockdown
The novel coronavirus' shuttering most restaurants across the North Bay area has created a domino effect for its food suppliers, forcing quick and creative action.
Before the pandemic, Napa Nuts, a family-owned and -operated wholesaler in Napa, was supplying its nuts, dried fruits, seeds and snacks to more than 60 businesses, including several Michelin-star restaurants, such as The French Laundry, The Restaurant at Meadowood and Auberge du Soleil.
Bonnie Miluso and her brother, Schecky Miluso, own Napa Nuts. The siblings in January took the helm from their parents, Al and Maxine, who still helps with the business. Al passed away in September. The Milusos bought Napa Nuts in 1990 from former owners George and Lottie Rosenberg.
When most of Napa Nuts' customers temporarily closed, slashing orders, the Milusos shifted their business-to-business focus to the company's little-used online retail store.
“The online store was something we had developed and it was there, but it wasn't widely used,” said Bonnie Miluso, who also serves as CEO, while her brother is chief operating officer. When the state went on lockdown, they turned to social media, particularly the Help Save Napa Restaurants Facebook group. “We've basically been able to stay open because we've transitioned to direct to consumer. That's most of our business right now.”
Napa Nuts offers free delivery in Napa and Sebastopol (where she lives), free shipping on orders over $50, and contact-free curbside pickup.
The pandemic, however, has eaten into Napa Nuts' revenue, Miluso said. Sales are down 14.5%, compared with last year between Jan. 1 and April 30. The more substantial loss due to COVID-19, however, can be seen in the sales changes between March 15 and April 30, amounting to a 55% sales drop from last year, she noted.
Miluso said the company was able to secure a Small Business Administration payroll protection program loan about a week ago, and late last week received the $10,000 economic impact disaster loan she applied for directly with the SBA.
“(The PPP loan) was less than we asked for, but will greatly help with payroll over the next two months,” she said, adding they received about two-thirds of what they requested.
After the shelter-in-place order went into effect, Miluso had to lay off a number of her 17 employees, a mix of full- and part-time workers. But now, between the growth in online sales and the infusion of funding, she's been able to do some rehiring.
“We have 12 full-time employees back working - this is the same amount of full-time staff we had before the crisis started,” Miluso said. “We expect to bring back most of our part-time staff that is available within the next few weeks.” Two of the laid-off employees since found work at stores considered essential businesses.
“We are feeling confident that Napa Nuts will be able to survive the economic crisis because we have been able to make such substantial changes to our business model,” she said. “The adaptability of our company, plus the flexibility of our staff, has been our salvation.”
Shoppers help make up for wholesale drop
Like the Miluso family business, Andy's Produce Market is a family operation, founded in 1964 by Andy and Kathryn Skikos. Today, the Sebastopol-based company has a retail and wholesale division, managed by the couple's children and grandchildren.
The company's wholesale division supplies fresh produce to about 250 restaurants across Sonoma and Mendocino counties, said Josh Skikos, who serves as wholesale manager and operations chief. But like most food suppliers to restaurants, business has dropped amidst the COVID-19 outbreak. Since shelter-in-place went into effect in mid-March, wholesale revenue is down about 60%, Skikos said.
Andy's wholesale division is still supplying its restaurant clients that have moved to takeout and curbside pickup.
According to Andy's Produce Market's website, “it was Andy himself who had noticed many local restaurant buyers coming into the retail store to take produce right off the racks. So to be better accommodating, he opened Andy's Produce Wholesale in 1993. It serves more than 200 businesses in Sonoma County, including restaurants, schools, office buildings and other local distributors.”
As the COVID-19 outbreak turned into a pandemic, Andy's joined with two other businesses to partner with Santa Rosa-based Third Street Aleworks to launch the restaurant's boxed-groceries program.
“They've been a longstanding customer of ours,” Skikos said. “We met (several) weeks ago and came up with the plan to execute on produce-delivery boxes, which helps our outreach and our community with supplying some of the best quality fruits and vegetables at very competitive prices. And that's really done well for both of us.”