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.”

We've basically been able to stay open because we've transitioned to direct to consumer. Bonnie Miluso, CEO, Napa Nuts

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.”

Andy's employs 70 people, with about a dozen of them working in wholesale, he said. Skikos said some of the wholesale staff have moved to the grocery store, avoiding any layoffs.

“We're so very lucky and fortunate to have our retail store that helps support us in the wholesale side,” Skikos said, noting the obvious increase in shoppers.

“A lot of the customers become like family to you, so it's easy to spot some of the new people,” he said, crediting Andy's loyal shoppers who took to social media to encourage others to visit the grocery store, resulting in increased foot traffic and volume.

Forced to make a new plan

Sheana Davis, chef, cheesemaker, caterer and culinary educator, has been forced to rewrite the business plan for The Epicurean Connection, her 15-year-old company that serves Sonoma and Napa counties' hospitality industry.

Since the novel coronavirus outbreak, Davis estimates she has lost 80% of her business. The company had been 100% wholesale.

“I could see this coming down the pipeline because I lost my international contracts immediately,” she said, referring to the COVID-19 outbreak that started in Wuhan, China, toward the end of last year, then spread through Europe before striking the U.S.

Catering events subsequently dried up, and participants in her culinary classes started canceling.

“Our last day of cheese deliveries was March 5, 2020,” she said. “We delivered to our chefs, Kendall Jackson, John Ash & Co., Sonoma Fairmont Mission Inn, Thomas Keller Restaurant Group, Andaz Hotel and Silverado Resort.”

The Epicurean Connection then closed for a month to recalibrate.

“It was time to rewrite my business,” she said.

Now the company is 100% focused on consumer business, delivering food two days a week to approximately 40 homes in Sonoma and Napa counties. She prepares the food at a licensed and insured commercial kitchen at Sonoma Community Center every Tuesday, and hopes to add an additional day to cook.

Davis also is preparing to launch a Saturday morning takeout service, where people can preorder and pay for their meals, then drive through and pick them up at her 2,000-square-foot facility in the town of Sonoma. She will prepare and package the food at the community center.

“In addition to our prepared food, we will be adding provisions - flour, yeast, salt, baking powder, beans, honey and more,” she said.

Davis also unearthed her email list from when she ran a café years ago, and sent the first one out on April 1.

“We have redirected the email to feature our shelter-in-place food delivery, recipes to make at home and a bit of personal tips from our team. We use Facebook, Instagram, NextDoor and Sonoma Valley Visitors Bureau.”

Davis plans to resume teaching classes and is getting ready to host them through Zoom video conferencing. She also is on the verge of locking up consulting work with two area nonprofits.

At the same time, she is working on securing more funding.

“We have not qualified for the PPP loans yet, and I've applied for a few grants” she said. “Luckily, my international travels last year allowed me to have some savings, thankfully.”

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