Food Distributor Aims At Big Market

Alan Cochrane-Times & Transcript Staff, December 5, 2000

New company hopes loyalty points program will help generate more customers
Think of all the hotels, restaurants, catering companies and institutions in New Brunswick, Nova Scotia and Prince Edward Island. Now think of the business opportunity involved in providing them with everything they need to prepare, wrap and serve their meals, then clean up afterwards.

It's a big market, worth about $500 million a year, and M&S Food Service of Moncton is looking for a good piece of the action.

"There's definitely a lot of room to grow in this business," smiles company president Russ Mallard. After about nine months of running the business, Mallard and his partner, Eric Sloan, feel they've got their feet wet enough to start treading water. In a couple of years, they hope to be swimming at full speed.

When they started the business earlier this year, Mallard and Sloan had to act quickly. Both were veterans of the food distribution business and eager to start a business of their own. It was the merger of two giants that gave them the opportunity.

"It was an opportunity to do something for ourselves and to run our own business." 

The opportunity came from the merger of the Oshawa group and the Sobeys group. Both groups owned their own food distribution companies. The Serca company was part of Oshawa and Clover was part of Sobeys. Mallard says there was concern in the industry that the merger would create a monopoly of food distribution service in the Maritimes.

Mallard and Sloan saw the opportunity to create a second company that would be smaller but at least offer a competitive alternative. They submitted their business plan to the competition bureau and received the green light.

"We really had to move fast," says Ballard. "It was only the end of February that we found out we had the business and we had to be up and running by the end of March. We had a tight time frame."

They moved into the former Serca food service building on MacNaughton Avenue in the Caledonia Industrial Park, starting out with a warehouse and some clerical staff. But since the Moncton operation was a satellite of the headquarters in Bedford, N.S., they had to hire people and increase the work force from 35 to 60 people.

M&S Food service has about 60 employees, a fleet of specially-built distribution trucks and a sophisticated computer system that allows the company to track incoming product and outgoing orders.

As a food service distributor, M&S (Mallard and Sloan) provides food and supplies to more than 500 hotels, restaurants, institutions and bakeries in the three Maritime provinces.

In operation since March, the company started out with a key group of customers and is now adding new incentives to draw in customers. In the coming months, salesmanship and added value will be a key factor as M&S knocks on doors looking for new customers.

"We carry about 3,000 different items, from fresh produce, meat and seafood to frozen foods, dry goods, baking goods, foam takeout trays, wrapping paper, condiments and just about everything else a restaurant would need," Mallard says. 

Customers can place their orders online. After the order is placed, the items will be picked from the warehouse, placed on a pallet and loaded onto a truck for delivery the next day. The trucks used by M&S are of the "multi-temperature reefer" variety, with separate sections for frozen, refrigerated or dry good transport. This means that a customer who orders frozen vegetables, fresh beef and a load of napkins will have everything delivered by the same truck.

"But we realized we needed to be different and offer unique services to our customers."

Mallard said his strategy is to gain confidence in customers, offering them added value to the service to give them more of a connection to their supplier.

"We want to provide service to the industry. If there's anything we can do to help them out or make their lives easier, we want to do it," he says.

M&S recently entered into a partnership with dineaid.com, an Internet company specializing in promoting hotels and restaurants. Through this association, M&S is offering customers two levels of membership and a customer loyalty program which allows the customer to gather points. Those points can be used toward services offered by M&S to its members.

Membership offers customers a place on the dineaid.com web site, which has a listing of restaurants throughout the Maritimes. It also provides such things as gift certificates for individual restaurants and comment cards for their customers. It also features different chefs and their favourite recipes.

Through the dineaid connection, restaurant customers of M&S can get online access to the M&S ordering system. This allows restaurants and catering companies to browse through the online catalogue and place their order. Mallard says this type of ordering saves time and allows the restaurant to better control its inventory, which means less waste.

M&S has also put together seminars by Wayne MacKay of Bottom Line Menu Tools. MacKay, a restaurant consultant, uses methods proven effective by big franchises to help independent businesses cut costs, reduce waste and improve their bottom line.

M&S has also struck a deal with Future Shop which allows members to purchase electronic items like stereos, televisions and computers for their business. Loyal customer points can also go toward membership fees in the Canadian Restaurant and Food Services Association.

"We want to make customers feel like they did the right thing by coming to us. We started this year with a core business and now we're ready to accommodate new customers," Mallard said. "We started with a base of independent restaurateurs and institutions and there's a lot of room to grow, with independents and with chains."

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