COVID-19: Counting the Cost
Specialty Food Association President Phil Kafarakis says big thinking is critical to help small businesses get through spring, summer months
Editor’s Note: The Specialty Food Association (SFA) represents as many as 4,000 independent specialty food companies. Its two annual conventions—the Winter Fancy Food Show in January and Summer Fancy Food Show in June—prove to be key scouting opportunities for those manufacturers, retailers and foodservice operators interested to preview food and beverage trends.
Before the coronavirus pandemic forced the cancellation of multiple food and beverage conventions, SFA was able to host its Winter Fancy Food Show January 19-21 in San Francisco’s Moscone Center. Now as SFA officials consider the organization’s annual June Summer Fancy Food Show in New York City, Prepared Foods spoke in late March with SFA President Phil Kafarakis.
A 38-year food industry veteran, Kafarakis has held sales and executive leadership positions at meat processors such as Oscar Mayer, Kraft Foods, Jones Dairy Farm and Cargill Meat Solutions. He also led McCormick & Company’s foodservice division before joining the National Restaurant Association in 2013 as chief innovation and member advancement officer. He later joined SFA in 2016 as the organization’s president.
Prepared Foods: Let’s start on a positive note. SFA hosted its annual Winter Fancy Food Show this January. It proved to be one of the industry’s few big events before a wave of COVID-19 related closures. In hindsight, what can you tell us about that show?
Phil Kafarakis: It certainly is unique as the first food show of the year. By the numbers, we registered more than 1,400 exhibitors and hosted more than 30,000 attendees including buyers and distributors. We also had more than 680 members of the press.
It is a West Coast event and interestingly, we find that only about 25% of our attendees go to both our shows—the one in San Francisco and the one in New York. This Winter Show was one of our biggest from a new products standpoint and we also showcased several exciting categories. For example, we welcomed and partnered with the Plant Based Foods Association and the Fine Chocolate Industry Association. With our presence in California, there also was some overlap and involvement with companies showcasing cannabis products.
I’d note the big thing for us involved our new SFA branding and approach to membership and benefits, which debuted last October. I think that opened peoples’ eyes and created a new environment. In conjunction, for example, we created levelUP, a new program—with dedicated meeting rooms, concierge service, tastings and more—so buyers could schedule meetings, create their own agendas and work more efficiently as well on the show floor.
Finally, I’ll note that we’re seeing more involvement from healthcare and foodservice operators who come looking for more innovative products. Going back a few years, we created a “Foodservice Pitch Competition” (now called “Front Burner Pitch”) and that’s become very popular.
PF: What’s the latest news with involving SFA’s Summer Fancy Food Show, June 28-30, at New York City’s Javits Center?
Kafarakis: We haven’t finalized a decision as of today (March 30). It’s difficult, of course, because we’re about 12 weeks out and this normally would be a heavy promotion time. Now they’ve actually converted the Javits convention center into a field hospital with 10’x10’ beds where our 10’x10’ booths would be. Meanwhile, we already know we’ve lost our normal international visitors.
We also have a fiduciary responsibility to protect the Association so we can continue to serve members. There are business nuances that we are working through with Javits and our legal team. Working through our business obligations is complex and the events at Javits are out of our control. Their operation as a hospital doesn’t even have an end-date at this point.
Even so, we realized that we needed to get some messaging out to our members and everyone in the industry. We filmed a video a few days ago (March 27) and posted it to our YouTube channel.
We’re telling our members, “Stay safe and stay focused on our business, your employees and your community. Let us worry about the show.” We knew that once the National Restaurant Show and Sweets & Snacks Expo cancelled, people would become more anxious. This is nerve-wracking time. Our members are keeping their heads down, making products and shipping but of course, they want to know about the Fancy Food Show.
Ultimately, if our plans change, our most immediate action will be to refund our members’ money back with no problems. Credit or cash. We need to get them their money. That’s who we are.
PF: What happens next?
Kafarakis: I can’t say exactly but we would want to do something in the fall. It could be a different venue or perhaps combined with something else. We would like the opportunity to showcase SFA’s Hall of Fame our annual sofi™ awards and our industry research. We also would be very focused on our business program with meeting space for buyers to come set appointments.
I’ll note that we wouldn’t want to get too far into the fall and take away anything from next year’s Winter Fancy Food Show. San Francisco’s Moscone Center completed an expansion this January and we were able to use new portions of that building. For the record—and for next year—the Javits Center is growing too.
PF: We do see that SFA’s website has quite a bit of COVID-19 related content. You have an “Ask the Experts” webinar series and a COVID-19 news and updates section.
Kafarakis: Yes indeed. More than anything, this is a time when we should be helping our members in truly meaningful ways. Last year, in conjunction with new branding, we migrated to an entirely new website with so much free content for members. It has everything—including lists of co-packers, lists of vetted brokers, white papers and other information related to insurance or working with banks for refinancing. Moreover, we’re partnering with proven experts who provide unbiased free insights.
Our “Ask the Experts” webinar series has topics such as “Working with Retailers: Tips for Makers During Challenging Times,” “Insurance Considerations Related to the Pandemic,” and “CARES Act Loans and Grants for Small Businesses.” Many of our member companies have less than $1 million in sales and fewer than 10 workers. We’re keeping things as simple as possible to help them and I’m proud to say that these are very timely topics—even as the ink is drying on the government’s “CARES” guidance.
Elsewhere, we created a virtual press room where members can share new product and promotion news. We have areas dedicated to our news, our awards and even a year-around “Product Marketplace” (www.specialtyfood.com/products). Here, industry buyers can select from as many as 20,000 products listed in as many as 161 different specialty food and beverage categories and subcategories. Visitors can select new products, all products or search by producer.
PF: Speaking of all those new products, we know that retailers, foodservice operators and larger manufacturers all attend SFA’s Fancy Food Shows to scout new ingredients, flavors and product concepts. Do you expect COVID-19 to impact SFA members’ ongoing innovation?
Kafarakis: Unfortunately, I think so. Many of our small companies simply are in survival mode whereas the larger manufacturers—such as those you find at Natural Products Expo West—can afford to keep putting new products out there.
We want to do everything we can to help our members make it back for another day. At the moment, most are more focused on back-end issues related to supply chain and manufacturing. They rely on more outside co-packers and third-party partners so marketing and product innovation efforts have to shift—at least for now—while supply chain issues take priority.
PF: Are more SFA members turning to E-Commerce and direct-to-consumer models? Does SFA help members in this arena as well?
Kafarakis: We have seen more members migrate to direct-to-consumer business. They’re using more social media to communicate to loyal consumers and ultimately, the hope of course is to present strong online sales information to retailers so that they’ll consider buying for actual store shelves as well.
We have brought in experts from Amazon and Alibaba to talk to our members about all the aspects of an omni-channel plan. At our 2019 Business Summit, we most recently featured Robb Powell, president, E-Commerce, at Advantage Solutions. We’ll be completing more new research with Mintel that will be ready to share later this summer.
Visit www.specialtyfood.com for more information.