Dot Foods CEO Shares Road to Food and Beverage Industry Recovery at Innovations
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Joe Tracy took the stage on the final day of Innovations 2021 to present his annual Industry Update.

The Industry Update has become a Dot Foods tradition. Presented every year by our CEO at our Innovations trade show, the Industry Update shares the state of the food and beverage industry as well as Dot’s recent developments. 
 
But this year’s update sounded different from years past. CEO Joe Tracy didn’t shy away from sharing the hardships of this past year, including the impact on Dot’s business. From the jump, Tracy addressed the toll that COVID-19 took on everyone: “COVID didn’t start at a specific time or a specific day … It’s fluid, it evolved. It’s like a virus because it is. It really impacted all of us.”
 
Under the strange circumstances of the pandemic, however, different technologies and strategies emerged as solutions to drive business forward across multiple segments of the food and beverage industry. We’ll recap just a few of the industry challenges and opportunities covered in Joe Tracy’s Industry Update. 

 

Labor Shortage

 
The labor shortage was a common theme throughout this year’s show. As Tracy put it, “The big barrier to recovery is labor. It’s not just independent restaurants; it’s big national chains as well.”
 
With disposable personal income at an all-time high and savings at a forty-year high, consumers have money to spend, and that’s resulted in pent-up demand for the foodservice industry. However, the workforce hasn’t returned to help meet demand. COVID-19 concerns, more retirements, childcare, stimulus checks, and unemployment benefits are still keeping many people at home. 
 
Restaurants will need to raise wages to attract and retain employees. The good news, according to Tracy, is that foodservice employment is expected to grow in the coming years, but restaurants should prepare to employ less young people and more workers 65 and older. 
 
A shortage of truck drivers has been a common theme at Innovations for the past few shows, but the pandemic accelerated the issue. The trucking industry is losing young drivers, and more drivers are interested in becoming owner operators. Tracy predicts that high insurance rates will also take a toll on the transportation business in the coming years.  

 

Technology

 
Labor shortages, pent-up demand, and higher costs have already impacted consumer experience, but advancements in technology offer a path forward. “Foodservice needs to embrace technology,” advised Tracy.
 
The pandemic transformed how people order food. Consumers want to use their mobile devices. Taking advantage of mobile technology will help restaurants reduce the need for labor. On the grocery side, click and collect business has boomed. 
 
When it comes to automation, Tracy is looking to restaurant chains to lead the way in foodservice. Independent restaurants lack the capital to make significant investments in automation, but chains can take the first steps to explore the technology to reduce labor, speed up service, and improve consumer experience. 
 
The food and beverage industry benefited the most from ecommerce and delivery services this past year. Still, food and beverage only make up a small segment of ecommerce. Tracy identifies ecommerce as another avenue for future industry growth. 

 

What’s Next for Dot? 

 
Tracy outlined the plans for Dot to continue optimizing their service, but he knows there’s a difficult road ahead. “We’re not immune to what is going on in the industry … We’re working on solutions, but it’s not going to be fixed overnight.” 
 
Our vision to enhance choice remains strong. Dot is focusing on ecommerce and product integration services to help our customers and suppliers have more options for buying and selling products. With our recent acquisition of ShopHero, we look forward to expanding these services to retail. 
 
DotFoods.com/Shop, our new ecommerce website that is currently available to most of our foodservice distributors, will position us for growth in the digital marketplace. The website provides better product information to our customers. “We have some of the best product data, but we have to take it to the next level,” explains Tracy. “We have to have videos and images—not one image but five images. We have to get better if we’re going to be able to help our partners compete in a digital environment.”
 
Like nearly everyone in attendance, Dot is also struggling with recruitment. Even before the pandemic, plans were in motion to increase automation. As Tracy says, “We’ve been anticipating labor shortages for a while. We started working on automation in 2019. Frozen warehouse automation is planned to launch by the end of next year.” He also discussed plans to automate parcel fulfillment after seeing a fast increase in parcel volume this past year. 
 
Last but not least, Tracy announced that Dot will open our thirteenth U.S. distribution center in the Southeast in 2023. A new location will position us to tap another labor market and provide better service. 
 
At the Industry Update and other Innovations seminars, the message was clear: Our industry has a long way to go to stabilize the supply chain, but innovation will get us through. Speak with your Dot representative if you have questions about our service or would like to investigate new opportunities for your business. Dot Foods customers, suppliers, and national account operators can hear Joe Tracy’s next Industry Update at Innovations 2022 from April 27-29.