(Bloomberg) -- Franco Fubini, who founded fruit and vegetables seller Natoora Ltd., is used to charging celebrity chefs a premium price for carefully tended produce, like white peaches from Italy, Sicilian pomegranate and Essex heirloom tomatoes.
But in the past week, sales have evaporated. As shoppers empty supermarket shelves of pasta and dried beans, wholesalers like Natoora, which buys from more than 400 farmers in Europe and the U.S., are struggling to sell food that would normally go to restaurants and hotels.
“The situation is unthinkable,” said Fubini in an interview from New York. “Here in the U.S., the situation is very critical for small farmers. Very critical. It’s incredibly, incredibly challenging.”
Many suppliers are trying to sell food directly to consumers, but it takes time to rejig complex supply chains and deal with new storage and distribution requirements.
Natoora, which supplies David Chang’s Momofuku Ko, London steakhouse Hawksmoor and Gordon Ramsay's restaurants, said it’s giving away unsold food to charities and churches. It's also trying to sell more produce in stores and started a food-delivery app for households as a way to recoup some lost revenue.
Still, it takes a lot of new retail customers to replace a restaurant. A medium-sized neighborhood eatery in London buys about 100 tons of fruit and vegetables a year, Fubini estimated.
“Our revenue in Paris has gone to zero, our New York revenue has gone pretty much to zero,” said Fubini. Restaurant sales account for about two-thirds of Natoora’s revenue, which was expected to be 45 million pounds ($52.8 million) this year. He’ll likely lose a substantial part of the business because of the virus, he said.
Bravo Italy Gourmet, which exports Italian food primarily to Middle East restaurants and caterers, would normally sell 3 tons of cheese a week. Those shipments have now gone to zero.
“Demand is decreasing for all the goods, except for supermarket goods,” said Federico Tanasi, Bravo’s chief executive. “We didn’t see this, never before, a problem like this.”
He’s trying to find new routes for cheeses, like wheels of Grana Padano and Parmigiano-Reggiano that are handmade in Italy’s Emilia Romagna region. Starting next week, the company will try trucking food from Italy to Luxembourg, and fly it to Kuwait. But exports will still be well below normal and the longer trip means the food has shorter shelf life.
Ortaggi Ltd., which sells wholesale at the New Covent Garden Market, has lost as much as 70% of its orders from hotels, said Jaime Suarez, the co-owner. The company is also now trying direct-to-consumer sales online, charging 30 pounds for a two-person household bundle of bread, milk, eggs and fresh produce.
“I have been in the hotel supply business since 1990 and I have never seen anything like this before,” Suarez said. “There is no business at all.”
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