Company Serves Up Fresh-Cut Convenience

Phil and Frank Gilardi have the produce industry in their blood: Their grandfather ran a wholesale produce business in the early 1900s. The brothers have built on that familial knowledge and now own Freshway Foods, a fresh-cut processing company serving the foodservice business.

The Gilardis started the business in 1988 with the intention of focusing on fresh-cut produce, and Freshway Foods has grown from there. In 1992, the brothers built their first new processing facility in Ohio and added a second in 1996. In 2000, they consolidated all of their business to one plant, which today is more than 100,000 square feet. In December, Freshway Foods opened a facility in Sanford, Fla., allowing the company to better serve all markets east of the Mississippi River.

“We’re able to get to every one of our customers within 12 hours,” said Frank Gilardi, who serves as CEO. “We look at ourselves as a strong regional processor, in that we’re a very service-oriented company.”

While Freshway Foods already had some customers in the southeastern United States, opening the Florida facility allowed Freshway Foods to expand its distribution in the area and serve its current customers better.

While being a regional processor allows Freshway Foods to have better turnaround time and get product to its customers more quickly, there are unique challenges when the company goes up against national suppliers.

“One of the biggest challenges we face is getting the word out about our capabilities,” Frank said. “They’re biased toward national processors and growers. We believe it’s our challenge and our responsibility to get the word out about what our strengths are.”

Frank said Freshway prides itself on the company’s ability to match up with any of the national players in the marketplace.

Industry Challenges

Another concern for Freshway Foods is the rising cost of inputs, especially fuel. The company transports its product on its own trucks, which helps Freshway Foods serve its customers better. And to keep costs down, Frank and Phil make sure each load is an equitable size – and that they’re loading the truck to the best of their ability.

“We’re trying to avoid (passing on costs) as much as we can, but it’s going to be difficult to keep from doing it completely,” Frank said. “First, we have to make sure we’re as efficient as can be.”

It’s not just transport to the customers that is getting more expensive. Costs to source products are getting more expensive as well – especially since Freshway Foods is located in the eastern United States and much of the year-round product comes from other regions.

“We’re working on building new grower relationships throughout the United States and throughout North America to source a little closer to home,” said Phil, who serves as president.

In addition to some challenges Freshway Foods is facing with sourcing and distribution, the entire fresh-cut industry is facing increased scrutiny after recent media attention about food-borne illnesses.

“We have to vigorously defend what we do and get the word out,” Frank said. “Whenever we see a potential threat, we need to make sure to address that and not wait until somebody addresses that for us.”

Food safety is a day-to-day concern for the team at Freshway Foods – allowing them to stay on top of the issues before they can even become issues.

Though the industry already uses top-notch food safety practices, there’s always a way to be better, the brothers said.

“We as an industry always have to be searching for, enhancing and deploying best practices within our industry – and even within the entire food industry as a whole,” Phil said. “We always have to be doing a better job. We already do a good job, but we have to be doing better and better all the time.”

As the industry continues to grow, it will be under the microscope even more – with more pressure from the media, the public and the government.

“Because of the visibility of our industry, we’re going to become more scrutinized by regulatory agencies,” Frank said. “That will be a challenge for us, to make sure we’re doing our job on the food safety side and regulatory side. And as an industry, we’re trying hard to do that.”

It’s not just the industry working hard to maintain its high level of food safety practices – Freshway Foods has always prided itself on its high-quality, safe products.

Freshway Foods has strict measures in place to ensure its products are as clean as possible. In addition to being USDA Quality Through Verification-certified at both facilities, the company has Good Agricultural Practices policies in place, tracing all the way back to its growers. Freshway Foods also goes through a number of third-party audits throughout the year. In 2005 alone, the company had more than 36 inspections – some of them unannounced.

“We have such a high level of commitment to food safety that it’s just part of what we do,” Frank said.

Food safety doesn’t just stop once the product is loaded onto trucks. A field sales service support team – located throughout the company’s distribution area – works with customers on handling practices to ensure the food safety chain is maintained.

In addition to its other employees, Freshway Foods has a dedicated quality assurance staff.

Product Mix

A majority of Freshway Foods’ business is in the foodservice sector – though the company is expanding into the retail sector with some of its products.

“Demand for our product is very good,” Frank said.

Much of that demand comes from a lack of labor for preparatory staff. Products, such as those from Freshway Foods, add convenience for the store and foodservice operators.

Convenience for foodservice and retail deli users is as important as it is for consumers.

“The whole convenience aspect and the I-want-it-now American mentality really works to drive our industry,” Phil said.

“Convenience is really driving our market segment, and all of the information says that’s going to continue for quite some time,” Frank said.

Phil said the entire industry – from seed companies to equipment suppliers – is responding well to the increased demand for, and special needs of, fresh-cut products.

One product the team at Freshway Foods is especially excited about is the value-added salad kits. These kits are sold to in-store delis to assemble into individual salads. Everything the deli staff needs is in the box – including the packaging.

“What’s unique is that they’re made fresh in the store,” Frank said. “They appear to be pre-made but are made at the store level. It gives (the salad) an in-store look compared to some of the other things out there that look somewhat manufactured.”

Phil Gilardi said such products represent a huge change from when the fresh-cut industry started in the 1980s.

“You see a lot more sophistication in how the product is grown and selected,” he said. “You go back into the 1980s and these fresh-cut produce places were just a small room of a big distributorship and this was where all the distressed produce went – it was just a way to reduce your losses.

“It’s completely flipped around. I believe, at least in our case, that the premium product is destined for the processor now.”

So, what’s next for Freshway Foods – and the industry?

“First and foremost, all of us must always keep safety as that top priority,” Phil said. “We all must keep quality and innovation up there as well.

“We’ve got to continue to promote the category as fresh produce. It’s fresh-cut, and that’s what the American population wants.”

Learn more about Freshway Foods at www.freshwayfoods.com.