Warehouse clubs specialize in mass marketing – literally. They offer larger boxes of products, bigger pastries and giant slabs of meat. At warehouse clubs, bigger is better. “We deal with the larger quantities of products – a 64-ounce bundt cake, 24 mini-croissants,” says Marc Garcia, co-owner of Pacific West Foods Distributing. “Most of our breads are not sold by the loaf but in a twin pack. As the packages grow in size, the price is reduced.”
These economies of scale enable the clubs and their distributors to shave their margins razor-thin. “We don’t go out at the high 40 percent distribution commission that a lot of companies do when they’re going into a grocery store,” Garcia declares. “We come in a lot less, and it’s because we deal in volume.”
To take advantage of large sizes, Pacific West Foods Distributing is experimenting with bite-sized, individually wrapped single portions inside large packages. After all, if you don’t have an army to feed, you might not finish that 18-inch apple pie before it goes stale.
Garcia will offer sweet goods – such as cinnamon rolls, Danishes, coffee cakes and pieces of cake – in single portions he calls All-American Big Bites, but sell them in bulk quantities. So customers can get individual portions at bulk prices.
“You buy them 12 at a time,” he explains. “They’re very inexpensive and individually wrapped. You can throw them in the kids’ lunch boxes, and mom and dad can pack them for their drive to work.”
The single packs also can be put out at functions like picnics, where the individual wrapping will keep them fresh during the afternoon and less attractive to pests. They can be sold individually at community fundraising bake sales or in vending machines. “We see an opportunity, and we’re going to try to take advantage of it,” Garcia says. “We’re talking to other companies – I’ve got 30 different items in design.”
On Ice
Pacific West Foods Distributing handles a wide variety of baked goods and breads along with baked Mexican specialties such as tamales and burritos. The company has on-site freezer warehouse space and seven trucks. “Four of our trucks can haul ice and keep products frozen,” Garcia notes. “Our capabilities of distribution are really endless. We can do anything.”
Garcia admits that few products Pacific West distributes need refrigeration, but the capability has opened up opportunities for trucking products for other customers through Arizona heat. “A lot of the time, we just use it to keep the product fresh and store it,” he says. “We have climate-controlled distribution,” he points out.
24/7 Operation
Baked goods are replenished daily and deliveries made to the warehouse clubs five times weekly. Those who drive the trucks are account managers, and on days they do not make deliveries, they are in their customers’ stores servicing and merchandising their accounts.
Products can be received at the warehouse anytime from 2 p.m. to 2 a.m. The night warehouseman receives merchandise deliveries and breaks them down into loads by 2 a.m. At 2 a.m., the account managers come in, load their trucks and make their deliveries to the customers.
The family owned business was started in 1993 manufacturing specialty popcorn and nutmeats by Marc Garcia’s father, Ed, who also is co-owner. When that business became crowded with competitors, the company started distributing baked goods to warehouse clubs. That became bigger than their manufacturing business, so they sold the manufacturing equipment.
“Ed is 66 years old, he’s in every day and he is a big part of this company,” Marc says. “Like me, he oversees a little bit of everything. His main focus is inventory, quality control and distribution. His fingers are everywhere – you can’t slow that man down.”
Also working in the business is Kristin, Marc’s wife and the company’s controller; Kristin’s brother Sean, who worked his way up from account manager to sales supervisor; Kristin’s mother, Pam, who worked her way up to sales manager in two of the three years she has been working with the company; and Sean’s wife, Katie. “She is now in charge of the order desk and also Ed and I,” Marc jokes.