A Q&A with Joe Schmitt, who has led the 80-year-old Rapids Wholesale Equipment for more than 24 years, helping expand the 56-employee dealership’s four locations and various divisions, including Chain Restaurant Solutions and Foodservice Contract and Design businesses.
FE&S: What primary segments do you cover?
JS: For contract and bid work, we work with colleges and universities, K-12 schools, chain restaurants, stadiums, hotels and convention centers. We also do a lot of design work so we collaborate with many independent restaurateurs as well. Among chain restaurants, we work with all types of multi-unit operators, from full-service restaurants to fast-casual and quick-serve brands. The senior living market has been pretty active for us as of late. And then we have our online and cash-and-carry businesses where we work with mainly single-unit restaurant owners and independents.
FE&S: Tell me more about the Chain Restaurant Solutions part of the company.
JS: This is our equipment and facilities solution group we started about nine years ago, which is focused primarily on multi-unit operators. For these clients, we do asset management, facility management, preventative maintenance scheduling and tracking, repair maintenance and invoicing, review and audits for compliance, and more. This portion of our business covers everything from fine dining steakhouses and restaurants all the way to an Au Bon Pain at the Boston Logan International Airport.
We started the division to give ourselves a point of differentiation among multi-unit end-users who might not have been willing to switch equipment suppliers just to get these services. But they get to that 5, 10, 150-unit mark and they really start to feel the growing pains. More often than not, they need a facility manager, and in this case, we fill that role. Probably what drove this business more than anything, though, was when we started meeting with end-users who recognized they didn’t know what they were doing when it comes to managing their equipment and facilities. They would repair something and then the same piece would fail the next month, and [they] wouldn’t know if the service agencies had actually fixed the problem or if they were due for a replacement.
The other part of this business is conducting comparative analytics for our end-users who buy equipment from us. We’re able to share with them all the experience we have in terms of how to make good equipment choices based on statistical data and lowest lifetime cost, and how to make these differentiations between different manufacturers.
We worked with Panera on this when they were looking to upgrade their Panini press machines and wanted to select the best model with the best repair history. We have also worked with Au Bon Pain to help them determine if they should purchase slicers for slicing meat in-store, or purchase pre-sliced meat.
FE&S: Why has this service been so vital for chains?
JS: Store and regional managers at chain restaurants are great at managing people and customers, but they are not as good at managing equipment repairs, windows, sign replacements, or dealing with plumbing and other facility issues, so they really rely on us to lift some of that burden so the store managers can focus on other tight margin areas like labor and food costs, customer satisfaction, and other elements that make their brands profitable.
FE&S: This is a very different type of service offered for a dealer. Do you feel like the role of the dealer has changed?
JS: I do find our role has changed and will continue to change. Our approach is to try to provide new service offerings to differentiate us from competition and really make a difference for our customers. We also strive to create a deliverable product that we’re in full control of, which allows for smoother project implementation and longer timelines on projects so we’re not waiting on an interior designer or architect or consultant to tell us what we can and can’t do. Our approach is we’re going to go down the path to do it ourselves if at all possible.
FE&S: Rapids Wholesale has a robust design-build program. How have you grown that side of the business?
JS: Contract and design work has become extremely competitive. We are reaching out to markets that we haven’t reached out to before, and others are reaching into markets in our area like never before. General contractors, plumbers, electricians, and everyone seem to be more focused on getting the project on a price basis. In my opinion, we’ve lost some of the focus on the customer and have to work harder at better teamwork and encouraging more camaraderie on job sites.
FE&S: In what other areas have you expanded?
JS: We’re constantly looking for new services and solutions. In our design area, we have invested heavily in helping our team achieve LEED certification so we can work on more green building projects. We have also expanded our use of 3D modeling with a program similar to Revit so that we can show customers or prospects what the end result might look like on a more multidimensional level. And we continue to offer in-house interior design services as part of our design package.
FE&S: You mentioned senior living work has grown. How so?
JS: We have been very active in that market for the past eight to ten years. There was a slow-down when the 2008 recession hit, but in the last three to four years, senior living has become hot again and we’re seeing more activity in that market more than ever. Most of the projects we are working on now are the assisted living and nursing home units, but memory care has become a significant portion of that business, and they have very special needs.
FE&S: What keeps you loving work in the foodservice industry?
JS: In the hospitality industry, we are all generally pretty nice people, so the relationships you have and friendships you make – whether they are with customers, suppliers and even other dealer competitors – are ones that last for years.
FE&S: In your view, how has the E&S industry changed over the years?
JS: It has become very competitive in terms of consolidation and I think we haven’t been terribly innovative at least on the dealer-distributor side, and even on the manufacturer side in some cases. We seem to be seeing more of the same in all product categories, with more foreign imports growing. But consolidation at the factory level can hopefully change some of that and on the dealer side, it’s all about developing more creative delivery methods and ancillary services, financial tools and other offerings that will help customers improve their return on investment in a shorter time frame.
FE&S: You’re currently serving as president of the Foodservice Equipment Distributors Association (FEDA). What are some of your initiatives and goals as president through this year and next in your two terms?
JS: We have quite a few initiatives going on. We’re working on some better industry collaboration between manufacturers, dealers, reps and consultants through the various associations and even working on possibly consolidating conventions and conferences. We’ve also held two meetings so far since I started as president to work on improving our educational platforms.
On our wish list is to try to identify a way for the foodservice equipment channel to be presented in a fashion that we’re more attractive to young talent coming out of high school and college, rather than try to attract talent at the more individual figure level. We’re trying to develop a more general platform that we can use to increase awareness of our industry and attract younger professionals in different areas, whether it’s an engineer coming to work for a factory or a business student who has completed sales training and could work for a dealer or service agency. Of course, we’re also working hard at trying to find someone to fill FEDA Executive Director Ray Herrick’s big shoes, as he is retiring at the end of my term.
FE&S: What’s the greatest advice you’ve been given or would give when it comes to working in the foodservice industry?
JS: Change or die. Or maybe I should say: innovate or die. If we think we can do the same things as five years ago, we’ve already failed.