It’s a challenge for a privately held business to pass from one generation to the next. Even more so to get to the third generation. But that’s exactly what happened with Ace Mart Restaurant Supply, a San Antonio-based foodservice equipment and supplies dealer.
Ace Mart Restaurant Supply in November 2021. Jonathan, who has been with Ace Mart for more than 17 years, succeeds Paul Gustafson as company president. In addition, Carl Gustafson, Paul’s brother, retired from his position as Ace Mart vice president at the end of 2021, making way for Stephanie Bean, who was promoted to vice president of people strategy and human resources. Both Paul and Carl will remain connected to Ace Mart, serving in advisory roles. Jonathan represents the third generation of the Gustafson family to serve as Ace Mart president. His grandfather, Norman “Gus” Gustafson, founded Ace Mart in 1975 and was succeeded by Jonathan’s father, Paul.As part of a series of changes to company leadership, Jonathan Gustafson became president of
Before he could come work at Ace Mart, though, the family required Jonathan, and anyone else who wants to eventually work for the company, to gain some experience elsewhere. He spent three years at Olive Garden and during his tenure there joined the company’s manager in training program.
Here, Jonathan discusses what drew him to Ace Mart, the evolving role of the dealer, the future of technology and more.
Q: What made following in the footsteps of your father, grandfather, aunt, uncle, etc. appealing to you?
A: It’s the industry at large. Whether it’s a FEDA (Foodservice Equipment Distributors Association) event or some of the meetings I would go to from time to time when growing up, it all looked so cool. We got to go to these great places and meet some great people. Plus, there was a sense of pride. My family built this business, and the idea of continuing that legacy and building on that attracted me to it. I had worked for the business when I was younger and got to see how it evolved from a very small business to what it is today.
Q: Ace Mart is known for perfecting the cash-and-carry model. How has the company evolved in recent years while staying true to these roots?
A: That’s been something that’s been talked about at length. We go to executive retreats and talk about what the future of Ace Mart looks like. Not that long ago, when e-commerce burst onto the scene, people said our business would be dead. But what we have found is that infrastructure retail gave us — the inventory, the stores, the distribution centers — allowed us to play in design-build and other areas. Right now, leveraging the retail infrastructure is a competitive advantage because we have inventory all over the place at a competitive price. Because of COVID, we realized we had to offer our customers a touchless buying experience. They could buy online and pick up curbside at our stores. It took some effort from the developers to make this happen, but it worked out well. We were surprised as to how well customers adapted to this. But it gave credence to our strategy moving forward.
Q: How has the role of the dealer evolved in recent years?
A: As we look at what our customers want and the services they require, we constantly look at ways to adapt. Customers want things quickly at a good price and with convenient delivery. They need customized delivery times, for example, to balance out their busy periods. They want customized solutions. In an Amazon world, quick, easy and fast is important, but we have to layer in that service component that has always defined this industry.
Q: Complete this thought: For dealers to be successful in the future, they must …
A: Adapt. Innovate. We are constantly challenging the status quo. We have to be more efficient. We are constantly looking for ways to drive costs out of the channel. We have to look at our analytics to make sure we have the right products in the right place. We are collaborating more with manufacturers to make sure all of that happens. It’s becoming more and more important that we plan, given all the supply chain issues we face at the moment.
Q: Let’s stick with supply chain for a moment. Supply chain issues are a hot topic these days. How is Ace Mart addressing these challenges?
A: We had our best year ever in 2019 and were ramping up to meet greater demand in 2020 when the bottom fell out. We had all this cash tied up in inventory, which is normally a strength for us. But we had to make some cuts. Over time, though, that became a strength for us because we had a stockpile of inventory to help us dig out when business got better. Like everyone else, we started working with our manufacturers to see what they could do for us. We do have out-of-stock items. There are some holes in our inventory, but all in all, it’s just required us to think differently. It does not happen overnight. Before, we used to order and receive the product right away; now, it’s on order for six months before we can pay for it. We are now having record-breaking months and are on track to have our best year ever. That’s even when you factor in the big Texas snowstorm from last February, which we jokingly called ‘snow-vid.’ Now, we have this inventory, and people are coming back to us.
Q: There has been a lot of consolidation among factories in recent years. How does that impact the way you work with manufacturers?
A: When some of these manufacturers get really big, we often lose some of that personal touch that smaller businesses can provide. There are times when I don’t know who to call. This is such a high-touch business and I fear we will lose that. Some companies are trying to work on that. But I want to buy from manufacturers because we work together to solve challenges, not just because they have a great brand.
Q: What role will technology play in helping dealers better work with operators and their supply chain partners in the future?
A: It’s going to be huge. There are so many different areas to look at. There are efforts to create better connectivity between dealers and manufacturers in progress. Right now, it’s focusing on product information, but there’s so many ways for this to go, and it can bring us into more of a modern age of distribution. Eventually, we can share data in real time with the manufacturers so they can adjust more quickly. And then there’s investments like ERP (enterprise resource planning) systems that can help you drive costs out of the channel. There are always ways to do things better, and we have to keep looking for ways to ensure we are the best-run company we can be.
Q: What’s the most important lesson your father shared with you?
A: My dad is a very caring man. He cares so much about our people and our customers. It’s something I’ve always admired about him. And I aspire to be as warm and open as he is. He’s not afraid to talk to any customer about any issue. I have a ways to go, but I want to be as open and warm as he is and be able to handle things with grace.