Battered Deep South Begins to Pick Up Pieces
Battered by Hurricane Katrina and the disastrous floods that followed, the abandoned city of New Orleans and its neighboring communities are slowly getting back to business one month later. However, bakers and snack producers in the region face many hurdles before anyone can claim it’s business as usual, and, at presstime, the threat of Hurricane Rita was expected to complicate matters even more.
Hundreds of supermarkets are preparing their stores for the return of families who evacuated their communities, noted the Food Marketing Institute (FMI). Likewise, foodservice chains like Burger King noted that they’re beginning to re-open stores in the devastated areas. Bankrupt supermarket chain Winn-Dixie reported in mid-September that 102 of its 125 stores in the New Orleans area are up and running. The chain reported that insurance claims from Hurricane Katrina damage may exceed $100 million.
Despite such progress, FMI reported that supermarkets, restaurants and other snack and bakery food customers face such hurdles as providing security for employees and shoppers in stores and along distribution routes. In some cases, retailers may have to offer incentives for companies to hire displaced workers, including those who are homeless or do not have verifiable paperwork.
As these businesses re-open their stores, however, companies such as Flowers Bakeries, Interstate Bakeries Corp. and Sara Lee are executing plans to ramp up production as they restart service to the markets. For some plants, particularly those in New Orleans, it may take months to get up to speed.
Although Flowers Bakeries’ New Orleans plant was knocked out of commission, the facility housed only one line, and the company can serve the market from its other plants in the area, including its recently opened plant in Houston — although that plant was in Hurricane Rita’s crosshairs at presstime as well. Other independent bakeries, such as Leidenheimer Baking Co., don’t have the luxury of turning to other plants in unaffected areas to serve the markets impacted by the hurricane.
Ramping up service to the hardest hit areas in Louisiana and Mississippi, however, may take weeks. In addition to removing debris, some bakery facilities may face sanitation nightmares, especially those located within New Orleans proper where flooding has compounded any cleanup efforts. Moreover, making deliveries to the affected region could be costly, as bakeries are forced to ship product more than 100 miles away. In addition to fuel costs, many bakers may initially find that only a handful of stores are open, making the routes not profitable.
“We will continue to serve the market, but we anticipate the cost of doing so will be extremely high,” said George Deese, president and chief executive officer of Flowers Foods shortly after Hurricane Katrina hit.
Although Flowers was serving the market with its Baton Rouge and Lafayette, La., bakeries, 10 of its 24 warehouses were knocked out of commission by the storm. Insurance will cover damage to physical property and from business interruption.
To serve restaurants opening up in the region, SYSCO Corp. re-opened its broad-line distribution center in Harahan, La. Its Jackson, Miss., operation had also been temporarily shut down.
The impact of the storm will be felt by the entire snack and baking industry for months to come. In addition to rising oil and natural gas prices, sugar prices may remain high due to the damage to several refineries in the South. In addition, barge traffic had been disrupted, impacting the flow of wheat and other commodities, creating a bottleneck and a lack of storage space as harvest season approached.
Still, there has been a major outpouring of money and food donations by the industry. For example, Kennesaw, Ga.-based Wise Foods supplied more than 650,000 servings of its products to the American Red Cross and Salvation Army.
Sloan Y. Bashinsky, 85, retired chairman and CEO of Golden Enterprises, Inc., the parent company of Birmingham, Ala.-based Golden Flake Snack Foods, Inc., died Aug. 2. Bashinsky was highly respected throughout the snack food industry. He was the recipient of the Snack Food Association’s Circle of Honor in 1995, the most prestigious award given in the snack food industry. He retired from Golden Enterprises after 50 years in the snack food business, and served as chairman emeritus of Golden Enterprises until his death. In lieu of flowers, memorials may be made to the Big Oak Ranch or your favorite charity.
Claire Thoron Pyle, 64, wife of Bob Pyle, the former longtime president of the Independent Bakers Association (IBA), passed away after a long battle with cancer on Aug. 1. Claire Pyle was the meeting planner for IBA from 1985 to 2000. She also hosted the IBA Spouse Program in addition to numerous ladies’ luncheons. During her lifetime, Pyle worked and lived in Paris, earned a master’s degree in
Education from Boston College, and also lived in Boston, Kittery Point, Maine, the Washington, D.C., area, and La Quinta, Calif., and spent many summers with her family in Dublin, N.H. IBA members wishing to send condolences should contact Nick Pyle at 1-202-333-8190.
It is with deep sorrow that the Snack Food Association (SFA) announces that Sarah McCarthy, wife of SFA President and CEO, Jim McCarthy, lost her 13-year battle with breast cancer on Friday, Sept. 9, 2005. Sarah McCarthy, 47, was a microbiologist at the National Institute of Allergy and Infectious Diseases at the National Institutes of Health. She worked for NIH for the past 23 years. Memorial contributions may be made to the Lombardi Comprehensive Cancer Center, Georgetown University Hospital, New Research Building, Room E501, 3970 Reservoir Road NW, Washington, DC, 20007. For more information, please contact Liz Wells at email@example.com or 1-800-628-1334 ext. 202.