16 minute read
Meeting the Challenge
The Inside Story of What It Took to Keep the Gulf Coast Fed During the Pandemic
In early March, grocery stores across the country met unprecedented demand as the United States began sheltering in place to prevent the spread of COVID-19. This was, for most of us, our first global pandemic, so nobody was quite sure what we needed to get and what we didn’t. Many of us ended up buying a little bit of everything, just in case. As customers rushed stores, Rouses Markets fared far better than national grocery chains because it is a local company with local relationships, and because the Gulf South is no stranger to natural disasters. The Rouses response gives us an interesting look at how grocery stores work behind the scenes and, in particular, how local markets support their neighbors in times of crisis. To find out more, I reached out to some of the Rouses leadership team to see how they helped steer communities through the worst of the storm.
The Start
The first identified case of COVID-19 presented in the United States on January 20, 2020. It had been identified weeks earlier in China and was noted for its high transmission rates and severity of symptoms. By the end of the month, there were just under 10,000 cases reported around the world. Early on, corporate management at Rouses had an eye on how the coronavirus was spreading, in part because so many of its private label products — such as olive oil and coconut water — are imported from global suppliers. Also, by watching how other regions responded to the crisis, Rouses could better calibrate its own response.
“We all have colleagues we stay in touch with at other retailers,” says Jason Martinolich, the vice president of natural and specialty foods for Rouses Markets. “We were hearing from people where it all started in Washington and then California, and we really got a good grasp of things. They were basically two weeks ahead of us, so we had an idea of what was happening from a standpoint of what people were buying and what stores were running out of. We stayed in contact with our manufacturers, sharing that insight with them, and also working with our distributors to make sure that they were understanding what we were hearing.”
The general idea was that, if the virus made its way to the Deep South, Rouses would be able to keep its shelves stocked. Because the company does a lot of importing from Italy, and because Italy was hit hard by the virus, the company was also able to gauge what a pandemic would look like if it arrived in our region.
“We were talking to our partners there to understand the things that they did to make sure that manufacturing continued, and to learn how they were protecting their employees from contracting the virus,” Jason says.
Because Rouses is local to the turbulent Gulf Coast, it has cultivated practical experience in crisis management over the years. “We prepare for emergencies like hurricanes, so we know the basic essentials that people need in a time of crisis. Of course, we had no idea what social distancing was, or sheltering in place, or any of that at the time!” says Tim Acosta, director of advertising & marketing for Rouses Markets. “When the government started talking about halting
— Ali Rouse Royster, 3rd Generation
the airlines coming in from Europe and all that, it started getting crazy late that first night, a Wednesday. That Thursday was very busy. And then on Friday, when the governor said the schools were closing, that’s when pandemonium broke out. It was the second weekend in March. People were just buying everything they could get because they thought, you know — well, I don’t know what they thought — that’s when the toilet paper thing started.”
Donny Rouse, the third-generation chief executive officer of Rouses, says that when those sales started increasing on Friday, March 13, he knew that life was about to change. “Everything went crazy,” he says. “And we knew this was completely different than what we’ve ever seen with any other type of disaster, whether flooding or hurricane or such. We were hoping it wasn’t going to come down to Louisiana, but we were preparing for that eventuality.”
One of the first things Rouses did, says Tim, was go on modified hours of operations. “That is something that we learned from storms. So instead of being open 7 a.m. until 10 or 11 at night, we started closing at eight o’clock at night. This was right after the first week, and that gave a lot of relief to the team members working in the stores. It allowed the stores extra time to get cleaned and sanitized and restocked after that day’s business, and ready overall for the next day.”
As the pandemic began to escalate in the U.S., Rouses quickly reduced their hours of operation, which provided relief to the team members working in the stores, plus allowed needed time for sanitizing and restocking the stores each night.
When natural disasters loom in the distance, the leadership team has a standard protocol, says Donny. “We get our team together. We have a meeting. We make a plan.” He says the company’s procurement teams, which actually buy the products that end up on Rouses store shelves, immediately started calling suppliers and wholesalers they have close relationships with, buying everything the company could get so that shoppers would have the goods they needed. To save time and get shelves stocked faster, they had the truckloads of goods shipped directly to individual stores rather than to a central location. The teams worked relentlessly during the first, critical couple of weeks of the pandemic.
The Supply Chain
Customers were looking for hand sanitizer, toilet paper, and items like charcoal and canned goods: things that you could keep in your house for an extended period of time. “It indicated that families were preparing to hunker down and stay safe,” says Jason. “We have certain items that we bring in and store before hurricane season starts. And by tapping into those supplies, it really did help us get out in front of the rush, and it helped the supply chain for our stores when they were getting hit with the extra business.”
The supply chain connects the sources of products to the store shelves. As Jason explains, every company and every manufacturer have an idea of how much they’re going to sell of certain items for the entire year, and they plan everything based off of that. They plan their labor to make the product, they plan the raw materials necessary to make it, and they plan the logistics around getting the product out the door. Whenever there is a disruption in the supply chain, it throws that plan out the window, and you have to start from scratch and begin rethinking how to move forward.
When the pandemic really set in, there was a sudden and, in many ways, unprecedented rush on supermarkets. The preparations to shore up before the onslaught acted like barrier islands along the coastline: They absorbed much of the force of the hurricane but, nonetheless, the hurricane came.
“All of a sudden,” says Tim, “you had everybody sheltering in place. The kids weren’t in school. Families were home, and under normal circumstances, people would go out, travel around, get food from McDonald’s or another fast food restaurant, eat at diners and restaurants. But now they were forced to be home, and where do they go for their food source? They go to the grocery store.”
The disappearance and reappearance of eggs at Rouses are a good example of how grocery store supply chains work. Eggs flow consistently through distribution channels, from chicken to frying pan, and supply is constant. When demand suddenly skyrocketed overnight, however, the pipeline was depleted. You can only produce so many eggs at any point during a given time period; in normal times, the supply pipeline is full and consistent. Not too many eggs, or they’ll go bad. Not too few eggs, or shoppers will be unable to bake cakes.
When the shelter-in-place directive began, eggs were an item that shoppers bought in bulk. “We scrambled,” says Tim. To supplement the supply line, Rouses reached out to members of the restaurant community. “One of the first things that happened was when the restaurants closed; restaurants have their own supply chain, their own distributors that they work with that deliver eggs and meats and produce and so forth. Once they started closing the restaurants, you had that inventory in a supply chain that was getting backed up that had no place to go.”
At the same time, Rouses was doing extra business because people had to feed their families. As store inventories began declining, Rouses team members started working the phones. “Our friends in the restaurant business connected us with some of their suppliers, and we worked something out where we can get some of their products to come into our store. So we had some eggs and some meat items, some steaks and beef, and different types of produce. At that point, customers were just looking for items.”
Those eggs, he says, bought the markets a little bit more time, and bought chickens more time to lay more eggs.
He continues: “Once you deplete the pipeline, it takes a long time to get it filled back up. The pipeline goes from the farmers raising the chickens, to the chickens laying the eggs, and the eggs are packaged up to the suppliers, and they go down to distribution centers, and then ultimately to our stores.”
— Nick Acosta, Meat Director, 3rd Generation
It’s more complicated, even, than that, because you need truck drivers to transport grocery store items, and not just anybody can drive a truck. So the demand for truck drivers increased simultaneously with the pandemic’s spread, and these truck drivers were still bound by strict laws regarding weight and speed and the number of hours in a day they can travel. Truck drivers are essential workers and very much on the front line, and a shortage of drivers can further impair the supply chain.
When you deplete all a store’s inventory it just takes a while — about two cycles — to start getting product back. And that went on for a couple of weeks, until about the end of the month. Rouses had to begin putting limits on certain items, and they had to start putting messages out there that the food supplies would be there; that people should just buy what they really needed, and save goods for their neighbors. Some of that came in the form of communications with customers in the stores, and also through messages on Rouses social media channels.
“Nobody can figure out the reason for the toilet paper situation, but it was going on throughout the country. But the first things to go were hand sanitizers and soaps, and we weren’t really surprised by it. We knew that would take off quickly. Water too, though we couldn’t figure out why people bought so much of it. My guess is because it was like a hurricane, when you lose power, and I think people just kind of got into their shelter-down mode, buying bread, eggs, some of those essential items. But that has slacked off now,” Tim says.
Eggs have since stabilized, according to Tim. As long as no one panic-buys again, there won’t be another shortage. “We are totally caught up, and we feel good about the situation, with the products rolling in. The thing that was different was that this affected the whole country. It’s not just one region of the country that was hit; the whole country was affected. So everybody was trying to do the same thing. But having that experience from dealing with storms, we feel like we were ahead of some of the stores in other parts of the country, whether in the Midwest or the Central Plains or the West Coast. I mean, everybody’s got their own natural disasters that they deal with, but you know…we feel like we were better prepared to handle that, to get the stores restocked and get the right inventory back in through our connections with our vendor partners.”
Local Ingenuity
For centuries, communities in the Gulf South have survived disasters like flood and freezes through resourcefulness and solidarity. Because
When the shelter-in-place directive began, eggs were an item that shoppers bought in bulk. The disappearance and reappearance of eggs at Rouses are a good example of how grocery store supply chains work.
Rouses is part of the communities it serves, it has been able to act as a force multiplier for local inventiveness and ingenuity. “We were talking to one vendor about doing a charcoal lighter fluid for us under a private label,” says Tim. “When this all hit, because the vendor is a manufacturer, he was able to take the technology and equipment that he uses to make lighter fluid, and converted it to begin making medicalgrade hand sanitizer.” Meanwhile, as Rouses started selling out of its hand sanitizer products, and Purell and the national companies struggled to keep up with the demand, that vendor reached out. “We said we’d take as much as we could get.” Unsurprisingly, the hand sanitizer is packaged in a charcoal lighter fluid bottle.
“That’s just one story about a Louisiana company helping us address customers’ needs, and he’s keeping his business going, and it’s good for the community.”
Another thing that Rouses did for the community was to partner with local restaurants after they were ordered closed, allowing local chefs to offer some of their dishes in Rouses locations. The restaurants prepared the dishes, packed them up, and brought them to stores to sell. Rouses took care to make sure restaurants kept every penny of the revenues from the sales of their food items.
“I really wanted to do something for them, to help them keep some income, keep their workers employed,” says Donny Rouse, “and I was talking to some of my marketing team. I thought, ‘Hey, we’ve got Big Mike’s Smokehouse here in Thibodaux. They’re closed and they’re a great restaurant. Let’s allow them to take over one of our deli areas in our store over the weekend so they can sell some of their product. I was just about to pick up the phone and call James Breuhl, our vice president of fresh, when he called me with the same idea, and I said, ‘Let’s do this.’” His marketing team, Donny says, took that idea and ran with it, approaching restaurants in New Orleans about doing the same, and building store-restaurant alliances as far away as Lafayette.
Produce manager Josh Smith was recently recognized by the United Fresh Produce Association as one of the top 25 produce managers in the nation. "He motivates us," said director of produce Robert Ybarra. "He's a person of high character, high energy, he's all about sales, he gets excited about any contest we have, that we put forth. We are blessed, we are thankful, and we are grateful for Josh's contributions to the Rouses team."
— Blake Richard, Store Director, 3rd Generation
“Once this is over, we would like to continue those partnerships, giving restaurants another avenue to sell some of their products in larger markets,” he explains. “How great would it be if you didn’t have to go all the way to Commander’s Palace in New Orleans to get turtle soup? You could buy it in Lafayette, or you could buy it in Mobile!”
The Team
Of all the members of the Rouses team who stepped up during this crisis, Donny singles out the frontline employees working registers and stocking shelves at Rouses Markets across the South. “Our team members have been great,” he says. “They began wearing masks on their own, and we started providing extra sanitation for the stores to protect them and the customers. We recently put up plexiglass screens in front of the cash registers, and that made our team members feel more comfortable, and our shoppers feel more comfortable; and that’s what we were looking for. We want to make everyone in our building feel comfortable and safe. Our team members — they’ve been really proud to serve the community during these times.”
To that end, Donny says his stores are doing everything they can to take care of the team and the customers. “We’re doing that through sanitation. We’re doing that through extra employee benefits to our team members, all of whom have done such a great job. I’m really proud of what we’ve been able to do as a company. We paid our team members an April bonus, and we’ve been feeding them lunch for the last 45 days in our stores. I’m really happy the way the company has come together to support our team.”
As a family-owned company, Rouses has unique insights on what families are going through during the shelter-in-place initiative. And despite unprecedented challenges in a fast-moving tragedy, there is some good that has come out of this. “We’re experiencing, in my opinion, better family time,” says Donny. “You know, for me, my kids are riding their bikes more. I’m taking my son fishing in a pond in the neighborhood just about every day. So you’ve seen a lot more kids outside playing in their yards, and it just feels more like when I was younger, growing up, just being outside more. I’m seeing a lot more families do that.”
So, some good has come out of this pandemic — more family togetherness, more time spent in nature — and, when you are part of the communities you serve, as Rouses is, you are grateful and proud that you can supply what is needed to keep those families and communities going. Donny says: “As an independent grocer, we can react more quickly than these national chains can. We’re part of these communities. We know what the communities’ needs are because we’re there. We have great communication with our team members across the board. And it’s moving to see our team members serve their communities, serve the customers, making sure that everyone can continue getting fresh foods during these times. We can’t go to restaurants right now, but we want to make sure that we can provide quality products that customers can use to prepare home-cooked meals. This is time for our families.”
