Volume 3 | Issue 1 | Year 2007

Shalit Foods Inc. (SFI) was started in 1990 by Sol Shalit as a specialty distributor, working alongside Nestle Canada to assist in its launch of NIMS (Nestle Integrated Menu System) into Canada. Given the exposure and the relationship to Nestle, SFI’s number of specialty lines continued to grow, and SFI became involved with a number of large suppliers. However, it soon realized that its strengths were not in distribution but rather in sales and marketing solutions.

In 2000, Sol’s son Ron Shalit, director of sales and marketing, joined the company and began to grow and develop business relationships in the U.S. market. Ron’s ability to understand market concepts, trends and solutions, has helped him secure significant relationships with large U.S. distributors such as U.S. Foods, Sysco, and GFS, while securing business with a number of leading healthcare organizations, along with a number of large education and hospitality institutions.

In 2002, SFI embarked on a fundamental journey of change by exiting the distribution business. In 2003, following nearly seven years of IT and management consulting experience with Deloitte (then Deloitte Consulting), Sol’s other son Tal Shalit joined SFI. Tal’s experience brought industry best practices for sales and marketing solutions from Fortune 500 international high-tech, communications, energy, and manufacturing companies.

“When we made the change into the company we are today we had a number of options, one of which was to buy manufacturing facilities. We decided to go ahead and outsource,” said Tal Shalit. “We have a very interesting model. We manage our manufacturing and many other components internally, and these components are very tightly integrated. It is as if we are actually manufacturing, but both our manufacturing and a majority of our warehousing are outsourced. We manage them from this [Toronto, Ontario headquarters] operation without taking on all the expenses and the onus of asset management and capital investment.”

What happens when high-tech business practices are brought to the food industry? First, suppliers were trimmed from 65 to 10 of the most trusted and best business partners. This drastic reduction has enabled SFI to strengthen its core relationships and significantly improve its purchasing and selling power to the market for its choice suppliers. Second, SFI developed brands and solutions that the market demands. Third, by outsourcing its manufacturing needs to leading Canadian companies, SFI was able to rapidly grow, but still have the ability to react and respond to market demand in a timely manner.

As a result, SFI became a company that has all of its core elements managed from a centralized location, creating a fully integrated business model similar to a number of leading high tech and communications companies.

Neighbor to the South

SFI essentially operates two different divisions – its U.S. arm and its Canadian arm. Its ability to provide streamlined solutions to different manufacturers across both countries provides invaluable advantages for suppliers looking for an easy way into the market place. The ability to fine-tune its business model to manage its manufacturing needs externally has enabled SFI to focus on leveraging some of its distribution sales & marketing relationships from the past, and significantly improve on its logistics capabilities across the entire North American market. With a number of new relationships on the rise, SFI’s reach and efficiencies continue to grow by servicing the customers while supplying and supporting their distributors.

“The majority of our business is Canadian. That’s part of our competitive advantage. We offer sales, marketing, and logistics solutions specifically for the Canadian market, so if there are American or international companies looking to penetrate Canada, we are the perfect one-stop solution for them. They can just come in, we can take on their product line, bring it into the country and help them grow from there,” Shalit said.

SFI’s Canadian arm serves U.S. and international manufacturers by providing them nationwide solutions along side national exposure in frozen and fresh foods, with industry-leading warehousing, transportation, sales and marketing solutions. The latest additions to the SFI offering include Savory Creations, Lick’s Foods, Indian Harvest’s Multi Grain Blends, and Chef Paul Prudhomme’s Magic Seasoning Blends. Many of these products are included as critical ingredients in the branded solutions, that SFI brings back into the Canadian and U.S. markets.

“We are providing food service solutions to our customers – additional menu ideas, additional products that they don’t necessarily have,” Shalit said. “These are different solutions for problems operators have in the kitchen. We provide them with the ability to save money one way or another, either by providing a better quality product, by minimizing waste, or by providing a more convenient product.”

SFI’s newest brand, Harmony Cuisine™, has so far been extremely successful across Canada. Its value proposition is a unique one and offers many advantages: great taste, convenience, minimum waste, easy storage, 0 grams trans fat, high fiber, safety, flexibility for entrees, side dishes, toppings, etc. It’s even suitable for the vegetarian/vegan population.

In the U.S., given the massive market, SFI chose to keep its model very simple, and go to market with a 10-product Green Menu™ offering, along with its Care Menu™. The Green Menu™ is a line suitable for chain restaurants, colleges, prisons, dining services, management companies, purchasing groups, and healthcare industries. The Care Menu™ is a frozen food line targeted to the ever-growing healthcare industry where an increased number of long-term care facilities and hospitals are looking to outsource their foodservice operations as much as possible.

“We are witnessing a transition and that’s where we have been strategically positioning ourselves,” Shalit said of the U.S. market. “A lot of hospitals up to a few years ago had high-end chefs or a few chefs in their kitchen cooking. But in the U.S., they are now experiencing a lot of the things that Canadian hospitals experienced 10 years ago. Some of the more progressive places … some of the leading operators in the industry are definitely moving more and more toward outsourced solutions.”

The company is in touch with the latest trends affecting tastes as well as business practices. “Ethnic food is important, vegetarian is important, making sure that things don’t have as much sodium as a lot of the fast-food meals out there these days. There’s really no reason to pump sodium into the dishes,” Shalit said. “Safety is another important issue – making sure that the products are safe and produced in well inspected plants with good systems approved for their processes.”

Strategically, SFI has carefully placed itself in a position to capitalize on two growing trends in the U.S. marketplace: healthy, vegetarian and vegan items (Shalit Foods’ Green Menu™), and improved healthcare solutions (Shalit Foods’ Care Menu™).

The industry is currently looking for more healthy alternatives, while ensuring that the quality of the food is not compromised. In addition, vegetarian and vegan foods are continuing to grow as a percentage of the big picture as the demographics slowly shift. “People are a lot more aware of what they eat now, and this trend is expected to continue to improve over the next 10 years,” he said. “Even the large chains and operators are looking for new and exciting ways to offer their customer base vegetarian and healthier alternatives that still provide high-end and unique flavor profiles.”

Demand and Supply

SFI’s ability to leverage nationwide warehousing solutions, deliver across the continent not only full truck loads, but also less than truck load quantities have enabled it to support customers wherever they may be. In addition, the company’s ability to source and use top-of-the-line ingredients helps them ensure end products are of a culinary nature (chef quality). “Every item we design or take on is carefully tested for its flexibility, quality, functionality, and added-value proposition,” Shalit said. “When it comes to sales, marketing and logistics solutions SFI provides operators with a different approach to some of the alternatives provided by traditional brokers in the industry. We pride ourselves on not taking on too many lines in order to ensure that each line fits with our strategic direction, and that we are able to provide it with enough attention to ensure growth in such a vast market.”

In the U.S., SFI tries to offer products that are so unique that in many cases, they do not have direct competition. For example, menu items in the Care Menu™ for healthcare settings include balanced cuisine entrees, bread puddings, specialty purees, sandwich purees, minced essentials and complete meals. A very short sampling of entrees includes Beef Bourguignon, Veal Goulash, Oriental Beef with Vegetables; Chicken Tortellini, Chicken Noodle Casserole, Chicken Cacciatore; Apple Braised Pork, Sweet and Sour Pork, and cereals. The Green Menu™ is a unique line of products featuring a delicious selection of hearty stews, chilis, simmers, curries, vegetarian burgers and wraps. Here’s a sampling:

• Green Menu™ Harmony Cuisine: includes Rain Forest Black Bean Simmer, a mix of harvest black beans, select vegetables, inspired with hints of exotic spices combined with wheat berries;

• Native Harvest Cous Cous Simmer: a blend of Native American vegetables and heritage beans with a hint of jalapeños, combined with large cous cous, makes an authentic stew;

• Island Treasure Sweet Potato Bean Ragout: chunky sweet potatoes, vegetables, beans and black barley are simmered with Jamaican spices and fruit juices to create flavors of the Caribbean.

The menu goes on and on, incorporating a fusion of ethnic specialties into unique, tasty and healthy combinations.

The trends in the foodservice world continue to require culinary solutions. “The quality that chefs demand in the foodservice market is much higher than the demands of consumers in the retail market,” Shalit said. SFI continues to ensure heavy focus is given to the sourcing of quality, clean label, and all natural, ingredients, all of which contribute to a higher quality product.