But as the Washington region begins to reopen, Ellis is left with far more questions than answers: When, or whether, bookings will return. How to balance the safety of her waitstaff against their need for paychecks. The capacity of her suppliers, and by extension, Avalon, to hold on long enough to keep their delicate ecosystem intact.
“You can feel better if you’re not going through it alone,” Ellis said. “But, also, it’s horrifying that the whole world is affected by something you can’t control.”
Avalon, which catered roughly 1,000 events a year before the pandemic hit, occupies only a sliver of the economy. Yet the caterer and its network of workers and suppliers show how the coronavirus recession cascaded from one company to the next, and why charting a path forward is so fraught. Each canceled catering job rippled through a network comprising a 400-member waitstaff and dozens of vendors, including food distributors, a florist nearby, a bartender’s family in Lorton and a cheese farm in the rolling hills of rural North Carolina.
As states begin to reopen, companies and workers face an economy in transition. Supply chains that once served large commercial customers, with profits tied to scale, now pin their sales hopes on individuals. Workers who have spent years in food and hospitality contemplate a future with far fewer opportunities. Small businesses that rely on bringing people together are studying ways to keep them apart.
Ellis’s go-to florist is working directly with overseas farms to fill holes in its supply chain. One of Avalon’s cheese vendors is marketing its chevre online so that smaller purchases might offset the loss of big-ticket bulk orders. A longtime employee, whose wife and son also recently lost jobs, might have to seek work outside the food industry. Ellis is mulling whether to place plexiglass dividers between party guests.
How the U.S. economy reignites will depend on countless ecosystems like Avalon’s adapting — and on the risks they’re willing to take.
“Reevaluating what you’re doing and how you operate [are] matters of survival,” said Joe Brusuelas, chief economist at RSM. “Supply chains that support that portion of the economy are going to be fundamentally altered.”
History doesn’t offer a playbook. Economics dictated how past recessions came to an end. Now, absent a vaccine or basic public trust, there’s no guide for what it will take to put these links back together.
“I don’t even know how the dominoes fell anymore,” Ellis said, “because, boy, they started falling fast.”
The first signs
For Avalon Caterers, the first hint of trouble came in late February. As the deadly coronavirus was tearing through Europe, a client in Spain who had been meticulously planning a spring event in Washington no longer needed Avalon to track down specialty gin glasses. She wanted to go over cancellation policies.
“They were already seeing the real truth of what was happening before we were,” Ellis said. “They were seeing things on the ground that seemed a little extreme to us.”
Five miles from Avalon’s offices in Alexandria, Helen Olivia Flowers was coming off its most successful start to spring when co-owner Rachel Gang turned her focus to her next big event: a “who’s who” showcase of the Washington events scene on March 13. Since buying the company seven years ago, Gang and her husband have tripled business and grown the walk-in flower shop into one of the top event florists in the D.C. area.
Within a few days, Helen Olivia’s clients began to drop away. A five-star hotel in the District suspended its account. Weddings and corporate gatherings slated through May disappeared. By the end of the week, the industry showcase felt more akin to a support group.
“By the time we gathered on the 13th, they set up an industry panel to talk about how to do cancellations moving forward, what bank loans were available and how we were going to pivot,” Gang said.
Ellis, too, was being inundated with cancellations. Spring and summer events evaporated. Fall bookings followed.
Avalon has survived downturns: After the Sept. 11, 2001, terrorist attacks, there was little need for event planning, other than funerals. The business didn’t find its bearings again until the holidays. Past recessions showed Ellis that catering is the “first to feel the effects, and the last to come back,” because “people are spending their extra money on us, not their basic money.”
Like at other large caterers, the freezers and refrigerators at Avalon were well stocked. But with no one to serve, Avalon’s sous chef divvied up the perishables and made care packages labeled with his co-workers’ names.
Horacio Zamora, Ellis’s business partner and Avalon’s head chef, was reluctant to hand out food that could keep for a few more months. Powering down the refrigerators and freezers felt too much like giving up.
Zamora had come far since immigrating from Chile about 40 years ago, working his way up from cooking gigs on cruise ships to serving presidents and Britain’s Queen Elizabeth II. His wife and five grandchildren, ages 5 to 20, depended on him.
“Me and my wife, we are immigrants,” Zamora said. “We have seen the poor side of life. If you’re going to have to tie your belt tighter, there’s nothing wrong with that. I’m not going to cry — I’ve been there before.”
Jhonny Acha, who worked at Avalon for eight years, took home a bag of fruit, cheeses, breads and prepared appetizers. Soon, he and his wife and their son, who also lost their jobs, would apply for unemployment benefits. On his last trip to Avalon in mid-March, Acha figured he’d be back by Easter.
With each new cancellation, Ellis reached out to vendors and venues. “I would call to say, ‘I’m so sorry to do this,’ and they would say, ‘This is happening all over,’” she recalled.
Avalon’s last booking, on March 14, was for a couple who’d moved up their wedding and settled for a small ceremony at home. Avalon prepared beef, salmon and potatoes for 15 people and dropped off the meal with detailed heating instructions.
Ellis had to ask one of her workers to come back to make the delivery. Avalon had shut down two days before.
‘It’s different work’
As Avalon packed up, one of its longtime distributors faced its own seismic shift.
International Gourmet Foods’ commercial clients — hotels, restaurants, caterers and small retailers — saw cancellations pour in as the country’s economy effectively shut down.
“Customers who’d placed an order on Sunday for Monday were calling to say, ‘Don’t worry about dropping it off,’” company president Christine Di Benigno said.
Suddenly, IGF’s customers had new needs. As restaurants tried to stay afloat by offering groceries and takeout, they depended on suppliers such as IGF to pivot with them. That pivot included asking existing vendors whether they carried tomato sauce as opposed to canned tomatoes, or other goods that would be less labor-intensive to handle in the kitchen.
“It wasn’t a question of having zero items; it was about what items started moving,” Di Benigno said. “Disinfectant moved like crazy. Toilet paper moved like crazy. There was a lot more scrambling for to-go options and containers.”
One of IGF’s suppliers, Goat Lady Dairy, whose cheeses often appeared on Avalon’s menus, needed to regroup, too. From Grays Chapel, N.C. — a town so small it doesn’t have a post office — owner Carrie Bradds was contending with a last-minute cancellation by one of the dairy’s largest distributors: $20,000 worth of specially made tubs and logs of fresh chevre, plus other highly perishable products.
Needing to act quickly, Goat Lady expanded its online store from a few gift boxes to its entire cheese line.
“It’s different work,” Bradds said. “It used to be when I shipped, customers would want a full wheel of raw cow milk Gouda. Now I’m having to go package it and sell it eight ounces at a time.”
When Rachel Gang’s local wholesalers began shutting down in mid-March, the florist had to “set up entirely new supply chains.” On top of buying directly from farms in California, Helen Olivia opened air cargo and airfreight accounts, plus one with U.S. Customs and Border Protection, to source flowers from Canada, the Netherlands and South America. She now angles for cargo space on commercial carriers, anxiously tracking her precious petals through each precarious leg.
“I’ve never worked so hard to make $100 in my life,” she said. “The average sale now is $100 to $150 per arrangement — it’s not the $10,000 events we’re used to. And the work that’s required to earn that $150 is 20 times more.”
Sales are down 50 percent, Gang said, a reality that could be worse if not for Helen Olivia’s prolific use of social media, complete with videos and do-it-yourself guides.
“The only thing that’s kept business funneling through our shop is being brutally honest and raw with people about what it’s like being a small business,” Gang said.
The foggy path ahead
No matter the industry, the question of when to ramp back up is just as vexing as the question of how. Past recessions — such as the 2008-2009 subprime mortgage crisis — aren’t the best guides. Recovery relied on retail shopping kicking into gear along with spending on durable goods, like cars and home furnishings, as well as entertainment.
The coronavirus recession continues to forge its own terrible path: More than 40 million layoffs, well-known brands forced into bankruptcy, economic growth slashed. And there is growing dread that the pain could stretch into next year.
Now, recovery hinges on zapping a microscopic pathogen and giving millions of Americans not just jobs, but also the confidence to eat out or make firm wedding plans.
“Nobody wants guests to be coming down with covid 14 days after an event,” Gang said. “There’s a sense of responsibility. Even if the government green-lights us, I don’t know that we’re there yet.”
Gang said Mother’s Day arrangements gave her shop, and the industry as a whole, a much-needed lift, though individual bouquets can’t make up for the long-term loss of hotel lobbies and banquet halls. Now, flower shops such as Helen Olivia are staring down the summer season and wondering what comes next.
“We’ve been hustling, hustling, hustling … but people don’t spend the way they do in spring in the summer,” Gang said. “We don’t have this nest egg.”
At Goat Lady, Bradds expects the next two months to bring serious cash flow problems. Distributors typically pay for orders a month or so after receiving invoices. Soon, the farm’s last bulk orders will have been paid for.
Before the recession, Goat Lady sold $30,000 to $40,000 worth of cheese each week. Since the downturn, weekly sales have not surpassed $5,000. Business is down 90 percent overall.
“We’ve been fine the last couple of months because the distributors that owed us were still paying,” Bradds said. “But now they don’t owe us anything.”
Bradds said her future sales are most dependent on North Carolina restaurants reopening. Still, the ones that can afford to reopen are running at slashed capacity, and many wineries and bars are still closed.
Goat Lady has picked up new customers at farmers markets across the state. And while those sales may not bring in much cash, Bradds hopes they will continue as shoppers try to buy locally and avoid stores and restaurants.
“This whole thing is going to change the landscape of our food system,” Bradds said. “In some ways it’s bad. In some ways it’s not.”
The variables widen further up the supply chain. At IGF, Di Benigno isn’t just counting on steady supplies of food products. Scaling up the operation again will also depend on reliable delivery systems, comprehensive cleaning procedures and enough demand from major customers.
“Is there one specific rung [that matters most]? No,” she said. “The ramp-up is almost as difficult as the slowdown. … We’re all interdependent.”
Avalon’s landlord suspended rent until Oct. 1, but even then, Ellis doesn’t know how the catering company will make up for months of zero business. She’s adding a provision to Avalon’s contract protecting the caterer from liability in case venues, clients or vendors don’t take enough precautions against the spread of the novel coronavirus.
Decades in catering didn’t prepare her for this, she says. How can table settings be arranged six feet apart? Should clients have to wear masks or go through the same hand-washing procedures as waiters and chefs? Ellis recently received a pitch for $180 plexiglass panels to separate guests at tables. How many could she even afford?
Those are the business questions. Ellis’s heart sinks when she considers the answers.
“The folks I work with may be more than eager, in fact, desperate, to go back to work,” she said. “They’ll be ready. But what happens to our employees? What am I asking them to do, really? Put themselves in harm’s way?”
The last week of May, Zamora, Ellis’s business partner, went back to Avalon’s kitchen to pack up the remaining goods and turn off the fridge and freezer. He starts drawing Social Security in a few weeks, and while he insists on keeping his spirits up, those checks won’t be enough to get by. Zamora’s family has been shopping at cheaper grocery stores, opting for simple soups and rice dishes over cuts of meat.
If Avalon’s bookings don’t return this year, Zamora will have to start looking for other work. The region may be reopening, he said, “but we don’t know if the phone is going to ring."
“The only thing I know is how to cook,” Zamora said. “I can do it very well. But hospitality is not a business right now.”
It took two months and multiple applications before Acha’s jobless claim was approved. His wife and son are still without work. And in a few months, Acha said, he may have to look beyond the industry he knows so well. Maybe there’s work in construction or deliveries — so long as it keeps him safe from the virus that shut this ecosystem down.
“The more time that goes by, you get to the point of thinking, what am I going to do in the future?” Acha said. “You want to keep your hopes up and see if this is going to go away, or if it will take longer. It’s not a good feeling.”