Diaz Foods: Importer Weathers Economic ‘Perfect Storm’
August 2, 2012
By Chris Shattuck
Over a period of more than 40 years, growing from a single grocery store on Atlanta’s Fifth Avenue to a regional distributor in about 25 states, wholesale supplier Diaz Foods has weathered its share of economic downturns.
But even this seasoned company, started in 1969 by a Cuban immigrant and his son selling imported goods to the Hispanic community in Atlanta, had never faced a maelstrom like the one that hit in 2008.
Fluctuations in commodity prices and diesel fuel coupled with deflationary pricing all contributed to a “perfect storm” of economic hazards that caused the company’s average annual growth rates to slip beneath double digits for the first time in decades, Rene Diaz, president and chairman of Diaz Foods, told GlobalAtlanta.
However, unlike some other businesses around the state, Diaz also had to deal with another outside factor – a mass exodus of many of its customers.
Since the passage of Georgia’s new immigration law in 2010, Diaz has seen thousands of immigrants leave the Peach State, contributing to about a 30 percent drop in business in Georgia, Mr. Diaz said.
“Georgia has always been our No. 1 market for 31 years – until last year,” he said. “Georgia fell from one to second and the Carolinas became our largest market in our footprint, which is huge because obviously it’s less expensive for us to deliver in Atlanta or Georgia than the Carolinas.”
Although Diaz was able to recapture some of these customers in other states, the increased transport cost posed a challenge for how it could more efficiently serve businesses from its facilities in Atlanta and from the ports of Savannah and Jacksonville, Fla.
That need has forced the company to re-adjust from the “old way of doing things” to a model that better accounts for factors outside the company’s control like fluctuations in fuel and commodity prices, Mr. Diaz said.
“We have not necessarily reinvented ourselves, but we have really looked at who we are and what drives our profit,” Mr. Diaz said. “So everything we’ve done in the last 36 months or 48 months has been efficiency driven.”
The company has devoted additional resources to its Business Intelligence Division, hiring six employees in recent years to help crunch data on things like products per truck, route lengths and time per stop to find and correct inefficiencies, said Liliana Bejarano, the division’s vice president.
“We try to see the information from many different ways,” she said. “Any possible aspect we try to analyze and take advantage of that data.”
For example, the company noticed that customers were ordering more imported soft drinks like Mexican-made Jarritos, Diaz’s highest selling product by volume, which have a relatively high profit margin, Ms. Bejarano said.
Taking advantage of that information, Diaz Foods began pushing sales of more of these and other drinks, including coconut water from Thailand, an aloe drink from South Korea and a Chinese soft drink marketed towards children, Mr. Diaz said.
Managed under the umbrella of The Zaid Group LLC, Diaz Foods is one of several family-run sister companies, including: Diaz Produce, the company’s produce division; Tortillas de Casa, Diaz Food’s tortilla manufacturing arm; and the Village Taqueria Tequila Bar, a Smyrna-based restaurant.
Despite the rough economy, the Diaz Food conglomerate as a whole contributes to more than 30 nonprofits, including Children’s Healthcare of Atlanta, the Carter Center and the Atlanta Community Food Bank, of which several Diaz family members sit on the board of directors.
“It’s our human responsibility as a citizen of this country and of this world to give back,” Mr. Diaz said. “My family came here with nothing to this country – and to have the ability to give back the opportunity this country gave us, I think it’s just something that we have to do.”
Although community outreach and volunteer work is not required, Mr. Diaz said, the company does everything it can to support employees who are engaged with nonprofits and service groups.
For example, each year it offers a week of paid vacation for Eric Newberg, Diaz’s chief financial officer, to volunteer with Atlanta-based nonprofit Camp Sunshine, which provides recreational activities for kids with cancer.
Diaz Foods is also active in the business community, supporting the Georgia Hispanic Chamber of Commerce, which Mr. Diaz helped found in 1984.
“We have been fortunate enough to have him serve on the board of directors at the chamber in the last two years,” said Tisha Tallman, the chamber’s president and chief executive officer. “He is a great example of an active entrepreneur that consistently gives back to the Hispanic business community through time, talent and resources.”
Visit www.diazfoods.com for more information.
Source: Global Atlanta