MUSKEGON — In an economy as integrated as that in the United States, almost any change in consumer habits means bad news for some businesses but good news for others.
Structural Concepts, a manufacturing company in Muskegon that has all of North America and a few other parts of the world as its geographic marketplace, is developing niche products for a new trend related to the slowdown in the restaurant industry.
Structural Concepts designs, engineers and builds temperature-controlled food and floral display cases for the grocery and food service markets. The company’s award-winning technological innovations are designed to provide retailers with ease of operation, increased sales potential and reduced operating expenses.
The privately held company serves many of the larger businesses in the food retailing industry, including supermarket chains such as Albertson’s, Safeway, Ahold USA, Wal-Mart, Publix, Winn Dixie, SuperValu, Loblaws, Sobeys, A&P, HEB, Ingles, Shaw’s, Hy-Vee, Wegmans and many more. Other food service clients include Starbucks, Mrs. Fields, Borders, McDonald’s, Wolfgang Puck Cafes, Seattle’s Best, Gloria Jean’s, Aramark, Marie Callender’s, la Madeleine, Starwood Hotels and Hilton Hotels.
“Meijer is by far our biggest customer in Michigan,” said Randy Holleman, chief engineer at Structural Concepts. “They are really a good, forward-looking company. We’ve got a lot of nice opportunities with them.”
Holleman, whose formal title is director of development engineering, is also a member of the steering committee of the Muskegon Inventors Network. An innovative capability is important at a company like Structural Concepts because it is heavily involved in new store development as well as store remodeling projects — and major retail businesses continuously change with the economy.
Founded in 1972 and led by James Doss, Structural Concepts recently had to cut back its employee roster from about 320 to 280 or so.
Annual sales are estimated at about $50 million.
“Like a lot of other industries, we’re noticing a little bit of a slowdown,” said Holleman.
He said the company makes “pretty much just about any case you see inside a food store.” Traditionally, these were cases designed to maintain one specific internal temperature zone. But that has changed.
“Now what we’ve had to do is develop cases that have two or three different temperature zones within the case,” said Holleman.
That situation is a direct reflection of the slowdown in the restaurant industry. According to Andy Deloney, vice president of public affairs at the Michigan Restaurant Association, restaurateurs have been hit hard in Michigan over the last couple of years, but the slowdown is now evident nationwide.
Holleman said the trend is for people to eat at home instead of eating out. However, a lot of those are working people who may not have the time or energy to cook a meal from scratch once they get home at the end of the day.
“We are trying to tailor and develop cases where our customers can provide somewhat of a prepared meal that (consumers) can pick up at the supermarket,” said Holleman.
To that end, Structural Concepts has developed a “meal bundling case” where the components for a complete meal in a particular food theme can be offered in one convenient location and changed frequently to keep attracting shoppers. For example, if the theme is tacos, the case would contain all the ingredients for making them — stored safely and efficiently in separate temperature zones.
The consumer headed home after work can “be in and out in a couple of minutes and they have all the stuff necessary to make a meal,” said Holleman.
For consumers with even less time, Structural Concepts has developed cases for pre-cooked foods, ranging from entrées to side dishes to desserts. The entrée can be heated at home in the microwave or toaster oven.
“West Michigan seems to be a little slower in a lot of these new (supermarket) trends than some other areas throughout the United States,” said Holleman.
“We developed what we call a multi-zone or three-zone case for a customer in the southern part of the United States,” he said. He confirmed that the customer is a major retail food chain, but he was not at liberty to identify the company.
A case can conceivably have different temperature zones for frozen food, meat and cheese (about 38 degrees Fahrenheit), fresh produce (41 to 42 degree range), and a non-refrigerated section for products such as taco shells and canned goods.
Holleman said Structural Concepts is the only company he knows of in West Michigan manufacturing “refrigerated merchandiser” display cases. He said they “pretty much” produce a complete, self-contained unit, starting with sheet metal and wood. Interiors are finished in stainless steel or epoxy-coated cold-rolled steel. Case exteriors are finished to correspond to store décor.
Components for the cases are sourced all over the world. The case can be manufactured with the required refrigeration equipment built in, or the installed case can be tied in to a centralized refrigeration system already in the store.
Although the company is seeing a slowdown in business, Hollenman said it really didn’t begin to happen until after Thanksgiving.
“Our equipment would be one of the last things to go into a new construction project,” he said. The display cases often don’t go in until two years after ground has been broken. In a remodeled store project, it is generally about six months before the new cases are installed.
“There are still stores in the pipeline” for which they are producing cases, noted Holleman.
“Just in talking to some of our vendors, they said January and February — economy-wise in West Michigan — seemed to be absolutely horrible, but they are starting to see some things pick up a little bit,” he said.
“It would be nice to say that January and February were the worst of it,” he added, but he refrained from speculating further along that line.
In addition to supermarkets, Structural Concepts also provides cases to the food service industry in settings such as hospitals and high schools. Coffee shops like Starbucks generated “real growth in the last five years” in the demand for food display cases, said Holleman.