One month after announcing the cancellation of Summer Fancy Food Show 2020, originally slated to take place June 28 through 30 in New York City, the Specialty Food Association (SFA) has followed up by enacting several cost-saving measures.
The SFA, which said it is not eligible for federal government relief funds under the Paycheck Protection Program (PPP), placed 30% of employees on a 90-day furlough earlier this week, though will still be covering these employees’ insurance for the duration, according to an update on the organization’s website. Other cost-cutting measures include pay cuts for its executive team.
“We wanted to wait as long as possible before making some painful decisions around choosing between potential staff reductions and/or a furlough plan,” SFA president Phil Kafarakis said. “Both were being considered.”
The SFA cancelled the show on April 13, a few weeks after Gov. Andrew Cuomo announced in March that the show’s venue, the Jacob Javits Convention Center, was being converted to a field hospital for COVID-19 patients. According to Bill Lynch, SFA’s VP, engagement & experience, city, state and federal officials did not indicate at the time how long the hospital would occupy the space.
“We found that other food-related shows were informing their communities about cancellations without ample time for them to change plans and save them from losing their investments,” said Lynch. “We wanted to handle things much differently, so we set a 12-weeks-out target to get an answer out to our community.”
The organization said it attempted to negotiate with the Javits Center over moving the event to a different date later in the year, but the venue refused to release the SFA from its contract because there were no government order in place at the time prohibiting large gatherings. However, Lynch said, the SFA ultimately decided it would be too difficult to move to a new date given the size and duration of the show.
Kafarakis added that the SFA was also seeking assurance from its insurance provider that its claims would still be honored, which further delayed the decision to cancel the event.
“We were really working to protect the solvency of the Association,” said Kafarakis.
According to Irene Math, SFA treasurer and SVP of finance & strategy, though the SFA has event cancellation insurance as well as an “infectious disease rider,” it still anticipates that the claims process will span several months. In the meantime, it has taken steps with its financial advisors in order to “mitigate risk” and “maintain fiscal health” while it works to recoup these losses.
The SFA said it has refunded or given credit to 81% of its Summer Fancy Food Show exhibitors through its established Refund Center.
The SFA has also taken several other measures to reduce costs during this time beyond executive team pay cuts and employee furloughs, including pausing recruiting for 10 new positions and eliminating temps and contractors where possible. The SFA also said it has reduced “budgeted operating expenses, revenue-based bonus expenses and its discretionary 401(k) contribution” along with its board of director fees.
Looking ahead to Winter Fancy Food Show 2021, slated to take place from January 17 to 19 at the Moscone Center in San Francisco, Kafarakis told NOSH the SFA is already in discussion with the venue regarding “responsible ways to move forward” with the show. He said the SFA has also been in touch with other industry groups as they work to develop best practices for safety measures. The SFA is evaluating “lots of variables” including health concerns along with international and domestic travel, as Kafarakis said “no one can say at this point what will or will not be possible in January.”
“We’re hoping to launch 2021 for our industry with a great event, but only if it is safe to do so,” said Kafarakis. “The bottom line is that we’re in a ‘stay tuned’ zone right now.”