The story below is the second in a series on America’s small businesses, their struggles under the shutdowns, and what they’re doing to survive. Over two weeks, The Federalist is traveling the country to tell more stories like this one (and a few about the outlaws).
SALT LAKE CITY, UTAH — Raymond and Jill Zaelit massively expanded their facilities in 2017. Their business is meat, or more specifically, carving, crafting and delivering customized cuts, ages, breeds — whatever you need — to gourmet chefs.
The couple spent well more than $2.5 million on the state-of-the-art expansion: A more expansive processing facility to serve the rapidly growing fine dining scene in Salt Lake and Park City, increased storage, more freezers, and a roomier office space and lobby to make sales and host clients. It’s a large capital investment — one they’re proud of.
“If you told me this pandemic would hit, hit like this,” Raymond, 58, says, thinking back on their expansion, “I wouldn’t have believed you.”
They’re the third generation to helm Majestic Meats Co., founded by Jill’s grandfather in 1950. The couple met on a blind date, and Raymond helped his father-in-law with sales when he had time to spare from his career.
In 2004, when Jill’s parents were ready to retire, they bought the place and 13 years later, oversaw the first move in its 67 years. “The weight to having a family business,” Raymond says as he guides me through massive walk-in freezers holding a fraction of their peacetime capacity, “is you don’t want to be the one who fails.”
But they’ve got a plan to survive, if not yet prosper, and hopefully rehire their full 25 employee-roster and then some.
TJ England knows the weight of family responsibility. At 37, he’s the chief legal officer for C.R. England, a 4,000-truck, 6,700 employee shipping company founded by his great grandfather, Chester “C.R.” England less than 50 miles north of their headquarters one century ago.
Chester got started well before the post-war highway interstate system, and 10 years before the Great Depression. With his one truck, the way through for his family was the same as for most Americans: hard work.
While trucking rates border fatally low for today’s one-man shops, larger trucking companies are doing well. With basement-level fuel prices and consumer needs maintaining, C.R. England doesn’t have to start laying off their 5,700 truckers or 1,000 other staff members like so many smaller businesses do, but with an industry that transports virtually every product Americans consume, he’s had a bird’s eye view of the the seismic shift in our consumption after coronavirus.
Such shifts have hit men like Raymond, whose business typically generates about $10 million a year in revenues, hard, as people switched from eating out to cooking in. “We we went from doing normal orders on Friday to going in Monday like the faucet turned off and 85 percent of it was gone, shut down,” he tells The Federalist. “We knew on Monday that they were shutting everything down at 11 o’clock that night, and we told the boys, ‘We’ll text you, I don’t know what’s going to happen.'”
“And yeah, it was… it was pretty, pretty devastating to lay off, you know, 75 percent of the crew. In a small business like ours, we’re like a family.”
“We had to lay off our son,” he tells me in disbelief.
Restaurants, the bulk of Majestic Meat’s business, are shuttered across the country, with those beginning to open down the road doing a fraction of their typical sales — and needing just a fraction of their typical food orders. While some will make it, industry estimates predict one in four of the country’s restaurants won’t.
With grocery stores alternately and unpredictably stocked or bare, and customers hesitant or afraid to go shopping, the Zaelits saw an opportunity to generate some revenue: restaurant-quality meat and fish, vacuum-sealed and delivered to your doorstep.
Using longtime business relationships to navigate the supply chain disruptions plaguing normal consumers, they can deliver everything from chicken to burgers to pork chops to sushi-grade tuna steaks. They redesigned the website, took out ads on social media, and went to work spreading the word.
“Probably within 24 hours we had a skeleton crew here,” Raymond remembers. “We thought, ‘OK, we’ve got to find out a way to survive.’ And so we took our web page and opened an online service. And we got together and we made a list of what we’re going to sell online and spent hours every night preparing so the following Monday we got online with our store for retail.”
On the first day, there were maybe 15, 20 orders, Raymond estimates, with word spreading fast. By the first week, 65,000 people had visited the page and he and a small staff had filled hundreds of orders. Each time he spoke with local reporters, and as word of mouth spread, that number grew. “We were able to start to rehire some people,” he says, including their son, with everyone doing everything, from packaging to delivery.
“We pretty much went two months on our own and we didn’t have any [Paycheck Protection Program] funding, and survived,” Raymond says. “We survived: pretty much what it was.”
“It seemed to happen so fast,” TJ says, surveying a near-empty office: A pandemic, a work-at-home order, a bottoming out of international trade and the Mexican peso, wrapped up with a 5.7-magnitude earthquake.
Before it all, C.R. England was the largest mover of food products across the Mexican border. Today, Mexico can’t afford to import American meat. “And then we had other markets that were really slowing down,” TJ says. “We do construction raw materials, auto parts, restaurant food service. Those all slowed down so dramatically that we started moving trucks and drivers from those locations to service groceries and some of these other high-needs, pharmaceuticals and those kinds of things.”
“At the very beginning when everybody started hoarding food and everybody’s rushing the grocery stores, we actually saw an uptick in business — we were busier than normal. But then we saw other segments start to drop off. Interestingly, though, we do move product for Georgia-Pacific, who does toilet paper, so we saw an uptick in food products, grocery. Walmart was just busier than ever, I mean they were asking for as many trucks as we get them. Target, same way, Rite-Aid — customers like that were just begging for trucks.”
As low-profit-margin retail stores have struggled to find freezer space, C.R. has found a role as well: Parking refrigerated trailers out back. “It’s just been this game of calling each other, talking to each other, figuring out what everybody needs and seeing if we can meet the needs.”
Majestic Meat’s PPP loan finally came through last week. In the first round of funding, they’d gone through their large corporate bank, earning only hours of waiting on hold and maddening non-answers. For the second round, they switched to Utah’s Capital Community Bank and were approved within hours, Raymond says. They’re still waiting on federal disaster relief despite getting their application in on March 17, but hope to hear something in the next two weeks.
“Am I happy that we had to borrow money,” Raymond asks, “because of a virus that we had nothing to do with; that we’re just in a shutdown? No, I’m not. But you have to reach out to survive and if that’s what it takes for us to do it, that’s what we’re going to do. And hopefully the restaurants will start getting back and they start opening back up and the price of meat will start settling down in the next few months.”
In the meantime, they’re holding onto the struggling restaurants’ outstanding balances to just try to give them more room to breathe and hopefully make it through. “It could throw us the opposite way,” he knows, “if we’re stuck with a ton of bad debt, which we very well could be.”
“Personally, I thought at first this would be a quick hiccup,” TJ says, “that that things would slow down for a few weeks, maybe a month, then we get through this, we’d all return to work and everything would be good. But I think we’ve done some systemic damage to the market, to the economy, that is going to take some time to heal.”
“I’m an optimist but some days, the phone rings…” Raymond trails off. “It’s just a grind. Some days you just think, ‘Why do we do this?’ My wife keeps me grounded.”
“My biggest fear in this is the unknown. You just don’t know what’s coming.”
But when it is finally over, he plans to keep the new line of business they built to get through. “People say, ‘Are you going to continue to deliver meats [after the crisis]?’ We’re a family business, and the public stepped up and helped us, so we’re going to continue to do it — even after restaurants get back to normal.”