Richard's Foods Distributors

Bringing in big business via word-of-mouth
Written by: 
Molly Shaw
Produced by: 
Victor Martins

After almost 30 years in business, Richard’s Food Distributors (RFD) has risen to the top of the retail food distributing chain in the greater Los Angeles area. Today, RFD serves a range of retail and grocery stores, particularly in the Hispanic market, delivering within a 50-mile radius of the city, but also to customers as far as Washington, Oregon and Texas. Furthermore, RFD is doing it all without advertising; no website, no newspaper ads, no social media, just good, old-fashioned word-of-mouth.

“We do not spend a dime on getting the word out to customers,” says Umar Mohammed, purchasing manager of RFD. “All of our business is 100 percent from word-of-mouth advertising.”

“When you find something good that you really enjoy, what do you do,” poses Mohammed, whose father Abdul Mohammed purchased the company in 1987. “You decided to tell everyone about the product and you look forward to that same experience. That’s how we operate and that’s how we’ve gained customers from Arizona to Washington, Idaho to Texas, New Mexico and as far as Australia and Singapore. We’re very grateful for our supportive customers and the slow and steady growth we’ve achieved thanks to them.”

From the street to the store

But what RFD is today is very different from where the company was in the late 1980s. “My father, Abdul, who is now semi-retired took over RFD in 1987,” recalls Mohammed. “The company existed before 1987, but it was a small, 2,000-square-foot warehouse.” Now RFD calls a 50,000-square-foot site home in Santa Fey Springs, Calif., just outside of L.A.

Early on, RFD’s primary business was to supply lunch wagons and catering trucks in the city. “At one point there were about 60 small catering houses, but now there are only about 10 or 15; it’s about a third of what it was,” notes Mohammed. “As the construction industry in the area died down and there were less hungry workers on the streets, the demand for these food trucks slowed.”

Less demand, coupled with increasing city regulations and limited permitting for catering carts cut the market down to just a few players. “The demand changed and while higher end food trucks are still popular there are also more restaurants and food is easily accessible,” explains Mohammed. “The decreased demand and the saturation of the market drove most people out of the business.”

RFD was faced with a tough choice. “We had to diversify,” recounts Mohammed. “RFD made the steady transition into retail and grocery chains, mainly Hispanic chains. It all started with one store and if you fast forward 15 years, now we’re at 40 to 50 stores.”

Today, retail and grocery store sales account for approximately 80 percent of RFD’s business, while a small 20 percent still serves foodservice catering trucks. “We serve a 50-mile radius of L.A. with our own trucks, but we also offer a really good out-of-state discount for outside carriers,” notes Mohammed.

Standing out

Aside from reaching a broad audience through solely word-of-mouth business, Mohammed says RFD stands out from the crowd by offering new and unique products, the best possible pricing and highly reasonable payment terms. “First, we distinguish ourselves from the competition by finding new products that no one else will take a chance on,” he reveals. “In the last three to four years we have probably had 800 to 900 new products in stock and in just the last six months we’ve brought in 100 new items.”

Mohammed says RFD also works hard to keep its overhead low so it can pass along the savings to customers. “We offer some of the best pricing possible,” he assures. “And finally, we also stand out because we offer good terms, giving most stores a full 30 days to pay with no late penalties.”

That’s because RFD understands the grocery business is a fiercely competitive one that comes with considerable overhead and capital investment. “Our terms are very beneficial for our customers because the grocery world is hard to survive in and the capital is enormous,” explains Mohammed. “It’s like we’re loaning the money to survive until they have it to pay back.”

As expected, this has spread throughout the retail community in greater Los Angeles, adding to RFD’s trusted reputation for customer-oriented service. “We do want to grow and we have been, slowly but surely,” says Mohammed “We try to keep a low profile because we don’t want to get too big, we’re in it to please our customers and if it means staying small that’s what we’ll do.”

Richard’s Food Distributors continues to be a trusted name in retail and grocery distribution, placing customers’ needs first to earn a stop at the top of the food chain.

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