By Jonathan D. Epstein

news business reporter

One of the region’s best-known mobile and prepackaged food service companies is seeking out new business opportunities and diversifying its clientele after the loss of its biggest contract, with 7-Eleven, forced it to change strategy.

Pine Hill Fresh Foods, known for its mobile coffee and vending trucks, is seeking to develop new vending or catering relationships with several gas station convenience store chains, universities and manufacturers around the region.

Already it has a contract to supply 300 Hess Express stores and some independent retailers, but it’s pursuing more. It’s also eyeing new “grab-and-go” product lines for schools, offices and boxed-lunch programs.

The goal is to quickly replace the business volume it lost when 7-Eleven bought out Wilson Farms. That, in turn, will enable it to not only bring back three dozen jobs, but increase employment further, said owner and CEO Jeff Russo. At the same time, it’s spending $3.1 million on a building expansion.

“We’ll bring back our staff and then we’ll bring back more after that,” he said. “I wanted to make sure everyone knew that there’s still a company. We still have a lot of activity going on.”

Pine Hill, which for years had supplied prewrapped fresh sandwiches and other food to 160 Wilson Farms stores before 7-Eleven bought them, said the wholesale food service relationship with the Buffalo Niagara 7-Eleven stores had recently ended when the Dallas-based chain decided to use international provider LSG Sky Chefs to stock its stores.

Pine Hill had been aware of the plan, but the decision was still a blow, causing the company to lay off 37 employees.

However, the 7-Eleven contract had disadvantages, Russo noted. The volume of work from those stores and the limitations of its existing production facility meant the company couldn’t expand its business.

“The relationship with Wilson Farms was a really, really good, strong relationship, but when 7-Eleven took over Wilson Farms, it piled on a lot of expenses and a lot less volume,” he said.

Now, though, the company is taking advantage of the loss of the 7-Eleven work to try new ventures, while expanding sales to other existing customers. Within four weeks, Russo said, he expects the company will have replaced all of the former 7-Eleven store contracts, and perhaps even added another 100. That will allow him to bring employment back up from 150 currently to 175 or even 200 by year-end.

“We didn’t have any more capacity. We were totally maxed out from a storage and manufacturing standpoint. We basically had to hammer the brake pedal because we couldn’t handle any more production,” Russo said. “Now we have all this new capacity and we’re going to go and fill that capacity. It opened up some new doors and we’re going to go to town on that.”

Founded in 1967 as Pine Hill Coffee Service, the company initially provided fresh foods and drinks to construction and industrial sites in Buffalo, but has since expanded to include a network of more than 80 mobile catering units, vending service and wholesale food supply. It also now serves a broader geographic region across upstate New York and four other states.

Pine Hill supplies freshly made and hand-wrapped sandwiches, subs, salads and entrees to hundreds of national chain stores under their brand names, including Fresh-to-Go products for Hess markets in New York, Pennsylvania and Massachusetts. It also supplies several university food programs, under the Pine Hill Deli Fresh name, and makes tacos, wraps, hard rolls, pastries, doughnuts and refreshments for other clients.

More recently, it partnered with Aramark and Next Generation Vending LLC, one of the largest facility services firms in North America, to provide “high-end meals” for food-service mini-stores inside manufacturing plants. So far, it has three so-called “micromarts” in Binghamton’s Frito-Lay plant, a Corning Glass plant and a facility in Albany, but Russo said he hopes to add four per month for two years, for a total of about 100 across the Northeast.

About 35 percent of Pine Hill’s revenues of $15 million to $20 million come from trucks and the rest from fresh food.

“In recent years Pine Hill has developed some solid experience supplying quality packaged foods in university and office settings,” he said. “That is one area where we expect to see some real organic growth as customers become aware of our newly available capacity.”

Meanwhile, the company’s plans for a new commissary and bakery facility remain on track, Russo said. The company last year said it would expand into a vacant 38,000-square-foot former Jubilee supermarket at 4233 Lake Ave. in Hamburg.

Pine Hill bought the property for about $600,000, and will now spend about $2.5 million to renovate it into a food depot, increasing its production capacity by 400 percent. The company now has two production lines, but Russo plans to ramp up to four – two hand-wrap, two machine-wrap – with a maximum capacity of six. The mobile vending operation will still be based in Orchard Park.