DALLAS – Kim Peacock was once the purveyor of first-class luxury, but now her Arlington company has more than 87,000 pounds of nuts and no idea if her airline customers will ever want them again.
So GNS Foods of Arlington, a supplier to American Airlines, is trying to unload dozens of pallets of mixed cashews, pistachios, pecans and almonds after the COVID-19 pandemic forced carriers to stop serving the first-class perk on flights.
GNS opened a retail store at its factory and started peddling nuts online in hopes of getting rid of them at their wholesale price, even though the company took the effort to roast, salt and package the nuts.
“We have pallets and pallets of nuts here,” Peacock told The Dallas Mornings News. “We didn’t know how long this was going to last. The airlines were in a state of disarray themselves and they didn’t know if they were going to be bringing them back or not.”
The company still has about 70,000 bags that weigh 1.25 pounds a piece.
First-class nuts have been one of the surprise victims of the global COVID-19 pandemic, which has overtaken all aspects of life and sent airlines into a frenzy of how to protect customers and avoid bankruptcy.
American Airlines stopped serving warm nuts and most other food items to passengers in March, when the COVID-19 pandemic started and airlines were on the front lines of battling the spread of the virus. Now flight attendants pass out a paper bag with a small bottled water, pre-packaged snacks and hand sanitizer. High-profit-margin alcohol sales are offered only on longer-haul flights and only to premium-class customers.
American Airlines has had to find ways to unload its excess food, too. The Fort Worth-based carrier has donated about 500,000 pounds to food banks nationwide, including several in North Texas.
Of course, American is facing its own problems as leaders try to maneuver to save the business. Its sales were down about 87% in the second quarter, and the company is facing the potential of cutting 20,000 or more employees in the fall.
Small suppliers such as GNS Foods, with about 20 employees, are an overlooked casualty as the airline industry fights for survival.
Last year, GNS sold about 12 million pounds of nuts. About 70% of those sales were to American Airlines; Chicago-based United Airlines buys a smaller portion. The company has diversified in recent years by purchasing a candy-making operation and expanding sales to private labels.
But mixed nuts were the bulk of its business, allowing GNS to expand into other areas while keeping consistent business the rest of the year.
“The margins that you make when you sell to the airlines are quite small, but it’s great year-round business,” Peacock said. “I would take it back in a heartbeat.”
Business came to almost a sudden halt in mid-March, when the COVID-19 pandemic first resulted in international travel restrictions and an immediate drop in airline traffic. At one point in early April, fewer than 90,000 people boarded planes at U.S. airports, 96% fewer than on the comparable day a year earlier.
Until then, GNS had sold bags of nuts to airlines, which put them on planes to be warmed and handed out to premium-class customers. The nuts are a sign of prestige, along with those wider seats and blankets.
When the airline temporarily stopped serving nuts a few years ago, customers complained and they were quickly brought back.
Now, during the pandemic, nuts are an afterthought. That has left GNS with a lot of nuts and no airline customers.
Earlier this month, GNS opened a store in Arlington to sell the nuts to the public. At about $6 for a 1.25 pound bag in store, they are selling for less than they cost GNS wholesale, even though the company has to roast, season and bag the nuts. Online they nuts are more to compensate for shipping.
“If we can get rid of the product and break even, our business is going to be smaller, but we have a chance of being profitable going forward,” said Peacock, who started the company in 1990.
GNS Foods is selling both a “first-class nut” mix and an Aloha blend, which used to be provided on flights to Hawaii.
Peacock said the nuts are selling well both in the store and online.
GNS brought back all of its employees furloughed earlier in the pandemic and even hired a few extra to handle retail and online sales. The company is getting calls from across the country and has even had inquiries from Hong Kong and Canada.
“It’s been a little, no pun intended, nutty around here,” Peacock said.