As owners of one of the top wholesale food distributors in the state, Dana Chun and Will Hughes know they have to keep up with the changing tastes of local consumers to survive.

King Food Service was incorporated in 1975 as a meat distributor and subsidiary of a Los Angeles-based firm. In 1994, King Food Service became an independent company and has gradually expanded its inventory to more than 3,000 products.

The Waipahu-based company last year reported sales of about $33 million, a far cry from the "few millions" that King Food Service made when Chun joined the business in 1981.

"It didn't take long to realize that you couldn't just sell chilled beef and be successful. You had to expand beyond that," said Chun, president and chief operating officer.

"We've expanded into just about every type of chilled and frozen food product you can imagine," added Hughes, chief operating officer.

Five years ago, King Food Service made a large expansion into gourmet and specialty foods to satisfy the needs of the "white tablecloth" eateries. Among its clients are Sansei Seafood Restaurant, DK Steak House, 3660 on the Rise and Chai's Island Bistro, as well as Hilton, Marriott and Hyatt hotels.

"In the beginning we were sourcing most of our products from the West Coast of the Mainland, and now we source nationwide in addition to European specialty products, a lot of seafood from Asia and from Australia," Hughes said.

Hughes said the company has the advantage of having one of the few facilities here that was built for cold storage.

The Pupu'ole Street building has enclosed refrigerated docks to keep food cold at all times, heavily insulated walls and a storage facility in Los Angeles so the company doesn't have to rely on third-party consolidators.

But to be successful, Chun and Hughes said, they also must keep up with "what's going on in the world," whether it's the avian flu's effect on the chicken supply or a country buying up the world supply of a certain type of shrimp.

Chun said they also must stay in close touch with their customers.

"The people that ultimately decide what you bring in are your customers," Chun said. "The chefs have preferences and they obviously tell you what they prefer and you go out and you check the marketplace and you see if it's one chef or many chefs and see if you can make a viable line out of it."

The two attend food shows around the world to see what's hot and they bring back samples for their customers. Sometimes a product catches on, sometimes it doesn't.

"We're looking for long-term customers, customers that we can help grow the business and not just be a delivery company for," Chun said. "We like to consult and we like to be a part of their success."

Over the years, King Food Service has also had to overcome severe economic hurdles, such as the weeks and months following the Sept. 11 attacks. The company also has had to deal with financial problems of its clients, such as the 2001 bankruptcy of interisland cruise operator American Classic Voyages, which left King Food Service with a $780,000 credit loss.

"We were able to regroup and continue ahead and still put out a profitable year despite taking that type of a hit," Hughes said.

The U.S. Small Business Administration last year named Chun and Hughes the small-business persons of the year for O'ahu.

Despite the accolades, the two men said they must continue to work hard to be profitable. Both said they want to add to their 46 employees, but not get so large that they cannot control the operation.

"Our business plan has always just been steady, healthy growth," Hughes said. "It's still a relationship-driven environment here, and you cannot just grab market share by cheap pricing and keep that market share. We have to be careful about overshooting our plans to bring in additional revenue and have no control over the cost side."

Reach Curtis Lum at culum@honoluluadvertiser.com.