Things To Come: Food Service 2014

2014 the year that consumers will be spending more, which translates to more posteriors in more restaurant seats. Are you fully prepared to handle this new business. 

Depending on your industry segment and region of the country; changes in products or service style can be subtle or you you may need a major renovation.  Here are a few insights to consider.  

As industry consultants we're lucky enough to work with exciting chains all over the country.  We've seen some trends popping up on menus that is sure to move mainstream in 2014.  You need to reach new customer through their senses, both intellectual (ie: healthy eating or great value) and olfactory.

Fast Casual concepts with continue to fight each other for market share as innovators like Modmarket Farm Fresh Eateries, Great Wraps and Garbanzo Mediterranean Grill  focus on fresh & healthy, while delivering taste sensations that consumer’s translate into dining value. 

Multi-concept casual dining giants serving up more of the same seafood and Italian dishes will continue to struggle with declining sales, but they can look forward to improvements in 2014.  However, real growth in this segment does not come easily because the faster moving and clearer thinking emerging chain innovators keep introducing spot-on trendy products. 

Savvy executives have discovered that re-imagining the menu is far cheaper and faster than “re-branding.”   They are looking to add new seasonings, sides, toppings, and specialty breads...the nitro that has fueled the segment since early 2011.  Ask whether or not you have been providing what your customer needs – or want he wants?  

The “hot chain” concepts that we support have added culinary support to develop or refine new taste experiences. Take time to tell customers why they are using quality products ABF poultry, ZTF oils, red tomato, chia and Quinoa seeds, and roasted veggie toppings. As Chef Paul Ladouceur, SPS-Culinary Services says, “try to add texture to products and discover how intelligent ingredients are not only trendy, nourishing and taste good, but they can produce a healthy bottom-line.”.” 

QSR (fast food) restaurants will outpace all segments in increased profits, partly because the Affordable Heath Care Act forces foodservice organizations to move hourly-workers to 30 hours per week (leaving them to toil without a health safety net).  This unfortunate situation does offer operators an opportunity to invest this political cash gift (they don't have to pay insurance) in equipment upgrades and profit producing promotions.

Thoughts on Distribution 

Not even the Wall Street Journal knows how Sysco’s purchase (merger) of U.S. Foods will impact the marketplace. Lets just accept the fact that it's hard to turn the Queen Mary even in calm waters, but they will find a safe harbor, even as they improve their Machiavellian category management program.

Look for the continued growth of regional distributors and groups like, DMA and Uni-Pro (Mug-Group) that are sure to capture market share during the next 18 months. You can also bet that the super-cube will emerge leaner and more profitable. To the average chain operator differences between distribution services will become even more obvious later in the New Year. 

Food Trends – Eat This List

PRETZEL EVERYTHING	Breads, twists, wraps, nuggets
MIS-MASH	Haute Jewish Deli (amped up chicken liver, peppered pastrami; other - Beef potato chips, marshmallows & macadamia nuts, Asian-American comfort food (hand held)
The NEW COBB SALAD	Trendy ingredients (jerk, ABF chicken, Italian ham, fried avocados
More BROCCOLI	Frittata, broccoli slaw, roasted, as pizza topping, and Pizza oven-roasted cauliflower with whipped goat feta
TO-GO "car cups"	Actually fit cup holders & not just for drive-thru's to hold finger foods from fried fish to whiskey-butterscotch parfaits

Make a New Year's resolution to stay current with your industry, attend a trade show, improve your product knowledge and remember to share your experiences by mentoring the next generation of foodservice professionals.

To Your Success!

Fred

Fred Favole, is Founder & President of Strategic Purchasing Services (SPS), America’s most experienced firm specializing in chain purchasing & supply-chain management support. Ask Fred about a solution for your business; P: 912-634-0030 e-mail Fred@StrategicPurchasingServices.com

Riding Purchasing Off the Rails

You would be surprised (unless you get to see as many procurement departments as I do) just how many companies today are not able to identify savings opportunities

Many of these companies will tell you they know where the cost savings are and they have vendor “deals” in place, but they don’t really. They roll the dice on profits by allowing manufacturers and distributors to control the true cost of goods much like a reverse auction.

I recently started learning to play the drums, which means that I currently suck out loud in neighbor-terrorizing fashion. On the way to my lesson today, I psyched myself up by repeating the simple trick for learning anything: embrace failure.

We can't be good at something until we've first spent a lot of time being really bad at it.  Why should foodservice purchasing be different?

So in the spirit of embracing failure, I am sharing with you how 75 % of the chains we've consulted with over the past 18 years have mastered the process of giving money away to their so called “supply-partners”. 

For many emerging chains, advanced product contracting and spend management control is out of reach unless they turn to professional outsourcing services.  The legendary mistakes made by untrained staff can take years to repair.  

After a few minutes of fumbling, the new Director of Purchasing for a 100 unit chain, just promoted from training director, and with zero purchasing experience, calls his primary cheese supplier and asks if there is a contract in place and demands a price decrease.  Or the new manager rolls-over past contracts walking past immediate savings opportunities available through forward buying programs.

Chain executives that hire inexperienced staff should not be asking why they come up with dry holes again and again in drilling for cost savings. Why? Because they haven't done the due diligence needed to really understand that chains complete by having high performance procurement management. Many chain organizations do value supply executives. For example, McDonald's has always raised purchasing to a "C-Staff" level of importance, right up there with marketing and operations. 

I spent a few minutes here working on the premise that experience drives performance and that if you invest in hiring or retaining a professional to manage procurement you will be more profitable.

Sifting the rubble after the purchasing guy departs

It’s easier to blaze a new trail after you've already been hiking for a while and every time our firm takes over for those smart multi-tasking COO's or Chef's or the guy promoted from training, we are reminded just how much it really costs to be out-of-touch or “cheap”.  

At some point you're going to run out of time and money as the competition devours business in your home market or stops your expansion plans.  The reason is you don't control the supply-chain, manage markets or have the systems, controls and procedures in place to support profitable growth.

You will find that one of the neat things about taking back your purchasing process from distributors, buying groups, and brokers is how, maybe after three months, out of nowhere, bam!   An amazing string of savings opportunities will just burst onto your bottom-line.

Trying to explain to emerging chain organization executives why they should invest in professional management can be a lot like trying to put an octopus to bed.  I can always come back to it later, but for now, I am turning my attention on completing a spend analysis for restaurant chain that will lead to a $1 million savings next year.

To Higher Profits!                                                                                                           
Fred


Fred Favole is Founder & President of Strategic Purchasing Services (SPS), America’s most experience culinary-purchasing firm specializing in department outsourcing and cost-reduction management.  Contact email: fred@strategicpurchasingservices.com Office: 912-634-0030