Friday, January 23, 2015

Foodservice Chains Build On Performance Conclusions

Your cost improvement strategy is on solid ground if based upon restaurant profits and brand positioning relative to the competition. 

The purchasing supply-chain contribution to your business should be driven by activities that contribute to the cost positioning of your chain. 

Ideally, the involvement of purchasing and R&D, working with marketing and operations in part of your performance management process.  This interactive dynamic sets the stage for overall spend and menu success. 

If you don't have the resources on staff, consider outsourcing as a tremendous and affordable solution to drive your business to the next level of efficiency. 

The really great restaurant chains excel at the Value Improvement Process and you can too!  

Start with these 4 basic steps:                                             
  1. Identifying key areas of investigation    
  2. Set appropriate cost targets                                    
  3. analyze options in each area                                                 
  4. secure resources to complete the work
The process we use with emerging chains or franchising organizations is to form small groups knowledgeable about specific areas of the business. Then, during monthly meetings or via online webinars, ideas are discussed and the best are presented to senior management.

If you would like to discuss the challenges facing your foodservice business or would like to learn about our Free spend analysis, give us a call today....It's Your Money!

To Higher Profits!  Fred                                                                                                                                                                                                                                                                 
Fred M. Favole, is Founder  & CEO of Strategic Purchasing Services (SPS) the industries most experienced consulting firm specializing in "outsourced" purchasing management. Office: (912) 634-0030,   

Thursday, January 1, 2015

Things To Come - Foodservice 2015

Supply Chain Matters
Welcome to 2015, the year that moderate energy prices increased consumer spending; even as the millennial generations' craving for junk food gives way to better food choices.  Keep in mind, they just learned via Twitter that testosterone replacement therapy has been perfected and life expectancy is now 87.45 years!  

Depending on your industry segment, your competitor’s changes in menu or service style to gain the profit or competitive advantage can be subtle; like fast food restaurants hiding the condiments, your favorite pub downsizing the personal size pizza or that national bar and grill chain adding a take-out charge to your take-out order. Expect more of the same in the New Year.

As industry consultants we are lucky enough to work several "hot" emerging chains with unique menus and trend setting concepts.  We work with them to source new items, develop contracts and manage the supply-chain process. Future restaurant chain leaders will find 3 basic ways to reach the teen to twenty something age group; social media, healthy offering and olfactory sensations.  This kicker this year these basics have found there was into the QSR and Fast Casual segments.

Gone are the days where double size-it promotions, $2.00 off coupons, and 36 oz sugar cola's can draw new customers, especially for the "Homeland" generation.

Segment Movers for 2015

·                     Fast Casual concepts with continue to fight each other for market share. And, innovators like Anthony Pigliacampo at Modmarket Farm Fresh Eateries (Denver) and Ron Siegel of Chickpea International (NYC) will continue to focus on fresh, healthy and tasty fare, while offering real dining value. 
·                     Casual Dining giants that serve up more of the same seafood and Italian dishes year after year will continue to struggle, closing stores faster than they can remodel. Real growth in this segment does not come easily, primarily because the competition is keen and emerging chains can move faster and offer more exciting menu dishes. 
·                     QSR restaurants may outpace all segments in increased profits, partly because they are starting to think "green and healthy" and mostly because the Affordable Healthcare Act in 2015 will force them to reduce non-management staff working sub-30 hour weeks.  This unfortunate (ha ha) situation does offer many operators an opportunity to pocket this political cash gift since they don't have to pay insurance. 

Distributors Are No Longer Price Friendly 

Not even the Wall Street Journal knows why Sysco’s purchase of U.S. Foods has been delayed. Let’s accept the fact that it's hard to turn the Queen Mary even in calm waters, as Super-Cube downsizes sales and support staff.  

What operators really need to watch out for is Machiavellian category management programs from some distributors that restrict open market purchases and distort the true cost of goods.  If you are not controlling 80% of what you spend through direct manufacturer contracting, you need to retain a professional purchasing support service. If you have a home-grown management mentality, then at least consider using an outside audit service to manage price-compliance within your supply chain.      

Your Foodservice Career

2015 will be the best year since 2005 for you to break into management, get promoted, change companies or retire from you day job and open your own foodservice business.

This year the “hot chain” concepts will add culinary to develop or refine new taste experiences and there is always a need for experienced restaurant operations managers willing to work long-hours and relocate to new growth markets. 

If you have the what it takes, make your move between March and May, the best months in the year to land that new career opportunity!

Why not make your New Year's resolution to stay current with your industry by attending a trade show,  taking a professional improvement course, work smarter-not harder, thenpay it forward" by sharing your knowledge, experience and passion for this great industry with the next generation of foodservice professionals.

To Your Success in the New Year!


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