The world’s food growing limitations and coming inflation will politicize the production and distribution of many transported food products and commodities. We have already seen legislation controlling farming land development, cattle and poultry processing. These are only a few of the components that will change the face of the foodservice supply-chain.
Unless the foodservice industry reforms the menu and purchasing processes by supporting local and regional suppliers, America’s golden age of food product variety at reasonable cost will give way to product shortages and allocation programs.
In our purchasing consulting practice and my previous experiences with Fortune 100 restaurant chains, there has always been a battle for a share of the world’s food supplies. The independent restaurant operator, and many emerging chains do not understand that we compete against international conglomerate farms/packers,both domestic and foreign.
Will your foodservice organization be forced to change menu offering because of world-food management solutions? Did you realize that the largest food organizations already utilize closed buying systems for the purpose of expanding control over food supplies. My consulting firm specializes in protecting our foodservice clients from price increases and supply shortages. However, we come across too many operators that try to match the popular menu items promoted by the major brands..Other restauarnt chains depend on distributors to manage supply relationships for them without realizing this does not provide the same price-volume protection as contracting directly with the supplier.
What can be done?
We are a creative and talented industry, isn't it time that we made changes in how product are selected for the menu? Why create “false” markets and elevate common products like the Kiwi fruit , to exotic food status. Many restaurants promote bone-in chicken wings, once a throw away item, creating a high-demand and supply problems. Does every casual dining, sports bar, pizza and sandwich joint have to offer chicken wings?
It's true that foodservice has been a "follow-the-leader" industry when it comes to products. The “me-too” product offerings inflate acquistion costs for everyone (ex: chicken tenders’ prices are now falling because the BK promotion has ended). When will product development managers and chefs follow the lead of procurement professionals who can identify best buys based on seasonality and product availability. Why not use more pork and turkey for greater profitsand give the customer a break by discounting menu prices!
A better solution is to make product selections in tune with seasoning farming production, protein availability. The new menu management process can start with chain Purchasing and Culinary departments working together in sourcing local vendors and buying more seasonally available products.
Independent restaurants can also support the local and regional supply sources. To jump start this process, consider developing a local supplier database of local green suppliers, independent farms, growers, packers, processors and re-distribution centers (ie: DOT Foods, Mega-Warehouses).
Send the local supplier data base from your part of the state to State Restauarnt Associastions and recommend that they support this initiative and share information from around the state in an online database of suppliers.
I am confident that local suppliers can help prevent a supply-crisis if we prepare for the coming changines. The industry will have to "do more with less product variety" and pay higher prices for the products that are available. This is why we must develop and support food sources closer to home.
The Foodservice community, more than any government program, can lead the way in preserving food self-sufficiency. And, in doing so, assure the food supplies for the talented professionals that feed America.
A final suggestion: whenever your foodservice distributor or purchasing agent seeks a new source of supply, takes a competitive bid, grant a 5% cost preference to locally qualified suppliers and consider it a business investment.
Fred Favole is President of Strategic Purchasing Services (SPS), America’s most experienced foodservice firm specializing the outsourcing, rebate recovery, staff support, and commodity contracting. His contract information: P: 912.634.0030, email: Favole@gate.net. Profile: linkedIN.com/in/strategicpurchasing