Multi-unit restaurant operators face the continual challenge of balancing the delicate equation between providing top-notch dining experiences and maintaining healthy profit margins. One critical aspect that directly impacts a restaurant’s financial health is spend management, where understanding the distinctions between direct and indirect spend plays a pivotal role.

While the terms “direct” and “indirect” might sound straightforward, their application within the context of foodservice procurement can be multifaceted and nuanced. By gaining a comprehensive understanding of these differences, operators can make informed decisions, optimize resource allocation, and pave the way for sustainable growth and success in this dynamic industry.

What is Direct Spend?

Direct spend refers to the procurement of goods and services that are directly involved in the production and preparation of food and beverages for a restaurant or food establishment. These are the expenses incurred on items that are essential for the core operations of the business.

Examples of Common Direct Spend Categories:

Food ingredients: This includes all the raw materials and ingredients used in cooking and preparing dishes, such as vegetables, meat, seafood, spices, and other essential food items.

Beverages: The cost of purchasing beverages, such as soft drinks, alcoholic beverages, coffee, and tea, falls under direct spend.

Kitchen equipment and utensils: Expenses related to acquiring and maintaining kitchen equipment like ovens, stoves, refrigerators, knives, and other utensils are considered direct spend.

Packaging and disposables: Costs associated with containers, takeout boxes, napkins, and other disposables used to serve food directly to customers.

Cleaning supplies: The expenditure on cleaning products and hygiene essentials for maintaining kitchen and dining areas.

Direct spend is a crucial aspect of foodservice operations and managing it efficiently can contribute to cost control and ultimately impact the profitability and success of a restaurant or foodservice establishment.

What is Indirect Spend?

Indirect Spend refers to the procurement of goods and services that are not directly involved in the production and preparation of food and beverages but are essential for the overall functioning and support of the restaurant or food establishment. These are the expenses incurred on items that are necessary for the smooth running of the business but are not directly related to the core operations.

Examples of Common Indirect Spend Categories:

Facility maintenance: Expenses related to maintaining the physical infrastructure of the restaurant, such as repairs, renovations, and upkeep of the building and equipment.

Cleaning and janitorial services: The cost of outsourcing cleaning services for the restaurant premises, including regular cleaning and deep cleaning.

Office supplies: Expenditure on items like paper, pens, printer ink, and other office essentials used for administrative purposes.

Marketing and advertising: Costs associated with promoting the restaurant, including advertising campaigns, social media marketing, and promotional materials.

Staff training and development: Expenses related to training programs, workshops, and educational materials for employees to enhance their skills and knowledge.

Utilities: The costs of utilities like electricity, water, gas, and internet services required to run the restaurant.

Insurance: Payments made for various types of insurance coverage, such as property insurance, liability insurance, and worker’s compensation insurance.

Indirect spend, while not directly impacting the food preparation, plays a vital role in the overall efficiency and success of the foodservice business. Proper management of indirect spend can contribute to cost savings and improve the overall performance of the restaurant.

What is the difference between Direct and Indirect Spend?

How do I manage my direct and indirect spend?

Managing direct and indirect spend for multiple locations as a multi-unit restaurant operator requires careful planning, coordination, and a centralized approach to procurement. Here are some strategies to effectively manage direct and indirect spend across multiple restaurant locations:

Leverage Technology and E-Procurement: Implement e-procurement systems and technology to streamline the purchasing process. E-procurement can centralize supplier databases, automate purchase orders, and facilitate electronic invoices, making it easier to manage spend efficiently.

Centralized Procurement: Establish a centralized procurement team or department responsible for managing purchasing decisions for all locations. Centralizing purchasing allows for better coordination, leverage in negotiations, and streamlined processes.

Standardized Supplier Agreements: Negotiate standardized supplier agreements that cover all locations. This approach helps in securing consistent pricing, terms, and conditions, reducing the risk of variation in spend across different locations.

Implement Spend Analysis and Reporting: Utilize spend analysis and reporting tools to track and analyze spending across all locations. This data-driven approach enables you to identify spending patterns, areas of potential cost savings, and opportunities for consolidation.

Supplier Consolidation: Whenever possible, consolidate suppliers across multiple locations to negotiate better pricing and terms. By sourcing from a smaller number of trusted suppliers, you can achieve economies of scale and reduce administrative overhead.

Group Purchasing Organizations (GPOs): Consider joining a Group Purchasing Organization to pool purchasing power with other restaurant operators. GPOs negotiate contracts with suppliers on behalf of their members, enabling access to better pricing and deals.

Regular Reviews and Audits: Conduct regular reviews and audits of spending to ensure compliance with procurement policies and identify any discrepancies or areas for improvement.

Implement Budget Controls: Set clear spending budgets for each location and monitor adherence to those budgets closely. Implement approval processes for purchases exceeding a certain threshold to maintain financial discipline.

Training and Communication: Train and communicate with restaurant managers and staff about spend management policies, cost-saving initiatives, and the importance of adhering to centralized procurement guidelines.

Share Best Practices: Facilitate communication and collaboration between restaurant managers across different locations. Share best practices and successful cost-saving strategies to foster continuous improvement.

Sustainable and Ethical Sourcing: Emphasize sustainable and ethical sourcing practices across all locations to align with consumers’ increasing demand for environmentally conscious businesses.

Stay Updated on Market Trends: Stay informed about market trends, pricing fluctuations, and emerging technologies that can further optimize your spend management across multiple locations.

By implementing these strategies and maintaining a centralized approach, multi-unit restaurant operators can effectively manage direct and indirect spend, optimize costs, maintain consistent quality, and drive sustainable growth across their restaurant locations.

By becoming a member of Consolidated Concepts, you can empower your staff to enhance their procurement process, improve cost efficiency, and focus on providing exceptional dining experiences across all locations.

With access to our trusted network of suppliers, restaurant operators can navigate the complexities of direct and indirect spend more effectively and achieve sustainable growth in a competitive industry. As a Group Purchasing Organization (GPO), we wield the collective buying power of multiple restaurants, unlocking exclusive savings on all your supplies, from fresh ingredients to essential services. Say goodbye to procurement headaches and embrace our centralized approach, ensuring consistency, accountability, and data-driven insights that’ll keep your business thriving.

 

Are you effectively managing the culinary maze that is the foodservice supply chain?

As the restaurant industry rides the waves of relentless evolution, staying afloat and thriving demands more than just culinary expertise and exceptional service. In this fast-paced and fiercely competitive landscape, the mastery of cutting-edge supply chain management strategies has become the secret ingredient for multi-unit restaurant operators looking to gain an edge over the competition.

Successful restaurant operators must skillfully manage their supply chain to ensure that the freshest ingredients, top-quality products, and essential resources reach each restaurant location precisely when needed. But in today’s data-driven landscape, relying on intuition alone is no longer enough. Smart operators know that embracing innovation and technology is the compass that points towards supply chain success.

What is restaurant supply chain management?

Restaurant supply chain management refers to the systematic and strategic coordination of all activities involved in sourcing, procuring, producing, and delivering goods and services required to operate a restaurant successfully. It encompasses the entire process of managing the flow of materials, products, and information from suppliers to the restaurant’s final customers.

The goal of restaurant supply chain management is to ensure a seamless and efficient flow of goods while minimizing costs, reducing waste, and maintaining the highest quality standards. It involves various critical aspects, including:

1. Sourcing and Procurement: Identifying reliable suppliers, negotiating contracts, and procuring the necessary ingredients, equipment, and other resources needed for restaurant operations.
2. Inventory Management: Monitoring and controlling inventory levels to prevent stockouts and reduce excess inventory, optimizing storage space and minimizing costs.
3. Logistics and Distribution: Efficiently transporting goods from suppliers to individual restaurant locations, optimizing delivery routes, and ensuring timely deliveries.
4. Quality Control: Establishing rigorous quality standards and implementing processes to ensure that all incoming goods meet the required quality and safety criteria.
5. Demand Forecasting: Analyzing historical data and market trends to predict customer demand accurately, helping avoid stockouts or overstocking.
6. Cost Management: Finding cost-effective solutions without compromising quality, including optimizing sourcing, transportation, and storage expenses.
7. Sustainability and Eco-conscious Practices: Incorporating environmentally friendly practices, such as sourcing locally, reducing packaging waste, and supporting sustainable agriculture.
8. Technology Integration: Adopting innovative technologies, such as supply chain management software and data analytics tools, to streamline processes and gain real-time insights.
9. Crisis and Risk Management: Develop contingency plans to address potential disruptions in the supply chain, such as natural disasters, supplier issues, or economic fluctuations.

Effective restaurant supply chain management is essential for multi-unit restaurant operators, as it ensures consistency across different locations, enhances customer satisfaction, and boosts profitability. By optimizing the supply chain, restaurant owners can focus on their core business activities, ultimately leading to increased operational efficiency and long-term success.

10 Restaurant Supply Chain Management Best Practices

Implementing effective strategies for restaurant supply chain management can significantly enhance operational efficiency and contribute to the overall success of the business. Break the chains of conventional thinking and embrace the power of smart supply chain management with these 10 key strategies:

1. Data-Driven Decision-Making: Gone are the days of traditional, gut-feel-based decision-making. Leverage data analytics and technology to gain insights into customer demand, inventory levels, and supplier performance. Analyzing historical data and trends can help with accurate demand forecasting and inventory optimization, reducing wastage and ensuring sufficient stock availability.
2. Supplier Relationship Management: Cultivate strong relationships with reliable suppliers who can consistently provide quality products at competitive prices. Negotiate favorable terms and establish open communication channels to address any potential issues promptly.
3. Centralized Procurement: Centralize procurement functions to streamline purchasing decisions and take advantage of economies of scale. By consolidating purchasing across multiple locations, restaurants can negotiate better prices and reduce administrative costs.
4. Inventory Control and Just-in-Time (JIT) Approach: Implement JIT inventory management to minimize storage costs and prevent excess inventory. Keeping inventory levels lean while maintaining a well-coordinated supply chain ensures fresh and high-quality ingredients are readily available.
5. Technology Integration: Invest in supply chain management software and tools that offer real-time tracking, inventory management, and reporting capabilities. These technologies help automate processes, improve accuracy, and enable better decision-making.
6. Sustainability and Local Sourcing: Embrace sustainable practices and prioritize locally sourced ingredients. Customers increasingly value environmentally conscious restaurants, and sustainable sourcing can also reduce transportation costs and support local communities.
7. Risk Management and Contingency Planning: Develop contingency plans to address potential supply chain disruptions, such as natural disasters, transportation delays, or supplier issues. Having backup suppliers and alternative logistics options can help mitigate risks effectively.
8. Streamlined Logistics: Optimize transportation and distribution processes to minimize delivery times and costs. Consider partnering with logistics providers that specialize in the restaurant industry to ensure efficient and reliable deliveries.
9. Collaborative Communication: Foster clear and open communication between different stakeholders in the supply chain, including suppliers, distributors, and restaurant managers. Effective communication facilitates problem-solving and ensures everyone is aligned with the overall goals.
10. Continuous Improvement: Regularly review and assess supply chain performance to identify areas for improvement. Encourage feedback from employees and customers to stay agile and adapt to changing demands and preferences.

By adopting these strategies, restaurant owners and operators can create a well-organized, efficient, and resilient supply chain that delivers fresh, high-quality ingredients to their establishments consistently. A well-managed supply chain not only reduces operational costs but also enhances customer satisfaction and contributes to the overall success and growth of the restaurant business.

It’s evident that the power of data, technology, and innovation is reshaping the restaurant supply chain. The complexities of sourcing, logistics, and inventory management demand a data-driven and technology-enabled approach to ensure efficiency, cost-effectiveness, and customer satisfaction.

Embracing these strategies equips restaurant operators with the tools needed to navigate any future challenges that lie ahead, safeguarding their business against disruptions and enhancing their ability to deliver consistent excellence.

With a serious commitment to continuous improvement and innovation, the path to success in restaurant supply chain management becomes clearer, guiding them towards a future of sustainable growth and triumph.

 

According to a recent Restaurant Success report, future food trends for 2020 will include local sourcing, fresh produce, healthy eating, and an emphasis on authentic items. Diners, it seems, are flocking to the comfort of kitchens that serve a variety of delicious food, so long as it doesn’t feel heavily processed. However, as Thrillist explains, “…the rise of the Golden Age “scratch kitchen” (in which everything is made in-house), long a point of pride for fine-dining kitchens, isn’t usually financially realistic in the more casual kitchens.” While many chefs may work to bake their own bread or cure their own meats in-house, the fact is scratch kitchens are expensive, labor intensive, and not often worth the financial expenditure.

At Consolidated Concepts, we focus on ensuring restauranteurs cost-savings opportunities that excite your front of house while saving you labor costs in your back of house. So how do you keep that scratch kitchen feeling without spending excess time on labor? Here are a few ways to keep the focus on the food and the money towards your bottom line.

1. Create versatile, convenient, and profitable appetizers

Potatoes have long been one of the more versatile items in any kitchen, but the time and labor cost to prepare them for your various dishes can be lengthy and expensive. From washing to peeling to baking to mashing and so on, potato preparation can be a costly process. Increase your margins by switching to this appetizer mix. With a product that is both fully customizeable and easy to prepare, you can improve your turnaround time and provide your customers with a product that tastes fresh and handmade, while adding your restaurants’ own signature ingredients to give the dish your own personal flair.

Click the link below to learn more about how Idahoan Tater Tumblers can increase your bottom line.

Learn more about Idahoan Tater Tumblers

2. Make your very own dipping sauce

Who doesn’t drool over a great aioli or house made dressing? From dips to sauces, many restaurants find customers clamoring back to have their one-of-a-kind house-made sauces. In reality, we know that a true scratch sauce comes with a lot of labor, kitchen space, and room for emulsification error.  Now, what if you could have the same great flavor and save yourself the stress and time consumption from behind the scenes? Save yourself the time, headache on labor and start with something great. Unilever mayo can do magic as your base- just add in your own signature spices give your own restaurants dipping flare!

Watch this video of how one of our clients recently utilized Hellmann’s mayo as the base for 8 inventive custom dressings.

Learn more about our Unilever Food Solutions program

3. Add your own spice

Nothing says delicious like a unique sauce or seasoning added into one of your signature dishes. With Knorr® Intense Flavors liquid seasoning, you can elevate any dish on your menu.   These products, that are foodservice exclusive, can save you time, labor, and ingredient costs by providing a ready-to-use bottle of flavor that will add a bold dimension to any meal.

Check out the link below to learn more and get a free sample on us.

Learn More Knorr Intense Flavors program

To read the original article, please visit QSRmagazine.com.

Restaurants are known for their razor-thin profit margins. That notion holds particularly true among affordable fast-casual and quick-service concepts. Add on pressures like rising real estate costs, unpredictable food prices, and minimum-wage hikes across the country, and operators are left with even less of a financial safety net.

In this climate, every penny counts. And restaurateurs are continually re-examining every part of the business, including their ingredients, labor schedules, and food packaging in order to maximize return. To help, we asked experts and operators to identify ways restaurants can maintain fiscal discipline and trim costs without sacrificing quality.

1. Rethink ingredients

Consumers are more health-conscious than ever. They want to know where their food comes from, and they’re flocking to scratch-cooked, health-forward, and farm-to-table offerings.

Those trends can add new layers of complexity to a restaurant’s bottom line, says Vince Purves, President of Consolidated Concepts.

Scratch ingredients may come with a lower upfront price tag, but the manpower required to break them down in-house can add up quickly. For that reason, Purves is a proponent of pre-portioned, processed foods, which he says can cut down costly staff time while still maintaining high-quality standards.

Take the chicken breast, for example. An operator might want to tout that its birds are broken down in-house. But a prepared chicken breast from a processor cuts down trimming waste, frees up staff time, and can ensure product consistency that is otherwise difficult to replicate across multiple units.

“Are you getting credit for trimming a random chicken breast?” Purves says. “Does the customer really know, and do they care?”

The same logic holds true for produce options like pre-diced onions or shredded carrots, he says. In some cases, it may even be advantageous to add multiple SKUs of similar products—a pre-sliced chicken breast for salads and a whole breast for sandwiches, for instance. Such options may cost a few pennies more on invoices but could save labor dollars by eliminating on-the-clock work.

Purves says technological advancements have improved the quality of frozen and pro-

cessed ingredients in recent years. A processed chicken breast, for instance, might come marinated in an all-natural solution of water and sea salt that tastes just as good or better than a raw piece of meat prepared on site.

“That provides very low waste and significantly reduces labor,” he says. “It provides a consistent product, too.”

Purves says the key is understanding the relationship between supplies coming in and the associated labor costs needed to transform them into meals for customers. Many restaurants aren’t there yet, but Purves believes it’s an easy sell once operators realize the potential labor savings.

“If you can reduce enough of the processes—the actual back-of-house processes, where you can eliminate one person—that gets their attention,” he says. “But there are so many other benefits of getting something that’s produced to some extent from a third-party manufacturer: that consistency of product, better yield, the fact that there’s probably more cost stability associated with it.”

2. Watch every penny—constantly

Sometimes you’ve got to spend money to save money.

That’s what 105-unit Capriotti’s did with a system-wide upgrade of its POS system. The addition of NCR Back Office has integrated inventory management, recipes, and sales data with store schedules and labor costs.

Capriotti’s chief development officer David Bloom says everything about the restaurant business has grown more complicated in recent years. Complex labor regulations and innovations like third-party delivery require deep financial analysis. An old-school reliance on instinct won’t cut it, Bloom says.

“I’d say a lot of restaurateurs actually don’t take the time and energy to keep updated financial reports,” he says. “You’d be amazed at how many restaurateurs just look at their bank account versus actually running a financial statement and diving into it. That used to work. But, unfortunately, it just doesn’t work anymore.”

Capriotti’s software creates an ideal labor schedule using manager parameters and provides regular updates of overages and actual time clocked. It also keeps watch on overtime issues and tracks part-time employees who approach 30 hours per week—the federal threshold for requiring employee health insurance. The system is also vigilant about tracking food costs, overages, and waste for the sandwich concept.

“I can tell you not just your food cost is high, but specifically I can say which meats or cheeses are high,” Bloom says. “I can say my turkey sandwiches are high, I must be putting too much meat on the turkey sandwich. So you can be very, very specific in finding problems.”

Combined across the system, the store-level data can pinpoint problems with individual operations. Sometimes, fixes are as simple as ensuring franchisees leverage the chain’s existing national contracts with suppliers, rather than purchasing product from local, more expensive providers.

Bloom says franchisees often lack the time or expertise to analyze their financial data in-house. That’s why corporate invested in the system itself and performs regular, in-depth financial reviews of franchisee operations. Bloom says the franchisor performs this service at no cost to operators.

“We don’t make any extra money doing that. Our royalty is completely based on the topline,” he says. “They certainly understand the time we’re investing with them to improve their bottom line is strictly for them. Now, the argument could be made that in the long run it helps us because healthy franchisees are growing franchisees.”

3. Focus on saving, not just cutting

Mike Charvat, senior vice president of operations at Grill Concepts Inc., says the third-party operator of hotel restaurants has labored to think more holistically about its store budgets.

“Instead of cost cutting, we’re looking at cost savings generally and better spending,” he says. “It’s really getting ahead with a plan. At the end of the month, it’s really too late to do anything about it.”

Grill Concepts operates full-service restaurants and the quick serve In Short Order Daily Grill in the lobby of the Sheraton Seattle Hotel. Charvat says the company’s fiscal approach doesn’t differ between its full-service and quick-service concepts. Both segments of the industry require disciplined inventory management and long-term planning.

“The margins are generally the same,” he says, “but it’s different food price and check averages.”

With its unique operation inside hotels, the company’s restaurants receive one key forecasting tool that most other operators don’t have the luxury of using: hotel occupancy numbers that can help predict traffic. That makes scheduling and inventory management much more precise.

Much of the cost-control strategy for Grill Concepts relies on separating short-term expenses from the long-term financial health of operations. For example, the company is heavily focusing on manager recruitment and retention with hopes that more emphasis there will pay off in the long run.

“If we can reduce turnover by 25 percent, that’s a huge savings,” Charvat says. “We cut down on recruiting expenses and ads.”

Some brands might choose to trim training programs to save cash. But Charvat views such moves as shortsighted. Grill Concepts is re-examining perks and benefits packages in an effort to create long-term stability in its management ranks.

“People are always fighting over people in this business. It’s really wanting to retain them and wanting them to not talk to other [employers],” he says. “We think it’s going to lead to better retention and higher morale. We want to be the employer of choice in the restaurant business. There’s so much competition out there.”

4. Design on a budget

Restaurants have many tools at their disposal to trim costs and adjust budgets. But when it comes to real estate, operators have limited flexibility.

Miguel Vicens, a creative director at Coevál Studio, a Dallas branding and design firm specializing in restaurants, says the strength of today’s real estate market means restaurateurs have to pony up for the space and locations they desire.

“Landlords and property owners these days don’t have to settle for anything,” he says. “So I don’t think there’s a ton of negotiation.”

But operators do have budgetary leeway when it comes to all the finishes that go into transforming an empty box into a restaurant. Vicens says there are many ways to achieve a high-design look without spending a fortune.

For example, instead of using reclaimed wood for a counter or bar top, the company has found that hardwood floors can achieve a similar effe ct at a fraction of the cost.

Some restaurateurs may be drawn to the modern, institutional aesthetic of shiny metals and subway tiles that have grown to dominate the fast-casual space. But Vicens says that look is tired. And even operators on tight budgets can create a distinct space.

“You do save some money leaving spaces as bare as possible,” he says. “But the problem is you fall into that trend. Does it look like a trendy coffee shop or does it look like an actual restaurant?”

When budgets get lean, operators should cut from the restrooms first, Vicens says. Tile costs vary widely and are an easy downgrade to realize savings. And when shopping for locations, it’s always cheaper to find a space that previously housed a restaurant because of the existing kitchen equipment and electrical and plumbing fixtures.

For multiunit operators, Vicens recommends maintaining consistency of finishes. But he says operators should seek to define each location with one unique piece of artwork. Coevál Studio likes using vinyl or mosaic to build a signature piece that will prove Instagram-worthy to diners.

“You can have 20 units and they all have a different Instagram moment or Instagram wall,” he says. “They describe where you are.”

5. Watch what goes in the dumpster

One of the easiest ways to identify fiscal waste is to examine the physical waste.

Dumpsters offer a glimpse into a restaurant’s spending patterns. And they’re frequent culprits in overspending.

“You normally wouldn’t think about it,” says Geoff Aardsma, vice president of client service for Enevo, which provides waste, recycling, and analytics services. “All you’re seeing is that small bill, but it really touches almost every part of a restaurant’s operation.”

Aardsma points out that trash trucks cause parking lot wear and tear and can interrupt drivers looking to get in and out during a lunch rush. Scheduling too many pickups is akin to over-ordering produce. And scheduling too few means on-the-clock workers have to go out back and deal with the headache of overflowing garbage.

Enevo deploys dumpster sensors to monitor waste generation and pickup schedules. The company says it can save restaurants as much as 15 percent by managing waste pickup. Aside from outsourcing waste removal services, Aardsma says, restaurants should explore recycling opportunities to reduce the cost of cardboard and other materials going to landfills. Enovo has also worked with some suppliers to switch to reusable crates that cut back staff time and keep empty boxes out of the dumpster.

“In the quick-service space, it’s really about supply chain management and the packaging of materials being delivered to the restaurant,” he says. “There’s kind of a hidden cost of supply chain, and that’s the waste that occurs from packaging of supplies sent to you.”

6. Don’t go overboard

Andrew Gruel likes to call himself “the garbage man.”

“I go into the garbage cans,” says the founder and CEO of Slapfish. “And I’m serious. It’s really that simple. You find patterns.”

Scouring through the garbage of his fast-casual seafood concept, Gruel has found tangible savings. When he finds too many french fries in the trash, he knows the kitchen is over-preparing. Finding 3-inch-long scraps of carrot, he knows the prep cooks are wasting valuable produce.

While he sweats the details, Gruel says his fanaticism goes only so far; he is careful not to make cost-cutting changes that affect quality.

For instance, he’s worried about the skyrocketing price of avocados. Slapfish serves a house-made guacamole on some of its sandwiches. A cheaper, pressed avocado product is available, but Gruel says customers would notice an obvious departure like that.

“I look at what effect that has overall on the brand,” he says. “Let’s say we do it, serve 1,000 a week, and save a nickel on each one; it’s just not worth it.”

Instead, he’s made other changes that customers hardly notice. Some even add to the charm.

Packaging is intentionally barebones. Fish and chips are wrapped in newspaper, and to-go orders are packaged in brown paper bags, an aesthetic that Gruel calls an homage to the simple packaging served at Five Guys.

The same goes for the design, which is dominated by inexpensive choices like simple concrete floors and timeless subway tile. Menus are written on chalkboards and butcher paper, rather than pricey digital menuboards.

“I don’t need an interior designer to come in and tell me about some centerpiece,” Gruel says. “We want people to come in and not expect much from the design and think, ‘Wow, I’m impressed by the food. I wasn’t expecting that.’”

With marketing, the company relies mainly on free or cheap social media marketing to lure diners in. And Gruel has built a menu that is intentionally malleable. Instead of Mahi tacos, the menu calls for fish tacos, allowing the restaurant to swap out different types of fish as market prices fluctuate.

“It has to be built into the design of the food menu,” Gruel says. “We call it ‘Choose the dish, not the fish.’ People come to us for our over-the-top fish sandwich, not our Mahi sandwich.”

Brought to you by our partners at Fresh Concepts

 

Outbreak Alert – Romaine Lettuce

Update – 11/28/2018 12:25pm PST

The FDA has narrowed down the potential affected growing regions to the following counties:

Monterey, San Benito, San Luis Obispo, Santa Barbara, Santa Cruz, Ventura

Romaine harvested from locations outside of the California regions identified by the traceback investigation does not appear to be related to the current outbreak.

There is no recommendation for consumers or retailers to avoid using romaine lettuce that is certain to have been harvested from areas outside of the Central Coast growing regions of northern and central California. For example, romaine lettuce harvested from areas that include, but are not limited to the desert growing region near Yuma, the California desert growing region near Imperial County and Riverside County, the state of Florida, and Mexico, does not appear to be related to the current outbreak. Additionally, there is no evidence hydroponically- and greenhouse-grown romaine is related to the current outbreak.

During this new stage of the investigation, it is vital that consumers and retailers have an easy way to identify romaine lettuce by both harvest date and harvest location. Labeling with this information on each bag of romaine or signage in stores where labels are not an option would easily differentiate for consumers romaine from unaffected growing regions.

Recommendation:

Based on discussions with producers and distributors, romaine lettuce entering the market will now be labeled with a harvest location and a harvest date or labeled as being hydroponically- or greenhouse-grown. If it does not have this information, you should not eat or use it.

If romaine lettuce does have this labeling information, we advise avoiding any product from the Central Coast growing regions of northern and central California. Romaine lettuce from outside those regions need not be avoided.

Romaine lettuce that was harvested outside of the Central Coast growing regions of northern and central California does not appear to be related to the current outbreak. Hydroponically- and greenhouse-grown romaine also does not appear to be related to the current outbreak. There is no recommendation for consumers or retailers to avoid using romaine harvested from these sources.

Update – 11/26/2018 4:00pm PST

Summary:

Based on discussions with major producers and distributors, romaine lettuce entering the market will now be labeled with a harvest location and a harvest date. Romaine lettuce entering the market can also be labeled as being hydroponically or greenhouse grown. If it does not have this information, you should not eat or use it.

If consumers, retailers, and food service facilities are unable to identify that romaine lettuce products are not affected – which means determining that the products were grown outside the California regions that appear to be implicated in the current outbreak investigation — we urge that these products not be purchased, or if purchased, be discarded or returned to the place of purchase.

Romaine lettuce that was harvested outside of the Central Coast growing regions of northern and central California does not appear to be related to the current outbreak. Hydroponically- and greenhouse-grown romaine also does not appear to be related to the current outbreak. There is no recommendation for consumers or retailers to avoid using romaine harvested from these sources.  

The FDA has urged growers, processors, distributors and retailers to:

• clearly and prominently label all individually packaged romaine products to identify growing region and harvest date for romaine; and
• clearly and prominently label at the point of sale the growing region when it is not possible for romaine lettuce suppliers to label the package (e.g. individual unwrapped whole heads of romaine lettuce available in retail stores).

When it comes to efficiently running your food service operation, more operators are joining Group Purchasing Organizations (GPOs).  GPOs and consultants offer various types of services and sources that help boost the bottom lines of their members. Some of these services support day to day operations while other services help impact cost savings. GPO services can include:

• fully outsourced supply chain management
• individual project-based services like location scouting or specific sourcing
• custom contract negotiations for individually spec’d items
• Master Distribution Agreement (MDA) negotiation
• product recommendations and vetting

Among all of these services, however is one that can be incredibly beneficial, and easily attainable for operators: Blanket Manufacturer Contracts.

What is a Blanket Contract?

Blanket Manufacturer Contracts are valuable volume-based contracts that GPOs negotiate with manufacturers and service providers. GPOs like Consolidated Concepts have thousands of members. The large combined volume of the GPO’s membership appeals to food and supplies manufacturers who offer exclusive pricing and contract terms to GPO members. Members of the GPO get hundreds of contracts made available to them instantly, including broadline grocery products, produce, paper products and even chemicals. These volume-based contracts can mean major savings for the operator. Savings take three basic forms: deviations off invoice pricing, manufacturer rebates (paid monthly, quarterly or annually), or service discounts.

Despite the natural appeal of blanket contracts, some food service operators are still hesitant when it comes to using a GPO to assume these contract benefits. After all, is it not possible to get the same contracts if operators just negotiate for themselves? As a decade-old GPO we’ve seen the hurdles and hardships that the DIY method can create for operators. First of all, negotiating and tracking direct manufacturer contracts costs major time (or consulting fees) for the operator and require a level of contract expertise in order to ensure operators aren’t snared into loopholes and skewed pricing. Secondly, contracts can also often prove restrictive. Operators may be bound by the terms of the contract and may have to meet minimums, agree to exclusivity clauses, or have limited choices when it comes to product selection.

How do operators take advantage of blanket contracts?

If an operator is already a member of a GPO, taking advantage of blanket contracts is a natural next step after joining. As a member or client of a GPO an operator should aim to get on as many of that GPO’s contracts as possible in order to reap the full benefits of GPO membership. Being a good user of blanket contracts requires the right perspective from the operator side. For example, if an operator has 20 loaded deviations and is on 20 contracts. In order to maximize their cost savings year over year on these contracts, a good goal may be to try and explore 10 more contract opportunities per year or to increase their contract utilization by 50% per year.

New contract opportunities are often easy to identify and join if an operator asks the right questions. One way to find about new contracts from a GPO is to request an invoice or usage analysis from the GPO’s analytics or account management teams. Break the contracts into categories and inquire about the best fits in each category: food, non-food, and indirect spend. Or, ask in a business review, “ What new contracts are available and what are some popular contracts that I’m not currently taking advantage of?” By staying in the loop on the new or existing contracts the GPO has access to, operators may be able to find deviations and rebates on items they’re already purchasing or looking to source.

How do you choose the right GPO for the best blanket contracts?

While many GPOs offer blanket contracts, finding the right GPO for a restaurant operation is integral. Select a GPO that has a core competency that includes blanket contracts. A great GPO will provide business reviews, compliance reviews, and savings analyses. Additionally, a GPO with the latest software and technology will be able to use that technology to identify contract opportunities for their clients, audit contract pricing, and recommend contract renewal and contract management strategies.

A good GPO will never pose a threat to a restaurant’s existing procurement team.  Rather, the GPO should offer extra contracts on top of the existing direct contracts that a CFO, VP of Supply Chain, or Procurement Director has already negotiated on their own. Blanket contracts help in-house staff be more effective at their jobs and are perfect for items for which they don’t have quite as much buying power. Take, for example, beverage napkins: an item that every operator buys in high-volume but is rarely considered a ‘core item. With a blanket contract, operators can utilize the GPO’s more aggressive volume-based pricing without going through the hassle of negotiating directly with manufacturers.

Want to know more about what makes a GPO right for you? Learn more about Consolidated Concepts here.

Bacon is Trending: Do you know Which Type is Best For Your Operation?

Bringing home the bacon for your restaurant could be as simple as adding a comprehensive and exciting breakfast menu to your operation. According to the NPD restaurant group, breakfast consumption is forecasted to increase by 5% by 2019 and global trends in dining are continuing to make waves in the breakfast category. As a restaurant operator, it’s important for your kitchen staff to find ways to save time while still appeasing and delighting diners during the morning rush.

One breakfast favorite that makes any menu item, from Breakfast Poutine to Huevos Rancheros, stand out is bacon. In the United States, bacon is still listed as one of the top menu items in breakfast foods and easily fits into your grab and go menus, from bowls to sandwiches. However, as any good chef knows, no two kinds of bacon are the same. So when reaching out in your supply chain, it’s important to make the best decision for your menu needs. One easy solution is to look towards ready to cook bacon options which help chefs minimize labor costs while making preparation convenient for your morning rush.

Do you know the different categories of bacon and which is the right fit for your menu applications? From center of plate applications to quick serve BLT’s, there are three tiers you should know. Gold, silver and bronze bacon types are not only differentiated in price, but in menu applications. Knowing which type makes the most sense for your menu can aid in cost and labor savings that over time will impact your bottom line. Consider the below when purchasing supplies for your kitchen.

GOLD

Gold bacon is considered such if the lean protein present extends to 60% or more of slice length. The slices come from the center of the belly and are often sold refrigerated and gas flushed. The typical use of this grade bacon would be for center of plate applications. In order to technically qualify as a “gold” bacon, the slice must be at least 9 inches long, have a 6-inch minimum secondary lean, and the primary lean must be 75% visible.

 

SILVER

Silver bacon is considered such if the lean protein present extends 40% or more of the slice length. It can be refrigerated or frozen and is most commonly used for center of plate and sandwich applications. Typically, the length of these slices is a little longer than gold averaging between 9” to 9.75”.

 

 

BRONZE

Bronze bacon is the cheapest and also the most frequently seen application for high turn-over restaurants. These slices are almost always sold frozen and most commonly used for sandwich and buffet applications. Typically, these pieces vary in length from 8.5” to 11” and there’s a standard of a 1” secondary lean that must be at least 25% visible.

 

 

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From Smithfield: The Smithfield family of brands offers operators a full range of ready-to-cook bacon choices to meet your back-of-house needs. Our ready-to-cook sliced bacon options include single slices on parchment paper to make preparation convenient and quick, our shingled slices allow for convenient separation, and our sliced slabs are economical. Available in honey-cured, applewood-smoked and hickory-smoked flavors. Consolidated Concepts works directly with Smithfield to bring you cost savings.

This article was originally published on Modern Restaurant Management

Q: What is a basic supply-chain checklist for a new restaurant opening?

A: Opening new locations means your brand is growing. It’s an exciting time, but there is a tremendous amount of planning required from a supply chain standpoint to support the growth. The location of a restaurant isn’t just important from a customer count and sales standpoint; it’s also critical to make sure products can be delivered efficiently from the appropriate distributors. This means supplies get delivered at the right time and at cost-effective prices.

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This year at the National Restaurant Association show, we had the chance to meet with existing clients, growing restaurant chains, and industry enthusiasts. While attendees tasted innovative new spices, plant-based proteins, globally infused desserts, and a plethora of chickpea-based butters and snacks, we had the chance to converse with them about their contracts, growth plans and cost-savings opportunities.

Several of the topics top of mind for them were similar to the discussions being held at the expos and demos throughout the halls. What will all this new technology mean for their business? How will they be affected by new tipping laws, the GDPR, or new labeling requirements? But beyond the trendy panel topics, we heard a consensus that is true for every entrepreneur and owner—how do I balance a growing business with thin margins and rising costs?

At Consolidated Concepts, these worries are familiar. We work regularly with restaurants and operations that are seeking new opportunities to reduce costs and scale operations while franchising out locations, balancing various distributors across states, and ensuring they’re getting the best prices for their procurement budget. Overall, we found three areas of concern from show attendees and ways to ease concern.

Cost of Labor

A top concern was the rising cost of labor. With new tax regulations, the minimum-wage hike, and the changing landscape for hires, it’s understandable that operations are struggling to hire top talent and keep them. 36% of restaurant operators name staffing as their biggest challenge to success (source) and with over 16.3 million restaurant jobs available across the country and a much smaller talent pool, it’s no wonder so many struggles to hire and keep top talent.
At Consolidated Concepts, we offer a variety of tools to help reduce labor costs and increase productivity and product savings. Our Supply Chain Assessments allow our staff to look closely at our clients’ purchasing, storage, and handling practices to find a specific time and labor savings opportunities. Furthermore, our CC101 library offers more insight and information about the products that restaurants are currently purchasing. We look at current ordering tendencies and uses of current products. CC101 then offers alternatives that better fit the specific purpose of the product as well as offer better pricing on these items.

Avoiding Recalls

We all saw the recent seismic effect of the romaine recall on Panera Bread, other restaurants, and even grocery stores. Food-borne illness outbreaks cost restaurants around $15.6 billion annually. A recall at your operation can cost you in lost sales, profit margins, PR, and marketing costs and the ramifications can last long after the recall.

We partner with Fresh Concepts to ensure you’re always in the know on produce recalls within three hours of their announcement. Fresh Concepts focuses on ever-changing food safety standards including SQF, GFSI, GAP, and GMP, and holds their growers, shippers and distributors to the highest standards of financial stability, inventory turnover practices, and pricing agreements.

Contract Coverage

Many of the multi-unit operators with whom we spoke acknowledged that while they may have direct contracts on their top-volume items, they were less sure of their pricing on the remainder of the items they purchase. Custom contracts take time and expertise to negotiate, plus they restrict operators to certain terms to which they may not wish to be bound.

This is why so many operators find Consolidated Concepts’ volume-based blanket contracts to be so valuable. Our clients have access to over 100,000 line item contracts with more than 300 manufacturers available at their fingertips to cover all of the items they purchase, including food products, non-food items and indirect spend programs. These contracts allow operators to save money instantly by accessing deviated prices and rebates on items where they wouldn’t necessarily have enough volume to warrant investing time in securing a direct manufacturer contract. Additionally, our partnership with spend management specialists, Buyers Edge allows us to manage and audit all of those contracts to make sure that every single line item is appropriately priced. Clients who leverage Consolidated Concepts’ contracts as part of their existing supply chain team’s operations are able to uncover significant savings on products they already buy or to upgrade to products that might enhance their customer offerings, without sacrificing margins.

The Evening Networking

Beyond the lineup during the day of exhibits, on-floor education sessions, bar star and world culinary demos, the evenings during the National Restaurant Association show are filled with networking and social activities. Rock out for the night on Saturday with Keith Urban or dine and mingle with industry buffs at an exhibitor planned after party. Had enough networking for the day? Explore all the culinary expertise Chicago has to offer with the travel tips and insights from the show hosts.

Booze Exploration

Last year, frosé slushies were the talk of the aisles. With new innovations in liqueur and a continued interest in hand-crafted brews, we’re interested to see what other boozy beverages become front and center.  In recent news, we’ve seen trends of brewers’ experimenting with dairy and a continued interest in rosé. What will this year bring?

Kitchen Robotics

From robots taking up a spot behind the grill (Hi Flippy) to sushi rolling machines (Suzomo Sushi Maker), robotics seems to be making their way into the kitchen. The KI awards already acknowledge award recipients like Peel-a-ton that “automates labor-intensive fruit and vegetable peeling” but the rest of the tech seems to step away from heavily programmable tech. Is there a push back to enhancing the tech we already know? Or will we see more robotics front and center at the show?

Best Supplemental Lunch Booth

Where’s the aisle to be? That’s what we’re excited to find out at this year’s show. From smoked salmon samples (Duck TrapRiver) to full pints of beer mapping out who’s who and what they’re bringing is always fun during the show. Last year, we loved the focus global snacks like Chaat and Think Jerky, and the meatless bites from Beyond meat and Upton Naturale. Will the trend of meatless snacks and entrees continue to take center stage? At a show this large, exhibitors, manufacturers, products, and more will be utilizing the full breadth of their marketing teams to get people to stop at their booth. Follow the weekends hashtag #NRAShow18 and #FiredUp to see all the booths that are hot and get a taste of what’s new.

Pizza Aisle

As QSR recently noted, we are in the middle of a pizza-boom! And beyond the ingredients, we all know what makes a good pizza great is the cooking method. We’re looking forward to seeing some of the electric brick ovens and spinning brick ovens featured in this year’s KI awards in action as well as other exhibitors showing their best stuff. The big question is, will we see an influx of cauliflower and alternative crusts as options?

Chobani Booth

Serving up some of the freshest and quickly rotating snacks and beverages throughout the day, Chobani had a large presence that extended beyond their booth last year. As restaurants continue to trend towards healthier dining, we’re curious to see how they will continue to innovate this year.

Meeting with Clients

Are you headed to NRAShow18? We’re #FiredUp to connect!