Anyone with even half a finger on the pulse of the restaurant industry is aware of the dramatic rise in carry-out, restaurant delivery, and off-premise dining. Spurred on by cultural shifts (longer work hours, less emphasis on home-cooking, rise in whole food restaurant offerings), generational influence (Millennial and Gen Z individuals who spend an increased portion of their disposable income on food) and technology factors (a market flooded with easy solutions for placing, paying for and tracking restaurant orders), off-premise dining is becoming an increasingly significant percentage of total restaurant sales. According to Technomic, off-premise sales now account for 44% of all restaurant sales, or $228 billion with expected growth of roughly 5.6% annually through 2019, compared to 3-3.5% growth for the restaurant industry overall. Data collected by the Buyers Edge Platform supports this trend.
To-go packaging is quickly becoming one of the most important categories of items in a restaurant’s weekly order. Not only do operators need to focus on the quality of the packaging and ensure that packages preserve the temps and textures of their dishes, but they must also develop processes and kitchen layouts that factor in the increasing quantity of packaged items that they will need to deliver. Furthermore, packaging selection presents an opportunity for an operator to present themselves as an eco-friendly and earth-conscious dining option. Pactiv’s earthchoice line of carryout containers overs the perfect balance of an environmentally-friendly package that still maintains the integrity of dish during restaurant delivery. Pactiv’s MFPP containers, specifically, offer plastic saving materials that are microwaveable, ‘click’ closed to indicate a secure closure and are stable and grease and moisture resistant. These packages come in 7 popular sizes to fit a variety of to-go applications.
Many operators serve takeout and delivery
business channels with the goal of converting take-out diners to eventually
‘escalate’ to become more profitable in-house guests. (Conversely, off-premise business is a good
way to keep regular patrons engaged, even on nights when they aren’t looking to
leave the house.) It is important
maintain the same standards of excellence in the off-premise experience as
guests expect when dining in-house. This
means that ingredients, condiments and even cutlery that in-house guests would
not even normally see, suddenly become, for off-premise diners, a metric by
which the restaurant can be judged. If a
restaurant sends a takeout chicken sandwich order with packets of generic-brand
condiments, guests may rightfully assume that the restaurant regularly uses
‘lower quality’ ingredients in their recipes.
On the flipside, take-out accoutrements like condiments, cutlery, and
soft drinks present yet another opportunity to ‘wow’ new and repeat guests
alike. The Buyers Edge Platform’s
culinary and operational experts recommend delivering recognizable branded
Portion Control condiments such as Hellmann’s
Jellies and Peanut
Butters and Dickinson’s
Honey. This branding for
quality can easily be extended by offering the corresponding table-top
condiments for in-house guests.
As far as utensils and cutlery go, as off-premise dining continues to grow in popularity, carry-out cutlery will become an ever more prevalent restaurant cost. Furthermore, as off-premise dining migrates from the domain of QSRs to include restaurants of all styles and cuisine types, cutlery is becoming an increasingly important element of the dining experience. We’ve all struggled to cut steak tips with an inadequate knife, reached into a soup bowl holding our too-small spoon by our fingertips or broken a tong off of a cheaply-made fork. Manufacturers like Georgia Pacific offer cost-effective products that reduce waste, storage, maintenance and labor costs while enhancing a restaurant’s image and food safety. Smart operators can even save in the long run by investing in higher-quality cutlery dispensers that enable a reduction in waste and increases in sanitary safeguards. For cutlery, nothing beats the Dixie Ultra Smart Stock Wrapped Cutlery system which dispenses one piece of cutlery, with 60% less plastic wrap, at a time through a system that is preferred by 88% of fast food patrons over open bins of wrapped cutlery.
Clients of Consolidated Concepts have the ability to purchase all of the above items at reduce costs by taking advantage of the deviated prices and rebated savings that are available through our contracted manufacturer programs. Learn more.
Whether your restaurant is a vegetarian’s delight, or you’re
known for your oversized onion rings, knowing that you’re going to receive
consistent pricing and quality from your produce vendors is key. A proper
produce management program will ensure consistency in product, contracted
pricing, food safety optimization and more.
Companies like Fresh Concepts elevate their
relationships with local growers and shippers to bring you a premier managed
produce program. Part of this management process is giving you peace of mind in
your produce partner relationships. Fresh Concepts does that with their
recordkeeping. They store a record of contact information and certificates of
insurance for distributors and shippers, plus third party audit information. By
keeping a tab on this information, they can easily manage next steps when food
safety concerns arise, ensure traceability, and keep suppliers accountable on
implementing best practices and their certificates. They also conduct
second-party audits for certain distributors and shippers with high-risk items
to make sure all brand standards are maintained.
Another important feature of a produce management program is
their process of dealing with food safety risks. Fresh Concepts focuses on a three-prong
approach to food safety management: second party audits of facilities to
prevent food safety risks, a formalized process when outbreaks or recalls do
occur, and a perfected communication alert system and process for getting you
replacement product if needed. The foodservice industry is often filled with food
safety risks and working with Fresh Concepts is one way to ensure you are
properly protected against possible outbreaks and informed against recalls and
other issues. They also focus on ensuring restaurant operators are informed of
food safety precautions they can take in their operations. During the recent
government shutdown, Javier Martinez, Food Safety Manager at Fresh Concepts,
reiterated, “The actions taken at the operator
level — in the walk-in refrigerator, in the kitchen, at washing stations — make
up the critical “last mile” in the food safety chain. Following
proper techniques for washing and prepping food at the restaurant level can
help to ensure the highest levels of food safety. “ (source)
A produce management program can also be very beneficial in the irregularity
of pricing in the produce market. Programs like Fresh Concepts work with
shippers, growers, and suppliers to ensure you get contracted pricing that
consists of set highs and lows that often protect you from the volatility of
the industry while offering you savings. For example, throughout 2018 there
were multiple romaine lettuce recalls that not only caused public panic, but
affected the pricing on romaine lettuce and its other leafy counterparts. Fresh
Concepts was able to give its customers an alert to price changes, an update on
the outbreak within two hours of its notice, and a list of producers who they
could order from that could offer the correct item to their specs. Andy
Rosenbloom of Buyers Edge Platform says, “The produce market can
experience crazy price fluctuations throughout the year for a whole variety of
reasons: seasonality, weather, demand, or even politics. Having a produce
management partner in place ensures that your prices maintain stability,
quality and safety.” Having this level of insight and accountability from your
produce management partner is imperative to running your operations
Interested in learning more about Produce Management programs we partner with? Visit us here and let’s chat.
At Consolidated Concepts, we pride ourselves on
offering our clients much more than just rebates and buying power. We recently
had the opportunity to foster a collaborative session between one of our most
exciting clients, Pincho, with one of our most innovative and interesting
manufacturer partners, Unilever.
As a concept that relies heavily on bold flavors
to wow their guests, Pincho focuses on
providing exceptional sauces and marinades to make their dishes stand out. The south Florida concept has grown rapidly
to include 10 locations serving Latin-inspired burgers and kebabs such as the
standout Toston Burger, served with 2 fried plantains as the ‘buns’ and their
marinated chicken pincho, served with chimichurri dipping sauce.
Top Pincho executives, including their CEO, CMO
and Culinary Director joined their Consolidated Concepts client managers for a
day of culinary innovation and experimentation at Unilever’s US Headquarters in
Englewood Cliffs, NJ. As one of Consolidated Concepts’ top direct-contract
producer of kitchen staples like Hellmann’s/Best Mayonnaise, Knorr Sauces and
Bases, Le Gout bases and Lipton and PureLeaf teas, regularly invites clients to
work alongside their chefs to develop new ways to delight guests and scale
In preparation for Pincho’s visit, Unilever’s corporate chef, Chef JC Lopategui of Miami visited several of Pincho’s south Florida locations to taste their menu, explore their kitchens and work alongside Chef Adrian Sanchez. Chef JC then utilized that knowledge to collaborate closely with Unilever’s Chef Rob Wallauer of New Jersey to demonstrate how Unilever’s high-quality products and ingredients may fall in line with Pincho’s overall culinary offering.
The menu that Unilever developed for Pincho
speaks for itself, complete with flavorful staples (Fried Chicken Sandwich with
Pincho sauce, Smoked Shrimp Salad with Hatch Chili Dressing) to inventive takes
on Latin classics (Lomo Saltado Poutine, Ahi Tuna Tostone, Intense Citrus
Flan). The collaborative spirit in the
kitchen was palpable, as the three chefs combined their talents to create
inspired sauces and dishes that were heavy on flavor, spice and ingenuity.
The ultimate goal of such collaborative events is to help Consolidated Concepts’ clients see how manufacturer-partners’ products can fit into their culinary mix and business strategy. “Most of the time a spec sheet and price just isn’t going to be enough to make an operator understand the real value of a product,” said Mark Cimino, Consolidated Concepts’ VP of Client Relations. “This is the second client that we’ve brought to Unilever,” he said. “They both left with a sense of the amazing potential that Unilever’s products offer in terms of being customizable, scalable, and cost effective.”
If your operation has any plans that involve menu changes, menu expansion, regional expansion, Limited Time Offers (LTOs), allergen considerations, acquisition or other growth – a custom culinary innovation session may be right for you. Get in touch with your client manager or account executive to learn more about what opportunities Consolidated Concepts may be able to arrange.
Today’s regional and national restaurant and
foodservice chains are confronted by a surplus of business and organizational
challenges, but none as critical as the direct and indirect impact of
purchasing and supply management.
With over 30% of revenues being spent on food
supply, restaurant operators are increasing focus and resources on developing
more operational and cost-effective ways of purchasing, procuring and managing
supply. This trend is the logical outcome of increased managerial concern to
meet specific supply objectives of quality, quantity, delivery, price, service,
and competitive improvement.
What’s more, negotiations with distributors is
receiving increasing emphasis as opposed to competitive bidding, and
longer-term contracts or master distribution agreements are replacing
short-term buying techniques, placing special emphasis on strategies that
ensure short- and long-term value for funds spent.
In an interview with Barry Friends of
Technomic, a research and consulting firm servicing the food and foodservice
industry, Barry describes the challenges concerning restaurant and foodservice
operators, while providing solutions for managing master distribution
agreements. Barry spent 24 years in executive leadership roles with three of
the top five U.S. foodservice distributors — Sysco, US Foods, and Reinhart —
making him uniquely qualified to share his insight on the complex issues
associated with distributors and distribution agreements.
Q: What are the biggest challenges facing regional and
national restaurant and food service chains when it comes to supply
Regional and national chains are flooded with
distribution related problems. The nature of their problems and challenges vary
wildly on their scale, maturity and business model. Most chains are growing,
and their problems are growth related — resources — operations — capital. In
most cases, growing chains don’t have supply chain resources, they don’t have a
supply chain person (department), and if they do it’s cobbled together or it’s
a shared role between purchasing and operations.
Consequently, there aren’t a lot of
distributors to choose from that can do a great job for growing chains across a
large geography. Depending on scale and density, most chains are stuck dealing
with broadline distributors — a single window approach for sourcing all food
and operating supplies.
However, the most critical issues that supply
chains manage is disruption. Bottom line, in order to manage risk and avoid
stoppage, the operator surrenders quality, quantity, delivery, price, and
service to the distributor, subordinate to the broadliner’s capabilities,
transparency, and responsiveness to fluctuating markets.
Moreover, Barry points out that the biggest
challenge regarding the operator distributor relationship is that operators
“don’t know what they don’t know.”
Barry explains that when “RFPing your
business, you will get a number of offers, and you can choose the best one, but
no matter how much you (the operator) know, the distributors know more; they
have all the power, and they (the distributors) are excellent at making their
customers feel like they have a great deal when that it not be the best they
Q: What factors influence distributor costs?
There are many factors that influence
distributor rates, but in most cases operators are not prepared to nor do they
have the resources to analyze these influences.
To be clear, distributors do not raise costs,
manufactures do. In general terms, costs are driven by the markets. For
example, produce costs change daily while meat costs change weekly. Most
distributors spreadsheet your supply by category and contract a fixed percent
markup on top of their cost.
There are things that can be built into a
distribution agreement to help smooth out price volatility, but costs are
mainly controlled by the market. Once an operator comes to terms with a
distributor, the distributor’s primary focus becomes delivering the service end
of the agreement.
Q: When does it become ideal for a chain to start thinking about doing a
master distribution agreement?
In short, you should do a distributor
agreement as soon as possible.Basically, the moment an account is big enough to
command the attention of multiple distributors, is the ideal time to start
negotiating a master distribution agreement.
The rule of thumb is if a restaurant or food
service chain has a regional and/or national presence, it should be behaving
like a chain with regional and/or national authority. The chain should be
buying at the very least on an honorable cost plus percent markup agreement,
and it should be negotiating special pricing on it’s most important value added
items, for example french fries, hamburgers and butter.
As a unit of measure, most of large
broadliners like Sysco consider a 5 unit chain and above a “chain account.”
Q: How does an operator analyze whether they are getting a good deal?
Unfortunately, operators really can’t.
Even after operators get their 2 to 3
proposals, at the end of the day, there’s still a margin, and a backend markup
that the chains are not privy to. What is the base price? What are the attached
backend service costs, and how do you (the operator) analyze and compare? Aside
from asking distributors how they make money, the operator is ill prepared and
ill equipped to answer these questions.
The best way to know whether you are getting a
good deal or not is to leverage the expertise, technology and buying power of
Consolidated Concepts — the leading
purchasing partner in the US for restaurants
and food service organizations. They work with hundreds of chains which allows
them to benchmark and compare one distribution agreement with another.
Q: What’s the difference between a fee per case and percent markup?
Either one is fine. Generally speaking, the
distributor will like the percent markup better, and as the product inflates,
the distributor’s profit increases. It prevents them from coming back to the operator
and saying they need a rate increase because their percent markup will float in
respect to inflation.
Commonly, the higher the price volatility, the
riskier the security. For example, 15% markup on produce during a tomato
shortage can raise the price per case from $25 to
$50. However, either option is still better
than autonomous pricing from the DSR (Distributor Sales Representatives).
All in all, it comes down to what the
distributor is willing to offer and what you are able to do to rationalize that
Q: What factors should an operator consider when terminating a 3 to 5 year
Even if the broadliner agreement is sound and
the service level is excellent, a chain experiencing significant growth should
be checking the validity and currency of their agreement with some regularity.
MDA’s have something called an “exit clause,” or common language that says with
60 or 90 day notice, for no cause, the operator can terminate the agreement.
For instance, a 25 unit chain on a 5 year MDA
has grown to 50 units in the last 2 to 3 years and has doubled their purchase
volume or added a third purchasing volume under their broadliner. In this case,
there is no clause that forbids the chain from shopping their current MDA; in
fact, Consolidated Concepts highly recommends shopping for new pricing with an
agreement currently in place.
Q: What common triggers cause an operator to renegotiate their distribution
agreement? What sets them off?
There are many triggers that start the
distribution agreement negotiation process. Usually this is triggered by
something that causes the operator to lose trust in their incumbent
distributor. It could be a matter of price or it could be how the distributor
Another factor that compels renegotiation is
the chains own external state of affairs. Unfortunately, sometimes the problems
associated with growing pains transfer to blame on current purchasing
A great example is a 260 unit chain
experiencing the pain associated with declining revenues, despite years of
loyalty to their distributors, they were urged to turn to Consolidated Concepts
for a more innovative solution to reducing purchase spend.
Q: What is compliance and why is it important?
Compliance is designed to add strength to the
agreement by assuring that both distributors and customers are adhering to the
agreement. For example, if a customer doesn’t pay on time, or is not purchasing
at the frequency or volume described by the key performance indicators in the
agreement, the distributor has the right to call that customer to the carpet.
In other cases, a red flag may be raised
against a distributor who doesn’t call out a customer who is not in compliance
with their key performance indicators. For instance, a distributor accepting
100 cases when 150 cases are in the agreement is an indicator that the
distributor figured out how to profitize that business to their satisfaction
without the 150 cases. This can be a sign that the operator is paying for
something they may not be aware of and did not agree on. This is why compliance
is important for both sides.
Q: What qualifies a chain to ask for additional incentives?
The number one thing that qualifies a chain to
ask for incentives or an improved deal is when a chain starts consistently out
performing or overachieving the parameters of their agreement.
An good example of a chain that deserves a
better deal is a 10 unit chain (paying cost plus 2 dollars and 40 cents a case
with a requirement of 80 cases minimum order and 4 million dollars worth of
supply per year) that grows to 15 units (paying 7.5 million dollars a year and
124 cases per order during the term of their agreement. In this case, the operator should reach out
to the distributor to negotiate better pricing.
At the end of the day, the
distributor will be competitive in situations that make sense. It’s your job as
the operator to get the distributor to think of you as a 15-unit chain with 7.5
million dollars in business. They won your business once; make them win it
Interested in learning more about Master Distribution Agreements? Download our E-Book below.
At Consolidated Concepts, we know that whether our clients are health-conscious fast-casual chains or highly-focused burger concepts, food safety is always paramount. Choosing the right vendors and distributors for your meat, dairy, and produce is integral to keeping your restaurant safe from inevitable food recalls and outbreaks. In relation to food safety and produce, Consolidated Concepts chooses to partner with Fresh Concepts. Fresh Concepts is a produce management program with trusted relationships throughout the produce supply chain that negotiates the best produce options for operators. Their close relationships with grower-shippers, integrity-focused business practices, consistent distributor vetting, and innovative tracking systems and technology make them a strong partner for our clients.
Consolidated Concepts recently took a few clients out to Salinas, California for what Fresh Concepts calls, the Account Executive Conference. The annual conference gives Consolidated Concepts and our clients a chance to meet grower-shippers, walk the fields, explore new farming technology, and test innovative products. The Fresh Concepts team meets with growers year-round to examine contracts, conduct food safety audits, attend food shows, and host training sessions, but the Account Executive Conference goes beyond offering operators the chance to experience the full value of Fresh Concepts partnership. “With each visit, our appreciation for those responsible in producing our country’s fruits and vegetables grows. Everyone we bring to the fields has a new perspective the next time they order a salad, it’s a refreshing and humbling experience,” says Chris Rheault Director of Operations at Fresh Concepts.
Mark Cimino, Senior Vice President of Client Relations at Consolidated Concepts, who attended the conference this year, noted, “I was just amazed at the level of sanitation and safety that they practice. I think if people who are buying that product knew what goes into washing their produce they would certainly feel comfortable continuing to purchase from these growers.” Some of the other topics discussed during the conference were the advancements in harvesting technology, the safety measures and technology put in place for the laborers, and what the current political climate and economic climate is doing for laborers and growers in general.
The industry is facing many labor challenges due to a reduction in workforce and rising costs. Rob Mater, an account executive in the casino sector at Fresh Concepts noted that “The amount of work it takes to get a head of Iceberg or Romaine to your local grocer for .99 to 1.29 is astounding.” Growers are creating programs to retain quality workers, including affordable housing and profit sharing in some cases.
Fresh Concepts continues to improve their produce procurement program by having a genuine care and concern for their clients, that esteems client interests better than their own, and puts all their guiding principles into practice.
As Cost Reduction Specialists for restaurants, we at Consolidated Concepts have a team of culinary and purchasing specialists who find our clients ways to reduce costs and cut waste on common menu items. Did you know you can optimize your salad ingredients to reduce your produce and labor spend? Check out our CC101 infographic to find out how to save on your salad costs!
101 is a process and analysis completed by Consolidated Concepts which offers more insight and information about the products that restaurants are currently ordering. 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. This increases consistency with the final product and reduces costs!