Adverse weather conditions and seasonal decline in Mexico, Guatemala, and the U.S. are still impacting various growing regions and commodities. As a result, it is anticipated that these challenges will lead to extended periods of elevated market prices and potential shortages in supply. The Salinas Valley, as well as most of California, is heading for a heat wave, and while the early harvesting has caused some issues with supply, the heat wave may also be a factor in future supply issues. Despite this, the quality of most items has improved, and the supply situation is better. However, we need to closely monitor all commodities as temperatures are expected to exceed 100 degrees in certain areas.
Grains
While soybean oil moved lower last week, the sideways trading trend continues. The USDA released its acreage report and corn won some acres over soybeans. Soybeans are higher, now, but so are meal and oil this week. Palm moved lower with soybean oil, Canola was flat.
Dairy
Shell egg markets are down this week. California and Northwest markets are flat. The Block is increasing & Barrel are decreasing. Blocks were above barrels today for the first time in 6 weeks. Butter is flat. Sources suspect inflation may be impacting travel plans this year.
Beef
Packers did encounter facility challenges this week, this helped limit supply and held trade levels flat. Middle meats continue to trade steady across the strip, rib, and sirloin sub–primals. Tenderloins continue to trade under pressure. Insides, chucks, and grinds continue steady; due to need for lean material for holiday grind ads. With limited supply, thin meat demand should spike near–term.
Pork
Butts came down as the market took a significant drop right before the July 4th holiday. Loins are still down as demand has tapered off, but should start to rebound. Ribs are still holding strong. The belly market has continued its downward trend for several weeks. The bottom has fallen out of trimmings as supply is up.
Poultry
Wings and tenders continue to be hottest part of the bird and excess supply is nonexistent. The wing market continues to show growth despite being in a traditional slow time for wing demand. Breast have started to strengthen again as demand continue to pick up. Dark meat demand remains very good. Whole birds are mostly balanced.
Seafood
Snow crab season is 70% met in terms of quota. Harvest is good but not great with more 5/8oz clusters available. With king crab supply being short, Dungeness and snow crab are the best alternative. Wild Salmon is in season.
The volatile markets across various commodities have been attributed to weather-related problems such as excessive heat and rainfall and a shortage of USDA inspectors, specifically affecting the avocado industry. As a result, it is anticipated that these challenges will lead to higher market prices and potential gaps in supply. The temperature in the Salinas Valley is rising, and the early harvest is still causing supply problems, but there has been a gradual improvement. Although the warmer weather is beneficial, it will take time to recover fully. Consequently, we can expect volatile markets for most commodities.
Grains
Soybean oil traded within a very tight range and was flat for the week. Palm oil supply and demand is balanced, and Canola followed palm and soy. From actual activity, the markets were very busy. Planting for soybean and Canola is really moving nicely with good weather.
Dairy
Shell egg markets flat this week. The Block & Barrel are up. Milk volumes are noted to be tighter than in recent weeks as temperatures rise. Butter is down. Cream availability is tightening to various degrees throughout the country, butter producers indicate cream volumes are generally able to meet processing needs.
Beef
Packers continue to eye higher cattle cost, while buyers continue to experience slower sales. Middle meats continue to trade mostly steady. Tenderloins continue to trade under pressure from lagging consumer demand. Insides, chucks, and grinds continue steady. The COF report will be released on Friday; the on–feed number is projected to be 1.1% below a year ago.
Pork
Pork butts are relatively flat for next week, expect markets to trend up after this flat week. Spareribs look to be coming down while backribs and St. Louis are flat. Bellies are also coming down as demand has come down. Loins are following suit with pork butts.
Poultry
Wings and tenders continue to be hottest part of the bird and excess supply is nonexistent. The wing market continues to show growth despite being in a traditional slow time for wing demand. The breast market was steady this week as supply and demand has leveled off. Dark meat demand remains very good. Whole birds are balanced.
Seafood
Snow crab season is 70% met in terms of quota. Harvest is good but not great with more 5/8oz clusters available. With king crab supply being short, Dungeness and snow crab are the best alternative. Wild Salmon is in season.
Distribution agreements can play a crucial role in managing foodservice challenges more effectively within the context of procurement and supply chain management.
According to research by the National Restaurant Association, operators today are grappling with several challenges, including:
Increased Business Expenses
The Necessity for Additional Staff
Supply Chain Disruptions
Debt Repayments
These pressing issues raise critical questions for multi-unit restaurant operators, especially when it comes to navigating master distribution agreements.
Understanding Restaurant Distribution Agreements
Restaurant distribution agreements typically fall within the procurement and purchasing phase of the supply chain, involving the sourcing, ordering, and delivery of goods from suppliers to the restaurant. By formalizing a distribution agreement with a reputable distributor, restaurants can ensure a reliable and consistent supply of high-quality ingredients while effectively managing their costs and inventory levels.
Key Elements of a Distribution Agreement
What is a restaurant distribution agreement? A restaurant distribution agreement is a legal contract between a restaurant and a distributor, outlining the terms and conditions of the supply chain process. This agreement defines the products and services that the distributor will provide, along with pricing, payment, quality, and delivery standards. It may also include provisions for warranties, liability, confidentiality, and dispute resolution. The primary goal is to establish a clear understanding between the restaurant and the distributor, mitigate risks, and ensure a reliable, cost-effective supply chain to support operations.
Products and Services
Defines the types of food and beverage products the distributor will supply (e.g., fresh produce, dry goods, dairy, meat).
Includes essential services like order processing, inventory management, and delivery.
Pricing and Payment Terms
Details the pricing structure, including discounts, rebates, and volume-based incentives.
Specifies payment methods, due dates, and penalties for late or non-payment.
Includes provisions for price adjustments based on market conditions or changes in raw material or transportation costs.
Quality and Delivery Standards
Outlines the quality standards that the products must meet.
Specifies delivery schedules and procedures to ensure timely and high-quality deliveries.
Warranties and Liability
Includes provisions for product warranties and distributor liability.
Establishes terms for addressing defective products or delivery issues.
Confidentiality
Contains clauses to protect sensitive information shared between the restaurant and distributor.
Dispute Resolution
Outlines procedures for resolving conflicts or disputes that may arise during the contract period.
The agreement should specify the exact products and services covered, as well as any exclusions or limitations, to ensure that both parties have a clear understanding of their responsibilities and obligations. Additionally, the agreement may outline the quality standards that the products must meet and the delivery schedules and procedures to ensure that the restaurant receives high-quality and timely deliveries of the products they need.
Common Questions About Master Distribution Agreements (MDAs)
Master Distribution Agreements (MDAs) offer significant advantages for multi-unit restaurant operators, but navigating their intricacies can be complex. Here are some key questions operators often ask, along with insights to help you make informed decisions:
When is the Right Time for an MDA? While there’s no one-size-fits-all answer, most operators with a regional or national presence can benefit from an MDA. Consider an MDA if you:
Manage multiple locations with consistent purchasing needs.
Have enough buying power to potentially negotiate better pricing and terms.
Desire streamlined logistics and consistent product delivery across locations.
What are the Key Benefits of an MDA? MDAs offer a multitude of advantages, including:
Cost Savings: Negotiate volume-based discounts and potentially secure better pricing on essential supplies.
Supply Chain Efficiency: Establish clear protocols for deliveries, inventory management, and communication with a single distributor.
Standardized Quality: Ensure consistent product quality across all locations by working with a single, reliable supplier.
Administrative Efficiency: Reduce paperwork and streamline ordering processes by dealing with one distributor.
What Terms Should I Negotiate in an MDA? An effective MDA should address critical aspects like:
Pricing: Negotiate favorable pricing structures considering factors like volume, order frequency, and market fluctuations.
Minimum Order Quantities (MOQs): Set realistic MOQs that optimize inventory management without creating unnecessary stockpiling.
Delivery Schedules and Fees: Ensure timely deliveries at agreed-upon frequencies and negotiate transparent delivery fee structures.
Product Availability and Substitutions: Outline clear procedures for product substitutions in case of shortages.
Performance Guarantees: Establish service level agreements (SLAs) to ensure the distributor meets specific delivery timeframes and quality standards.
Dispute Resolution Procedures: Outline a clear process for resolving any disagreements that may arise during the contract term.
What Happens if I Need to Terminate the MDA? MDAs typically have defined termination clauses. Carefully review these clauses, including any early termination fees or minimum purchase requirements you might incur.
By understanding these key aspects of MDAs, multi-unit restaurant operators can leverage these agreements to optimize their supply chain, secure cost savings, and ensure consistent product quality across their locations.
We leverage our industry expertise to build RFP’s and negotiate with distributors and develop agreements that benefit your operation. Outsourcing your restaurant distribution agreements to Consolidated Concepts offers several benefits for restaurant operators.
Cost Savings
Efficiency
Risk Mitigation
Experience and Expertise
Technology and Analytics
Strategic Partnerships
Scalability
Outsourcing your distribution agreements to our third-party experts means tapping into our extensive network of suppliers. We negotiate competitive prices and favorable terms, ensuring punctual delivery of top-tier products. Leveraging advanced technology and analytics, we optimize your supply chain for efficiency, mitigate risks, and offer invaluable industry insights. This strategic approach not only reduces costs but also enhances your restaurant’s competitiveness and profitability, setting a foundation for sustained success.
At Consolidated Concepts, we’ve been through it, know the pitfalls, and have the software advantages to make your contract management more efficient.
Fill out the form below or click here to contact our experts for help with your distribution agreements and learn how you can streamline the entire contract management process!
Weather conditions are once again causing disruptions on both the east and west coasts, leading to a slowdown in the progress we had observed in recent weeks. As a result, markets are experiencing an increase in prices due to lower yields. The Salinas Valley’s weather conditions are still hindering acreage productivity. To keep up with demand, the industry is harvesting early, leading to a limited supply of crops. Below-average ground temperatures stunt crop growth, resulting in high commodity market prices. Regrettably, this unfavorable weather pattern is forecasted to persist into June.
Grains
The whole soybean complex was lower. The lower markets are pointing to lower soybean oil in the future. Crush margins are falling again for crushers, which, if sustained, could lead to higher basis levels. Planting is doing very well. It is wet in some areas, but overall planting for beans is ahead of schedule.
Dairy
Shell egg markets flat this week except for Large & Medium shell eggs. California and Northwest markets are also flat. The Block is up & Barrel are flat. Some manufacturers have shared they are seeing increased interest in aged cheeses. Butter is up. Bulk butter overages range from 1 to 10 cents above markets.
Beef
Economic strains on the consumer are pushing focus to value cuts. Flank and flap, appear to be in a lull due to a possible price reset. Ribs and tenders continue to disappoint as buyers steer clear of high prices. Top sirloins and strips are stars leading to higher prices. Insides, chucks, and grinds continue steady; supporting each other due to use of lean material for Father’s Day.
Pork
Pork butts are finally trending down coming off the Memorial Day. As supplies tighten and customers prepare for the July 4th holiday expect markets to hold strong. Ribs are still considered a strong market even though we are seeing spares come down, backribs and St. Louis continue to rise. Bellies are relatively flat for next week as demand is steady. 72 trim is up.
Poultry
Tenders continue to be hottest part of the bird and excess supply is nonexistent. Wings continue to be in high demand despite the summer season being here and supply is limited. Jumbo and medium breasts supply has improved as hatchability and bird weights are improving. Dark meat demand remains very good.
Seafood
North Atlantic Lobster tails supply is improving, and prices are coming down. Markets are steady week–over–week. Seafood sector is gearing up for big holidays going into summer and operators are revamping summer menus.
Weather conditions in the eastern region have started to show signs of improvement, while the delayed rainy season in Mexico and ongoing drought conditions may lead to unpredictable crop cycles through the 2024-25 season. Nevertheless, we are still witnessing the persistent consequences that have affected different commodities, leading to reduced yields and consequently causing an increase in market prices. Production in South Georgia is increasing for various items, although squash will remain scarce due to weather-related challenges. Over the next ten days, we anticipate tight markets in the region and the West Coast on chile peppers, including tomatillos, shishitos, and serranos, will continue to be in short supply and volatile for the next few weeks.
Grains
Soybean oil futures moved higher last week. With good planting progress, good weather, ample South American supply, and large fund selling, the move seemed more like keeping in step with higher palm than anything else. Expect the market to trend lower into next week. Canola, too, was higher.
Dairy
Shell egg markets are all up. The latest HPAI outbreaks only directly affect Michael Foods. The two farms are a blend of both Conventional and Cage Free egg layers (hens). The Block & Barrel are decreasing. Cheese production schedules are steady to stronger throughout the U.S. Butter is up. Cream is tightening.
Beef
The market continues to be unsettled as packers and buyer have different ideas on which direction the market will move this summer. Ribs, strips, and top butts are holding steady. Tenders continue to disappoint as consumers shy away from higher prices. Insides, chucks, and grinds are steady as customer look for bargains. Increased harvest could lead to a market adjustment prior to next holiday.
Pork
Butts have softened as expected but not at the rate forecasted after Memorial Day. Spare ribs remain volatile due to constraints from demand and St. Louis production. Backribs are trending up and should continue throughout June. Boneless loins will follow suit with butts on their normal season decline until later in the month. Bellies continue to be a rollercoaster.
Poultry
Tenders continue to be hottest part of the bird and excess supply is nonexistent. Wings continue to be in high demand despite the summer season being here and supply is limited. Jumbo breasts supply has improved as hatchability has improved. Dark meat demand remains very good. Whole birds are mostly balanced.
Seafood
North Atlantic Lobster tails supply is improving, and prices are coming down. Markets are steady week–over–week. Seafood sector is gearing up for big holidays going into summer and operators are revamping summer menus.
Weather patterns in Florida, Mexico, Georgia, and California have significantly impacted various crops, resulting in lower yields and ultimately driving up market prices. In general, supplies from the Salinas Valley continue to be limited. Consequently, we are still witnessing active markets. The Salinas Valley’s weather conditions are still hindering productivity. The industry is harvesting crops early to meet the demand, resulting in limited supply. The below-average ground temperatures impede crop growth, leading to extreme market conditions for most commodities. Unfortunately, this unfavorable weather pattern is expected to persist into June.
Grains
Large fund buying, soybean oil stocks drawdown, and wet weather in the US growing region, aided in the futures market for soybean oil moving higher. Canola moved higher with the possibility of a rail strike and wet weather there, too. Palm was slightly lower with good production. Exports, though, are looking to increase.
Dairy
Shell egg markets are all up. Reported 4.2-millionlayer farm in the Midwest has contracted the H5N1 virus, bringing the total number of hens lost this month to 7.4 million. The Block & Barrel are decreasing. Cheese production schedules are steady to stronger throughout the U.S. Butter is up. Cream is tightening.
Beef
Reduced harvest continues to limit transactions. Ribs, strips, and top butts continue to drift higher due to solid demand. Tender prices remain steady, as consumers shy away from higher priced cut. Insides, chucks, and grinds continue to support each other; limited trimmings are facilitating the use of these cuts into grinds.
Pork
Butts will start to trend downwards now that we have passed the Memorial Day holiday. Ribs are holding relatively flat as demand is steady and supplies are steady as well. Boneless Loins are holding strong due to exports. Bellies are coming down but will be short lived as the market is expected to rise.
Poultry
As hatchability of eggs remains an issue, we continue to see supply shortages especially on wings and tenders. Breast demand has started to level off. Wings demand continues to be strong. Tenders demand is very strong and remain the hardest offering to find. Dark meat demand remains very good. Whole birds are mostly steady.
Seafood
North Atlantic Lobster tails supply is improving, and prices are coming down. Markets are steady week–over–week. Seafood sector is gearing up for big holidays going into summer and operators are revamping summer menus.
Adverse weather conditions in Florida, Mexico, and California have had a notable effect on different produce, leading to reduced harvests and ultimately causing an increase in market prices. The recent rainfall during March has impacted the supply levels, leading to high market activity. Despite expanding into new acreage that is not fully operational yet, we anticipate ongoing supply shortages in the weeks ahead. Additionally, the Salinas Valley is still facing below-average temperatures. Reaching into these fields will likely cause supply issues towards the end of the season. We will continue to see some increases in mildew and anthracnose, which will continue to hold back yields and weights.
Grains
Soybean oil moved about 2% higher last week. Crude, diesel, and soybean oil were all higher. The short speculator position is still present, but funds were the big buyers last week. Palm oil was flat with balanced supply & demand, while Canola moved higher with soybean oil.
Dairy
Shell egg markets are thriving, notably those in California and the Northwest. The Block and Barrel are steadily expanding. Butter is ready. Cream supplies are starting to run low for the season. As summer approaches, milk production across the country follows seasonal norms.
Beef
Supply is limited, and packers are seeking for higher pricing; progressively increasing prices will be key. Prices for ribs and tenders have risen across the board, despite the fact that stock remains available. Strips and top buttocks continue to rise, while supplies remain limited. End cuts, insides, and chucks are flat. Grind prices increased due of a limited yield and increasing demand.
Pork
B/I in butts is expected to rise next week, although boneless butts fell slightly. Spareribs are also becoming more popular as the grilling season approaches. Loins are also rising due to increased retail advertising and robust exports. Bellies are rising next week, and the market remains turbulent.
Poultry
As hatchability of eggs remains an issue, we continue to encounter supply limitations, particularly for wings and tenders. Breast demand has begun to level off. The demand for wings remains robust. Tender demand is extremely high, and it remains the most difficult offering to find. Dark meat demand remained very good. Whole birds are usually steady.
Seafood
The availability of North Atlantic lobster tails is increasing, and their prices are declining. The markets hold constant from week to week. The seafood industry is preparing for the summer season and updating their menus in anticipation of the major holidays.
Adverse weather conditions in Florida, Mexico, and California have had a notable effect on different produce, leading to reduced harvests and ultimately causing an increase in market prices. The recent rainfall during March has impacted the supply levels, leading to high market activity. Despite expanding into new acreage that is not fully operational yet, we anticipate ongoing supply shortages in the weeks ahead. Additionally, the Salinas Valley is still facing below-average temperatures. Reaching into these fields will likely cause supply issues towards the end of the season. We will continue to see some increases in mildew and anthracnose, which will continue to hold back yields and weights.
Grains
Soybean oil futures were turbulent last week, but they finished slightly over 1% higher. Pressure from palm oil helped bring the market higher, while potential taxes on used cooking oil could increase demand for soybean oil. Canola oil moved alongside soy. Palm was higher. Supply has increased, but demand has decreased.
Dairy
Markets for shell eggs are all flat. Block and barrel sales are steadily rising. Butter is still up. The EU market remains stable, with milk production underperforming and cheese absorbing more of the milk. The retail and food service sectors consistently seek butter from domestic producers. But there’s more demand for tons of unsalted butter.
Beef
Packers keep mentioning cutting back on harvest, while buyers “pump the brakes” and try to make sense of the direction of the market. As the week goes on, tenders, strips, and ribs are leveled. Strips and top butts are still the market’s shining stars and are reliable performers. Chucks, insides, and end cuts are all flat. Demand for grinds keeps getting better.
Pork
Next week, B/I in butts will increase, but boneless butts will slightly decline. As grilling season draws near, spareribs are becoming more popular. With the inclusion of retail advertisements and robust exports, loins are also increasing. Next week, bellies will be rising, and the market will continue to be unstable.
Poultry
Egg hatchability is still a problem for the industry as a whole, and supply shortages, particularly for wings and tenders, persist. There is a great demand for breasts of all sizes and no extra supply. Wings and tenders are still the most difficult to locate offerings. The demand for dark meat is still high. Most whole birds are even.
Seafood
North Atlantic lobster tail production is increasing, while prices are falling. Markets are stable week after week. The seafood industry is preparing for major vacations in the coming summer, and operators are revising summer menus.
Adverse weather conditions in different growing areas such as Florida, Mexico, and California have significantly impacted various commodities, resulting in lower yields and ultimately driving up market prices. Additionally, some markets saw a slight increase due to the increased demand from Mother’s Day.
Grains
Selling of soybean oil futures, good South American harvest, shrinking biofuel demand, good soybean oil stocks, and good U.S. planting progress all helped push soybean oil lower last week which dragged palm oil down and Canola, too.
Dairy
Shell egg markets are all down and demand has softened. The Block & Barrel are increasing and steady. Milk availability has tightened. Butter is up. Domestic butter demand is steady from retail and food service sectors. However, for unsalted butter loads, demand is stronger. Cream volumes are comfortable across the nation.
Beef
Continued over production by packers has stifled long–term increases. Ribs, strips, and tenders are steady as the week progresses and currently do not point to a run higher to end the week. End cuts, insides, and chucks, continue coming under pressure from buyer bids. Grind demand continues to improve and with holidays and grilling season ahead, the outlook is good.
Pork
Butts continue to rise as domestic and export demand is strong. Ribs saw some decreases but are expected to be short lived as the holiday approaches. Boneless loins will continue to rise due to strong export demand. Bellies declined this week the market remains volatile. Trimmings are moving up due to the strong demand.
Poultry
Breast demand is high on all sizes and excess supply is non–existent. Wings demand continues to strengthen. Tenders demand is very strong and tenders remain the hardest offering to find. Dark meat demand remains very good. Whole birds are mostly balanced.
Seafood
Markets are steady week–over–week. Seafood sector is gearing up for big holidays going into summer and operators are revamping summer menus.
Here’s the harsh truth: managing a restaurant’s supply chain isn’t easy. And when you own multiple locations, the complexity multiplies, making it even more challenging to maintain consistency, control costs, and ensure smooth operations across the board.
In fact, in 2023, a staggering 77% of operators reported experiencing supply delays or shortages of essential food or beverage items. When you’re juggling multiple sites, these challenges only intensify.
Coordinating inventory, suppliers, and logistics across various sites amplifies complexity, making it even more crucial to master supply chain management. It’s all about guaranteeing that each restaurant receives precisely what it needs, precisely when it’s needed.
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’s no small feat and involves various critical aspects, including:
Supply Chain Management Best Practices for Restaurants
Mastering restaurant supply chain management isn’t just about good food—it’s about smart business.
Elevate your operations with these 10 essential strategies:
Data-Driven Decisions: Harness the power of analytics to forecast demand and optimize inventory.
Supplier Relationships: Forge strong partnerships for quality products and favorable terms.
Centralized Procurement: Streamline purchasing for better prices and reduced admin.
JIT Inventory Control: Keep stock lean with just-in-time management for freshness and efficiency.
Tech Integration: Invest in software for real-time tracking and smarter decision-making.
Sustainability: Go green with local sourcing to reduce costs and support the community.
Risk Management: Plan for the unexpected with backup suppliers and logistics options.
Logistics Optimization: Trim delivery times and costs with streamlined transportation.
Collaborative Communication: Keep everyone in the loop for problem-solving and alignment.
Continuous Improvement: Stay ahead by regularly reviewing and adapting to changing needs.
By embracing these strategies, restaurant operators not only safeguard their businesses against disruptions but also position themselves as industry leaders poised for continued success. With a steadfast commitment to efficiency, cost-effectiveness, and customer satisfaction, the future looks bright for those who dare to innovate and adapt.
As the restaurant industry continues to evolve, the importance of staying ahead of the curve in supply chain management cannot be overstated. With the power of data, technology, and innovation at their fingertips, operators are better equipped than ever to tackle the challenges of tomorrow.
