June 18, 2018

The Restaurant Supply Industry is Broken

The Restaurant Supply Industry is Broken

You dread this moment. You’re forced to drop a popular menu item because the ingredients you need to make it are sold out, too expensive, or no longer available from your supplier.

What happens as a result?

Best-case scenario: No one notices (except you) and you’re able to restock the next day.

Worst-case: Your customers are very disappointed and switch their loyalties to another restaurant. You lose revenue.

The reasons for this are complex, ranging from fluctuating costs, shipping overhead, delivery complications, and much more. These reasons demonstrate a functional reality that all restaurant owners are dealing with - the restaurant supply industry is broken.

Why is the Restaurant Supply Industry Broken?

1. Costs are Unpredictable

One-third of a restaurant’s costs typically go toward purchasing food.

So even small changes in price can radically affect the economics of running the business.

The problem is, it can be difficult to manage or anticipate those changes.

It takes too much time and headache to change suppliers regularly and go where the best deals are.

And, there’s no transparency.

Worse yet, there’s no guarantee that prices won’t shift over time or that suppliers will provide the same quality and costs for the long haul.

2. Sustainability is an Opaque Topic

Consumers are demanding increased transparency about where their food comes from and how it’s prepared. They’re also putting pressure on restaurants to think about sustainability and make it a key part of their operations.

Food packaging accounts for one of the leading sources of landfill waste on the planet.

Unfortunately, it can be difficult for restaurants to gain visibility into the origins of supplies they’re ordering, much less make changes to meet sustainability goals. For many restaurants, they simply don’t have the leverage or unit economics to make these concerns a priority.

3. The Problem with Shipping

Do you know exactly where all of your restaurant’s supplies are coming from?

If you added up the mileage it takes to get from each of your suppliers to your back door, how big would that number be? It’s a delicate balance: you look for suppliers that are close enough to deliver the freshest ingredients while also seeking suppliers’ prices that work within your budget.

You don’t want to end up like the countless food startups that have gone under due to enormous delivery and shipping costs.

Restaurants like MAD Greens, Au Bon Pain, and even In-N-Out Burger advertise their local supply chains, and guests really respond to that — they know the ingredients didn’t have to travel far before ending up on their plates. Customers respond with loyalty when they know they’re getting fresh, delicious food.

It’s clear that’s what customers want, so why are so many restaurants still working with too-long supply chains that bring in food and ingredients from thousands of miles away?

4. Delivery Process Adds Inefficiency and Unnecessary Costs

Distance isn’t the only factor that affects how long it takes your food and supplies to reach your restaurant.

The method matters. How are your items shipped? By land? By air? By sea? Some combination of two or even all three of those? The shipping method can have a huge effect on the amount of time it takes them to reach your kitchen.

To truly control these costs and increase access to quality ingredients, you’ll need to know how your suppliers are getting their products to you. Getting clarity on the shipping process helps you to get what you need at the price point you need it.

The challenge: Not all suppliers provide this level of transparency (most don’t).

5. Food Availability is a Giant Question Mark

Sourcing local, seasonal ingredients can be a major hurdle. Many restaurants don’t have transparent access to multiple vendors to ensure a steady stream of supplies and avoid shorts.

One of the biggest restaurant trends today is farm-to-table, as diners have come to expect menus that rotate to reflect fresh, local foods aligned to the changing of the seasons. With each of those changes, new foods and ingredients are needed in near real-time.

But this isn’t easily accomplished when restaurants are ordering from traditional suppliers or making a last-minute run the grocery store before tonight’s dinner service.

It’s simply not feasible for restaurants to hire a single person or a team to track down all the necessary items across an array of suppliers.

Fixing the Restaurant Supply Industry

Whether it’s controlling costs, giving customers greater visibility into the supply chain, or getting a handle on shipping and delivery processes--there are many multifaceted challenges that impact your restaurant’s bottomline.

Tired of dealing with the broken restaurant supply industry while you’re trying to make your restaurant as successful as it can be?

There’s a better way to manage your supply chain - notch.

notch is an online mobile and web application that allows restaurants and suppliers to bring their supply chain online, to order and fulfil restaurant supplies from their networks of dedicated regional suppliers.

We can help provide further supply chain transparency and communication - it keeps your supply chain local, efficient, and cost-effective, and makes ordering food and supplies into a one-stop shop with easy, stress-free ordering that can be done from your computer or phone.

Visit our Solutions Pages to learn more about supply chain solutions for Chefs, Operations Managers, Accountants, and Distributors!

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