It's important for any business to begin with the right suppliers — but it's even more important for those in the food services industry. Food service companies need to be able to procure supplies quickly in order to operate, and the cost of their supplies directly impacts their bottom line. When operating with lean profit margins, it becomes even more important for companies to improve their supply chain.
Begin with an Internal Assessment
What products do you need? In the food service industry, you'll need equipment, furnishings, non-perishable supplies, and food supplies. Some of these items will be purchased as a one off when you open, while other items will need to be purchased regularly. You can begin by assessing your needs to open your restaurant, and then slide into the day-to-day supplies.
When crafting your menu, pay attention to the ingredients that you'll need to purchase, and find a way to use the same ingredients in creative ways. A menu that reuses the same ingredients can still be fresh and unique, while significantly reducing the potential for food waste.
Equipment: Small and Large Appliances
Equipment is usually the largest expense for those within the food industry, at least upfront. Walk-in freezers, ranges, ovens, and other commercial appliances will need to be purchased to consistently prepare food fast — and to meet health inspections. Make a comprehensive list of the equipment that you need before you begin sourcing these items. Even things like microwave ovens can usually be better procured for commercial use than through a consumer-grade store, and can often be found for a reduced cost.
Larger appliances are a more significant investment. When it comes to large equipment, you may need to look into suppliers that offer financing options. Loans for equipment are secured with the value of the equipment, so they can be easier to procure than other types of small business funding. Walk-in freezers and display cases can cost upwards of $10,000, which can be a significant amount for a business that is just starting out.
Furnishings: Tables, Chairs, and Rugs
Restaurant furnishings are important but often overlooked. It's not just that you need to find the perfect restaurant furnishings, but you also need to find a reliable distributor. What happens if a few of your chairs break? Will you be able to replace them with identical chairs? Or will you need to replace all of your chairs to maintain a cohesive look?
When you first open, it can be beneficial to look at overstock sections at local restaurant supply stores or look at restaurants that have gone out of business. Later, you'll want a reliable furniture contact, who can provide replacements as needed.
Non-Perishable Supplies: Cups, Plates, Packaging, and Napkins
What happens when your restaurant runs out of cups, plates, packaging, or napkins? Even though they may be a side thought, they're critical for running a business. Something as simple as napkins can really drive up a restaurant's costs if they have to regularly be purchased on-the-fly rather than being purchased through a distributor.
Apart from food, non-perishable supplies are one of the items that a restaurant is going to need to purchase the most frequently. It's important to cut the costs of these items to reduce profit margins, and it's important to have these items delivered on a schedule to avoid having to make special orders. Over time, you'll have enough information for your business to determine the right costing.
Food: Baked Goods, Food, and Beverage Distribution
There are many major distributors for food and beverages. Often, you need to go through a few for different products: some may have better deals on bakery items, while others may have better deals on meat products or ready-made dishes. Many restaurants go through a separate distributor for their regular food items and baked goods, as they can source baked goods locally that are fresher. National distributors tend to have the lowest cost for meat and produce.
Comparing multiple distributors and continuing to negotiate costs is important for restaurants. If food costs creep up, margins get smaller. When it comes to baked goods, food, and beverages, deals can often be negotiated to increase profit margins.
Restaurants often run on very lean profit margins, and they need to be able to source their products reliably. Food service supplies can benefit from strategic procurement, such as utilizing a supplier network. Supplier networks are able to save companies time and money through more efficient and strategic procurement processes.
About Michael Wilson
Michael Wilson is AFFLINK'S Vice President of Marketing and Communications. He has been with the organization since 2005 and provides strategic leadership for the entire supply chain team. In his free time, Michael enjoys working with the Wounded Warrior Project, fishing, and improving his cooking skills.