The Cost Advantage of the Right Purchasing Partnerships

Everyone in the food industry is feeling the pinch of the economy with reduced consumer patronage in restaurants and even a reduction of produce consumption in the winter months. This makes business tight causing a hard look at any extra costs.

One of those costs is with partnering services, with many food service operators relying on purchasing groups to help them make category-specific strategic purchases. There is a great advantage to that because you are adding in a team of experts in the category to help you connect to the growers with produce that fits the operation’s exact needs. There are many areas where we have seen food service operators benefit! This is a cost that can translate to a benefit, but still is a cost that has to be carefully considered!

We want to explain the benefit of these purchasing partnerships, the advantage they bring, and also what to look for in a buying group so that you are maximizing your spend and saving money by avoiding the wrong partnership.

Understanding Category-Specific Markets

The first advantage that comes to mind is that a category-specific buying group are in the day-to-day markets to a degree that a foodservice operator can’t. The reality is unless a operation has reached a critical mass to hire specific category buyers, there isn’t bandwidth for buyers purchasing from multiple categories to dedicate to every specific market. This is where a buying group brings that advantage, helping source at the best price, quality, and then creating sourcing redundancy when mother nature gets in the way of supply with fresh agricultural products.

Building a Competitive Menu

We’ve seen that with chains building out a competitive menu featuring specialty items and showing off their culinary skills to attract customers. So it helps to know the group who can source the specialty sweet potato or has the R&D background to bolster the ways produce can be efficiently integrated into a menu.

Utilizing Kits for Overall Efficiency

In the area of produce, this may even mean assembling produce kits with fresh cut product in addition to dressings and other ingredients. In our experience, this is especially helpful with coleslaw, as a foodservice operator can control consistency of the menu item, reduce preparation time, and streamline back-of-house training. This is another area where produce buying groups have experience and will help food service operators navigate.

Finding the Right Purchasing Partner

Some of this may be a review of foodservice purchasing practice and strategy. So let’s take this a step further. What are things foodservice operators should look for in securing a purchasing partner?

Size

The first thought may be to hire the biggest, most known buying group. However, the caveat with size is that it is often accompanied by overhead. Having many team members mean there are many salaries being paid and those salaries are accounted for in the service price. This is where you may want to search for smaller teams to maximize your cost with this kind of partnership. This can also be a catch if the team doesn’t have the resources to support their client, so too small may not be what you need either. The sweet spot comes from a team small enough to bring efficiency, resulting in a better price for service (because of smaller overheads), but also finding a team that has the right support team in place that covers shipping, purchasing, sales support, marketing, R&D, and food safety.

Generalized or Specialized?

Some purchasing groups cover multiple categories where some groups are highly specialized and focus on one category. The choice in which is better for foodservice operators depends on your team’s size and capacity. Small operations with one or a few locations may need generalized purchasing support because the operation hasn’t reached a place to hire a dedicated buyer. However, as an operation grows and has a dedicated buyer, a more specialized purchasing group makes sense to bolster workload. When a chain has reached a size where they have dedicated buyers, a specialized buying group makes a lot of sense if they can bring in specialized services such as shipping that is dedicated to that category’s temperature range. For example, our team specializes in produce and have dedicated team members to support a produce purchase, having access to a wide network of growers for sourcing, building menus that incorporate and streamline produce items, and logistic strategies to maximize cost, quality, and shelf-life of a highly perishable category.

Referral

The best way to know who to work with is to ask those in your network that you trust for a referral. Other buyers will have their stories, both good and bad of the people in the buying groups, what it is like to work with them, and if they come through in a pinch or if they drop the ball. This is the information that can make or break your operation, because in the world of produce, it is a guarantee that mother nature will cause problems and supply will be scarce, or this shipper will deliver on time and keep the product consistently cooled, where that shipper is less reliable.

Relationship

The operator/buying group relationship is very much B2B. This matters because the selling experience should not be viewed as transactional, or one-and-done, but instead relational. We describe produce buying for food service as a flywheel, because need discovery, purchase, and shipment comes right back to need discovery and so on, continually cycling to bring optimization to this part of the supply chain. What this means is that you need to work with people who have values that will be continually focused on your business. This shows up with responsive communication and listening skills so that a buyer knows their needs are being served and not just having products pushed on them. The catch with relational selling is there are no shortcuts, with the seller to the buyer, and the buyer in finding the right purchasing group fit. Referrals will help guide the buyer, but in the end there is also the component of personality and value alignment that will ultimately determine the right buying group. That simply comes from trial and error.

Savings with the Right Buying Group

From our years of experience, we have seen the benefit of the right buying group and the benefit to a customer’s bottom line when there is that harmony of relationship, values, organizational size, and reputation. This translates to any category that a buyer may purchase; and our team has built our business around maintaining that balance for buyers looking for fresh produce.