Restaurant Food Purchasing 101Experts reveal how to buy food at the quality you need and the price you can afford.
As a restaurant owner, you’re going to spend more on food than almost anything else. And getting the quality of ingredients you’re aiming for at the lowest price takes a bit of know-how.
Before choosing a vendor, opting for a foodservice supplier or signing a contract, read this advice, which can save you time, money and aggravation.
Consider a foodservice supplier
Shopping at a wholesale foodservice supplier is one inexpensive option for small startups, said David Kincheloe, president of National Restaurant Consultants. “A lot of smaller restaurants actually go to Restaurant Depot. Restaurant Depot is a good source, they have average quality. Some of the bigger food purveyors are opening their own version.”
The downsides: In most markets, these suppliers typically don’t deliver, so you’ll need to spend time going to them. And, said Kincheloe, “You take what they’ve got at the time.”
Stick with a minimum number of vendors
For higher quality and/or specialty items, you’ll want to work with a food purveyor. Look for one whose offerings allow you to deliver on your concept. “If you’re organic, if you’re local, if you’re sustainable…most of the food purveyors have options for each one of these,” said Kincheloe.
Related: How to Appeal to Millennial Diners
If you can commit to one or two vendors, you’ll increase your purchasing power.
“The old adage of spreading your purchasing dollars out amongst many people and bidding it out every week to try to get best price on whatever product you’re trying to purchase does not net you any substantial gains. You spend a lot of time chasing pennies while you’re frittering away dollars,” said Kincheloe.
Jeremiah Higgins, partner at HJL Restaurant Advisors, also advised against shopping around each week among vendors. “Although it sounds like a good idea in theory, when you factor in your time, invoicing and inventory control, it really doesn’t pay to shop in that way,” he said. What’s more, he noted, “Many vendors will learn your tricks and undercut the competition one week, only to ‘get theirs’ in a week or two, or on another product.”
Kincheloe recommended using just one or two main purveyors. “But there are always going to be certain things you may not want to buy from either one of them. Certain purveyors are better at produce, at seafood, and so on. So you may want to have another alternative vendor.”
If you’re buying items from other sources and can buy them through your purveyor instead, “That can help on your case count averages, which then helps get you a better price.”
To make sure you’re getting a good deal from your purveyors if you have several, Higgins suggested taking one day a year and inviting them to come in and ‘re-earn’ your business. “Be upfront with them before the meeting and tell them what you are looking for from them. They will determine if they can help or not.”
Choosing a vendor
Consider several factors before deciding on a vendor. Of course one is price. Another is quality.
“For some of your critical items you want to get a sample to make sure it’s the quality you want and gives the flavor profile, the consistency and so forth that you want,” said Kincheloe. Note that if the sales rep tries to sell you on house brands rather than the ones you want— which he will, as he gets a higher commission for house brands — be sure to sample them before saying yes.
Then there’s technology. Does the purveyor have online ordering? Can you track your purchasing electronically through them? Do they help you with menu analysis? (If you put your menu into their electronic system, it should automatically cost it out. Some systems can even tell you which menu items are doing well and which aren’t based on your food purchases.)
Decide what quality you need
It’s possible to order food that is too low quality — but it’s also possible to aim too high, said Kincheloe. Do you need the highest quality protein if you’re going to chop it up? “Why buy a 4-ounce chicken breast when a random will do?”
Let your menu and the demographic you’re targeting dictate the quality of ingredients you need.
Choosing a contract term
While you don’t want to get locked into a bad contract (for instance, one that doesn’t stipulate the quality standard) or the wrong vendor, if the contract is good and the vendor has proven to be reliable, a longer contract can mean significant cost savings. Many restaurateurs will choose an annual contract, but longer might be even better.
Said Kincheloe, “We negotiate these on behalf of our clients — and we will do it very, very well, I guarantee that we will do it better than anybody else can do on an individual basis because we deal with this every single day — we will generally negotiate a two or three year contract. Remember, committing equates to a better price.”
How often to take deliveries
“How often you take deliveries at your restaurant makes a huge difference,” said Kincheloe. “If you can get yourself down to one or two or three times a week, you’re going to be able to help yourself.”
The amount of storage you have will influence your purchasing philosophy. “It’s a balancing act. Every restaurant is different. Some are blessed with lots of storage, some are not,” he noted. The less storage you have, the more often you’ll need to take deliveries. (Hint: To create more storage space, think vertical.)
How much to order
The bottom line according to Higgins: Order just enough to get you from one delivery to the next so you’re not tying up cash.
To make sure you’re not ordering too little or too much, there’s no way around it: You’ll need to keep track of what you’re using by doing inventory, a task some restaurateurs make the mistake of skipping.
You’ll also need to establish par levels, the amount or number of an item that should be on hand at all times. Said Higgins, “This par is determined by the order history from the point of sale system. This makes ordering product very simple. You look at the product section, make a note of the product on the shelf, minus the par, and you place the order. For instance, if your par is five cans of tomatoes and there are two on the shelf, you need to order three.” If you frequently run out of a particular item, “Up your pars.”
Higgins cautioned that whatever delivery size and schedule you decide on, “Pay on time. Good credit terms as you grow the business are invaluable to your success.”
Receiving your deliveries
To help control costs, a manager should inspect each delivery against the order sheets to check that you got what you ordered. Anything you purchase by weight should be weighed.
Reject the delivery if isn’t fresh, doesn’t meet the product specs in terms of quality, quantity or packaging, or if the invoice doesn’t match the agreed-upon price.
To make sure the manager has time to inspect the order and isn’t busy with other tasks when the truck arrives, “Stay strict with your drop times,” Higgins advised. “I suggest that all deliveries arrive between 7 a.m. and 10 a.m.”
If you’re using a separate vendor for meats or seafood — the expensive stuff — be especially sure to have those items delivered as early as possible in the morning so the general manager or kitchen manager — the only people who should check these deliveries, according to Higgins — is available.
Food purchasing is a complicated business. But the difference between getting it wrong and getting it right will show up not just on your bottom line but on your guests’ plates. It’s smart to work with a consultant if you haven’t done it before, or at least seek advice from someone who has. And factor in some trial and error. As with many aspects of running a restaurant, you may get it wrong before you ultimately get it right.