With inflation skyrocketing this year, with no sign of slowing down, it is becoming harder and harder for hospitality businesses to stay both competitive and profitable. If you are already well established, then you may be thinking of where to cut costs and re-evaluating your suppliers can be a good starting point. If you are just setting up your business, then you will want to make sure that your costs are as lean as possible, without compromising on the quality of your product. Either way, we have laid out the steps to sourcing the best food supplier in your area to suit the specific needs of your hospitality business.
Before we get started, it is important that you choose your food supplier with your head chef (if you aren’t already). Your head chef will be the one who will have the continued relationship with the supplier and will be the one placing all of the orders.
What should the food and drink costs be for my restaurant?
In order to be a profitable hospitality business, you will need to make sure that you have a menu that makes you enough money. As a general rule, you can put a percentage value to the cost of your food and drink compared to the sale price.
- Your food costs should be around 30% of the sale price.
- Your drink costs should be around 20% of the sale price.
These are of course rough estimates and will vary depending on the type of business (fine dining vs street food for example) and the variety of the menu offering. Most restaurants will have dishes with different profitability, some high-profit dishes, and one or two low-profit dishes. For drinks, the costs will vary depending on the type of drink. A spirit will have a cost of around 15% compared to the sale price, whereas wine is around 35%.
What you need to know about your business
Before you can effectively choose a good food supplier, you will need to gather some information about your own business first. Being armed with these details will help you to pick the right supplier for your needs, and make sure that you aren’t spending too much money in unnecessary areas.
- Take a look at your menu – Break down every dish into individual ingredients and quantities. Your kitchen/bar should already have these written down, but if not then this is a great time to get everything written up. From here, you can see how much of everything that you need.
- Split everything into categories – Next is to organise that list into categories based on potential suppliers, such as Meat, Fruit & Veg, Dairy, Beverages, Bakery etc. Your chosen supplier may supply a lot of these categories, but it will be helpful to split them down as you may find a specific supplier for one who can provide better quality or price (or both).
- Work out your budget – If you are already established, then you can look at what you are currently spending for each product per month. If you are just setting up, then this will be harder, but just as important. Your budget will help to gauge where your suppliers will need to be on cost and help you decide where you may want to cut or increase costs on specific items.
- Take a look at your storage vs sales – For new businesses, work out your projected sales quantity vs the storage you have on site, particularly for fresh and frozen. This will help to gauge how often you will need to order from your supplier for each different category.
Should I use a Local or National Food Supplier?
With costs rising in basically every area, it can be very tempting to look at the cheapest option when looking for your food supplier. National companies can usually offer a bigger variety for less, but is this the best way to look at the problem?
Here are the pros and cons of choosing either a local or national food supplier:
National Food Supplier
- Cost – Due to the sheer size and buying power of these large companies, the costs to you are usually lower and more attractive.
- Variety – National suppliers can act as a one-stop-shop for most of your ordering needs, allowing you to offer more variety. This also tends to include non-food items too such as cleaning products.
- Consistency – The last thing you need is for your best selling dish to be unavailable due to supply issues. A national is less likely to have a product go out of stock
Local Food Supplier
- Quality – If you decide to opt for a local supplier, then you can usually expect a better quality of product which also tends to be fresher.
- Ethics – Supporting local is also a more ethical option. The lower miles means a better carbon footprint for your supplies, and you can have a better idea of how the product was grown/reared.
- Supporting the local economy – Your money goes back to the local farmers and growers, which in turn helps the local economy for everyone. It will be more expensive than a national supplier, but most people (including customers) are usually willing to pay extra for locally-sourced food.
- Delivery Times – Being local means that product can get to you faster, particularly in an emergency.
Should I have more than one food supplier?
Almost definitely. It may seem that the most cost-effective option will be to pick one supplier who can get everything for you. The bigger buying power of your order will mean that you can negotiate a better price, and everything will arrive at the same time.
However this is never the best route for a successful, quality menu.
Most restaurants will have multiple suppliers depending on what they need to buy in, the location of their venue, and if there is a specific dish or food that needs to be a cut above the rest. If you want a unique bar menu, then you will need a dedicated drinks supplier, or if you have a seafood restaurant then a dedicated seafood supplier who will deliver straight from the boat is a must.
How to find a local food supplier
Now that you are armed with all of your needs, it is time to look at the offerings from your local and national food suppliers.
- Word of mouth – This is by far the best place to start. Pulling the information from the experts in the area is always a good idea and this is no exception. Ask your fellow restaurateurs and business owners, particularly those in similar restaurant-types to yours as these will use the suppliers that you want.
- Web Search – Then you will want to fill up the rest of your list with suppliers you find online. A web search will give you both local and national results where you can see their websites and reviews from other customers.
- Download or order brochures/ catalogues – Most suppliers will have a brochure or catalogue, showcasing their business and what they can offer. Get these downloaded or ordered in the post to add to your research.
What makes a good food supplier
Now it is time to narrow down your shortlist and find the best supplier for you. This is what you need to look for:
- Competitive Pricing – This goes without saying, but pricing should be high on your priority list. It doesn’t necessarily have to be the lowest on offer, but the most competitive for the quality of product that you are expecting to serve your customers. If you sell high-end food and drink, then the cost of your produce should be higher than a sandwich shop.
- Delivery Days – How often do they deliver and does this fit with your opening hours? Not only that, but can you survive with your stock-holding before the next delivery?
- Lead time – From order to delivery. If you have a ridiculously busy service one evening and you are fully booked the following day, can you get restocked in time without having to drop menu items?
- Product Variety – Are you planning on selling some unique ingredients? If so then your supplier will need to be able to source them. A larger catalogue will also mean that you can group products into one supplier, increasing your buying power and hopefully reducing costs.
- Product Quality – This needs to match both the price they are charging, and what you are expecting to serve. Where are the products sourced from, how are they stored before they get to you, and how long do they spend door to door?
- Consistency – Can they ensure that you will always get your produce on time, at the same quality and quantity? Obviously this doesn’t apply to seasonal produce, but you need to know that you can count on the staples of your menu.
- Ethics – Does the supplier align with the ethics of your business? Does everything need to be sourced within so many miles? The Pig at Combe for example, offers a 25-Mile Menu where everything is sourced within 25 miles of the restaurant! Or perhaps your restaurant is organic, so it needs produce to match.
Tips for getting the best value for money
Now that you have your favourite suppliers, you will want to make sure that you get the best value possible. Remember though, this doesn’t always come down to low prices. You want the best product and service for the best price, so that you can offer the best food and drink to your customers, meaning they will spend more and keep coming back.
- Arrange a meeting with the sales representative or manager – The best way to start a dialogue with a supplier is to have a face-to-face meeting with them. They can hear your needs and potentially offer options that you hadn’t thought about. This also starts the relationship off, which will be a valuable asset over time.
- Sample the products – This is a must, especially if the product is more expensive than what others may be supplying. You need to know that the quality matches what you are expecting, and if not, then either negotiate a better price (if it still works for you), or find another supplier for that product. The overall quality of what you sample will also give you an idea of the supplier as a whole.
- Negotiate the price – Not all suppliers will offer discounts, but once you have your list laid-out, then see what you can do. Even a small discount will add up over the long run.
- Restrict the number of suppliers – The more you buy from a single supplier, the more room there is to negotiate a better price. As we have already mentioned though, make sure the important products come from specialised suppliers to suit your business.
- Don’t get complacent over time – It is easy to let your suppliers do their thing so that you can focus on your restaurant, and this should be the case with a good one. However it is always worth keeping on top of everything with them. Make sure that the quality of the product doesn’t dip over time. If costs go up, find out why and if you can renegotiate the prices.
- Spend more on your “wow” products – These are the ones that really stand out on your menu, the reason why people keep coming back to you. Do you offer a really good steak dish? Then make sure you are buying the best quality steak in town. Customers will happily pay more if they know that they are getting amazing food or drink. Just remember to keep the dish profitable!
Finding the right food supplier can feel like a circus performance. Trying to balance cost, quality and consistency, can feel like a daunting task. Hopefully this guide has helped you to work out a plan of action and narrow down the choices available to you.
If you find a great supplier, then you may buy from them for the full life of your business, but if not then don’t worry. Hospitality is a fine art and can take time to develop your perfect combination of service and product.