Even the most advanced operators struggle with broadline foodservice distributor relationships because these organizations are more focused on the restaurant business and often lack knowledge and expertise in the retail and convenience store foodservice markets.
The fragmented commissary business is also a challenge, particularly to advanced operators with large chains that have stores scattered over a wide geographic area. As a result, some top-performing companies with national or regional scale such as 7-Eleven, QuikTrip, Sheetz and Kwik Trip, have opened their own commissaries and bakeries to distribute fresh products to their stores. This strategy puts all the control in the hands of the retailer and also lowers their costs of goods, keeping more profit in-house.
This strategy, however â which puts the c-store operator in another business entirely â is not recommended for all advanced operators. This option should only be contemplated if external resource constraints are prohibiting innovation, program achievement and execution.
There are ways to leverage retail scale and foodservice experience within the confines of the existing supply chain, according to experts, although they acknowledge that it becomes extremely challenging as programs become more complex.
Ongoing innovation of the foodservice offering also can be a sourcing challenge for advanced retailers because there are slim procurement resources to support these efforts, one expert said. Highly innovative retailers should seek the following capabilities from suppliers:
- Micro-marketing capabilities and "mass customization;"
- Local and regional offerings;
- Trial of new products and programs with little risk or cost;
- Programs that allow some stores to be different, if need be, to meet unique customer preferences;
- More accurate forecasts of product usage; and
- Freshness guarantees.
At this advanced level of foodservice, retailers are constantly looking for new products and new suppliers to elevate their proprietary programs. When it comes to evaluating new supplier relationships, intermediate and advanced foodservice operators want to know if supplier products/programs fully meet their company specifications and strategy, and if they have relationships with existing distributors used by the company.
Top foodservice performers should continuously look for ways to optimize their supply chain and consolidate deliveries to improve overall program costs and efficiencies.
- Self-operated commissaries and bakeries are not recommended for all advanced operators.
- Operators can leverage scale and foodservice experience within the confines of the existing supply chain.
- Focus on finding and building relationships with suppliers and distributors that support innovation and speed to market.
- Establish a well-defined process for managing, communicating and integrating new supplier relationships.
- Continuously seek to optimize the supply chain and consolidate deliveries to improve overall program costs and efficiencies.