February 27, 2013

By Ed Avis

            In the January edition of Rest Mex Report, I wrote about the purchasing practices of Margarita’s Mexican Restaurants, a small, successful chain in the Northeast. In this issue, I dive a little deeper into the topic in conversations with two experts, Rupert Spies, a chef and a lecturer in food and beverage management at Cornell University, and Ed Hoegler, a chef and lecturer at Kent State University.

            Based on my conversations with Spies and Hoegler, here are seven things vendors should know about restaurant buying habits. Following each item I’ve given separate tips for using this information for distributors and manufacturers:

1) Good restaurants make spec books. Hoegler says when he ran a restaurant kitchen, he made detailed specifications of the 25 most expensive items he was buying and the 25 most frequently purchased items. Restaurant specs are highly detailed, including everything from the amount of fat in a particular steak to the brand of olive oil preferred.

  • Manufacturer Tips: You want your products to show up in as many spec books as possible. To do that you must provide a consistent product, because spec books are designed to promote consistency. You also need to promote your products – if no one knows about them, no one will specify them.
  • Distributor Tips: Be a consultant to your restaurants. If they have developed specs already, follow them carefully, but don’t be afraid to suggest substitutes. You probably know more about available new products than they do. If a chef specifies XYZ Brand Butter, and you know that ABC Brand Butter is the same quality and costs less, recommend a switch.

2) Some restaurants seek bids. Many restaurants stick with the same suppliers forever (see next item), but others regularly bid items out. Hoegler says he regularly sent his specs to three vendors, and chose the one that could supply everything the best – he did not “cherry pick” items from multiple vendors.

  • Manufacturer Tips: Distributors handle most bids, but if you are asked to bid directly, respond promptly, make sure you can properly supply and distribute the product, and follow up courteously.
  • Distributor Tips: Remember item #1 – be a consultant. If you can offer something better than the bid request asks, suggest it. You will be considered a partner then.

3) Some restaurants trust their vendors too much. Of course you want your clients to trust you, but the truth is too many vendors take advantage of the trust their clients put into them, and in the long run that’s a mistake. For example, Spies told me that busy restaurant managers sometimes stop checking incoming shipments, and unscrupulous distributors realize that and start cutting corners.

  • Manufacturer Tips: Again, consistency is key. Even if you learn that a restaurant rarely checks the quality of the fish you’re supplying, don’t provide anything less than what was specified. In the long run consistency will pay off.
  • Distributor Tips: If you want long-term customers, give them all quality service even if you think they’re not checking!

4) Restaurants seek product information widely. Chefs and managers like to keep up with trends, but they’re not as connected to the wider community as you are. So they read magazines, watch TV, surf the web, listen to sales pitches, attend industry events, etc. to get their info. Says Spies: “When you’re talking about new recipes, new trends, etc. they get it from trade magazines and such. But they still need someone who says, ‘I know you’re using these kinds of hot peppers, but I have an interesting new product I can offer you.’”

  • Manufacturer Tips: Be creative when developing new products, because new things get attention. And promote your products widely, through publicity, advertising, industry events, cuttings, etc. And make sure distributors who carry your products understand what you have available.
  • Distributor Tips: Your sales rep or delivery person is your best connection; instead of just taking an order, have him suggest something new. “Your distributor is probably the best route [to product information],” Hoegler says. If you can get a restaurant excited about a new product you’re carrying, you will get the sale.

5) Chefs are busy and don’t have much time to visit with a rep. But they still know that they need to learn, so good ones make the time to do so. “If a vendor has something new, they want to give people a chance of learning the methods of using it and incorporating it into recipes,” Spies says. “That’s a service they provide.”

  • Manufacturer Tips: If you’re making sales visits, plan them so you’re visiting at a slower time, and make your visits short. Spies says January visits are common. Practice your demonstrations so you’re not wasting the chef’s time – show her what you have, how it can make her life better or customers happier, and get out.
  • Distributor Tips: Spies suggests inviting multiple manufacturers to hold a cutting at the distributor’s warehouse or other convenient location. All area restaurant owners/managers can be invited, and the event becomes a party. And don’t forget tableware and other non-food items – restaurants want to see it all.

6) Some restaurants spend too much money. Hoegler said he advises chefs to pay for top quality for center-plate items, but to shop around a little for second- and third-level ingredients.

  • Manufacturer Tips: Naturally you always strive for quality, but when developing product, keep in mind that you’ll find different customers at different price-points. If you offer three levels – good, better, and best – it’s likely each will find its niche and you’ll sell more overall than if you just offered one level.
  • Distributor Tips: Yes, you’d like more of your client’s money, of course, but if you know that your client is buying a top-shelf product when something less expensive will do the same job, tell them and they will be delighted and you will earn loyalty. If your competitor offers this before you do, you’ll lose that customer.

7) Some restaurant buyers can be bribed. It’s very common for a salesperson to offer tickets to sporting events, nice meals, and other little bribes to buyers, and this probably works in many cases. But good restaurants spread buying decisions among various people so no single person is in charge, and many restaurants specifically forbid accepting gifts from vendors.

  • Manufacturer and Distributor Tips: In the long run, you’ll have more success selling the benefits of your product, good prices, and excellent service. Sure, you might lose some sales to the rep who takes the chef to a Bulls game, but you’ll sleep better at night knowing that you made your sales based on quality, price, consistency, and other product benefits. After all, your ultimate client is the restaurant customer, and she does not benefit from the bribe you gave the chef.

I hope you can apply these tips to your business. If you disagree with any of my tips, or if you have others that you’d like to share with the community, please let me know: edavis@restmex.com, 708-218-7755. Also please read the article I wrote on this topic from the restaurant owner/manager perspective, 7 Costly Buying Mistakes Mexican Restaurants Make.

Ed Avis is the publisher of el Restaurante Mexicano, and a veteran food industry journalist.

February 27, 2013