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Procurement Services Companies

4 Tips for Lowering Food Purchasing Costs

In the catering industry, you know there are many different expenses that can quickly cut into your budget. While there are some corners you should never cut, there are a few tips we can offer that should help with lowering food costs and add some breathing room to your budget. Continue reading today’s post to learn more about restaurant food costs and getting the most from your catering budget.

At Source1 Purchasing, we can offer the tools you need to propel your catering business to the next level. Contact us today to learn more about the benefits we offer, including access, control, and visibility. We look forward to being your dedicated procurement service company.

1. Track Food Prices

In the catering industry, you know that food prices are constantly shifting. It’s important to keep an eye on any increases or decreases as these could potentially have a dramatic impact on your overall food-purchasing costs. Tracking food prices will allow you to plan ahead with any necessary menu changes so that you can include more affordable options. If you choose to continue to use the same ingredients, then be sure to adjust the cost of your services accordingly.

2. Streamline Inventory

Obviously there’s only so low you can go with inventory, but if you find that you regularly have more food on your shelves than you actually need, then it’s time to streamline your process. Reducing excess inventory is a critical step to lowering the amount of food that is wasted or spoiled. Additionally, make sure that you establish a daily inventory for key items in your catering business. It’s important to identify any gap between the actual usage and any point-of-sale usage, as this could indicate over portioning, theft, or another problem.

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3. Monitor Trash Cans

At first glance, this tip might seem a little odd, but it could be one of the most invaluable tips for your catering business. Consider your kitchen area and the placement of trash cans. From training gaps and careless individuals to accidents and more, there are a variety of reasons why perfectly good food could accidentally end up in a trash can. When this happens, you are literally throwing away usable, and sometimes expensive, products. One option is to place clear plastic food boxes near each employee’s workstation so that the contents can be inspected at the end of each shift. If usable product is found in the bin, you can use that time for on-the-spot training and avoid losses, which directly impact your budget.

4. Utilize a Procurement Service Company

A group purchasing organization (GPO) can dramatically increase your purchasing power by utilizing their contacts to access the supplies you need. At Source1 Purchasing, we are proud to be the leading GPO, with more than $9.5 billion in purchasing power and contractual relationships with more than 1,000 suppliers. If you would like to achieve your goals while maintaining alignment with your brand standards, then contact us today to learn how we can help you control quality standards and strengthen your supplier networks. Contact us today to obtain your free supply chain analysis!

Procurement Services Companies

Avoid These Procurement Mistakes

A smooth procurement system is essential to the operations of your company. When your procurement system runs seamlessly, you probably don’t even notice it, but when mistakes happen, nearly every aspect of your business can come grinding to a halt. To help you avoid this situation, we’ve gathered a list of the most common procurement mistakes made in procurement services.

At Source1 Purchasing, we help you enhance your purchasing power by giving you the control you need over products, contracts, and services you need to protect your brand standard. Contact our procurement services company today for a free supply-chain analysis and propel your business to the next level with Source1 Purchasing.

1. Spending Over Your Budget

Since most businesses work diligently to ensure that they stay within their budget, this is not a mistake that you might expect your own business to make. If your organization is observing an overspend, and can’t find the immediate answer, then it’s likely that you need to more closely observe your communication and coordination protocols, as a gap in one of these two areas is probably the source of your financial leak.

2. Rushing Orders

Typically, rushing a purchase order is more common in a new business. Established businesses, however, can also make this mistake if their procurement department is newly organized. One way that you can prevent anymore rush orders from happening is to work with a procurement service company like Source1 Purchasing. We have the experience and knowledge to help you get what you need in a timely manner.

3. Reinventing the Wheel

While there are many different programs that you can use to manage your supply chain, it’s important to make sure that your system is organized, efficient, and clearly communicates with everyone involved. Source1 Purchasing can offer you the dedicated team of professionals you need to enhance your purchasing power, control your orders, and increase your visibility to track your program performance.

4. Omitting Key Parties

When you make decisions that affect multiple parties or departments, it’s critical to make sure that everyone is looped into the conversation. While omitting someone is likely an accident, it can cause some major hangups in the overall flow of your procurement system. Try to remember that over-communicating is almost always better than under-communicating. Ask for feedback, verify the items on the order are accurate, and communicate all options before submitting orders.

5. Being Inflexible

Even in the most well-oiled machines, mistakes can happen, which means that you need to have alternative plans in place. Whether the items you need aren’t ready at the time you place your order or they arrive damaged, your willingness to be flexible and find other means of obtaining these necessities can help to ensure that you meet your own production deadlines.

At Source1 Purchasing, we are proud to be a leading group purchasing organization (GPO)  with more than $7 billion in purchasing power. We can provide you with a free supply-chain analysis, and show you how we can help you provide the services your clients demand at a savings that your business will love. Contact us today.

Procurement Services Companies

5 Steps for Managing Supply-Chain Costs

The hospitality industry is always changing as it seeks to meet the needs of its customers. In this example, change is a good thing, but it can also bring added expenses. While you are likely working on ways to balance the needs of your customers with changing finances, it’s important to find ways to continually improve supply-chain costs. In today’s post, we’ll share the five steps you should follow to effectively manage your supply-chain costs.

At Source1 Purchasing, we offer great products at great prices, which means that you can optimize your supply chain, increase your purchasing power, and boost profits. If you are interested in learning more about what we can do for you, then please call today to get a free savings analysis.

1. Maintain Quality Customer Service

As a hospitality professional, you already know that it’s important to offer customers what they want while avoiding products or services they don’t. The danger of adding items that your customers don’t want could result in increased supply-chain costs for you. Likewise, eliminating a service they expect could also have negative impacts on your business.

For example, if the restaurant in your hotel offers filet mignon year-round, then it’s important to be sure that you’re tracking the annual changes in cost for that item. By planning for the months when the cost of the meat is higher, you can make the necessary adjustments to alleviate any increase in spending. You could place a larger order while the costs are lower, adjust the pricing on your menu, or vary the size of the portion serving. By honoring your commitment to offer filet mignon year-round, you will keep your customers happy, while adjusting your procurement orders will keep your bottom line happy.

2. Utilize Proper Sourcing

Procurement is the act of purchasing goods and services at the best possible prices at the right time. At Source1 Purchasing, we offer access to our team of procurement experts, visibility to leverage purchasing data, and control over the products, contracts, and services you need. We care about your brand’s standard, which is why our services start with a free supply-chain analysis, so that we can offer you the insight you need to make the best decisions for your business. Proper sourcing is critical to the success of managing your supply-chain costs, which is why you can trust us to provide you with cost- and time-saving opportunities.

3. Evaluate Total Cost of Ownership

The total cost of ownership (TCO) refers to not only the purchase price of an item, but also the total cost of operation over the lifetime of that item. This means that you need a hotel procurement company that can carefully compare the original amount of the item with the long-term costs. To fully evaluate the TCO, it’s important to consider the following items:

  • Preparation time
  • Branding
  • Durability
  • Warranty
  • Customer expectations
  • Waste

A thorough evaluation of these categories should help you to make a decision about which product offers the lowest TCO. At Source1 Purchasing, you can trust our team to make decisions that will provide the greatest value for your supply-chain costs.

4. Minimize Product Handling

Working in the hospitality industry requires you to provide reliable services for each of your customers. The farther away that your suppliers are from your customers, however, the less reliable your supply-chain network is. Whether you need to source particular towels, soap, or bedsheets, you know that it’s crucial for you to have those products delivered as quickly as possible and in perfect condition. In order for that to happen, it is necessary to minimize product handling. The more that each order is “touched”, the greater chance there is for error and damage. When you partner with Source1 Purchasing, we can offer the ideal procurement solutions for your company. With more than 22 years in business and more than $7 billion in purchasing power, we can offer the award-winning service you deserve.

5. Outsourcing

Working with a supply-chain management company is one of the best decisions you can make to better manage your procurement services costs. At Source1 Purchasing, we can help you save money, provide access to a number of assets that you need, and increase your purchasing power. By partnering with us, you can take advantage of our contractual relationships with more than 850 food and beverage suppliers and more than 250 OS&E (operating supplies and equipment) suppliers.

Source1 Purchasing is a leading Purchasing Services Organization (PSO), that provides innovative procurement-based solutions, and we work with companies that range from single-location and multi-unit operations to major corporate facilities. If you are in the hospitality industry, then we can help you improve your offerings by leveraging our purchasing power. Contact us today for a free supply-chain analysis and discover a better way to manage your supply-chain costs.

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Why You Need a Procurement Services Company

If you are in the hospitality industry and do not currently have a procurement services company, then continue reading to learn how your business can profit from working with one. Source1 Purchasing is your Top Rated Local® procurement solution whether you are in the hospitality industry, entertainment industry, or catering industry. Contact us today to start your free supply chain analysis.

The Purpose of a Procurement Service Company

Procurement serves the function of spending the profits of an organization in order to procure the goods or services that are needed to address the requirements of the business. At Source1 Purchasing, we work to provide your business with the best possible prices for the goods and services you need so that you are able to spend wisely and save as much as possible.

What Procurement Services Are Not

Contrary to what some might think, procurement service companies do not function like bulk warehouses that allow you to purchase what you need in large quantities at low prices. Rather, our purpose at Source1 Purchasing is to provide a strategic analysis of your company’s operational spending so that we can help save money for your bottom line through more efficient purchasing.

Why You Should Use a Procurement Service Company

When you work with Source1 Purchasing, we can provide a rapid analysis of your current supply chain to see what is functioning efficiently, as well as what changes need to be implemented to help keep spending low. We will negotiate with sellers to obtain the best prices for your business while still allowing you to utilize the best practices for your industry. Source1 Purchasing is proud to offer:

  • Systems and processes that limit risk and promote transparency
  • Programs that assist you in developing the specifications you need
  • Pre-qualifying processes for suppliers
  • Negotiating your contracts to ensure fairness and profitability

How Procurement Service Companies Help You

As part of our job, Source1 Purchasing can help you vet all third-party vendors so that you can rest assured that the goods and services they sell are of the best quality and value for your industry. Sometimes there are unreliable and unverified vendors that will try to gain your business before disappearing with your money and without supplying the promised goods or services. Source1 Purchasing can help by making sure that all of your suppliers are fully validated so that you can avoid these potential pitfalls.

Choose Procurement Services

One of the greatest services that a procurement service company can offer to your business is detailed knowledge of your particular industry as well as insights into saving your management time and money. Source1 Purchasing leverages actionable data, creates a program tailored to your needs, and offers the widest range of contracts available so that your business can get the best value for your needs.

Source1 Purchasing offers buying that you can believe in. If you work in the hospitality, lodging, or entertainment industries, then you need to contact us to see how we can help strengthen the supply networks you currently have, grow the ones you need, and provide the savings that your business deserves. Contact us today to get started!

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3 Ways to ‘Level Up’ Your Savings

Our team is always looking for ways to help our members increase savings and utilize all we have to offer at Source1 Purchasing. Here are 3 ways to maximize your membership:

1. Utilize your Program Development Manager

Each member has access to a Source1 Purchasing Program Development Manager (PDM) who serves as the point of contact to a one-stop-shop for supply chain-related solutions. Discuss your goals and needs for the month, quarter, or year, and collaborate with him/her to develop a strategy that works.

Discuss your goals and needs for the month, quarter, or year, and collaborate with him/her to develop a strategy that works.

A Descending Dollar Report is one of the tools your PDM uses to ensure you identify the items or suppliers with which you’re spending the most amount of money. For instance, the program development manager can help you select different toilet paper and sugar packet options. Although your choice of toilet paper outspends sugar packets 20 to one, the impact you see on the bottom line may not be as significant from a return on investment (ROI) perspective. In that case, it could be more beneficial to align on contracted items that offer leveraged pricing and/or rebates for this category.

Another way your PDM can help is by connecting you to suppliers and partners to leverage their expertise.
Suppliers possess invaluable product knowledge that can result in cost savings or in better-quality options. Recently for example, a supplier for trash bags/can liners shared with us that 40 percent of the trash liners purchased today are too heavy or big.

If you look at kitchen trash bags (with the most common sizes being 55 and 33 gallons), there are about 40 different SKUs being purchased of all different sizes just to fill these trash cans. Working with those experts can ensure appropriate choice of bag size and density to deal with the type of waste you’re putting in the can. Purchasing the right one can result in cost savings.

2. Leverage Your Data

Evaluate the second or third distributors that you’ve consistently been using. By sharing your purchasing data with us, we can utilize analytics that will identify where there are contracted opportunities. The data will show whether to buy that exact product from a different truck or to identify a new supplier to handle the same category and quality of the item you’re already buying. Thanks to the Source1 Purchasing program suppliers and distributors, the cost will be at a leveraged rate.

Additionally, for members interested in learning more about our program after regular business hours, visit the Source1 Purchasing online community. All of our supplier programs can be found there along with the categories they cover, overall program benefits, and ways to access those programs — either through your broadline distribution or a supplier you buy from directly.

By sharing your purchasing data with us, we can utilize analytics that will identify where there are
contracted opportunities.

3. Leverage Supplier Relationships

While product quality and price are important, safety is something that may not be at the forefront of members’ minds. There are a lot of programs that certify safety. One of the top ones is Safe Quality Food (SQF) and it has different levels. We work with suppliers by asking them what kind of food safety or product safety certifications they have to ensure the product reaching the end user every day is safe; and, what product recall procedures they have in place, should something happen.

One of Source1 Purchasing’s alliance partners, Fresh Concepts, is able to activate on produce recalls within 45 minutes of getting the first notification and communicating it to the distributors and end users. This quick product recall procedure response shows how Fresh Concepts takes consumer safety seriously.

Take maximum advantage of contracted programs to reduce your costs and add those cost savings straight to the bottom line to improve your margin. Evaluate your products so you have the right mix and quality of ingredients. By raising the quality, sales going through the pipeline increase as does your overall revenue.

At Source1 Purchasing, many of our members are management groups for which we provide custom analytics. We can customize dashboards and update them monthly for management companies that have their own direct deals in place or MDAs with their distributors that allow for incentives like drop size or house brand usage. If you’re an existing member, inquire with your Program Development Manager or, for prospective members, speak with a sales manager.

Take maximum advantage of contracted programs to reduce your costs and add those cost savings straight to the bottom line.

If you’d like to find out more about your Source1 Purchasing solution or maximize your participation, contact us at 888-411-9987.

How are you going to maximize your Source1 Purchasing membership in 2019? Please let us know by commenting, below.

Steve Larkin possesses 15 years of experience in hospitality including the restaurant and food services industries. His culinary background as a chef brings a unique perspective and approach to the business. Currently, he serves as the Director of Purchasing for Source1 Purchasing.

 

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How to Increase Margins and Revenue Growth

Do you have the desire to increase the bottom line? Or maybe you need to decrease expenses, but don’t know where to start? Here to tell us how to increase margins and revenue growth is Steve Larkin.

Steve possesses 15 years of experience in hospitality including the restaurant and food services industries. His culinary background as a chef brings a unique perspective and approach to the concept of business profitability. Currently, he serves as the Senior Director of Purchasing for Source1 Purchasing.

We talked to Steve about how to increase profit margins and revenue growth and he shared these three tips with us:

1) Reduce Costs

Decreasing costs on items you are already buying directly impacts the bottom line. However, when you increase revenue, there are items such as labor, product, and service costs to consider. Therefore, not all of the revenue influences the bottom line.

In the hotel industry, if you raise room rates $10 to $20, there are other charges, amenities, and disposables to account for in that rate increase. As a result, those costs would not be realized in the bottom line. For restaurants, while it may be tempting to offer a flat menu price reduction, you have to stay consistent to your brand. Customers may get the impression that the food quality has been sacrificed or isn’t worth the price you’re offering it for during regular hours and decide to come instead during a slower time when a discounted price is available.

Earlier in his career as a chef, Steve created seasonal and special menus rather than discounting the entire regular menu. By utilizing these special menus to pique customers’ interests they began to recognize each one had a story to tell. Then, they came back to try other menu items. The identity and branding of each of these menus was consistent without compromising the quality of the food offerings the brand provided.

A few months ago, Source1 Purchasing helped one of its customers increase margins through a cost reduction of thirty-thousand dollars per year by switching from what they were buying to offering a consistent product across all locations.

Steve and the team met with a management group in Ohio and chefs from the company who were conducting a product cutting exercise. They analyzed the top three costly items the group was purchasing, which were bacon, sausage, and French fries. Then, they included the supplier in the discussions about the product to obtain the client’s feedback for each of the different options that would be a fit. They selected three new options that would work for them and a significant cost savings resulted.

2) Utilize Built-in Incentives with Suppliers and Distributors

Take advantage of drop-size discounts, private label incentives, or quick-pay discounts. Inquire with someone in the accounting department about the feasibility of adjusting payment due dates. Instead of having invoices held in a ready-to-pay mode until the due date, during his days as a chef, Steve arranged to pay all invoices with a produce vendor weekly and was able to capture a 1.5 percent discount. These are some viable options to consider for increasing margins.

Rebates worked for Source1 Purchasing customer Wilderness at the Smokies Hotel & Waterpark Resort. Steve explained how the team also conducted vendor price comparisons and the resort could save money on items he was already purchasing from vendors he was already using. Between Q3 and Q4 of 2017, the resort increased overall savings by over 7 percent.

3) Raise the Quality of What You’re Providing to Justify a Price Increase

Stay true to your brand yet don’t be afraid of quality and value. When Steve worked as a chef at the family-friendly restaurant, Crayola Café, health and wellness was increasing in popularity. The team conducted a great deal of research to determine ways they could involve kids more into food selection at the restaurant.

He led the menu revision process which went from traditional American fare (chicken nuggets and French fries) to one that incorporated a healthier, build-your-own-salad component. Kids were engaged in the experience and had fun being a part of the decision-making process. Since a higher quality product was being offered, they were able to raise prices on the entire menu 5 to 10 percent. This is one way to increase revenue.

The Source1 Purchasing Solution

At Source1 Purchasing, we can help you in your quest to increase margins and grow revenue. With no charge for membership, we can supply everything from the parking lot to the roof top. Being a part of our group purchasing program means you’re eligible for pre-negotiated, national account pricing with suppliers.

You can realize discounts on nearly every category that hotels and restaurants already purchase from for food items, operating supplies, equipment, small wares, and services. There’s no long-term contract required and our supply partners collaborate with you to ensure your product mix is the best while maximizing returns.

Are you already a member? If so, make sure you’re optimizing your purchasing program with the tools available within the community Marketplace, mySource1Purchasing.com, such as the Contract Product Match Report. Steve pointed out the likelihood of items that are available at contract prices that you are currently buying at a higher cost.

There are items you were buying yesterday that you can make better purchasing decisions on today to increase your margins tomorrow. Another valuable resource is the Performance Report. It shows how much you’re spending on contracted items versus your total spend. The idea is to be able to grow that metric. In order to do that, Steve suggested capturing as many discounts, savings and rebate opportunities from the Source1 Purchasing program as possible.

If you are not a member of the Source1 Purchasing Program, let us work with our supplier partners to determine if you’re utilizing the top items and obtaining them at an ideal price. Signing up allows you to tap into our suppliers. Steve reminded us that it often requires a small change from you to venture out and order with someone new. With the possibility of a 7 to 12 percent savings, you have everything to gain including increases in margin and revenue growth.

Contact Us today and get a free purchasing analysis.

Are there any other ways you’ve increased margins and revenue to meet your goals?  How are you going to utilize the tips we’ve shared to help you in 2019? Please let us know by commenting, below.

 

Lodging

Making the Switch to Eco-Friendly Disposables

Hotel operators looking to make their establishment more sustainable by minimizing waste must first turn to their supply chain. Most hotels are large users of disposable products. Single-use items generate a great deal of waste and are often very costly. However, there are ways that hotels can minimize their use of disposable items and their environmental impact in the process. This can often be accomplished without increasing the cost of your hospitality supplies. Here are the two main areas where hotels can switch their normal disposable items for eco-friendly alternatives:

Reducing the Use of Disposables in Your Hotel

Guest Rooms

In-room personal care items are a popular amenity among hotel guests. However, these items generate a lot of packaging waste. What’s worse, they are often thrown away while still containing some product. Many hotels are minimizing the impact of their complimentary toiletries by purchasing products that come in environmentally-friendly packaging such as recycled paper.

Hotels should also look for suppliers that provide products that are free of parabens and sulfates. These ingredients are not only bad for the environment, many people with skin sensitives can also suffer adverse reactions from them. There are many companies that offer hospitality supplies with environmentally-friendly formulations. These products are available at a similar price point to traditional options. This allows you to provide more value to your guests without spending more money.

Food & Beverage

Your food service department can generate a lot of paper and plastic waste on a daily basis. While eliminating disposable items like napkins, paper cups, and plastic cutlery altogether is not feasible for most hotels, there are ways to encourage guests to use less of these items.

Hotels that offer a grab-and-go breakfast service will often stock their breakfast bars with disposable plates, cups, and cutlery. However, many guests actually sit and enjoy their meal in the hotel dining area or in their room. For that reason, it’s a good idea to make reusable coffee mugs and flatware available alongside disposable options. Generating a few more dishes may create a bit more work for your kitchen staff. However, cutting down on your cost of disposable products can save you money in the long run.

The best way for hotels to lower the impact of their daily use of disposables is to find quality suppliers to help them stock eco-friendly alternatives to their current products. Source1 Purchasing’s strategic suppliers program can help you identify the best suppliers for your all of your hospitality needs. Contact us today to learn more.

Lodging

Why You Should Perform a Checkup on Your Hotel’s Supply Chain

The success of your hotel is riding on the health of your supply chain. A stable supply chain consists of reliable vendors, predictable pricing, and streamlined purchasing processes. It’s a good idea to do a periodic checkup of your supply chain to evaluate your performance. Taking the time to review your supply chain at least a couple times a year can help you lower your annual expenses and fix issues in your purchasing system before a problem arises. Here are three steps you need to take when performing your supply chain checkup:

Step 1 – Audit Your Expenses

The first step in your supply chain checkup is to audit the expense reports for all of your hospitality supplies. This is a good opportunity for your purchasing team to pinpoint money saving opportunities. Perhaps there are items in your food and beverage program that are not moving well that can be eliminated. Or maybe you’ve experienced a sharp price increase on an item you purchase frequently and it’s time to request bids from alternative suppliers. Leveraging your data to make smarter purchasing decisions can make a big difference in your monthly expenses.

Step 2 – Review Your Supply Chain Map

Make a map of your supply chain network. You may find that you’re procuring items from multiple companies that can be consolidated and ordered from a single supplier. Or perhaps you’re paying high shipping costs to an out-of-town supplier when a local alternative exists. This is also a good time to evaluate all of your suppliers and how they are performing.

Step 3 – Set KPIs to Track in the Future

Setting key performance indicators (KPIs) will better equip your purchasing team to monitor the health of your supply chain year-round. Some common KPIs to watch are pricing, inventory turnaround, and supplier lead times. In addition, you should track the number of negative incidents you experience with your suppliers such as late or incorrect deliveries and other quality control issues. Constantly monitoring KPIs will allow your purchasing team to make quick adjustments to your supply chain as needed. This will make it easier to mitigate risk and keep your budget on track.

Source1 Purchasing can be a valuable partner in maintaining a stable supply chain for your hotel, restaurant or other hospitality business. Find out how we can help you with supplier relationship management while saving you up to 15% on the cost of your hospitality supplies. Request your free Market Basket today.

 

Lodging

5 Things to Consider When Selecting Products for Your Hotel Pantry

Traditionally, the pantry has been a resource to meet the needs of guests when they are looking for a light snack or quick meal. However, due to recent restrictions caused by COVID-19, the pantry has become a much more integral part of a hotel’s day-to-day operations. In fact, some experts believe that over the next few months more and more hotels will begin opting for grab-and-go items in place of traditional dining options1.

When properly planned and managed, the pantry can be a great source of revenue for your hotel. Now more than ever, it’s important that you select the right products for your pantry. This will ensure you are not just meeting the needs of your guests, but also earning a profit.

Before selecting the items for your pantry, you need to determine what categories should be included as pantry necessities. Common options are sweet snacks, salty snacks, healthy snacks, quick meals, ice cream, frozen dinners, and travel size amenities. Additionally, you need to identify what the best sellers in each of those categories are. This could be Reese’s Peanut Butter Cups for sweet snacks or Doritos for salty snacks, for example. You will be able to determine these categories based on market research.

Once you have your categories in mind, here are 5 things to consider when selecting the products for your hotel pantry.

1) Stick with What’s Familiar

It is vital to offer the popular products that your guests seek when they step into a pantry. Some hotels want to stand out by offering only regional items or only natural or organic products. This can be beneficial, but typically national brands outsell specialty items 4 to 1.

Research has shown that guests, especially families and business travelers, prefer comfort foods from well-known brands while they are traveling. Consumers would rather not spend money on an item they are unfamiliar with, taking a chance that it might not be exactly what they wanted. By offering items that guests are familiar with, sales and guest satisfaction will increase.

2) Use Room Rates as Budget Indicators

The room rate of a guest’s hotel is a good indicator of their travel budget and should be factored in when selecting the offerings in a pantry. For example, a guest who is willing to pay $200/night to stay at a hotel is probably willing to pay $7 for a pint of premium ice cream like Ben & Jerry’s or Haagen Daaz. On the other hand, a guest who chose an economy hotel at a $49/night rate is more likely to be looking for an inexpensive ice cream product in the $3-4 range, like Klondike or Good Humor novelties.

Studies have also shown that generic or low budget items are NOT usually preferred by guests, no matter what their budget, because they are normally associated with being low quality. If these products are stocked in the pantry, you will find that they will not sell as quickly, despite the low price.

3) Bigger Is Better

When America was asked “Would you like that Super-Sized?” the answer was a resounding “YES!” Guests typically opt for the 20oz soda, the king-sized chocolate bar, and the large “grab bag” chips. These products sell better and faster, which means an opportunity for larger profits. Market retail analysis of over 400 Marriott Markets shows that king-sized beverages, candy bars, and potato chips outsell their normal size counterpart across all categories where a king-sized alternative is offered.

To put it into perspective, the single serve 1 oz bag of Lays can be purchased from your food service company for about $.35 each (depending on your negotiated price) and can be sold in the pantry for $1.00. That’s about a 200% markup and $.65 profit per bag. However, a king size or grab bag size (2.25 oz) Lays sells wholesale for about $.65 and can retail in a hotel pantry for $2.00 or more. That’s about a 225% markup and $1.35 profit per bag. Is it starting to add up?

4) Mix It Up

Guests want options – not just in the number of products being offered, but in the categories available as well. A guest should be able to walk into the pantry and find a satisfying solution to what they are craving. Meaning if a guest needs to satisfy a sweet tooth, they should have several choices to choose from, including chocolate, cookies, and candy. If they come in and are trying to stick to their diet, they should be able to select from a variety of healthy products like energy bars, trail mix, or Lean Cuisine meals.

This is especially important during a time like COVID-19. As dine-in options continue to be limited, having a variety of food offerings for different mealtimes in your pantry is key. Individually wrapped meal items like muffins or sandwiches are perfect to grab-and-go so guests can dine in the comfort of their rooms.

5) Don’t Forget the Little Ones!

Travel size assortments and single serve over-the-counter medicines are very popular sellers but are commonly overlooked by hotels. These products allow you to meet the needs of your guests while earning a healthy profit, since most wholesale for under a dollar and can be sold for $2.00 or more. When properly supplied and merchandised, these assortments fall in the top five for all pantry offerings.

Graphic listing things to remember when selecting pantry market products

No matter what region your hotel is in or what main guest profile you are serving, the convenience of a well-supplied pantry market can improve guest loyalty and increase sales at your hotel. Selecting the right products to offer is the first step towards your hotel retail success.

In addition to helping you find savings on the right products for your pantry, Source1 Purchasing can also help you access competitive pricing on a wide variety of products and services for your hotel. Contact us to learn more, we’d love to meet you!

 

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