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Category: Catering

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Tips for Lowering Food Purchasing Costs

From upgrading computer systems to equipment maintenance, restaurant costs have a tendency to add up quickly. So, what is the best way to supply a kitchen with the freshest, most delicious and most sustainable ingredients at the lowest cost?

Begin with your delivery area. Meet with your vendors and ask each one to build current order guides listing only the product that you purchase from them. Create a spreadsheet of these items for your ordering manager. Include the amount of the item that should be on the shelf, in the kitchen, and in the front of the house. This will help to prevent ordering more than you need.

Keep your inventory tight. Hang inventory sheets on a clipboard in a specified area. When the delivery person brings in the product, your manager can take this clipboard and check the inventory order sheet against the invoice, to insure that all of the correct product has been delivered, prices are accurate and that you are getting exactly what you are paying for.

Keep an industrial foodservice floor scale in your kitchen prep area to weigh in any product you buy by the pound. Weighing deliveries can potentially save you thousands of dollars on lost product.

Make sure your meats, seafood and other most expensive products are delivered as early as possible. These costly items should only be checked in by your GM or kitchen manager for freshness.

Establish a standard delivery time. You should stress to your salesperson that not delivering your shipment within your specified delivery times will result in loss of business for them. Setting specified delivery times emphasizes the importance of receiving product to both your delivery person and to your management staff.

Many of the reasons that restaurant costs can increase are that simple procedures get overlooked. It’s important to utilize restaurant-wide, cost-insurable standards across to help reduce your purchasing costs. Source1 Purchasing is a leading strategic supply chain management group focused on cost management, savings and operational efficiencies for your industry. To learn more about the Source1 Program and how it can benefit your business, visit our website at

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How to Reduce Food and Beverage Costs

The costs of ingredients are high and only becoming higher, but with the demands of today’s customers, you can’t pass them up. It takes some creative thinking to balance the cost of ingredients with the amount of money in your budget, so here are some tips to help you stay profitable.

1. Buy what’s in season. By purchasing items that are in season, you’re showing customers that you’re relevant and have the freshest, best-flavored, and lowest-cost foods. Follow a chart that shows the time of year that various foods are at their peak. Having species-specific recipes ready for the latest catch can help net great prices and top quality.

2. Follow the rule of thirds. Divide the recipes on your menu into thirds. A third of the items should be unique signature dishes. The second third comes from all the ingredients and the byproducts from those signature dishes. The last third is popular or traditional items that the traditional diner would enjoy. Ideally, the recipes from the last third of the menu would include ingredients from inventory or byproducts from the dishes in the first two categories. By doing this, you are reducing waste, and lowering overall food costs.

3. Buy lesser-known and value-added products. Trendy items cost more. Consider looking beyond those products to boost your margins. Aaron Allen, CEO of Quantified Marketing Group, managed a restaurant that stored discounted cases of a new liquor that wasn’t well-known and ended up creating drinks that became popular. Before that time, total bar costs ran about 28 percent; eventually the little-known liquor became a top seller and brought bar costs down to 16 percent.

4. Low cost doesn’t mean low taste. It’s important to understand the value of less-expensive cuts of meat or offal, but these cheaper products are not always best for a menu. Items like sausage, sweetbreads, and tripe may require a little creativity from the kitchen staff, but they have great flavor at a low price.

5. Mix things up. It can be difficult to hide price increases if your menu always remains the same, but switching out old dishes for new ones gives you a chance to increase prices without anyone noticing. Plus, adding new signature items will give you the upper hand against your competition. Innovation is key when it comes to restaurant success, not just price increases.

6. Look at the big picture. It may be worth it to have one expensive ingredient in a recipe. Don’t be discouraged by the cost of one raw material, but instead look at the overall yield of the recipe as a whole. Pasta is a perfect canvas for luxury ingredients. Flavor is the key. Don’t feel the need to purchase all; high-end materials. You can deliver flavor with inexpensive, yet high quality ingredients.

The Source1 Purchasing Program can help you reduce your food and beverage expenses. To learn more about the Source1 Program and how it can benefit your business, visit our website at

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6 Purchasing Best Practices to Implement Today by using a GPO

In the hospitality and food service industries, there is a saying that amateurs buy often, but professionals purchase only once.

Some small to mid-size operators spend a great deal of time and effort buying instead of purchasing. When making a shift to purchasing best practices, you can access experience and information that will contribute to your success — purchasing is educated acquisition while buying is informal shopping. And a group purchasing organization can help operators transition to a more advanced procurement method.

Here are six purchasing best practices, along with reasons why you should adopt new buying habits.

1) Purchasing is about studying the products: Moving from buying to purchasing starts with education about product performance, value, security and sourcing. By studying these points, you can find answers to questions that improve guest satisfaction while increasing profits: How can you offer new products or find new dishes that demonstrate revenue growth? How can you increase your average guest check while lowering food costs? How can you create signature dishes that attract and retain guests?

2) Purchasing maintains product value and performance: The key difference between buying and purchasing comes down to this — buying is attaining products while purchasing is the management of products. There’s a contractual element to purchasing, which can guarantee elements like price, yield and grade, determining factors that ultimately make the product more successful. While buying usually creates product inconsistency, purchasing improves product quality and results in higher guest satisfaction scores.

Consistency is a crucial component of a successful operation, stemming not only from using quality ingredients, but also from having a reliable staff, according to an article on the Culinary Arts 360 website. “No one wants to chance eating at an establishment that has a dish perfect one night, and a mess the next,” the article states. Purchasing ensures a favorite dish will always include the same quality ingredients.

3) Purchasing as a group leads to extra discounts: Group purchasing organizations like Source1 can help operators with their purchasing model. By combining purchasing power from different operators, Source1 can present to an operator the latest r rebates, allowances and incentives on a variety of products across all areas of their operation.

4) Purchasing leads to information sharing: Group purchasing organizations help operators share knowledge and exchange reviews. Source1 Purchasing performs a business review every quarter with clients to evaluate savings that were realized and what potential they have for additional savings.

5) Purchasing is a tool for improvement: Operators that move toward a purchasing methodology can focus on continuously refining the process. Instead of buying the cheapest brand on the market, they can choose an item — say a standard chicken breast — and then work with that item to make it great. Once operators move to a standards-based purchasing model and create a new baseline, they can work on improving it.

6) Purchasing offers better return on investment: During the recession, many operators re-engineered their menus to focus more on ancillary items like salads, soups, appetizers and desserts. Profit margins are better on these products and they offer greater flexibility to introduce new ideas. These operators increased their margins by offering exciting new desserts with a cup of coffee or other beverage. This was a direct result of purchasing and its related analysis, demonstrating the great return on investment of group purchasing organizations.

There are many sound benefits to implementing purchasing best practices. The bottom line is that if you’re simply buying products instead of purchasing, you’re not getting the most for your dollar, and possibly save the wrong products at the wrong price. As an authority in GPO best practices, Source1 Purchasing can get guide you away from buying and toward purchasing. Plus you’ll have access to the resources, tools and leverage of a powerful purchasing program.

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The Evolution of Co-sourcing in the Hospitality & Foodservice Fields

In the past businesses have turned to outsourcing to gain assistance with controlling costs and managing operations tasks. Over recent years, outsourcing has begun to receive negative connotations due to the idea that control is given up once the decision to outsource is made.

However, a new trend is emerging in the hospitality and food service industries that allows owners and operators to remain in control while still being able to minimize cost risks and increase product and service consistency, which is co-sourcing.

By definition, the term co-sourcing is a business practice where a service is performed by a staff from inside an organization and also by an external service provider. Co-sourcing, unlike outsourcing, doesn’t involve simply handing work off to a third party. Instead, co-sourcing is teaming up with an external service provider to make food and beverage purchasing operations tasks easier, more efficient and cost-effective.

For instance, co-sourcing may involve supplementing the internal purchasing staff with a specialized skill, such as order entry program implementation services, which provides centralized standardization across the purchasing platform. Doing so would help in-house and culinary departments to ensure menu consistency and optimized cost effectiveness for the field operators.

“Part of our co-sourcing design is to have the management staff in a quarterback position,” says Scott Hoffmire, president of Source 1 Purchasing. “Management is on the front lines and expressing their needs, challenges and expectations to us, which allows us to help them navigate and get the best product fit with optimal pricing.”

Co-sourcing allows for a procurement specialist to harness the entire supply chain in order to meet specified needs, while allowing owners and operators to remain in control of the decisions. Unlike outsourcing purchasing, which can be seen as surrendering, the co-sourcing formula works in that it keeps the buying power in the hands of the owner or operator.

In addition to helping owners and operators meet sourcing and procurement needs, co-sourcing helps to protect the brand’s promise and reputation. “On top of procurement management, owners and operators are also in charge of guest experience, the overarching theme and various promotions,” says Hoffmire. “Since we are operators serving operators, we are able to offer industry know-how and the ability to maintain a brand’s reputation through co-sourcing, which can take the powerless to powerful.”

For more on Source 1 Purchasing’s strategic procurement solutions, contact us today at 901.334.4000.