As the hotel industry slowly climbs out of the cavernous vacancies left by the pandemic, “breakeven” has become the operator’s current goal, a means of hanging on until some sense of normalcy returns. Like most other businesses, hospitality has been hard hit with occupancy rates ranging anywhere from 48% to 50% from mid-July through October. While these rates typically decline into the new year, the second week of December saw rates drop to 37.8%, a tough decline given the present climate. According to Hotstats, just to breakeven, a hotel requires an average occupancy rate just over 37%. With the current state of the industry, hoteliers are looking to maximize hotel convenience store sales from every guest. One of the revenue streams that may need some revision in order to compete is the hotel convenience store.

With restaurants opening their doors only to close again as COVID-19 cases surge, hotel guests are looking for convenient grab-and-go snacks that will sustain them throughout the day. Guests are already comfortable with the level of hygiene that the hotel demands, as well as expects, and they – and you – will benefit from having them spend more of their time on the property and less visiting local retail locations.

Keep in mind that the current guest looks for more than soda and chips. Today’s conscientious consumer is searching out healthy, unusual, sustainable, and locally sourced products, and they’re willing to pay for it.

Half of all Millennials surveyed, those born between 1981 and 1996, reported they would pay more for food that offered added benefits.

The Kerry Health and Nutrition Institute (KHNI) reported on the 10 key trends in food, nutrition, and health for 2020. The major drivers for the food and beverage industry was sustainability and naturally functional. Functional foods refer to products that supply additional health benefits. Naturally functional means that the added benefits are derived from nature and do not come from processed additives.

Superfoods or food as medicine fall into this latter group and include foods rich in immune-boosting, anti-inflammatory antioxidants, and other healthy compounds. Common products in this category include berries, nuts, seeds, herbs, dark chocolate, dried fruit, and various teas and natural beverages.

Consumers are also turning to plant-based, whole grain, high protein, energy-producing snacks. Instead of chips and crackers, these guests are looking for nuts, dried fruit, and other wholesome snacks.

Additional trends include locally grown and authenticity. How does food become authentic? Usually, a story goes along with the product. This may be as simple as one of the ingredients with a rich history or how the founders came up with the recipe.

So, just how does a hotelier supply their guests with the latest food trends in a sometimes-small convenience store? Fortunately, packaged whole foods continue to expand providing operators some interesting options.

In addition to providing your guests with well-thought-out grab and go products, it’s important to consider how these items will be displayed. Prominent arrangements sharing the story behind a product, the producer’s sustainable practices, or the healthy, all-natural ingredients it contains are sure to catch your guest’s eye.

Here is a great example from Conagra showing how operators can display their grab and go items in their convenience store.

 

 

 

 

 

 

 

 

 

 

 

 

Consider the following companies that have created unique healthy natural foods with great stories behind the product.

• Sahale Snacks—After a hike on the challenging trails of Mount Rainier, founders of Sahale Snacks, Josh Schroeter and Edmond Sanctis, realized the basic trail mix blend they’d taken with them replenished their energy, but did little to satisfy their taste buds.Sahale Snacks was the answer—a nutritious and tasty snack. Today, the brand consists of 17 varieties of grab and go snack mixes. Glazed mixes include a blend of tangerine, vanilla, cashew, and macadamia, while a tasty trail mix might consist of berries, macaroons, and almonds.
• Angie’s Boomchickapop – What started in Angie and Dan Bastian’s Mankato, Minnesota garage as a way to teach their kids about healthy snack options, turned into Angie’s Boomchickapop, a healthy snack company centered around ready-to-eat and microwave popcorn. Products are whole grain, non-GMO, and gluten-free, and come in unique flavors such as Pumpkin Spice Drizzled Kettle Corn with nutmeg, cinnamon, cloves, and ginger.
• IBC Root Beer – This tasty soda makes a perfect accompaniment to delicious grab and go snacks and is made with all-natural ingredients like real cane sugar.
• Motts Juices – Samuel R. Mott started growing and packaging apples in 1842. Today, the company purchases more apples from New York farms than any other business. Their unsweetened single-serving applesauce packages and 100% non-GMO, no sugar added juices appeal to the health-conscious consumer.

Soure1 Purchasing, the largest Group Purchasing Organization (GPO) for the hospitality industry, offers a “one-stop shop” for locally sourced products as well as 1,000-plus suppliers that provide more than 9,000 high-quality products. With more than $12 billion in purchasing power, Source1 Purchasing members obtain direct access to suppliers, contracts, products, and detailed analytics. We reduce costs and streamline the procurement process. Contact us to find out more about our suppliers and the many benefits associated with a no-fee membership.

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.

Choosing 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!

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.

 

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.

 

Owners and operators are hampered by being “small fish” in a big purchasing pond, lacking the collective buying clout required to be able to negotiate the best prices. They’re discovering that “do-it-yourself” procurement is not as simple as they had hoped and are now realizing that they don’t have to do it alone.

This combination of unpredictable external factors and evolving customer demands are creating problems for hospitality professionals. Food service operators need to stay aware of consumer preferences and try to source the trending and popular ingredients from local suppliers, all while managing their food budgets in a volatile market with ever-changing commodity prices.

In order to have a competitive advantage over other restaurants, you need to offer high quality goods at the lowest price possible. Supply chain management is necessary to restaurant operators because of this need to minimize product costs and bring order to what too often can be a chaotic business. It is the responsibility of management to ensure that all of the costs of the product life cycle are kept low so the company can offer reduced prices to their customers, resulting in profits. The following are the benefits you can reap by partnering with a strategic supply chain management group focused on cost management.

Food service supply chain management requires identifying the processes that increase cost without increasing the value of the final product. These processes do not add value and should therefore be eliminated.

Resource consumption leads to increased production costs, which is more often than not the result of improper planning. A company that uses supply chain management can achieve efficiency of its operations since only those value adding actions are encouraged. This ensures that the organization’s processes flow smoothly and output keeps inline with the needs of the company.

A company that employs supply chain management can develop stronger close relationships with both its suppliers and customers. You will have better alignment of your needs with your selected suppliers, more options, better pricing and timely completion of orders. A company with a well –stocked variety of popular menu options will deliver on their brand promise to their customers, and will grow as a result.

One of the best ways to increase a company’s profits is by making sure that costs are kept as low as possible. By embracing and applying strategic restaurant supply chain management to your operations, you are able to reduce costs because you are getting rid of wasteful processes. Since these are operating costs for the company, the savings on these costs reflect increased profits for the company.

Food service supply chain management can help you transform a traditional linear supply chain into an adaptive network, providing you with increased visibility into the supply chain so you can sense and respond quickly to changes and quickly capitalize on new opportunities. Moreover, you can lower operational expenses with opportune planning for procurement, manufacturing and transportation. Better product, ordering process, and execution tracking can lead to improvements in performance and quality, resulting in lower costs.

Source1 Purchasing is a leading strategic sourcing group focused on cost management, savings and operational efficiency for the lodging, restaurant and food service industries.

 

Technology impacts every facet of the hotel industry.  Large operators embraced solutions early on.  Today, hotel operations of all sizes can benefit by considering theses three hallmarks:

1.            Social Media to drive reservations and guest satisfactions

2.            Mobile devices to address guest requests on the spot

3.            Integration on the cloud to ensure cross departmental collaboration

While at first these changes seemed a bit daunting, most successful operations have integrated the ideas.  If your operation is new to the three hallmarks, break them into manageable parts.  Consider a college intern for your social media presence.  Invite your department heads to assess the best way to use mobile devises in their departments.  And consider a purchasing expert like Source1 Purchasing to offer procurement solutions that translate to savings of time, resources and money.

Now that hotel operators are embracing technology in the hospitality industry, they are experiencing higher guest satisfaction and profitability. Today’s guests want a highly personalized hotel experience that includes using their personal technology devices during their stay. Chances are they booked a room directly from their smartphone, so it makes sense to use technology tools in rooms and throughout the hotel because guests are familiar with these and use them every day.

Technology is also revolutionizing how hotel operators manage their business. Sales departments have been restructured to strongly focus on social media and e-commerce. Other departments are using updated software to better communicate and quickly meet guest needs.

An article on the Hotel Interactive website addresses technology issues facing the hotel industry today and shares opinions from hotel leaders attending this year’s BITAC Tech and Operations conference.

When attendees were asked if they are leveraging technology to lower operational costs at their hotel, 11.3 percent said “no,” 18.8 percent said “yes” and a whopping 56.3 percent said “yes” but admitted they “could do better.” This suggests that although hotels are embracing technology in the hospitality industry to improve guest satisfaction, they are still looking for efficient ways to manage their hotel business.

One way hotel operators can improve accountability and harness maverick spending is by updating their procurement process. This can become a serious issue for your budget if overlooked. You need to know what you’re receiving, what vendor you’re buying it from and what you’re paying.

Hotel operators are also looking to online ordering for their food-and-beverage programs. Distributors wanting to make the procurement process as simple as possible are embracing this model and are providing the service at no charge to the hotel operator. Operators have at their fingertips new tools for online ordering, monitoring prices by category, identifying quality products and reducing wasteful spending.

Larger multi-unit operators are also tying their purchasing platform into their back office administrative software, which helps create an even more efficient procurement process.

Regain control over your purchasing. Identify products that meet your brand standards and work with a supplier that can consistently deliver high-quality products at a set price. This way you’re able to monitor prices by category. Your hotel’s procurement process can create a cost savings when you analyze your spending and identify ways to leverage it.

With the recession in the rear-view mirror, now is the time to explore procurement solutions that can help rejuvenate and add value to your hotel.

The transaction volume for 2013 is forecast to reach $18.5 billion, a 5.7 percent increase over 2012 levels, according to an article on the 4Hoteliers website. Analysts have a bullish outlook as the economy continues to improve.

For hotel owners, that means there’s no better time to consider ways to enhance your property and benefit from the projected growth in travel spending.

When considering renovations, look at what provides the highest ROI, adds value and gives you an edge over your competition.

1. Wi Fi  |  A great place to start is by adding Wi-Fi to your property. Hotels with Wi-Fi use it as a selling point and experience high customer satisfaction ratings. Many guests have come to expect Wi-Fi when they stay in a hotel.
2. Business Center   |  Business centers are also great additions for hotels that cater to corporate travelers. They can add value by providing business travelers with a place to print business documents or boarding passes.
3. Restaurant Refresh  |  Renovating restaurant facilities is another key area to focus on. Technology is an integral part of travelers’ lives these days, and they expect to be able to connect wherever they are. Make the dining areas tech-friendly by putting outlets near tables so guests can multitask — charge their phone, check their email, etc. — while they enjoy their meals.
4. Audit Resources  |  Another easy way to add value and cut costs is to comparison shop your phone and Internet plans. Compare service providers and see who’s offering the best plan in your area. Just like consumers, this can also save operators money.

Source1 Purchasing has access to extensive procurement solutions for all of your food and beverage, operating supplies, maintenance and renovation needs. From flooring and fixtures to equipment and supplies, Source1 can help you bring guests the latest comforts and conveniences, and rejuvenate your hotel so that it thrives in the improving economy.