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Category: Lodging

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Labor Saving, Low Cost Solutions to Maximize Hotel Breakfast Profits

Using high-quality products to maximize your hotel breakfast offerings at your operation can be a huge revenue generator. Cooking with name brand ingredients your customers know and love can keep your loyal guests returning and new customers choosing your location over others.

Hotel breakfasts can either be the best start to your guests’ day or an underwhelming experience that leaves them wishing they ate at the breakfast diner around the corner. This includes both room service and dine-in.

There is increasing pressure on hotel operators to provide high-quality service and offer more than just free pastries at breakfast. With guests returning to travel and seeking luxury properties to stay at, stand out from other businesses by including premium breakfast options with their stay.

Let’s look at some food and beverage solutions that increase your profits and keep guests returning to your property.

That First Morning Cup of Joe Counts

Nothing says “good morning, it’s going to be a good day” like that first sip of your morning coffee. It’s important to offer high-quality coffee options to your guests. It can set the mood for the rest of their stay. These days, guests have high expectations around freshness and the availability of flavor options.

Don’t be an average Joe hotel operation. Offer premium coffee that will caffeinate and rejuvenate your guests. For that boldly crafted timeless taste, 1850 by Folgers delivers a smooth lineup of fire roasted delight for the distinguished coffee consumer. Deja vue? More like Deja-brew! 1850’s carefully crafted steel-cut size results in more consistent brewing experiences. Give the gift of a brew-tiful day with 1850 by Folgers.

Not Your Basic Sausage and Eggs: Turnkey Breakfast Solutions

According to Conagra, 60% of hotel operators expect food and beverage revenue to grow over the next 3-5 years. That means it’s time to offer more than just the breakfast basics.

These labor saving solutions cut prep time, are cost effective and be used to create innovative menu offerings.

No need for extra cooler space. Idahoan Hash Browns are fully cooked so you can go from shelf to grill in 10 minutes flat. Simply brown or crisp on one side and heat through before serving crispy side up – in less than half the time of frozen or refrigerated. With unbeatable flavor and perfect texture, Idahoan Hash Browns are real potatoes that are real fast and real efficient.

“Protein” mentions on menus have risen nearly 77% over the last four years. Capitalize on the surge in protein mentions and say goodbye to the cooking and hassle of egg prep. With Sunny Fresh egg products, your kitchen staff can focus on innovative new ways to using eggs. Sunny Fresh egg products eliminate cracking, cooking and heavy clean-up, making them just right for your operation. Expand the appeal of your breakfast menu with dishes such as omelets, scrambled eggs, breakfast burritos or even grab-n-go sandwiches.

Don’t Forget Meatless Eaters

One-third of Americans are actively reducing their meat consumption. Help your plant-based eaters rise and shine with meatless breakfast options. Having a plant-based menu available for your meatless guests is imperative these days because your guests want it and your competitors are probably offering it.

Beyond Breakfast Sausage has arrived. These hearty patties are easy-to-cook, deliciously juicy, season to perfection and packed with 100% plant-based protein. You can power the day for your flexitarian, vegetarian and vegan guests by offering so many different breakfast items using Beyond Breakfast Sausage such as breakfast sandwiches, frittata’s, and other breakfast staples.

Source1 Solutions

Not only is breakfast the most important meal of the day, it is also an important amenity when staying at a hotel. A good breakfast brings many benefits to guests that accommodation providers may not realize. A satisfying breakfast can add comfort to a guest’s stay, making it a far more pleasant experience overall.

As a member of Source1 Purchasing, hotel operators get exclusive access to savings and discounts on all the products and solutions mentioned above and more! Contact us today so we can get your hotel operation on its way to cutting food cost and labor.

 
Interested in learning more? Submit the form below and a member of our team will reach out.

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Decrease Hotel Operational Costs with the Help of Technology

Looking for ways to decrease hotel operational costs without decreasing the quality of service?

Hotel operators focus on occupancy rates, average daily rates, and revenue per available room, which are three metrics used to determine success. In today’s current environment, where these three benchmarks have been drastically reduced, hoteliers are looking to increase each guest’s spend while reducing costs.

Think of technology as its own employee. Someone who can work 24/7 without you having to pay overtime. You don’t need to hire more staff – you just need the right tools. With things like data processing, extensive manufacturer and distributor relationships, compliance analysis, line item matching, billing and allocation, technology can be a solution to assist with the complex work of running a business.

From reducing food and beverage costs and saving money on linens and chemicals, to contract management and data cleaning, there are many areas in a hotel operation where technology can be utilized to help you find substantial savings and decrease hotel operational costs.

Use Technology to Decrease Hotel Operational Costs

The use of technology has many benefits and can help you increase efficiency, save time, reduce labor costs, and identify areas of savings. When you have so much time and money invested into something you love, such as your business, it’s hard to hand off responsibilities or lean on solutions such as technology. You want to be hands on in every aspect that goes into running your operation. Unfortunately, there is only one of you – and you only have two hands.

Running areas of your hotel operation such as the kitchen and managing inventory are time consuming and require paying attention to details such as price trends, counting supplies and placing orders. Taking advantage of tools such as a food cost management software can be the second pair of eyes and arms you need to take some of the burden off you and your team. You can automate processes and free up employees to do other things needed to keep your operation running.

With the use of technology and automation, comes a whole lot of data. Data is generated from so many different places such as manufacturers, distributors and vendors that it can be messy and hard to organize. Your purchasing department alone generates a tremendous amount of data. Having access to technology such as spend management tools can help you track spend in real-time and provides customized reporting to help you make quicker more accurate business decisions.

You Don’t Have to Do It Alone – Join a GPO!

A tremendous opportunity to decrease hotel costs lies in working with a group purchasing organization (GPO). While the basic principle, leveraging the collective buying power of its members, holds true for all GPOs, the purchasing power varies. The purchasing power of Source1 Purchasing is $12 billion, making it one of the largest GPOs serving the hospitality sector.

This means when you become a member, your buying power has drastically increased, leading to better pricing and bigger rebates. Smaller hotel chains and independent operators can then compete with the big brands in terms of purchasing power. The whole becomes greater than the sum of its parts. Start saving today!

Interested in learning more? Submit the form below and a member of our team will reach out.

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Don’t Blow It. Make a Safer Choice by Replacing Air Dryers with Paper Hand Towel Solutions

Remember the days when “customer service” was the keyword in the hospitality industry? Hotels, casinos, and restaurants spent days training staff on the many intricacies involved in ensuring their brand and business was noted for going the extra mile. Now, that same staff is learning the intricacies of hygiene. Making small changes such as replacing air dryers with paper hand towel solutions can make a big difference.

The Seattle Times reported the sad statistic that, at the end of 2020, U.S. hotels neared 1 billion in unsold rooms. That number accounts for approximately $46 billion in lost revenue. As COVID-19 restrictions and social distancing measures begin lifting, hotels and casinos are left to determine how they can attract the consumers that are slowly emerging from lockdown.

Increasing Sanitation Practices

A recent survey revealed that improvement in the sanitation practices at hotels would have a considerable impact on their customers’ comfort level. These practices included face coverings for employees, suspending daily housekeeping, using technology to reduce contact, adding transparent barriers, and signage for washing hands.

In an attempt to increase sanitation practices, some hotels have replaced paper towels with air dryers. Unfortunately, this misguided, though good-intention act, is not recommended by scientists nor appreciated by guests. Did you know that *33% of hospitality users surveyed in North America feel unsafe when entering a restroom with air dryers and *70% of hospitality respondents surveyed agree with the statement “I wish more facilities offered paper hand towels as an alternative to air dryers”.

Let’s look at what the latest reports tell us.

Studies Promote Paper Hand Towels

A study reported in Harvard Health Publishing found that hand dryers in public restrooms draw in bacteria from the air that then falls onto the hands of guests using the dryers.

When Petri dishes were set in bathrooms without the use of hand dryers, one colony of bacteria, at the most, grew on the dishes. When Petri dishes were exposed to air from a hand dryer, up to 254 colonies emerged.

The report concluded that the most hygienic way to wash your hands is using paper hand towels.

Scientific data also reports that jet air dryers can spread up to 10 times more germs in the environment. A study conducted by U.K.-based researchers revealed that paper hand towels were more effective than hand air dryers for removing viruses left behind after hands are washed.

Bacteriophages, a virus that kills bacteria, were applied to participants’ hands before being dried by paper towels or a jet air dryer. Not only did more remain on the hands that used air dryers, but the participant’s clothing also held five times more virus and surfaces carried ten times more. This means that not only can the virus be transferred by the person’s hands, but the jet air dry also increases contamination by blowing the virus around. The researchers’ conclusion, “Paper towels should be the preferred way to dry hands after washing and so reduce the risk of contamination and spread.”

One of the keys to the importance of using paper towels lies in the increased risk of transmitting bacteria when hands are not dried entirely before leaving a restroom. One study found that wet hands can spread up to 1000 times more bacteria than dry hands. Unfortunately, *62% of air dry users say they stop using the device before their hands are completely dry because it takes too long to complete.

Yet another study sprayed participants’ hands with a harmless strain of E.coli. After washing and then drying with either an air dryer or paper towels, researchers determined that dryers removed only 23% of the bacteria while paper towels wiped out *71%. They concluded that the friction caused by drying with paper towels dislodged bacteria from the skin’s surface.

Customers Request Paper Towels

Science has spoken, but what about your guests and their comfort level? According to an international study conducted by United Minds in cooperation with CINT, *70% of respondents wished more facilities offered paper hand towels as an alternative to air dryers, and 75% use these same paper towels to avoid touching other surfaces in the restroom. Surprisingly, *33% said they felt unsafe entering a restroom equipped with air dryers.

The most notable statistic was this: *41% of respondents said they were less likely to go to places that did not offer paper hand towels as a drying alternative. This means that over one-third of consumers may not return if a business does not offer paper towels for hand drying.

Some brands note the increased difficulty in maintaining clean facilities when using paper towels, or the ongoing need to keep them stocked. Checking and refilling put extra pressure and demands on busy staff.

The answer to this issue is the Tork PeakServe® continuous hand towel dispenser. This high-capacity, touch-free hand towel solution is fast and easy to refill and top up, freeing up staff for other activities. Watch this video to see how simple it is to refill.

It’s clear that the pandemic has brought hygiene to the forefront of consumers’ minds. It’s also clear that switching from air dryers to paper towels should be a part of your hygiene procedures. This one simple act can help your guests feel safer and reduce the risk of germ spread.

Hand Towel Solutions

Thankfully, there’s an easy solution. Help your guests feel safer by using Tork PeakServe® Continuous hand towel systems. It’s a hygienic, fast-dispensing, touch-free system that uses 50% compressed bundles to offer the highest capacity on the market, ensuring that hand towels are always available to your guests.

Learn how you can save on safe paper hand towel solutions when you become a Source1 Purchasing member! Contact us today!

 

2020 April Survey conducted by United Minds in cooperation with CINT using web-panels. The survey covered the US, with a total of 1012 respondents

Interested in learning more? Submit the form below and a member of our team will reach out.

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Using a GPO to Lower Hotel Food Costs

Looking to lower hotel food costs?

Group Purchasing Organizations (GPOs) started in the healthcare industry and quickly spread to education, electronics, manufacturing, agriculture, and hospitality. While their services have expanded since their birth in 1910, most operate under one important premise—the diffused purchasing power of a group of businesses, when combined and leveraged, produces a powerful collective buying power. As Aristotle said over 2,300 years ago, “The whole is greater than the sum of the parts.”

Hotels leverage this buying power to lower food costs, increase quality, and manage their inventory and supplies. Let’s take a look at just how a GPO can lower hotel food costs.

Direct Reduction in Food Costs

Imagine that you’re the operator or owner of a large-scale hotel with thousands of locations. Think Marriott International with over 7,000 properties in 131 countries. You can be assured that when you contact a supplier, you’re going to get the best possible price. The competitive advantage is palpable.

At Source1 Purchasing, we have 60,000 locations, more than 350 manufacturer contracts, 165,000 rebated line items, and $12 billion in purchasing power. Not bad. Now imagine that we’ve become a part of your team, finding the right suppliers for your needs and ensuring you’re receiving the best possible price. Move over Marriott.

Menu Optimization

At Source1 Purchasing, we specialize in hospitality and food service.

This means that we do more than simply lower food costs. We’ll also take a look at your menu, plating costs, and inventory controls to look for potential savings. In today’s environment, it’s important to search for every business-building and cost-saving strategy.

Even though room revenue is considered the heart of hotel profitability, food and beverage sales can impact direct sales as well as occupancy rate. If guests are staying in a specific area, and they have a choice of one hotel that offers stand-out food and cocktails at reasonable rates, or another that puts little attention into their food and beverage program, which one will they choose?

Success is measured by the ability to maximize revenues while containing costs in all departments.

Supply Assessment

It’s not uncommon for hotels to leave the responsibility of purchasing, costing, inventory control, and menu design in the hands of the chef or food and beverage manager. These responsibilities, along with scheduling, food preparation, and ensuring guest satisfaction can leave little in the way for supply assessment.

For this reason, many in the hotel industry simply go along with their favorite suppliers year after year. Chefs may talk with their distributors if there’s a menu change, ask about specials, or simply establish a regular delivery schedule that rarely deviates.

Working with a GPO changes all of that.

At Source1 Purchasing, we work with both broadline distributors and specialty suppliers. This ensures a reliable, cost-effective supply chain. We’ll find the highest quality and best costs for each product and ensure contracts are up-to-date. Now, the hotel is working with one supplier that provides all-inclusive inventory and cost management solutions. Group Purchasing, that’s personal!

Chefs and operators get to do what they do best—create memorable meals and guest experiences that keep clients coming back for more and telling their friends.

Procurement Specialists

As with all businesses, no two are usually ever quite alike. The same is true for GPOs. At Source1 Purchasing, we pride ourselves on becoming members of our client’s team. We’re committed to helping our customers increase their bottom line while providing their guests with high quality products and exceptional service.

To this end, we take a deep dive into analytics. This data provides us with the information we need to ensure your buying from the right suppliers, have the right contracts in place, experience the benefits of a solid supply chain, and have instituted the proper inventory controls.

Our supply-chain experts and their individual attention to a savings analysis of each product ensure you’re getting the best price for top quality.

In addition to food and beverage supplies, we procure the everyday operating supplies and products. In fact, we work with some of the top manufactures in the hotel industry, including American Hotel Register Company, World Amenities, and Chef Works, to name a few.

Like a cog in a wheel, while seemingly insignificant, it is vital to the momentum. One broken cog, and the wheel simply stops. A hotel has many moving parts and each part plays into the success of the business. At Source1 Purchasing, we’re here to help you keep your wheel turning toward maximum profitability.

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Maximize Hotel Convenience Store Sales with Grab and Go Items

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.

Maximize Hotel Convenience Store Sales

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.

Focusing on Current Snack Trends

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.

Supplying Guests with the Latest Food Trends

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.

Hotel Convenience Store Grab and Go Items
Convenience Store Grab and Go Items by Conagra

 

 

 

 

 

 

 

 

 

 

 

 

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.

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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!

 

References

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