The Ten-Minute Manager's Guide to...Working With Suppliers
By Virginia Gerst, Special to R&I -- Restaurants & Institutions, 1/15/2006
Suppliers keep pantries and walk-ins stocked, but their contributions to an operation’s success can stretch far beyond inventory.
An effective supplier partnership means keeping up with new products and trends, as well as the difference between getting the best price and paying top dollar. In addition, this relationship can represent an operator’s key ally, someone who’ll quickly deliver product to remedy an unexpected shortfall.
“There are restaurateurs who only look to suppliers as people who sell them things,” says Matthew Mabel, president of Surrender, a Dallas-based management and hospitality-consulting firm. “There are other operators who turn to vendors to help them grow their business. When suppliers become collaborators, it’s a dynamic combination.”
Trade Partners
Operators depend on purveyors for more than product and price.
“Of course value and cost are important,” says Surrender’s Matthew Mabel. “But smart suppliers offer services over and above what they sell.”
T.G.I. Friday’s puts its money on innovation. “Vendors spend a lot of time trying to understand trends, and we want to partner with those who will bring us new ideas,” says Roland Ornelas, senior director, enterprise strategic sourcing for the chain’s parent, Minneapolis-based Carlson Companies.
“If we want to add shareable appetizers to the menu, we’ll ask our partners for suggestions,” he explains. “If a certain ingredient is going up in price, they will come to us with new ingredients that maintain the flavor profile but at a lower cost.”
Suppliers help The Clean Plate Club Restaurant Group keep on top of technology, according to Larry Huber, owner of the Evanston, Ill.-based multiconcept operator of Davis Street Fishmarket, Merle’s Barbecue & Southern Kitchen and two Pete Miller’s Seafood & Prime Steak restaurants. “There always is a flow of information from them to us.”
When Huber opted to install a machine to shred pork for Merle’s sandwiches, he puzzled over the options until he finally called his meat supplier.
“He met with us, brought us information on some different products and we went to an equipment show together,” Huber recalls. “We found the machine I’m now using. It has made a huge difference in the product, and we never would have ended up buying it if I had not scheduled that meeting.”
Assessing Alliances
Finding vendors for Middle Eastern operations is a global challenge.
U.S. companies stocking Dallas-based Brinker International’s 28 Chili’s Grill & Bar franchises in the United Arab Emirates, Oman, Egypt, Saudi Arabia, Kuwait, Qatar, Bahrain and Lebanon must meet the same quality standards as domestic suppliers. If the purveyors are stateside, they must be able to swiftly transport goods halfway around the world (70% to 80% of the products served in Brinker’s Middle Eastern units come from the United States).
“Some vendors are great at distributing throughout the United States but don’t have the dedicated resources or expertise to deal with the complicated documentation required so goods can get into a foreign country as quickly as possible,” explains Taylor Smith, vice president of global marketing. “With perishable items, the longer they are in transit, the shorter their shelf life.”
Knowledge of Arabic also is a necessity. “Everything that goes to the Middle East has to have an Arabic label,” Smith says. “A gallon of dressing needs two labels. And not all distributors can do that.”
Alcohol vendors need not apply. In deference to local customs, Chili’s franchises do not serve it. The chain’s popular pork ribs also are off the menu. “In the Middle East, they don’t eat pork, so we have to source local beef ribs,” says Don Reagan, Brinker’s global marketing director.
Smart Shopper
Jacky Robert, chef and co-owner of Boston’s Petit Robert Bistro, boasts of an enviably low food cost of 23%. “In any restaurant, where you make your money is by purchasing smart,” he says.
Robert buys his fish from a single supplier (“I get a better price if I order from one person,” he explains), and his meat comes from a butcher he considers Boston’s best. He heads to a discount house for dry goods.
Produce is purchased in small quantities. “It’s never good to run out of something,” he admits. “But it eliminates waste.”
He checks supplies daily, and orders accordingly. “I know chefs who don’t spend the time to inventory their walk-in cooler and so they order blind,” he says.
Personal Pacts
Every chef and manager at Pete Miller’s Seafood & Prime Steak is expected to visit the meat distributor’s operation at least once, according to owner Larry Huber. The trip not only helps the staff better understand the product, it “takes the personal relationships to another level.”
“These people are on the phone every day,” says Huber. “There’s no question that once [they meet us], they are going to do their best to accommodate our needs.”
At Del Taco, Janet Erickson, executive vice president of purchasing and quality assurance, also believes in the value of getting to know suppliers. She has worked with many of the same people for the 16 years she has been with the 445-unit quick-service chain, based in Lake Forest, Calif.
“I’ve built credibility,” she explains. “If I say to them, ‘I’m in a bind and I need something; the next time you need a favor, I’ll remember this,’ they trust me. They come through for me.”
Long-term relationships build trust, and trust pays big dividends. “In this business, you sometimes deal with people for 20 to 25 years,” Erickson says. If you are not a person of your word, no one is going to go out of the way to help. Having a reputation for fair dealing and ethical behavior is very important.”
Carlson Restaurants forges relationships with its major suppliers in reviews, held at least once a quarter in its Dallas headquarters. “We give them feedback on how they are doing; we set objectives,” says Ornelas. “We encourage better relationships.”
Dealings should be cordial but not chummy, he advises. “They should be held at arm’s length,” he says. “You want good relationships, but you also want to be able to measure suppliers objectively.”
Supply Side
A purveyor may have a strong sales pitch, but operators know to look beyond promises before signing a contract.
Del Taco begins by looking at the vendor’s balance sheet. The chain then studies credit reports and conducts on-site audits of potential suppliers.
“One big mistake operators make is not getting enough background information to make sure a company is financially stable,” says the chain’s Erickson. “You want your suppliers to be there for you.”
Quality control also is on Del Taco’s checklist, so the company inspects all potential suppliers’ operations and asks for references from other clients—often Del Taco competitors. Answers are almost always forthcoming and honest.
“From a quality standpoint, guys in the industry are willing to share,” Erickson says. “If there is a food-quality problem, it hurts the entire industry.”
When selecting suppliers for its Middle Eastern operations, Brinker International looks for a proven track record in foreign distribution. “There’s no leap of faith taken,” according to Reagan. “They have to be able to show they can get the job done.”
Chef Jacky Robert only runs one restaurant, but his selection process is not so different from Brinker’s. The co-owner of 94-seat Petit Robert Bistro works with suppliers he knows can deliver.
“I choose people I have worked with before,” says Robert, who was chef de cuisine at Boston’s Locke-Ober before opening his own restaurant. “I know they are reliable.”
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