SPECIAL REPORT: Do suppliers really know what keeps operators awake at night?

Mind the Gap study, operators' pain points

New research suggests the biggest challenges that UK operators face are not necessarily the same ones perceived by the equipment providers that serve them. FEJ explores where these discrepancies lie and looks at what’s really causing anxiety in restaurant kitchens and boardrooms up and down the country.

What end-users say are their biggest problems, and what suppliers think are end-users’ biggest problems, are quite different. We need to be a hell of a lot better at listening to end-users,” declares Doug Fryett, director of Fryett Consulting Group and one of the world’s leading foodservice analysts.

This advice probably applies to markets the world over, but it is especially pertinent in the UK, where Fryett has just compiled the results of the latest ‘Mind The Gap’ study in conjunction with trade association CESA.

As with the first ‘Mind The Gap’ survey conducted several years ago, the aim once again was to examine the similarities and differences that exist between foodservice operators and the companies that specify, supply and repair their equipment. Independent restaurant owners, caterers, healthcare facilities and hotels were among those that took part.

The primary question that the research asked — and one that Fryett acknowledges was the “whole crux” of the entire survey — centres on the typical pains that foodservice operators face on an industry-wide basis.

Slightly over 70% of the end-user operator respondents stated that their primary pain was overhead and cost reduction, which is not a surprise to me”

Suppliers, distributors and design consultants were also asked to cite the top four pains they think operators are most concerned about from a list of 15 common options (main picture) devolved from the years of research that Fryett has conducted across the sector. These ranged from workflow optimisation and energy management to food safety and customer service.

“Slightly over 70% of the end-user operator respondents stated that their primary pain was overhead and cost reduction, which is not a surprise to me,” he says. “The second one was workflow optimisation — almost 65% of respondents said it was one of their top four pains. Worker productivity was almost 53% and standards and regulations 47%, which I find very interesting, especially in light of potential changes to rules and regulations following Brexit and the implications it might have on the British foodservice industry.”

Fryett then posed the same question to the other constituent groups in the industry to see how closely they matched what the operators had to say, starting with suppliers and manufacturers.

56% of suppliers picked overhead and cost reduction as the chief pain operators face, mirroring what operators themselves had to say, but this was then followed by employee retention (54%), consistent food quality (52%) and customer service (52%). “Straight away you can see the big difference between the two,” says Fryett.

CHART 2a Supplier responses

The dealer and distributor community was also consistent in terms of identifying overheads and cost reduction as the issue they felt end-users were most worried about, with 73% selecting it in their top four. The remaining most popular answers were consistent food quality (46%) employee retention (46%) and customer service (42%).

CHART 2b Distributor responses

Design consultants, too, gave overhead and cost reduction a high rating but ranked it joint first with rising food costs (63%). Consistent food quality (54%) and food safety (46%) completed their top four. “Again, there are some significant differences between what you see there and what the operators had to say.”

CHART 2c Design consultant responses

Finally, Fryett went to the service organisations. At the very top was standards and regulations (64%), followed by overhead and cost reduction (36%), customer service (36%) and worker productivity (18%). “The only common one between all the channels was overhead and cost reduction,” surmises Fryett. “It is also mentioned by the service organisation as the second highest one from their perspective, plus standards and regulations and worker productivity. So out of the top four they came up with, three were in alignment with the end-user operator.”

CHART 2d Service organisation responses

Service organisations are usually the first line of defence when something goes wrong and Fryett suggests operators increasingly want them to put systems and processes in place that allow them to understand total cost of ownership on specific pieces of equipment and offer advice on future replacement or purchasing decisions.

“Now I am the first to admit that you can get yourself into a quagmire if you are a service organisation and you go around recommending equipment etcetera, but let me tell you that in certain countries of the world service organisations are starting to move in that direction,” says Fryett. “They are actually starting to sell equipment and supplies to end-user operators because they are the closest to the end-user operator in many cases, so why not take advantage of it because their traditional revenue streams are being eroded by better quality equipment and longer warranties and lifecycles.”

CHART 3 How the responses compare

Fryett then asked operators how effective supply chains partners are in helping them ascertain and overcome the pains they identified. He used the answers to calculate a mean score for each channel constituent, with seven the highest possible score. Suppliers received 4.9, distributors 4.7, consultants 2.6 and service organisations 4.4. In terms of who operators say they most rely on to help select the best item when purchasing capital equipment, suppliers came out top with a score of 5.5, dealers 4.4, consultants 2.9 and service companies 3.9.

“I think what we need to do as an industry is start listening more to what really are the pains of the foodservice operators out there. It is the supply chain’s job to listen to exactly what the end-user operator is trying to tell us. I will give you a great anecdotal example: a chef from a very famous restaurant in the local area went to two dealerships that I am very familiar with and asked what the price of a certain piece of equipment was. The first dealer said it was X amount of dollars and then he went to the other dealer nearby who said it was X plus. So the chef said, ‘I am going to go back to the first dealership because it is cheaper.’

“A lot of dealer salespeople would say, ‘fine, go right ahead and do so’, but at this dealer one of the top sales people started asking more questions about what it was the chef was really looking for. Did he really need this particular piece of equipment? Or could he get away with something else? To cut a long story short, he didn’t need the particular piece of equipment that he came in for in the first place. Once the individual started asking the right questions, and honed in on a couple of those operator pains that the end-user could identify with, he decided to buy off him because he realised that was actually the equipment he needed.”

Foodservice operators are battling new cost pressures as they strive for profitability.

Additionally, says Fryett, being the expert doesn’t just mean knowing what questions to ask, but who to ask them to. Is it the chef? Owner? General manager? Or is it a line worker, general contractor or architect?

“Quite often I have found that people in our industry just concentrate on the first three. But there are other decision-makers in the entire process as well that you really need to be cognisant of, and yes it might be uncomfortable initially going to talk to them, and it might be very difficult at first to talk to them, but as Einstein said, ‘if you keep doing the same old thing over and over again you are going to get the exact same results’ — plus a huge headache. So I think the industry really needs to define who it is talking to out there.”

You can get yourself into a quagmire if you are a service organisation and you go around recommending equipment, but in certain countries of the world service organisations are starting to move in that direction”

The research also assessed the value that operators place on the information they get from the supply chain. One slight caveat that Fryett added to this question was the inclusion of operators’ own research and whether they relied on this more than the insight they get from providers.

“Lo and behold the answer is yes,” reveals Fryett. “The results show a mean average of 6.6 [versus the next best score of 5.6, for suppliers] meaning they rely more on their own research than they do on the information that is provided to them by the various channel constituents that exist.”

Doug Fryett

Doug Fryett conducts foodservice analysis across the world.

In many ways this is not surprising, says Fryett, because as consumers we increasingly do our own research first when buying products before later going to a perceived expert that we might be interested in talking to or buying from. This scenario is playing out in the industry too, and subsequently suppliers and providers need to think about adapting to this. As Fryett points out, many traditional websites contain information that is heavily geared towards selling, rather than easing operators’ pains.

Finally, the research asked how satisfied operators are with the foodservice equipment and supplies that are recommended to them, and they purchase, from the various supply chain members. Scores ranged from anything from two up to seven, but overall the mean average worked out as 4.6. “I look at this as a tremendous opportunity for the various supply chain partners to do a much better job dealing with the pains that the end-user operators say exist, but it also tells me that they are not all that happy in general with the equipment and supplies they purchase based upon on the recommendations of supply chain partners. Again, there is a tremendous opportunity to find ways to improve this particular score moving forward.”

In conclusion, Fryett believes it is up to the supply chain to listen, interpret and, most importantly, deliver — and create a strategy to address all three of those things. “What I really believe is we need to morph from a supply chain mentality to a value chain mentality. Value means different things to different end-user operators. It is the industry’s job to truly find out what that value is and morph from being a partner or an individual playing in a supply chain into somebody who is an integral part of the value chain.”

How can the supply chain provide more value to you?

As part of the ‘Mind The Gap’ research, operators were asked what they thought about the various channel constituents (suppliers, distributors, consultants and service firms) and specifically how these various parties can provide more value to them? Here are the top direct quotes for each.

Operators on suppliers

1. “Be aware of trends in foodservice and develop versatile equipment that can adapt, uses minimum energy and water and controls waste product from the process.”
2. “Communicate with me more and let us know what is new in the industry.”
3. “Listen to the requirements of the customer.”

Operators on distributors

1. “Stay focused on the end-user’s needs and not concentrate on selling the manufacturer’s equipment.”
2. “Don’t just be order takers — let us know what is new and can help my business.”
3. “Listen to the requirements of the customer.”

Operators on design consultants

1. “Keep up to date with innovations and legislation.”
2. “Listen to the requirements of the customer. If you’re not listening, how can you advise me what I need for my foodservice facility?”

Operators on service organisations

1. “Focus on keeping costs low for maintenance. Keep (and manage) inventory and lifetime maintenance costs for items of equipment to contribute to replacement decisions.”
2. “Let us know what equipment you think is best.”
3. “Listen to the requirements of the customer.”

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