Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
In the last decade, most industries, no matter how old and entrenched, have undergone a dramatic revolution in the way they do business. Energy is becoming cleaner, automotive is using robotics, retail is using iPads as point of sale devices, and so on.
Enter the world of food distribution, however, and you all but travel back in time to the last century. Much as it was done throughout the 1900s, food distributors use a largely paper-based system and onsite visits to take orders and payments. Phone orders and fax are widely used, sure, but ecommerce options – even basic email – are scarcely found.
As a restaurant owner (and technophile) this frustrating situation is something I constantly agonize over. And notably it runs contrary to other parts of the restaurant industry, where automation and efficiency are driving innovation. Owning a restaurant is highly stressful and the margins are slim, so entrepreneurs like myself need every bit of efficiency we can get, and I believe tech is the answer.
Tech assists at the edges
In my restaurant, we have adopted many tech tools that help us run smoothly and reduce the time we spend managing the business. A few of these include:
- A point-of-sale system that tracks our sales numbers, inventories, staff time and financials and prints our orders around the restaurant.
- iPads to take orders.
- OpenTable for taking online reservations.
- Google Drive for managing employee work schedules.
- Dropbox cloud storage for saving menus and business documents.
- Various forms of social media for interacting with customers, community members and media. This includes multiple Facebook pages and Twitter accounts and actively managing comments on Yelp, Trip Advisor and other sites through a paid service called Main Street Hub.
- Infusionsoft and Base CRM for tracking high-margin banquet orders. (These tools helped me increase sales 28 percent this year over the last holiday season.)
- Digital marketing (text and email) for last-minute deals – our mailing list of more than 3,500 customers came as a result of Groupon and other deal services we’ve used.
- And I am currently testing out Swipely to merge anonymous purchasing data with loyalty information to build guest retention. I’m also looking for ways to better integrate other data stores, like our point-of-sale system and our various marketing tools.
Solution still lacking for back end
But when it comes to the ordering of food and related products – around which everything else revolves – our hands are tied by an antiquated system that favors the sellers and makes it hard for smaller buyers to survive. If any industry process is ripe for disruption, it is this one.
Until recently, multiple times a week since my restaurant, Chef Tony’s, opened, I spent close to two hours putting together food orders with five to eight different suppliers. There was no transparency on pricing and everything was done on paper and communicated via the phone or by fax. None of my suppliers offered email and most couldn’t even take a scanned-in order. While larger establishments may have an ordering manager, most sole proprietors do their own food ordering. A mistake in one purchase can be very costly, and chefs like to make personal decisions about possible substitutions. This is a big part of my 70-plus hour work week.
I tried to get my suppliers to use some of the promising tech tools I found, but since adoption is low across their broader customer base, it just didn’t seem to work.
A promising start
The closest I’ve found to a comprehensive tool to make our supply chain more efficient is a product called Foodem. The initial idea was to get food suppliers to put their catalogs online and for food buyers to use the marketplace as a way to compare prices and products among vendors to make better and faster buying decisions. I ultimately became a beta tester for Foodem (note I have no other ties to the company).
Foodem is in many ways a great first step. Using it I can see what various suppliers offer, including prices, which affords me the opportunity to change my menu if something else catches my eye. And I can see whether I’ve ordered enough from a particular vendor to qualify for free or expedited delivery or special pricing – services which greatly impact my bottom line. And because the marketplace concept attracts both large and small suppliers, I am able to test out new vendors to support my menu, which hinges on organic and sustainable seafood and produce.
Limitations still frustrate efficiency
The mixture of online and offline ordering I’m forced to do now actually adds more complexity to my work flow, though admittedly it has taken my ordering time down from two hours multiple times a week to just 20 minutes per order. That’s a huge deal and a great step in the right direction.
Another hole is the lack of social networking features. One of the biggest difficulties with moving the supply chain online is that food procurement has always been about relationships. The marketplace does not allow me at this point to build and sustain relationships with my vendors, and I haven’t yet figured out how to solve that. And while ordering may need to be done primarily through an online interface, mobile should be a no brainer for a number of key functions: approvals, reminders, substitutions, deal offers and more.
The reality, though, is that for any other supply-chain solution to truly disrupt the status quo, it will require the participation of far more suppliers. If the larger distributors don’t participate, then the bigger problem still exists for me. And smaller suppliers may need help with delivery in order to actively participate in a marketplace.
My vision of a perfect world that marries food and tech is one where software would allow me to input my menu and automatically order the right supplies to create it. If it could then create a workflow schedule for my team and publish the menu, which would then be marketed to my customers, I would truly be in heaven. That may be decades off and it may even be unrealistic in an industry that is as much art as it is business, but I’m positive streamlining the process will benefit suppliers and restaurant owners, and so ultimately consumers, too.
Have an idea for a post you’d like to contribute to GigaOm? Click here for our guidelines and contact info.