4 Big Issues Facing Foodservice in 2017
In today’s tough business climate, foodservice executives have to tackle many challenging questions: How do you integrate a food safety and quality management (QM) program into your existing operation? How far along are most organizations at all levels of the supply chain in that process? What are the key factors for driving profitability when facilitating or executing Limited Time Offers (LTOs)? What can Big Data really do for you as a large or small organization?
Finding the answers to these questions and more can make or break businesses, but how do you find those answers? That’s why we set out to answer as many questions as we could to generate fresh ideas and solve ongoing challenges in our industry at the ArrowStream Executive summit.
By facilitating discussions in a diverse group of foodservice executives, including suppliers, distributors, restaurant chains, technology startups, and third parties, we were able to work together to come up with solutions to challenges, such as incorporating technology into the supply chain, setting foodservice industry best practices and trends, and improving cohesion within the supply chain.
Here were some of our top findings:
1. Food Safety and Traceability Continue to be a Top Priority
Food safety and traceability are some of the top challenges currently existing in foodservice. Specifically, what protections and programs does each brand have in place for food safety and traceability? What are the potential perils of not having a proper quality management (QM) program?
Just like data security, all it takes is one incident to ignite a PR nightmare and have significant damage to a brand. Quite simply, not only is this a matter that can no longer be pushed to the back burner, but it needs to be at the forefront of all foodservice executives’ priorities moving forward. Just in case that didn’t provide sufficient motivation to closely monitor and take action on food safety, executives should have even more incentive now that they can potentially be held personally liable for negligence on food safety issues.
Takeaway: Food safety is being prioritized now more than ever and will be the largest area of focus for executives in the foreseeable future too. If your organization (chain, distributor, or supplier) doesn’t have a QM system in place currently, you’re already behind the curve. Organizations both large and small need to protect their brands and can choose different QM options that scale to their respective operations.
2. Limited Time Offers and Promotional Programs Must be Properly Structured
The LTOs and promotions conversations frequently centered around how to best manage these often-complex programs. Forecasting demand, tracking to plan, store commitments, and forced shipments were the key areas of focus. A major point of discussion throughout were the nuances of various LTOs, as well as how large-scale restaurants choose to structure their programs versus brands with fewer promotions during the year versus brands with buffet-style offerings that can incorporate superfluous inventory into their menu planning.
Takeaway: Ensure demand is built and forecasting is modeled properly with an accurate and streamlined commitment capture process. Involving store managers and soliciting their feedback will provide valuable on-the-ground insights to modify planning and drive the best results with minimal waste or shortage issues.
3. Communication Between Purchasing and Shipping is Vital
Distributors prioritized their big-picture challenges, which included freight routing, load consolidation, plan compliance, optimization of ordering patterns, and addressing revenue changes quicker for lanes.
Takeaway: Connecting purchasing and shipping departments for inbound freight management is paramount. Find an intelligent technology platform that can provide transparency between the departments so operations can run more efficiently.
4. Leverage Big Data in the Supply Chain
The final session focused on Big Data in the supply chain, delving into how to best leverage existing company data to uncover insights. These discussions revolved around how to utilize Big Data to drive decisions and action based on descriptive, diagnostic, predictive, and prescriptive information gathered from internal data. That segued into price elasticity modeling to determine pricing, LTO strategy, and predicting cannibalization with new product offerings.
Takeaway: The audience was representative in that many attendees were familiar with Big Data in some capacity, while others were not. Regardless of the size of your operation though, Big Data can be leveraged in various capacities without requiring a team of data scientists to put forth a plan of attack. While some progressive supply chains are taking advantage of it right now, this session revealed how far we can still grow as an industry in mining the right data to drive meaningful insights.
Having a focused group of industry leaders in the same room for an entire day makes it easy to gather ample learnings. Now whether it’s with more pressing day-to-day issues like food safety or bigger picture items like Big Data, seeing how much these learnings are applied and what progress is made in these areas will be fascinating to tackle when we reconvene in 2017.