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The Restaurant Roadmap is your guide to building and running a successful restaurant. Each episode explores the full journey of operations—from planning and development to menu design, execution, and growth. Hosts Danny Bendas, Amanda Stokes, and Chef Eric Lauer bring decades of expertise, joined by industry leaders and restaurant professionals who share their insights and stories. Together, they uncover strategies, tools, and lessons that help operators improve performance, strengthen teams, and elevate the guest experience. Whether you’re opening your first location or refining an established brand, The Restaurant Roadmap equips you to navigate every step with confidence.
Danny: Welcome to The Restaurant Roadmap podcast, powered by Synergy Restaurant Consultants, your go-to source for actionable insights and real-world strategies from the industry’s top experts, clients, and special guests. Whether you’re building a new concept or refining an existing one, we’re here to help you create a forward-thinking sustainable brand, elevate guest experience, streamline operations and maximize your bottom line. With decades of hands-on experience, our mission is simple: to deliver practical, proven solutions to the everyday challenges restaurant operators face. Let’s dive in and get to work.
Danny: Hello, everyone. Welcome to The Restaurant Roadmap podcast, powered by Synergy Restaurant Consultants. Today’s subject is supply chain and how you can maximize it, how you build great relationships with your vendors, negotiate effectively, and basically be a good partner. So, we have today Jim Campbell, who’s been doing supply chain, distribution, pricing, contracting for, I don’t know, 50, 60 years, I think, right, Jim? A lot longer than you’d like to remember, right?
And Chef Eric, who you also know. He’s been on numerous podcasts. We wanted to give two perspectives here: the global contractual side with Jim and the, sort of, in-store operational side with Eric. So, I want to start off by introducing Jim. Jim, if you can just give us a quick background on all of your experiences, and then we’ll turn it over to Eric, and will get started.
Jim: Okay, so I got involved in the restaurant business, kind of, right out of high school and worked as a bus boy and a dishwasher and a fry cook and all that kind of stuff. And then somewhere in the mid-70s, I got into the supply chain. In fact, in those days, we didn’t call it supply chain; it was called purchasing [laugh]. But at any rate, I've worked for many different concepts, not that many different companies, but within these companies, there were everything from fast food, casual, fine dining, ethnic dining, all sorts of different things. And so, that basically is what I had done for probably 40 years, and then got into the consulting business. And basically, it was mostly supply chain with these different operations and getting them set up with distributors, et cetera.
Danny: Yeah, so let me just say also, just Jim’s a very humble guy, but to toot his horn a little bit, we just recently did a project for a chain and an initial savings of that chain, over $40,000, right, one of their purchase items based on an audit that you had done for them. So, supply chain is critical from start to finish.
Jim: If you don’t mind, I’d like to add that that particular case, the supply chain team, they had got an A rating from me because they were that good. It’s just that there’s so many pieces to the puzzle and it’s so easy to overlook. When I was doing it, I overlooked things, too. And we just found one item there. There was a couple others that I haven’t heard back on whether they followed up on them or not, but basically that one item paid for the fee, did it not, Danny?
Danny: Exactly, and then some, if I’m not mistaken. So, hopefully there’s more out there for them and others that ultimately, we love the opportunity to work with the team, with people listening in, and we know we can help, we know we can save you money. I don’t think we’ve done a project yet, Jim, where we haven’t saved people a bunch of money. So Eric, real quick, tell us about you.
Eric: I’ve been working in the restaurant industry not as long as Jim, but as long as I could, [laugh] I’ve done everything from driving a produce truck, selecting produce, working in the kitchens, working in the dining room, all throughout, almost every role you can think of in the restaurant industry. Just, I love doing it, so it’s a lot of fun and glad to be here today.
Danny: You know, I think Jim and I, we started when the dinosaurs still roamed the earth, you know, that’s how long it’s been since we’ve been in this thing. All right, so we’re going to get right into it. We have a lot of cool stuff to cover. And so again, we’re just going to have a conversation so everybody feel free to jump in. Those of you listening, if you have comments, questions, feedback, feel free to reach out, info@therestaurantroadmap.com. We’re happy to follow up and answer questions and hopefully get the opportunity to help you.
So, the first thing to start off, you know, Jim, is, you know, there’s a philosophy about supply chains. I wanted you to expand on that and just talk about the company mission, the guardian, you know, you really become the—it’s true, you gave us a bullhorn here—you really are the guardian of the brand, right? So, why don’t you talk about that?
Jim: Yeah, that’s the beginning. The philosophy is where we start, and that leads right into the mission statement of whatever company you are working for. And you really have to be aligned with that mission statement and really believe in it or you’re working for the wrong company. So, that mission statement is very important from that standpoint, from a 40,000 foot level. It really guides you through a lot of things.
And then this idea of the guardian of the brand, there are other guardians, but we think we’re a pretty important one in the supply chain because operations and marketing, culinary, they’ve created menus and they have standards and specifications, and those standards and specifications are what guide us in supply chain. And we need to make sure that we support culinary and operations in whatever their requests are. We may have other ideas about things, we may think there are better ways to do things, but we can’t act on it. We can work with the different departments and make suggestions and see if we can make changes that way, but we have to support the line. So, that’s what the guardian piece of it is, to defend the food safety piece, and the value proposition, along with specifications so that we deliver the experience or we do our part to deliver that experience to the customer. And then as part of that, over a period of time, we build an expertise and experience and we need to lean on that to execute that part of protecting the brand.
Danny: You know, and I think, you know, you are, sort of, in this position, you’re the face of the brand to all of the vendors, generally speaking. So, that trust and that integrity, that’s really a mutual integrity back and forth where you want a really solid partnership, right, not that you’re going to not challenge your vendors. You want to work with them in partnership as opposed to adversarial relationships, right?
Jim: Yeah, I think that’s well said. We don’t want—an adversarial relationship doesn’t accomplish anything for either party. Once you’ve decided to do business, then you become the partner. Prior to all that—and we’ll get into that a little bit later—but you need to maintain a competitive spirit and environment and they need to know that. And then once you’ve settled on an agreement of sorts or a contract, that’s when the partnership really gets going, and you both help each other out.
Danny: Yeah. And then from the store level, Eric, this whole philosophy, quality at the back door, all those mistakes or potential things that go wrong at the back door just flow through, you know, the whole operation from quality of product, costs, food costs, cost of goods, everything, right?
Eric: Absolutely. When you think about it, we always used to say it when you’re working with computers and stuff, you know, garbage in equals garbage out, right? So, that quality starts at the back door. If you don’t have quality product coming in, you can’t make great quality products for your guests. So, that is a hundred percent correct.
And I love the fact that, you know, Jim said it’s a symbiotic relationship between you and the vendors because you have to have that, right? You have to have somebody on that side of the supply chain looking out for you just as much as somebody on your own side of the supply chain looking out for you. So, the people like Jim that work through this, they’re invaluable to the folks within the four walls of the restaurant because they can really help you, and anytime there’s an issue within your four walls, you reach out to someone like Jim, and then Jim takes it from there, he runs with the ball and takes care of those issues for you. It just makes everything a lot easier. And we really appreciate people like Jim inside the four walls, I’ll tell you that.
Danny: Yeah, and I think it’s really important again, you know, whoever’s running supply chain gets that feedback from the stores. So, you know, if you’re getting, you know, out of code product or out of a spec product, or you’re having, you know, delivery problems, those are all things that need to flow up so that someone in Jim’s position can manage that and take care of it and fix it. And you’re not only fixing it for you, but you’re fixing it—more than likely—for all of the restaurants within your chain, right, so, it’s sort of an internally global kind of thing.
Jim: Yeah, and I’ll add to it a couple of things here on getting the right products in the back door. It’s not just getting the specified product of whether it’s a choice New York, blah, blah, blah, but you talked about code dates and temperatures. The temperature has to be right. You could have the right product with the right specifications and all the quality we want, but if the temperature isn’t maintained, it’s at a date, again, it’s just more complexity to the whole piece.
Danny: Yeah. No, I agree. And that’s one of the things that we always recommend, temping product at the back door. And I always like to, every once in a while, go out to the truck and take the temperature of the truck. You know, we’ve heard stories where to save fuel, the driver turns off the refrigeration unit and all of a sudden, your stuff is coming in at 50 degrees because it’s super hot, right? Or you’re out in the desert somewhere and the quality just doesn’t hold up because they didn’t handle it right. But you need to know to then go fix the problem, right?
So, let’s talk about a supply chain plan. What does that mean? How do you make that work? And I just want to also emphasize, a lot of things we’re going to talk about are relevant to a chain, but there’s a lot here for an individual operator, independent to learn as well to make your purchasing better as well. So, what’s the supply chain plan, Jim?
Jim: Well, I agree with you that a lot of what we talk about are chains, but the individual restaurant operators, maybe on a smaller-scale, they may not have the time to devote to all the detail, but they basically need to have a plan. So, but the plan is like anybody’s plan, you’ve got objectives and priorities and goals. And for the supply chain, the two main goals are distribution a—the products, especially maybe your top 20, 30, 40 products that you’re spending on, and so those are your targets. And when it comes to the distribution piece, we’ll talk more in detail. That’s the next topic anyway.
So, you have to, kind of, look back for your plan for the next year. And many times most distribution contracts are multi-years, so you’re not renegotiating the contract itself, but you need to look back and look at things as we already discussed on deliveries, are they timely, the deliveries, are the temperatures right, those things. If you’ve had chronic problems, those need to be maybe scrutinized a little bit more in the coming year to make sure that we get the control that we need to get. And then most product contracts and agreements are not usually multi-year. So, you’re going to target your top spend items in terms of getting them on a calendar and negotiating them in a timely basis.
The other thing you would need to do is budgeting. You need to have a budget, an internal department budget, but more than that, it’s a forecast budget for the operators so that they have an idea of their costs for the upcoming year. And that gets shared with the finance department as well, so they play in with both the—both departments play with that. And they can build their own budgets then because food costs and your supplies and disposables, all those things are—the cost of goods is the major part of the business.
Danny: Let me ask you a question, Jim, before we go to Eric for any additional comments. So, if you’re an independent operator, we’re talking about here contracting, pricing, and stuff, this is going to sound like a crazy question, but does the individual operator have any power to negotiate price or contracts? I’m sure it depends on how much volume, like, one restaurant doing $8 million, it’s probably different than one doing two, right? But are there any tips to help an independent?
Jim: I’ve had clients in the past that fall into that $10 to 12 million and it’s a single restaurant. And what makes that work for that type of restaurant is the amount of product that they deliver. It’s the quantity. And in this guy’s case, they were delivering a full truckload twice a week. So, that makes it very efficient for them. They like that, and so you can negotiate those kinds of deals.
If you’re getting 150 cases four or five times a week, you’re not going to have a lot of negotiating power unless you’ve got some real intentions on expansion and can show that to them and convince them that you’re going to expand, and then they may give you a little bit of a break. But you’re not going to get the break until you actually get some volume. The only other thing that an independent can do is simply compare prices with three or four different distributors and let them know that’s what they want. And they may not even give you a program and say, okay, we’re going to mark up X number of dollars per case or a percent or whatever; they may just give you basically street pricing. So, it’s difficult. The best thing maybe to do if you’re an independent like that, and you have some volume on maybe a hamburger meat or something like that, maybe get with a local distributor or manufacturer or producer and see if you can get, kind of, deal with him.
Danny: Real quick, Eric, I’m sorry, I always throw stuff in that people don’t expect. I’ll get to you shortly, but you read about it—and I just got an email from somebody—about joining a co-op. If you’re an independent operator, I know there’s these purchasing co-ops that you can tap into. Do you have any experience with that, Jim, or comments or pointers for people?
Jim: Well, there are people like Foodbuy and some of those things that you might do better as an independent going that way because they can extend some deals to you. So, that’s a good point that I hadn’t thought about this morning. But there are several of them, and yeah, I think that’s probably not a bad approach if you’re a single restaurant. They can get you money back, even if it’s ten cents a case on something, it all can add up and maybe you can save a few thousand bucks.
Danny: Yeah, and you’re buying off of more volume because they’re buying for a bigger group.
Jim: Yeah, they’re extending their contract prices to you.
Danny: Yeah, and I know I shouldn’t probably say this, but what the heck was a long time ago, and nobody can get me for it now, there are times where we used to work deals where we’d buy off of a larger change contract for a product that we wanted to use, right? So, I’m sure the vendor wasn’t supposed to do that, but what the heck? Eric, I’m sorry, I keep interrupting you. Go ahead.
Eric: No, you’re good. You’re good. So, what I’ll add to that from the four-wall perspective, you look at items that you just said, right, that bigger chains are using, that maybe they’re not going through the amount that they’re purchasing or they’re bringing in and they’re moving through it a bit slower and those vendors want to move it before it goes bad on them, sometimes it’s important to have that relationship with your vendor so they come to you first and say, hey, can you take any of this? Can you do anything with this? A lot of that is important.
But I want to really follow up with what Jim said, too. You’re really looking at interdepartmental communication. So, he talked about marketing, talking to the supply chain, talking to everybody else, and making sure that it’s calendar-driven. So, don’t just, purchasing goes out and buys a bunch of steaks during Lent, and they want you to try to sell them on Friday night, right? So, follow your calendar, follow the marketing calendar and really work through together in that respect.
Danny: Yeah, and I think the other thing that comes to mind real quick, which we talked about in our last podcast, Eric, or one of our shorts, supply chain, like, the buyers can really inform the other departments, you know, “Hey, vendor XYZ is long on X or hey, it’s the season for Y, and let’s build our promotions around that to take advantage of that pricing.” And maybe you can pass some of that on to your guests, too, in great value and great products. I think using supply chain to inform opportunities, I think is also a really good way to think about things.
Jim: Yeah, yeah, that’s part of the marketing and the interdepartmental relationship of whether it’s suppliers long on something and you get to marketing on that to give them an opportunity for that, as well as seasonality of things where prices are best when the season opens and the volume starts flowing in. So, that information, sharing that with the marketing group and the operators because they got to want to sell this stuff. So yeah, that’s all important stuff.
Eric: Especially if you have a culinary department and that supply department and the culinary department have to have that great relationship where you just said if a supply person comes to them and says, hey, they’re really long on this product, what can you do with it? And can we get that to the guest in a profitable manner and in a very guest-friendly piece?
Danny: Yeah, and that’s again where these relationships and these partnerships become really important because then the vendor will come to you first and they’re really helping you a great deal, right? Hey, Jim, let’s switch over to distribution and let’s just talk about factors in terms of distribution, how it worked, how is it important. And there’s ways to say money on distribution, too, and don’t let me forget if you remember, let’s talk about night drops, too, real quick, okay?
Jim: Okay, so on the distribution piece, it’s kind of like, there’s so much focus on the food and quality of the food and the aesthetics and how great it tastes and blah, blah, blah, but none of that can happen without the distribution piece. And so, if you don’t have a good distribution piece, if you don’t have a good plan and program in place and you can’t deliver all that quality, you’re nowhere. So, it’s a critical link that has to happen. It’s just so very important. And it’s not something that I mentioned earlier, they’re usually multi-year contracts and that’s a good thing as long as the distributor’s delivering what they’re contracted to do.
Because when you change a distributor, if you’re a chain of 10, 20, 30 restaurants and more, it’s a strain on the management, the store management, the back kitchen, everybody, to make that change. So, you really don’t have an intention of desperately wanting to change the distributor unless there’s some financial incentive when you go to bid this thing out, eventually, when the contract comes to near end, and then you get an advantage and you can impact your food cost by 1% or something like that, then you do that. But there’s a back and forth in a negotiation, and quite often you’ll get what you want with the existing distributor. Not always, but you’ve got to be cognizant of the imposition that this puts on management when they have to make a change with a major distributor like that.
Eric: I’ll just add that I wish I worked with someone like Jim at some of the big corporate chains that I worked at before because it would have been nice for somebody to take that perspective at some of the decisions that were made because he’s absolutely right. Sometimes to change a distributor to save a couple bucks here and there, it doesn’t help the operator. Those folks we used to affectionately call them, the bean-counters make those decisions without that thought process behind them.
Jim: Yeah, if you’re a chain restaurant and if you’ve got $100 million in sales and you’ve got a four or five year contract, you’re going to save $200,000. I mean, that is nothing for the disruption that it causes the operators. So, you got to have some really big numbers to want to go ahead and be motivated to make that type of change.
Eric: Yeah, you talked about the plan earlier, right? So, they work together, right? Supply and in-house restaurant, right? So, if you save $200,000 just off of buying it different from a different distributor, but you’re spending $300,000, $400,000 on efficiencies because they don’t deliver at the same time and they don’t effectively deliver it to the back door and now you’re spending more money and labor across all your units.
Jim: Yeah, and that’s always the risk when you head into a new distributor. Are they really going to deliver? So, there’s risk involved with all of that. But basically, unless there’s a real big reward, you don’t want to disrupt the operations.
Danny: Yeah, I think the other thing, two other things to talk about here, I think in terms of distribution, everybody thinks they can get, like, five, six deliveries a week and then you pay for that, right? So, I think, you know, Jim, talking to, if you can, just what you can handle, fewer deliveries gives you some pricing advantages. And again, if you’re a smaller operator, that may be a way to save a few pennies here and there. And then the idea of night drops also.
Jim: You got to have the storage space. As long as you do, you’re much better off getting fewer deliveries. But you have to be cognizant of shelf life with fresh products and that kind of thing. But beyond that, the more you can take, it gives you some leverage with the distributor. It’s just much more efficient. And it’s more efficient for the restaurant operator to get two deliveries a week as opposed to four or five. And again, it’s a disruption in the kitchen and that kind of thing. And so, you’re right, the number of deliveries is very impactful on whatever price you’re going to get.
Danny: Yeah, we had done a project with somebody and they had researched, I think it could cost them something like $60 per invoice to receive it, process it, pay it. And you’re getting all these invoices all the time, just the accounting and the admin of all of that. And then it was many years ago, so it is probably much higher now. So, when you look at the whole cycle of supply chain, everything that has to occur, it all adds up. And then there’s night drops, Jim, what’s your thoughts on night drops?
Jim: Well, night drops to me is a really great thing as long as you can get it done. It’s more efficient, and again, efficiency leads to better pricing. It’s more efficient for the distributors. They’re not driving during traffic hours, so they can make more deliveries and get their deliveries done quicker and faster. That saves labor, it saves fuel, and it saves time, so those night drops are very valuable for them.
It’s also valuable for us because they tend to put stuff in the cooler and they’ll stack it in the areas that the store requests, and then the people come in in the morning, it's the first thing they do, they can check everything in. If there’s an issue, they’ll call and get it resolved. And people are always afraid, well, are we getting ripped off in some way, but that happens very infrequently. It’s almost never happening. So, from a security standpoint, I don’t view it as a very big risk.
Going into the kitchen, even if it comes in at 8 o’clock or 9 o’clock in the morning, it disrupts the prep work and everything else in the back kitchen. Somebody’s got to stop what they’re doing, put it away, they’ll jawbone with the driver and it’s just wasted time. The other piece is that if the delivery is behind and you expect a 9 or 10 o’clock delivery and you get it at noon, then you’re really messed up. So, if your night drop is at 5 in the morning and it’s running two hours late, then you get it at 7. So, there’s a lot of pluses. I love those night drops.
Danny: Yeah, and then you can also schedule your team on those days versus you schedule and then you wait and then they’re delayed, and then you get labor standing around waiting for the deliveries to come in. And like you said, then it wreaks havoc. The delivery—you know, there’s a lot of [standards 00:26:25] that are saying no deliveries between 11 and 2. There’s signs on almost every restaurant. But if you need the delivery, you can either send them away and hopefully they’ll come back or you end up taking it because there’s product that you need.
Jim: Yeah, and that’s another point is that if it’s late, you could have to not serve an item for lunch and you might miss it, whereas you’re not going to have that problem with a night drop.
Eric: From an operations perspective, the night drops are just so amazing because as you say, they’re in the building when you walk in, right? So, when I was in operations, I’d love to set up my prep list for truck-day items. So, if I had a long shelf life item, I would produce those items the day the truck came in and I would make them twice a week. I wouldn’t have to make them again. It was perfect.
And then any of the other small little items, you know, say you’re getting frozen fruit in for smoothies. So, I would get all the fruit in. I would pay somebody just to prep it the day it shows up and have it ready to rock and roll for smoothies throughout the day. So, you know, and Danny and Jim, you both touched on it a little bit was when that truck is late, the havoc it creates in the restaurant from an 86’ed item on your menu to just somebody standing around that you’re paying that’s supposed to be putting the truck away that they’re just standing there currently because there’s nothing for them to do. So, the key drops help us solve a lot of those efficiency items, and it really helps your bottom line in the long run because you can be more purposeful with your staff, with prep, and with all of your storage. So, love that.
Danny: So, those that are interested, Jim, I mean, I know any key criteria if you’re talking with your vendor about night drop, usually the drivers, they’re licensed, they’re bonded, you know, there’s always this concern that they’re going to steal from you, you know, whatever, you can’t replace an item if the quality is wrong. So, are there any things to make sure that you negotiate or you have in place if you’re going to go down the night drop road?
Jim: No, they voluntarily let you know that they are bonded and that kind of thing. And part of it is the integrity of the company itself. And there’s usually never a problem. If something’s called in and it’s been short or unaccounted for, there’s very few questioning from the distributor unless it becomes a chronic issue.
Danny: Same thing with quality, right? If you reject the product, they’re usually pretty good at it, right?
Eric: A lot of the big broad-line distributors now have apps and, you know, you have it right on your phone. You take a picture of the quality issue through the app and it works out well with that.
Danny: Yeah. So, we talked about interdepartmental collaboration, so I don’t know that we need to touch on that—
Jim: Before we leave distribution, there’s a couple other things. The biggest one is—and this is for the chain restaurants in terms of distributor markups that they, historically, they’ve been done on percentage basis, maybe a combination with some meat, protein products on a fee-per-case basis, but more and more, the intention is to base your markup on a fee-per-case. It gives you a much easier way to calculate how much distribution money you’re spending, what the cost is, as opposed to having four or five different percentages on things and then all these calculations. So, it’s a simplified deal, but it’s also a little better cost savings for you, just from the standpoint that as you go through a year, if ketchup goes up a dollar and you got a 10% markup, the distributor’s picked up another ten cents out of you. If it goes up a dollar and you got a fee-per-case, you’re not paying any more than you would. Now, at the end of the year, the fee-per-case may be renegotiated, but a lot of the contracts that I’ve done recently, the fee-per-case has been fixed for the entire time, so they don’t even get that.
Danny: You can also manage your case size that way too, right? I mean, we’ve gone down this road where you get bigger cases because you’re paying on a cost per case, right, versus percentage.
Jim: But you usually have to do that at the front end. If you start in the middle of the contract, [laugh] they have a little note in there that—
Danny: Yeah, but there is an opportunity to help your distribution costs by managing your pack sizes. Assuming you can use it and it’s not going to get thrown away.
Jim: Yeah, it’s not a shelf life issue.
Danny: Yeah, exactly. But it’s another just thing to look at, right?
Jim: One other comment would be on the finance side. Payment terms is a big piece with the distribution because it’s your highest amount of money that you’re paying out to vendors. And so, you try to even work with your own finance department and discuss with them what you’re talking about. And of course they’re going to tell you to get the lowest you possibly can and you try to do that, but sometimes it affects the fee-per-case or the percentage. And it depends on the position of the company. If their cash is tight, they may say, look, we’ll give up a nickel a case, but we want to get 30-day terms or we want to get 35-day terms or something like that. So again, that’s a part of the collaboration piece internally.
Danny: Well, let me ask you, we had just talked about this. We did a finance podcast not long ago. Are there still deals out there? Like it used to be in the old days, you got 1% net 10 or something like that. Do those deals exist anymore or are vendors pretty much gone away from that?
Jim: There aren’t many of them. Most of those discounts come from the manufacturers and they don’t pass that on. That’s usually in their contract because they’re the ones who are paying in 10 days as opposed to 30. I don’t see much of that with the end-user, with the restaurant companies. They usually will try to get an extension of five or ten days on the terms as opposed to paying it short. But there’s still, some of that exists.
Danny: Yeah, it’s also gotten to now where a lot of restaurant companies, the bigger ones, they’d rather hold the money for 30 days rather than pay it for a discount and use it for something else, right?
Jim: Yeah because you’re talking about, in some cases, hundreds of millions of dollars.
Danny: Yeah, exactly. And that’s where the collaboration with the CFO, it all gets back to collaboration, right? Anything else on distribution? We’re going to talk about supplier relationships here next.
Jim: So, on the supplier piece, the supply chain team has to really promote competition and at the same time, a partnership. So, they seem to be butting heads sometimes, but not really because at the beginning of the relationship, the competitive piece is what you are talking with these vendors about, that they know they’re in a competitive situation. And then once the contract is finalized and signed, we talked about not having an adversarial relationship, and it needs to be a relationship that mutually benefits both parties. And that can be done and it’s done by talking and letting them know what’s important to you and they’ll have to let you know what’s important to them, and then you can match things up.
So, you need to understand their capabilities, what are they capable of, and some of this comes in before the contract settled. But then you find out what they really are capable of [laugh] afterwards. But letting them know, you’re—actually going back to the philosophy piece in terms of the food safety, quality, and those kinds of things and specifications that have been laid out by our team, our culinary team, and so there has to be an understanding of that. And sometimes the salespeople, if they’re not that experienced, they won’t have that knowledge and experience yet. So, most of these larger distributors, they’ve all got culinary people, so there has to be that exchange. And then there can be an exchange between our culinary team and the distributor’s culinary team when they’re developing a new item or something like that. Eric, anything you want to add?
Eric: He spoke to it perfectly. You want to promote competition, but you’ve got to develop that partnership. So, use your hospitality. Use the ability to speak to people and treat them like human beings, to kind of, do that so your supplier doesn’t feel like you’re just pushing them with the competition all the time. So, it’s a very important piece because they need to make money, too, and we understand that, so it’s about what can we accomplish together?
Danny: So, we have about four or five minutes left. So, I want to talk about, Jim, kind of, I guess just as a way of bringing it all home, but just negotiating strategies, vendor selection, and I know inspections, also. The bigger companies, they inspect facilities, they want to make sure they have a HACCP food safety plan in place because the last thing you want to do is get product from a vendor that doesn’t manage their food safety protocol and you end up hurting somebody. It’s going to end up hurting you or they’re just going to potentially hurt a vendor. So, if we want to talk about that for a few minutes, that would be great.
Jim: Okay, so on the food safety and the HACCP programs and those kinds of things, whether it’s a distributor or a manufacturer, they have to have these things in place and they have to be good at it. And they have to understand how important it is to us because if there’s a breakdown, it directly affects our business, our customers, our brand, perception, everything else. So, that food safety piece is… you can’t compromise on it, period. And so, the distributor or whoever you’re negotiating with has to know that. So, you have to make a point about it.
And when you’re dealing with somebody, if you’re dealing with a meat company like an IBP or a Swift or somebody like that, there’s not too much concern because they’re going to have all that stuff. When you get down to smaller companies, then you’re going to want to see and get in there and even bring a culinary person with you if you’re going to go inspect the plant and see how they actually operate and take a look at their HACCP plans and what they’re doing. Make them show you and prove to you that they have the high standards that you’re after.
Danny: All right. So, negotiating strategies.
Jim: Like anything else, you’ve got to target certain things. One of the simplest things you can do is put all your contracts on a calendar with the expiration date, and then back it up two or three months, or even longer. Make time your ally. Do not force this at the end. Just nothing good happens with that. So, and the sooner you start, I mean, you’re not in a rush, you don’t have to do anything, and it’s the supplier who is there, waiting and waiting [laugh] and waiting. And sometimes if you just make them wait long enough, they’ll come back and say, “Well, if we can get this going here, this is what we can do,” and you haven’t done anything [laugh].
So, make time your ally. So, that’s a really big piece. And that’s just being organized and having a calendar and knowing when your contracts are up. So, the other big piece is, there’s a saying that he who speaks first loses, so [laugh] you don’t ever want to go to a vendor and say, “I want this hamburger for five dollars a pound.” That’s just insane. You don’t do that kind of stuff. That makes no sense.
And if they come to you and say, “What do you want to pay?” The only way I ever answer that is, “Give it to me for free.” So, [laugh] you don’t want to give them a floor. If you come back with anything, you may have in your plan and say, okay, if I get five dollars for this item, that’s going to be pretty good. If I get $4.90, that’s really good and blah, blah, blah. But you don’t know. You don’t know.
We talked earlier about on a promotional side that they could be long on something and that’ll disrupt your whole plan and you’ll do so much better. But if you come along with a price first, they’re going to jump [laugh] on it and say, “Okay.” So, you let them give you your price first and you take the bids that way. Many of these things, you don’t need a formal contract; you can just have a simple agreement. On the distributor side, you need to do an RFP in a very formal detail because there’s so many details around it.
If you’re negotiating for a New York strip, you’ve got a spec for it and they can meet it or they can’t meet it, and so there’s not usually a need for a written contract, but maybe just a letter of intent and that kind of thing. The other pieces are, I mentioned earlier about experience and expertise, and so that comes into play here too. You need to be prepared. Whatever the item is that you’re negotiating, if you’re negotiating a beef item or whatever, you need to do your homework and be knowledgeable about the marketplace. What are the market conditions? You can find that out pretty easily. The USDA has market news reports and so you find out what the sales have been and all that kind of stuff, so you’re prepared for the negotiation.
Danny: Sure. Very good. Eric, anything you want to add real quick before we close out?
Eric: No, I’m just grateful to be sitting here and listening to Jim talk about all this stuff. He’s such a wealth of knowledge and I’ve learned a lot during this time frame, so thank you, Jim, for sharing your expertise. So—
Jim: Oh, thank you. I appreciate that.
Eric: —I really appreciate it.
Jim: The feeling is mutual.
Danny: There you go. All right. Well, I want to thank you guys and let me close by saying again, love to get comments, feedback, topics that you’d like us to discuss going forward. You can email us at info@therestaurantroadmap.com. And again, we’re putting together an email here, hopefully going to go out shortly, to take questions from listeners, and if your question is brought up on a podcast, we’re going to offer you a free 30-minute consultation with one of our experts. So, look forward to that and we’d love to hear from you guys.
So, once again, I would like to thank Jim and Eric. You guys are great. Thank you so much, Jim. A ton of expertise. Appreciate it.
Jim: Okay, it was a pleasure.
Danny: All right. Eric, same thing to you. I know we talk a lot more, so I’m sure we’ll be talking again in the future. So, I want to thank you guys again. Thanks everybody for listening and we’ll get back to you soon with another podcast. Take care, everybody.
Danny: Thanks for tuning in. We hope today’s episode gave you valuable insights you can put into action. If you have questions, want more info on today’s topic, or need support with your restaurant-specific challenges, we’d love to hear from you. Reach out anytime at info@therestaurantroadmap.com, and visit synergyrestaurantconsultants.com to explore our services, sign up for our newsletter, and catch up on past episodes. Don’t forget to follow and subscribe on YouTube, Spotify, Apple Podcasts, LinkedIn, Instagram, TikTok, and Facebook so you never miss what’s next. Do you have feedback or a topic you’d like us to cover? Contact us. We’re here to help make the world a better place to eat.