PRLA Restaurant & Lodging Matters Fall 2020

Fall 2020  •  PENNSYLVANIA RESTAURANT & LODGING matters  • 17 7 Interacting with Suppliers and Distributors Over the past 10 years we have seen the industry move to greater collaboration between chains, distributors, and suppliers and expanded adoption of joint business planning and category management practices. Savvy suppliers and chains have embraced customer-supplier segmentation models and collaborative innovation approaches for their highest value “strategic” relationships. The COVID crisis has demonstrated the value of those collaborative business relationships that enable faster sharing of inventory, production and sourcing data, faster identification of risk, and more streamlined communication across multiple functional contacts. Our current environment has put tremendous pressure on operators as well as the entire foodservice value chain. Operators are turning to their distributors and suppliers for more than just help on supply chain management. In many cases, trading partners are more effectively working together during the crisis to their mutual benefit. Clearly this will have longer-term ramifications, as crises typically do uncover who your true friends are. Looking forward, we expect that the value of collaborative supplier relationships will only be amplified coming out of this current crisis. Those that have been there for the operators will be rewarded. Those that have not been should expect less. LOOKING FORWARD: Implications “Best-in-class” partnerships. What is a best-in- class supplier? However you define this today, your definition must evolve as operator expectations will likely increase. Independents are under tremendous pressure to survive and will not have time for suppliers and distributors that are not meeting their expectations or not being responsive. For chains, we can expect them to lean more heavily on their top 5-10 suppliers and to further refine their expectations, access, and reciprocating value for these strategic relationships. Collaborative innovation. Operators don’t need to do it all themselves and those that have been may be more open to working with distributors and suppliers in our new post-COVID world. With smaller teams, operators will have added motivation to seek outside support on innovation, testing, cost savings ideas, recipes, and promotion and merchandising support. In our new world of collaboration, we will see greater trust, shared risk, and acceptance of what win-win needs to be. Flexible, quality ingredients. Operators will become more flexible in their use of ingredients as they will need to find a way to reduce SKUs and simplify menus. Manufacturers and distributors can help. Operators will be looking for flexible, high quality products at a good value that they can use to develop profitable items for LTOs and specials. 