Foodservice operations embrace online sourcing—to a degree

More than 40% of restaurants buy supplies from online sources such as Amazon at least once per month, reducing their reliance on distributors, according to new research from Technomic.

The bulk of the online shopping—what Technomic calls third-party e-sourcing, or 3ES—is for nonperishable foods and other supplies that can’t spoil, such as disposables. "Today, operators are most inclined to purchase products in the nonfoods and shelf space but are reluctant to source frozen and perishables from 3ES,” said Joe Pawlak, managing principal of Technomic. “However, they can envision a giant like Amazon developing a solution to make operators comfortable purchasing these products online."

Even if operators don’t buy from an online source, the research noted, they often cite the prices offered in those alternative channels to negotiate lower rates from their broadliners and specialty distributors, Technomic found. 

But further penetration of 3ES will be thwarted unless online suppliers can figure out how to provide the consultation and service that are part and parcel of what distributors deliver, Technomic noted in its new report. “Unless 3ES can compete beyond price and many of the unique benefits that distributors provide, they will never become the primary source for operators,” the researcher concluded.

The report, 2018 E-Sourcing Impact Study, also noted that distributors are working quickly to provide some of the benefits associated with online buying, such as rapid order placement through apps, along with more intuitive interfaces in general.

Still, "our research suggests that street restaurant operators are bullish on the future of third-party e-sourcing," said Pawlak. 

Technomic is the research sister of FoodService Director.