Solving the Purchasing Puzzle

Local, organic, natural, gluten free, healthy, authentic—the list of customers’ demands seems endless. However, actually meeting these demands comes with a litany of challenges. FSD spoke to operators about how they handle the challenges involved with purchasing these specialty items.

Focus on: Local

The Dining Services department at Princeton University, in Princeton, N.J., is currently purchasing about 59% of its products locally. Stu Orefice, director of dining services, says the department’s local efforts began seven years ago when the department participated in the Real Food Challenge, which is a campaign to increase the procurement of “real” food [food that is local/community-based, fair, ecologically sound and humane] on college and university campuses.

“We’ve been working on this for years so we’ve known our radius is 250 miles and we’ve known our goals,” Orefice says. “Linda [Recine, purchasing manager] has been working on this for a while. Largely, because we’ve been doing it for so long, when folks call into Linda she immediately asks, ‘where is your product from?’ I think that’s why we are at about 59% local.”

Recine thinks one of the most important aspects of local purchasing is defining what local actually means to the customers.

“Local, natural and sustainability—those are all very vague terms,” Recine says. “It’s important to drill down from the word local. Is it local distribution? Is it locally produced? Is it locally manufactured? Lots of times I have vendors who call me and say they are from a local town, but really it is just their corporate office that is in that town and that doesn’t help me. You can’t just take what these companies say at face value. You have to do all the research yourself.”

Recine says another challenge is partnering with farms that can actually deliver to a large institution such as Princeton. By encouraging the department’s current vendors to partner with local producers, Recine says they’ve had great success helping small farms reach Princeton’s customers.

“We’ve spoken to farmers that would love to help us, but they don’t have the logistical requirements to get it done,” Recine says. “So that’s when we ask our vendors to help us out and partner [with the farms]. This also helps us reduce the amount of trucks we have on campus.”

Recine says the best place to start improving local offerings is with current vendors.

“You don’t have to stop what you are doing and start all over again,” Recine says. “You need to ask the questions. You can also just source on your own during the weekend. Go to your local grocery store or farmers’ market and see what is out there. Ask the guy who is selling honey, ‘Would you be able to do this in bulk? Could you satisfy the university’s needs? Could you partner with one of our vendors?’ It’s all really in the research and communication.”

Co-ops: At the University of Maine, in Orono, Glenn Taylor, director of culinary services, says local purchasing for his department has definitely become easier in the past five years. The department’s local purchasing efforts first began when the department hooked up with an organic co-op.

“We started to purchase potatoes yearly and occasionally a few other vegetables [from the co-op],” Taylor says. “At the time we thought organic was what we needed to do, but it wasn’t very cost effective and [with the] volume it was difficult. We’ve changed our philosophy since then to focus first on sourcing locally and then organic as a bonus.”

Taylor says the department currently works with 16 to 18 farmers in the state of Maine. Most of the department’s local products come from their main distributor, Sysco New England, which has partnered with Farm Fresh Connection, a co-op that Taylor says has the “pulse of all of the farmers in the state who are willing to produce our volume.”

“[Partnering with the co-op] has made [purchasing locally] so much easier for us,” Taylor says. “In September and October we were able to purchase all of our broccoli, carrots, potatoes, apples, green beans and tomatoes locally—all items come from the state of Maine, within 150 miles.”

Taylor says he’s been surprised with the pricing he has been able to get with this arrangement, since traditionally local items have come with a higher price tag.

“I’m not sure if it’s on the vendors’ end because they’ve partnered with certain farms, but the prices have been very competitive to what our traditional bids were for produce,” Taylor says. “When we first started, [the price] was pretty high. Local was a luxury then. Now it’s very competitive.”

Another challenge for Taylor was wrapping his head around the volume of local products he had to purchase.

“I was always thinking I needed to buy 50 cases of product at a time,” Taylor says. “I finally realized if I can purchase local items as a supplement and we [advertise] it on our signage and menu tags, then that satisfies that need [for local products]. It can be some local products; it doesn’t have to be all. My best advice would be to challenge your vendors. We try to develop our fall menus in late spring. The vendors get copies of the [menu] road map. They need to source it. That’s their job. We put some of the ownership on them.”

Local markets: Purchasing local items at a B&I location is a little easier, according to Carlos Rivera, director of dining services for CulinArt at Cadwalader, Wickersham & Taft in New York.

“In B&I, depending on what management company you work for, it depends on how much leverage and freedom they give you to tweak menus and price a little differently,” Rivera says. “When you talk local foods there is always a price tag attached to them, but my feeling has always been that once things are marketed correctly and presented with value, customers accept a little higher price tag.”

Rivera says this realization has allowed him to showcase local products in such a way that customers are willing to pay a slightly higher price. Gathering as much information about the products and passing that information onto customers has been successful for Rivera and his team.

“Obviously the origin and the farm that I am dealing with are very important,” Rivera says. “When I’m dealing with local produce I have to be a lot more specific than with a normal menu item. I have POS signage and I present a little history about the farm, and people really connect to that.”

Rivera also has been able to take advantage of the local greenmarkets near his location.

“We’re fortunate here that we have about five greenmarkets in the vicinity,” Rivera says. “With my 30 years of experience [in the city] I’ve developed many relationships with local farms. If there is a greenmarket down here I’ll just take my bag with me, and if I pick up something for the day I’ll feature products that way too. I’ll do whatever it takes to let people know that we are making the effort.”

Focus on: Healthy

Fredrick Girard, director of nutrition services at the Cheshire Medical Center in Keene, N.H., says his biggest purchasing

challenge has been finding items that fit with the Healthy Food in Health Care Pledge, which his facility signed in 2008. The pledge, from Health Care Without Harm, asks operators to commit to purchasing more local, nutritious and sustainable foods.

“We have to go through non GPO-approved vendors, and it causes us to sacrifice price breaks because what the broadline distributors have in inventory and what’s available to them don’t seem to match up with the needs of operators who want to operate under the pledge,” Girard says. “For instance, things that are made with healthier ingredients, such as whole grains, are organically produced, locally produced, sustainably harvested or farmed. The broadline distributors don’t offer what we need in order to maintain our relationship with the distributors, so we have to go off the beaten trail to get these little niche players and then piece it together.”

Girard says he “kicks over rocks and shakes trees” to find those companies that can provide the products he needs to purchase to maintain his commitment to the pledge. In order to find these companies, Girard says the Internet, food shows, sustainability conferences and farmers’ markets are good sources of information. He adds that word of mouth is also a great way to find new purchasing sources. For example, he says, companies used to call his office saying, “we know you are signed up with X GPO and we’re on that GPO’s list, so purchase our items.” Now, Girard says he gets calls from regional companies who say they saw him on the Healthy Foods in Health Care Pledge and that their companies can provide products that meet the needs of operators who have signed the pledge.

Girard adds that he receives a lot more visits from regional and specialized vendors now that they know he is looking for these healthier, sustainable items.

Another avenue Girard has purchased through is the NEAH (New England Alliance for Health), a consortium of New England hospitals. The group recently put out a dairy bid and a regional company won that bid, over one from a broadline distributor. “The [broadline distributor] lost to a regional player because [the regional player] is local and can provide products that meet our needs in a more sustainable manner,” he says. “They were also able to do it at a better price, so that was a win.”

Girard adds that many GPOs are beginning to offer the healthier, sustainable products he’s looking for. “They are starting to take heed. But quite honestly, they are really slow and there isn’t enough. That’s why we are going off the trail to suit our needs.”

Focus on: Ethnic

Sourcing ethnic ingredients presents its own challenges

for operators. At The J.M. Smucker Company, in Orrville, Ohio, Ken Edwards, executive chef for Metz Culinary Management, says purchasing ethnic foods for his daily menus and special events is especially tough because he usually orders from a closed order guide.

“My company is very willing to let me order outside of the guide when necessary, but yet another restriction comes into play when I find that my main purveyor simply does not carry the item I’m looking for or they need a long lead time for the order,” Edwards says. “I recently prepared an important lunch for guests from Shanghai. As you can imagine, there were a lot of unique and hard-to-find ingredients on my shopping list. I ended up shopping at a local Asian food market for nearly all of those items. Purchasing flexibility is a must when it comes to ordering for special menu items.”

Flexibility also is key for the dining team from Princeton when it comes to ethnic items. Orefice says although vendors are stocking more ethnic items, sometimes it’s easier to pop down to a local specialty shop.

“There are folks in the specialty business that mark [ethnic items] up a lot more than our regular distributor, but they can always get it for us,” Orefice says. “They are probably going to the same local bodega that we would go to and charging us shipping, but sometimes that’s just easier for us.”

Recine says the department also encourages chefs to try substitutions if they can be used for hard-to-get ingredients.

“We just had a special dinner called International Palate, where the students get recipes from their parents and the chefs recreate them,” Recine says. “Some of those recipes called for very odd ingredients—things like galangal root. We looked it up and the chef said we could substitute ginger. If there are people who will not allow substitutions then we will have to go buy it at a specialty shop or see if one of our vendors can help us out. We’ve never been in a position where we couldn’t get a hold of something. It may have taken a little work, but we’ve always been able to get it.”

Maine’s Taylor says he faces the same challenges with ethnic ingredients, but his vendors are getting better at helping him out.

“We started sourcing with a couple of vendors out of Boston that were able to get us more stuff,” Taylor says. “We still fight the drop/ship factor and lead time and all that, though. They make once-a-week deliveries and we are pretty much able to get anything we need now. I’ve also ordered items online if we needed things for catering that are a one-time thing. Anyone can write a menu but can you source everything? We made that part of the development process now. Nothing gets written or developed unless we know where we will be able to source the ingredients.”

Focus on: Special diets

The biggest purchasing challenge at the University of New Hampshire, in Durham, according to Jon Plodzik, director of dining, is sourcing specialty items for specific populations with dietary restrictions such as gluten free.

“As requests for those types of items continue to grow almost monthly, very few vendors seem to be able to offer a full line of products to meet that need,” Plodzik says. “As a result, we end up sourcing products from a variety of vendors and local establishments or special ordering, which is a problem in itself. As an example, I drove to a local health foods specialty market to pick up goat’s milk, goat cheese and goat yogurt for a student who could only consume those type of products. We couldn’t get the goat’s milk products from any of our standard vendors. Now we have to make a special trip for her weekly. [These efforts] truly are a reflection of us trying to accommodate all of our guests, regardless of their dietary restrictions.”

Jeanine Drake, director of nutrition services at Flagstaff Medical Center in Arizona, also has had to purchase away from her broadline distributor to get gluten-free items.

“Whenever you buy through a supplier you have to buy so many cases, and we don’t have the storage to do that,” Drake says. Furthermore, she says, there are very few patients who need to follow a gluten-free diet, so the amount of gluten-free product she needs is limited. Now whenever Drake needs these products her staff goes to a local grocery store to purchase them, including gluten-free bread, soups, rice cakes and ice cream.

New Menu, New Bidding Process

LA Unified revamps purchasing procedures, creates new “I’m In” marketing campaign.

The Los Angeles Unified School District knew it wanted to revamp its menus for the 2011-2012 school year to comply with the proposed new meal patterns set forth in the Healthy, Hunger-Free Kids Act. The district also wanted to take away the stigma of bad school food. In order to accomplish this menu makeover, the department decided it needed to change its current bidding process.

“Rather than doing a food bid, we put out a proposal for companies and what we asked for was how would you propose to do business with the foodservice department at LA Unified,” David Binkle, deputy director of foodservice at the 672,000-student district, says. “We did that for seven categories: chicken, turkey, potatoes, beef, vegetarian, produce and bread, and dairy.”

Each category would be won by one company, which would have that contract for five years. The idea, Binkle says, is that because that company is in a five-year contract, the manufacturer would have a greater involvement with the department and district.

“For so long we’ve been telling companies, ‘these are your products and you’re not doing anything,’” Binkle says. “Everybody is criticizing what it is we’re doing [in school foodservice], but nobody is really doing anything about it.”

Binkle says there are two goals with the new purchasing process. “One is to change the image of the meals,” he says. “We need help doing that. We can’t just shout from the rooftops that the food is different or that it’s a healthy pizza. The other is to remove the non-value added cost. I’m going to say that the majority of school districts purchase food based upon a line-item bid with a specification. It compounds buying the lowest responsible bidder philosophy. In other words, the cheapest price wins the award. That just compounds cheap quality, or in our case where we were paying large amounts of cost because there wasn’t a whole lot of competition because of the volume that we have for those products. There are only so many manufacturers that can make that many peanut butter and jelly sandwiches. What ended up happening is that we paid high cost for low quality. Then we were having to do all the work year after year to put bids on the street.”

To help Binkle and his team achieve their goal of changing the perception of school meals, they decided to turn to their manufacturers for help. In order to win the five-year bid, companies had to answer how they would meet 12 different criteria, including social responsibility and marketing.

Two of the manufacturers that won bids—Tyson in the chicken category and McCain in the potato category—have the same marketing firm, Esrock. As part of the companies’ bids, they said they would use Esrock to develop a marketing campaign that highlighted the positive efforts of the district’s child nutrition department. Esrock proposed several different ideas, including one called I’m In, which was selected as the department’s marketing plan. The idea behind the campaign is that students, district employees and the community pledge to be “in” for eating healthy school meals.

“The campaign originally started as a commitment to the foodservice department,” Binkle says. “The district has embraced the idea and taken it on as a campaign not only to have healthy school meals, but now it’s become an individual responsibility message.” Now students are “in” for graduation or not skipping school.

To launch the I’m In campaign, the district has held events, which often have included a local sports star who talks about the importance of eating well or exercising.

Binkle says the I’m In campaign has helped create a positive message about the district’s new healthier menu. “There is no pizza on the menu,” Binkle says. “There are no corn dogs, hot dogs or grilled cheese sandwiches. That’s a dramatic change and that’s why this positive message is so important.”