Foodservice operators, suppliers tackle industry pain points

Supply chain volatility: The segment has experienced everything from out-of-stocks to broadline driver shortages causing unwanted menu reductions.

Labor engagement: The shortage of labor impacts schools differently than other onsite foodservice segments in that vaccinations are mandatory in certain districts for staff, and the timeframe from interview to offer can stretch to six months.

USDA regulations: USDA regulations vary by each state, and within state regulations, district rules also exist. This is a barrier for manufacturers operating on a regional or national level.

Communication: Policies tend to change regularly on a district and state level in the public school system, and manufacturers would like to see a better way to communicate changes in real time.

Free meal programs: There is general uncertainty from both operators and manufacturers regarding which programs qualify as “free” depending on locales and dayparts.

USDA commodity programs: Schools are short of commodity suppliers and manufacturers, which limits procurement choices. Schools would like more commodity suppliers to enter the fray.

Provide clear nutrition guidelines: The example of sodium was brought up on a number of occasions as an issue for manufacturers to determine. Both parties (operators and suppliers) want to find a way to provide transparency for foods that meet strict guidelines.

Segment playbook: From a manufacturer perspective, the segment is challenging to navigate. The group suggested creating a “how-to” playbook for suppliers to use when looking to penetrate or expand into this highly complex segment.

The two “Ps”: Product formulations and packaging are sometimes not clear from a sustainability and nutritional standpoint; playing off the segment guide, manufacturers proposed creating specific details on these attributes for operators to make informed decisions.

Simplify the bid process: As it stands now, bidding on business can be a drawn-out and time-consuming affair. With the help of IFMA as a facilitator, the group would like to develop a program in future conferences to streamline the bid process.

CLOC and CIL: The USDA investigated programs related to how money is distributed, and operators were not sure if CLOC’s interests were in line with schools. There was a general mystery around this and CIL - Cash in Lieu of Commodities that few in the roundtables could address.

Lack of conduit for sharing information: Covid-19 forced companies to react instead of plan, which has had a negative impact on strategic planning.

Providing solutions to operators: Collaboration among manufacturers, distributors and operators is an ongoing challenge. There are several layers that can be a hindrance to delivering relevant innovations to specific concepts.

Penetrating stores: Chains are among the hardest of the segments to penetrate because the competitive intensity and gatekeepers are prevalent.

Identifying operator needs: Carryout and delivery are top-of-mind and major opportunities at the moment, yet manufacturers and operators have not been aligned with the complexities of concepts (FSR and QSR) and unique needs.

Labor and supply chain: The councils would be remiss if the issues with supply and labor were not mentioned. These are viewed as indefinite issues.

Manufacturer communication: Instead of relying solely on distributors and brokers for information, manufacturers would serve chains well with proactive information and insights and more frequent presence in account management.

Supply rate communication: Instead of informing of product shortages after the fact, chains believe technology and “data transparency” could be better utilized to offset this major issue.

Sustainability: While supply and labor have been at the forefront, social consciousness remains critical to chain patrons - particularly Millennials and Gen Z. Chains would like to see manufacturers share more information on practices and responsible sourcing, etc., to better inform their own patrons.

Innovation best practices: Manufacturers should share best practices from larger, more established chains to help with various innovations — POS, operations and HR.

Price increases: Operators have been told to expect an increase of 8-10% in prices from broadline distributors.

Labor supply and engagement: A need for quick-scratch or pre-cooked foods on a larger scale.

Communication: Expand communication with all stakeholders through IFMA collaboration.

Diner insights: Additional insights from manufacturers would help with purchasing efficiency and reduce waste.

Supplier understanding of C&U long-term vision: Students are a fickle group; the need for sustainable practices, food transparency and changing habits as new generations enroll are an ongoing effort.

IFMA engagement: IFMA would take the lead in connecting campuses with a number of initiatives that would speed up the learning across institutions. This might include shared R&D testing results, “living labs,” white papers on best practices across the FLCs and other IFMA-led initiatives.

Product awareness: A collaboration with universities and manufacturers to showcase new products and solutions with students and staff, whether by food shows, campus testing or at IFMA events.

Sustainability: Reducing plastics and bulk packaging were very important but then Covid-19 happened. “We’re constantly having the conversation that eco-friendliness is not going away. We’re always looking at what our younger employees want.”

Too many intermediaries: One of the biggest challenges to B&I is the number of intermediaries involved in the ecosystem: FMCs, GPOs, brokers, distributors, and central kitchens/commissaries. FMCs are in more than 90 percent of B&I accounts, which makes direct communication with client liaisons difficult.

Pricing transparency: This particularly relates to trade spending and promotions. Operators may use two distributors and find that the prices for the same items are markedly different. GPOs are a roadblock.

Technology: There are challenges with point-of-sale systems that seem “arcane.” “We are relying on Aramark and Compass for technology, but they are only good at food. Is there something better to use?”

Distribution timeframe: Distribution is taking too long to reach B&I. “The distribution system in foodservice is one of our biggest issues — it takes a long time for a new product to get through distribution.”

IFMA Sanctioned Quarterly Meetings: To stay on trend and to learn the segment complexities, the B&I FLC believes quarterly sessions with manufacturers would benefit both parties in the long run.

Direct communication: With FMCs highly penetrated into B&I accounts, operators want manufacturers to directly connect to client liaisons to keep accounts up to date on product introductions and status.

Segment best practices: Operators believe there are strong learnings from other segments that collaboration with other FLCs on a periodic basis will enhance success and avoid costly mistakes.

Pop-up innovation sites: Use regular onsite “innovation stations” to showcase new manufacturer products and ideas to the host accounts and self-ops.

On-time deliveries: This is related to supply-chain shortages, but operators indicated that timing could be better communicated by manufacturers, FMCs and distributors.

SKU overload: There are “massive” numbers of SKUs, and operators would like to see manufacturers and distributors streamline them.

Labor: The need for skilled labor. A method to garner interest in working in the segment.

GPOs: The question of the value GPOs bring to the segment. Other than pricing advantages, there is a question whether GPOs offer other benefits or are simply another layer of complexity.

Foodservice area relevance post-COVID: Execution of salad bars, grab-and-go and self-scan marketplaces are unclear across the segment. How will foodservice be positioned post-Covid?

Local and regional regulations: State, county and local regulations have tightened due to Covid, adding to an already complex regulatory environment.

Continuity among channels: Healthcare operators believe manufacturers can bring best-practices solutions to them in the same way they target national chain customers.

Menu reductions: Manufacturers can collaborate earlier in the product-development process to help healthcare operators with menu success.

Build for flexibility: Operators acknowledge product shortages are likely to continue into the future, but healthcare has strict guidelines where substitutes will not suffice. Operators are looking to collaborate with distributors and manufacturers earlier and often to prepare for the specific needs of the healthcare segment, which is complex and “strict” in one manufacturer’s words.

Product standardization across channels: One of the initiatives the healthcare FLC has been working on is the “bowl program,” which in effect, provides parameters to manufacturers who can then deliver standardized “turn key” products. This initiative is already underway.

Training for manufacturers: An introduction to healthcare foodservice is in the works for staff new to the industry, in conjunction with IFMA. It will model Foodservice Fundamentals, which is offered today by IFMA.