Aramark tests food-cost reduction program

Aramark is testing a program in 23 Philadelphia locations to cut food costs by reducing the types and number of ingredients the facilities stock, the contract-feeder told financial analysts last week.

An executive cited the example of reducing white-bread options to five from the previous array of 38. He also reportedly noted the facilities are now using two suppliers instead of 12.

The pilot program is consistent with an ongoing interest outlined several weeks ago by CEO Eric Foss “in reducing menu complexity and leveraging our scale across the supply chain,” as he expressed it to analysts.

He proceeded to review a four-part strategy the company is adopting to rein in food costs: strategic sourcing; “to really simplify our menu, which simplifies SKUs, which simplifies the number of suppliers we have, which consolidates our purchasing strength, which adds to our scale and leverage;” boosting production efficiency; and reducing waste.

Foss noted that earlier efforts have traditionally focused on reducing waste. Now, he told analyst, an emphasis will also fall on the other three “buckets.”