Dining out in restaurants has always been one of the all-time favorite pastimes around the world especially when it comes to eating from only the best kitchens the world has to offer. But with how the restaurants are seemingly always packed with diners and are never too short when it comes to the food they serve, you might be wondering how they are able to keep up with the demand relative to the supply of food they have in their kitchens. Where do these restaurants even get their food supply from?
Restaurants get their food supply directly from food distributors, who get their products from processing facilities that process the food from producers and farms. There are plenty of different types of distributors, which are all the main suppliers that restaurants partner with to get their food supplies.
The restaurant industry is very lucrative for both the restaurants and the food suppliers themselves. On the part of the restaurant, it is always important for them to make sure that they are getting their supply from the best if they want to make sure that they are not only providing their customers with top-quality food but also having enough food supplies in the pantry to keep up with the demand of their clients.
Where do restaurants get their food supplies?
We have all experienced dining out in a restaurant. In most cases, we have actually dined out in a certain restaurant for more than a handful already. And one of the things you might have noticed when you were dining in your favorite restaurant or in some other restaurant is the fact that the restaurant itself seemingly never runs out of food.
Moreover, you might have noticed in your favorite restaurants that the food quality is almost always the same no matter how many times you have eaten there. And when you look at the prices of the drinks and food on the menu (especially in the more affordable restaurants), you would actually wonder about the profit margin that these restaurants have on their food if they buy their supply straight from the grocery stores or from the supermarkets.
If you are the one doing the grocery shopping for your household, you would be familiar with the prices of most of the different food items in the grocery store or in a supermarket. And most of these food items are some of the more common ingredients and supplies that restaurants have in their kitchens or pantries. But you should know that they most likely are not getting their supplies from the same grocery stores you go to. They are not even getting them at the same prices you do.
So, where do they get these food supplies if they are not getting them from the same supermarkets? For us to get to know more about where restaurants get their food supplies, it is important to understand the food supply chain.
Of course, food originally comes from the places that produce them in their rawest form possible. We are talking about the places where the meat, eggs, vegetables, grains, and fruits are produced before they even make it into the food supply chain. Yes, we are talking about the agricultural sector here as the people working on farms are the ones who are responsible for producing the food that we eat.
Depending on where you live, some restaurants or supermarkets actually get their food supplies directly from these producers if they are close enough to your locality. For example, if you happen to live in an agriculture-heavy part of the country, your town’s restaurants most likely get their supplies straight from farms. Or even if you don’t live near any farms or food producers, if certain restaurants have partnered up with food producers or if the owners themselves also own their own farms, they may actually get their food supplies straight from the producers themselves.
However, in most cases, the food that is produced in the farms head directly to food processing facilities that further process them into products that can be distributed. In the case of meat and poultry, the animals are usually taken to slaughterhouses where they are further processed. The same can be said of their byproducts, which are processed and packaged into goods and products that can be readily distributed such as when milk is bottled. Meanwhile, fruits and vegetables are packaged, canned, or dried depending on how the food processing facility wants to process them.
The processing facilities are all monitored and regulated by the government and their agencies such as the USDA or the FDA. This is to ensure that the processing facilities all follow strict requirements that are there to see to it that the food products are processed in clean and sanitary environments that follow proper handling, protocol, and standards.
After that, the food processing facilities usually sell their products to wholesale distributors, who are responsible for selling the food products to the general public, which includes most restaurants. These are the groceries, supermarkets, and other retail stores that sell food items. This is the usual flow of the food supply chain as the distributors are the ones responsible for distributing the food to most restaurants.
However, not all restaurants tend to get their supply from wholesale distributors that are usually complete in terms of all of the food supplies that restaurants and households need. There will be cases where certain restaurants actually go straight to the source or will try to diversify the places where they source their food supply from depending on certain standards and factors such as price, quality, and freshness. We will get to that in greater detail as we go along with our discussion.
How do restaurants choose suppliers?
When restaurants choose their suppliers, they do not just choose from any supplier because they actually have a wide range of options to choose from. Of course, they are not like us in the sense that they only get their supply from large wholesalers such as supermarkets or grocery stores. Instead, here are some of the different options that most restaurants have whenever they are choosing their food suppliers:
- Wholesale food suppliers
The wholesale food suppliers are those that work with a large network of farmers and food processing companies to have a large supply of different types of food in an equally large supermarket or grocery store. These are your one-stop stores for everything you need such as meat, eggs, milk, fruits, and vegetables. They are generally good for basic commodities that restaurants need especially if they want something delivered to them fast and efficiently.
- Has almost everything you need
- Discounts for bulk purchases
- Easily accessible
- No interpersonal relationship between restaurant and supplier
- The products tend to be generic
- Most goods are not fresh
- Local markets
Local markets are the small farm-to-market communities you often see in certain portions of a town or a city. A lot of farmers sell their products directly to the local market vendors or are even the ones who set up their own shops in these local markets. Restaurant owners can easily mingle with the shop owners while asking them more about their products and how they grow their food.
- Supporting local and small food producers
- Forms an interpersonal relationship with the vendors or farmers
- You can learn more about the food you cook
- Prices may be higher
- Can be a hassle to go to these shops
- The ingredients are limited to what is available locally
There are restaurants that skip the entire food supply chain by going to the farmers themselves instead of waiting for the food to be processed by food processing companies and then distributed by the wholesalers and retail stores. This is great for restaurants that are able to gain access to nearby farming communities and cooperatives.
- Ingredients are fresher
- Builds good relationship with the farmers
- You are supporting local and small-scale farming
- The ingredients are limited to the locality
- You may have to go to different sources to source all of your food supply
- Doesn’t always go through quality control
The butchers are those who process the meat and poultry themselves and then cut them into different select pieces and parts. Knowing a local butcher near you can be great if you want to have access to meat that is fresh and can be personalized in terms of portions and sizes.
- Fresh meat
- Builds relationship with the butchers
- You get to learn more about the food
- Personalized cuts of meat in terms of sizes and portion
- Limited to what is available daily
- Prices can be higher
- May take more time on your part
- Organic food suppliers
Nowadays, there are now plenty of different organic food suppliers because there is a growing market of people who prefer to eat organic foods only. Food is organic when it is responsibly sourced and when there is nothing artificial that is used to produce the food.
- Has a growing market of people
- Friendly to the environment
- Food is fresh
- More expensive because organic food takes longer to grow and produce
- Limited in terms of the locality and the season
- Shorter shelf life due to the absence of artificial preservatives
Based on the different suppliers we have talked about, we can clearly see that restaurants have a lot of different options when it comes to choosing where they want to get their food supplies from. Of course, restaurant owners know the pros and cons of choosing which among these food suppliers best fit their menu and the overall theme of their restaurants while also taking into account time, availability of supplies, freshness, and profit margin.
In a lot of different cases, smaller restaurants that have just started usually source their ingredients from large-scale wholesalers that are readily and easily available. The reason is that the prices of the goods in these wholesalers are lower than that of the other options available to them. And because these are run by large companies, it is easier to access them as one can easily order food supplies with a simple call or through the use of an app.
Meanwhile, in most cases, the more experienced restaurant owners who have specialized restaurants tend to try to source their food from different food suppliers especially when they have the time, money, and means to source them efficiently.
In any case, let’s see what should a restaurant consider when choosing a food supplier
What to consider when choosing a restaurant’s supplier?
First off, the rates are very important because this is where restaurant owners are able to properly account for the profit margin of their menu. Restaurant owners need to be able to properly negotiate for rates that are favorable to both the restaurant and the suppliers especially when it comes to perishable goods.
- Credit period
In most cases, restaurants don’t pay their suppliers on the spot whenever they receive the supplies for their food. This is where the credit period comes in as most restaurants are given credit periods of about 15 to 30 days to settle their accounts with their suppliers through the sales they made from their food. The longer the credit period, the better for the restaurants that are just starting out because they would need more time to be able to get the sales income they would need to pay off their credit with their suppliers.
Restaurant owners will always want to prioritize the quality of their ingredients as much as possible because everything starts from there. No matter how skilled the chef may be, it would be difficult to really make a dish good if the qualities are not up to par. That is why choosing a food supplier that provides food and ingredients that pass quality control and the quality standards of the restaurant itself is paramount to the success of the restaurant.
Time is of the essence for plenty of different restaurants because they actually start prepping as early as possible in the sense that they would need to have their ingredients delivered as early as possible. This is important for restaurants that have a high demand for certain dishes. Of course, ingredients that are delivered on time ensure that the freshness of the ingredients is on par. That is why it is important for restaurant owners to look for suppliers that will always make it a point to deliver their food supply on time.
- The restaurant’s needs
Of course, the restaurant will always want to make sure that the food supplier will be able to give what the restaurant needs in terms of its menu. There will be menu items that have specialized ingredients that not all food suppliers can provide in the same way that there are food suppliers that have ingredients that you probably won’t be able to find in common retailers. For example, you probably won’t be able to find many organic ingredients in a large wholesale retailer. That is why it is important for the restaurant owner to choose a food supplier that is able to meet its needs as far as the menu is concerned.
Restaurant owners tend to choose their food suppliers in different ways depending on their needs and preferences and on the type of suppliers that are readily available to their locality. What we have discussed above is merely a quick way to understand what restaurants do to choose their suppliers based on different factors and on the types of food suppliers that are available.
How do restaurants arrange deals with food suppliers?
Now that you have a quick idea of how restaurants choose their suppliers from a wide range of available suppliers, you might be wondering by now how these restaurant owners arrange their deals with the suppliers themselves. In that regard, here are some of the ways and steps that restaurant owners tend to use and take whenever they are arranging deals with their food suppliers:
The first step that needs to be taken here is for a restaurant to do some background prep work before anything else. Doing so ensures that the owner is armed with all that he needs to know before he starts making deals with food suppliers.
In the prep work, there are many things that can be done. Researching the five best food suppliers in the location can be a good idea as it allows you to know which ones are best known for their quality and timely delivery. It is also important to look at the clientele of the companies that you are considering so that you would have a quick idea of well it is doing as a food supplier.
From there, you can try to compute your own food cost budget so that you will have a quick idea of how much you would spend based on the prices of the ingredients of the food suppliers you are considering dealing with. You should never skip this step because it is important for you to be aware of your finances before you start negotiating and dealing with food suppliers so that you will have a quick idea of how much you would end up spending based on the deal you made with the suppliers.
- Prepare your plan
After you have done the background prep work, you now need to prepare your plan of action so that you will be able to go to the meetings with your food suppliers fully armed with your own plans and figures based on your background preparations. Come up with a way to approach the suppliers regardless of whether they may be small farmers or large retailers. And, depending on the supplier you are going to be meeting with, make sure that you have specific questions that are tailor-made for them because certain suppliers tend to have different food supplies and ways of approaching their business.
From there, it is also important for you to already come up with a plan for your inventory control even if you don’t have your supply yet. This makes it easier for you to manage your inventory as soon as the business starts rolling and the food supplies come in.
Finally, make sure that you have backup offers that you are willing to pull out of your pocket in case the initial offer doesn’t seem to be a good idea for your prospective food suppliers. You should be more willing to compromise in your backup offers so that the food supplier will be more attracted to such offers in case they feel like they are on the losing end of the deal in your primary offer.
- Know the most important questions to ask
When meeting the prospective food supplier, it is important for the restaurant owner to know the most important questions to ask so that he can negotiate for a really good deal without compromising the quality of the work done by the food supplier.
Here are the things any restaurant owner needs to ask a food supplier:
- Payment terms
- Prices of ingredients and food
- Discounts for bulk order, if there are any
- Source of their supplies
- Credit terms
- Delivery terms and options
Asking questions relative to those topics is the most important part of making a deal with a food supplier because these are all related to the operations of the business and to the partnership between the restaurant and the suppliers.
When you are now ready to negotiate based on the things that you already know and on the things that the supplier was able to tell you, make sure that you are at your most confident as you negotiate for a good deal with the supplier. Make sure that you have your own position on the matter so that you can start negotiating from there. Don’t be afraid to hold on to your offer but make sure that you are also willing to compromise whenever it is called for. No supplier will ever want to deal with a restaurant owner who is too stubborn to try to actually compromise his situation.
During the negotiation, try to haggle for prices especially for the goods that you can buy in bulk because most suppliers will be willing enough to give you discounts if you buy more of certain goods. Meanwhile, it is also important for you to know which food supplies you should try to haggle in terms of their price especially when you know that these are the ones that make up a dish that will sell more. As long as you know what to do and what to say to the food suppliers, you will be okay during the negotiation process.
Best restaurant food suppliers
The best restaurant food suppliers can really depend on the needs of the restaurant itself and on the different available food suppliers in a certain vicinity. After all, what is best for a certain restaurant may not be best for others such as when a certain restaurant gets its supplies of organic food ingredients from a certain supplier, which might not be the best for a restaurant that doesn’t serve organic dishes.
However, when we are now generalizing the best restaurant food suppliers, there are two names that are referred to as the “Big Two” because they are the biggest food suppliers in all of America. These are Sysco and US Foods. Both of these food suppliers are the two biggest full-line suppliers in the country as they provide almost everything that a restaurant will need when it comes to food supplies. They will deliver anywhere in America but the restaurants that set up shop in smaller and remote localities might not be able to get their deliveries as frequently as the ones that are closer to populated areas.
Still, when you are looking for specific food suppliers that you need for the more specific types of ingredients in your menu, you probably should look at different suppliers. Moreover, it might even be better on your part if you are able to find them in local suppliers that need the business more than large-scale food suppliers.
Restaurant food suppliers open to public
Even if most food suppliers are only open to make business with restaurants and not to the general public, there are still some food suppliers that are more than willing to open their doors to the regular people who are not running their own restaurants but are just looking for quality ingredients to stock up their pantry. This became prevalent during the recent Coronavirus pandemic as many different restaurants closed down while food suppliers were trying to keep their business afloat.
Here are some of the food suppliers that are open to the public:
- Restaurant Depot
- Chef’s Warehouse
- Cream Co. Meats
Again, these food suppliers normally aren’t open to the general public. However, because of extraordinary circumstances, they had to make sure to keep their business running and their food supplies good by opening to the public instead of just making business with restaurants.
How often do restaurants order food?
When it comes to restaurants that need to keep their supplies full, it is imperative that they are able to order their food from their suppliers as often as possible. However, it really depends on the restaurant when it comes to the frequency of their deliveries.
There will be cases where restaurants will actually order their food on a daily basis especially if freshness is paramount to their business. This includes fresh fish and meat and also fruits and vegetables that are easily perishable. As such, in most cases, these restaurants rely on local suppliers who are capable of keeping up with the demands of the restaurants that need their deliveries sent every single day as opposed to the large-scale suppliers that are more or less fixed in terms of their delivery schedules.
However, the general frequency for most restaurants (those that don’t need deliveries sent every day) is that deliveries sent once a week would be more than enough to make sure that they have everything they need. Still, some of these restaurants may order or buy from other suppliers if there is a need for them to stock up on fresh ingredients on a more frequent basis.
How much does it cost to stock a restaurant with food?
In terms of the costs that the restaurant would incur whenever it stocks its pantry and kitchen with food, it really depends on the size of the restaurant as well as how well-known it is. Another factor to look at is the prices of the ingredients they source because there will be some restaurants that would have ingredients that are more expensive due to the very nature of their business.
However, in terms of statistics, a profitable restaurant will more likely end up generating food cost expenses somewhere between 28% and 35% of their total sales. Meanwhile, when they factor in the overall labor expenses, this number could easily reach somewhere between 50% and 75% of their sales. As such, the profit margin of most restaurants is only about 25% to 50% of their sales.
With the help of this article, you should have no problems getting started on your food supplier journey and by following these steps you will have nothing but success, for that I am certain. Leave a comment below if you found value from this article or have some other aspects to point out!