When so many supplies are scarce and restaurant operators are facing mounting pressure to source popular menu ingredients or suitable substitutes, cutting corners on sustainability is understandable. But increasingly, consumers hinge their spending on the degree of trust they have in the ethics of a business. Further, any sustainability risks within your supply chain could damage the value of your brand, impact your ability to adapt to change and make it difficult to remain in business. Being clear about your own mission and values can help you communicate them to suppliers, employees, investors and customers — and help you hold yourself and others accountable. In a recent report from New Food Magazine, Rick Sanderson, founder of the STAR Index ESG Platform, advises brands to focus on four P’s to gauge their starting point in this effort and to actively monitor progress: people, politics, platforms and partners. Do you have people around you who can adapt to ever-changing conditions and who ideally bring some external insights to their work? Are all departments and influencers in your business aligned in their willingness to adapt to changes, or do you have skeptics who need to be persuaded? Do you have the technology platforms needed to monitor and measure your progress, as well as to communicate with customers, suppliers and other parties? Are you aligned with partners who can help support your strategy and objectives — and who are motivated by their own mission to improve sustainability? As the supply chain is being impacted by factors including labor shortages, extreme weather, gaps in the availability of raw ingredients, and a spike in demand from consumers returning to foodservice outlets, businesses at every link in the supply chain are feeling the stress. At a time when some foodservice operators have been completely dropped by their distributor(s), the strength of your partnerships is paramount. At the time of this writing, the average fill-rate from manufacturers to distributors was running below 85 percent. But the service level for Premier Value 4 members is considerably higher than this average. That is due to the work our distribution partner, US Foods, is doing to rebalance inventory to provide our members with the best possible service. In recent quarterly earnings releases, US Foods and Sysco disclosed their food cost inflation rates: 8.2 percent and 10.2 percent, respectively. To keep this in context, a normal food cost inflation would be in the 2-3 percent range. Value 4 members have protection against this inflation with contracted manufacturer agreements (CMA). CMA’s give access to 350 vendors covering 105,000 products. Over the past 15 years, inflation on CMA products has been half of the inflation of non-CMA products. Our CMA contracts are firmly in place and while we will not know if that 50 percent “savings” rate is less or more until the current hyper-inflationary period has settled, we are confident that using CMA products is your best protection against inflation – and will offer extra security until we return to conditions that feel closer to normal. If you do not have these protections from your suppliers and partners, consider calling Value 4 to see if you qualify for our programs. |
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March 2024
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