High-performance cost of goods – maximising results for Clubs

The challenges of delivering benchmark cost of goods and labour costs (the controllable costs) are the conversations that are being had in almost every venue around the country at the moment.

Clubs with multiple venues and locations are in an enviable position of having economies of scale that a contemporary procurement strategy can leverage, to maximise margins and subsequent profitability.

 It is an opportunity that is overlooked more often than many would like to admit. Frequently food and beverage departments/revenue centres have highly streamlined beverage procurement, underpinned by pour targets, contract pricing and bonus structures. Yet in a world where food frequently accounts for more than 50% of the F&B revenue contribution, food purchasing is frequently left to chance.

Supplier choice can be (and frequently is) driven by variables such as habitual use, ease of ordering or even personal relationships with suppliers. Furthermore, the quantities purchased can be a result of gut feel/instinct, or guesswork. Pricing frequently reflects a default market rate.

The result is food costs that are frequently blown out, in the last 12 months some of our Club Clients are reporting food COGs beyond 60%. In combination with a challenging labour market, they make for unprofitable venues or departments.

In a time when incremental improvement can be the difference between profit and break-even or loss, it is an inherent responsibility for Club chefs and managers, to deliver a considered strategy that provides the best possible pricing, quality and profitability outcomes to its Board and members.

The mechanics of procurement strategy development

Typically there are a series of steps that should be undertaken that allow Clubs to deliver acceptable margins and agreed product quality & consistency.

In the first instance, it is imperative to determine quantities used across the Club/group for each supplier type (butchery, dairy, poultry, seafood, greengrocery, coffee, packaging etc) as well as any other requirements, such as frequency of delivery, weekend delivery, returns policies, sustainability requirements, quality assurance, guarantee of supply etc.

From this informed position we can develop a procurement strategy, including the types of food products, quantities, and specification requirements. We can also understand the criteria for supplier selection.

Taking the quantified opportunity to identified suppliers in conjunction with an opportunity-awareness programme, provides the basis for a competitive process that has integrity and is appropriately robust to maximise outcomes for the Club(s).

The next step is to evaluate supplier bids based on a predefined criteria, considering factors like pricing, quality, delivery capabilities, and compliance. Negotiations with shortlisted suppliers to clarify terms, conditions, and pricing, should provide the Club with a transparent and efficient process for food suppliers, ultimately leading to the selection of a supplier that best meets the Clubs’ needs.

Who is planning your food and beverage strategy?

Testimonials

“The Mulwala Water Ski Club engaged Future Food to appraise and make recommendations to our Food and beverage offerings of the Mulwala Water Ski Club.

Allan’s recommendations have been implemented with the result of increased patronage, increased revenue and numerous compliments of our food and service.”

Peter Duncan (CEO, Mulwala Water Ski Club)

“Ryde Eastwood Leagues Club partnered with Future Food to find and secure a new catering operator. The entire process was highly professional and structured and as a result we have secured a leading operator Catering HQ for the Club. 

The whole process ensured the best opportunities and scope for the club drawing in some great options. The team at Future Food worked closely with the team at Ryde-Eastwood to understand the business needs and ensure we had the best possible choices to bring the club forward.

This will be a game changer for our food operations. A good process and a great outcome!”

Carl Pozzato (CEO, Ryde Eastwood Leagues Club)

“Working with Future Food has been a fantastic experience and not only met, but exceeded our expectations. The knowledge of multiple industry concepts, along with a passion for food, has paved the way for our new brand and strategy to stand out among an increasingly competitive market. Future Food has been attentive to our needs, willing to work within our internal challenges, and apply key learnings to create a successful outcome.”

Glenn Sanders (ACCM General Manager Bentleigh RSL)

Future Food is an independent Food and Hospitality Consultancy that operates across Australia & New Zealand. Our clients use our informed, data-driven services to give them a commercial advantage, the aim is always to deliver business first outcomes coupled with amazing customer experiences – a winning combination.

Reach out to our Clubs specialist Allan Forsdick on 0401 557 760 to understand how our capability can benefit your Club, or via the link below.

High-performance cost of goods – maximising results for Clubs

The challenges of delivering benchmark cost of goods and labour costs (the controllable costs) are the conversations that are being had in almost every venue around the country at the moment.

Clubs with multiple venues and locations are in an enviable position of having economies of scale that a contemporary procurement strategy can leverage, to maximise margins and subsequent profitability.

 It is an opportunity that is overlooked more often than many would like to admit. Frequently food and beverage departments/revenue centres have highly streamlined beverage procurement, underpinned by pour targets, contract pricing and bonus structures. Yet in a world where food frequently accounts for more than 50% of the F&B revenue contribution, food purchasing is frequently left to chance.

Supplier choice can be (and frequently is) driven by variables such as habitual use, ease of ordering or even personal relationships with suppliers. Furthermore, the quantities purchased can be a result of gut feel/instinct, or guesswork. Pricing frequently reflects a default market rate.

The result is food costs that are frequently blown out, in the last 12 months some of our Club Clients are reporting food COGs beyond 60%. In combination with a challenging labour market, they make for unprofitable venues or departments.

In a time when incremental improvement can be the difference between profit and break-even or loss, it is an inherent responsibility for Club chefs and managers, to deliver a considered strategy that provides the best possible pricing, quality and profitability outcomes to its Board and members.

The mechanics of procurement strategy development

Typically there are a series of steps that should be undertaken that allow Clubs to deliver acceptable margins and agreed product quality & consistency.

In the first instance, it is imperative to determine quantities used across the Club/group for each supplier type (butchery, dairy, poultry, seafood, greengrocery, coffee, packaging etc) as well as any other requirements, such as frequency of delivery, weekend delivery, returns policies, sustainability requirements, quality assurance, guarantee of supply etc.

From this informed position we can develop a procurement strategy, including the types of food products, quantities, and specification requirements. We can also understand the criteria for supplier selection.

Taking the quantified opportunity to identified suppliers in conjunction with an opportunity-awareness programme, provides the basis for a competitive process that has integrity and is appropriately robust to maximise outcomes for the Club(s).

The next step is to evaluate supplier bids based on a predefined criteria, considering factors like pricing, quality, delivery capabilities, and compliance. Negotiations with shortlisted suppliers to clarify terms, conditions, and pricing, should provide the Club with a transparent and efficient process for food suppliers, ultimately leading to the selection of a supplier that best meets the Clubs’ needs.

Who is planning your food and beverage strategy?

Testimonials

“The Mulwala Water Ski Club engaged Future Food to appraise and make recommendations to our Food and beverage offerings of the Mulwala Water Ski Club.

Allan’s recommendations have been implemented with the result of increased patronage, increased revenue and numerous compliments of our food and service.”

Peter Duncan (CEO, Mulwala Water Ski Club)

“Ryde Eastwood Leagues Club partnered with Future Food to find and secure a new catering operator. The entire process was highly professional and structured and as a result we have secured a leading operator Catering HQ for the Club. 

The whole process ensured the best opportunities and scope for the club drawing in some great options. The team at Future Food worked closely with the team at Ryde-Eastwood to understand the business needs and ensure we had the best possible choices to bring the club forward.

This will be a game changer for our food operations. A good process and a great outcome!”

Carl Pozzato (CEO, Ryde Eastwood Leagues Club)

“Working with Future Food has been a fantastic experience and not only met, but exceeded our expectations. The knowledge of multiple industry concepts, along with a passion for food, has paved the way for our new brand and strategy to stand out among an increasingly competitive market. Future Food has been attentive to our needs, willing to work within our internal challenges, and apply key learnings to create a successful outcome.”

Glenn Sanders (ACCM General Manager Bentleigh RSL)

Future Food is an independent Food and Hospitality Consultancy that operates across Australia & New Zealand. Our clients use our informed, data-driven services to give them a commercial advantage, the aim is always to deliver business first outcomes coupled with amazing customer experiences – a winning combination.

Reach out to our Clubs specialist Allan Forsdick on 0401 557 760 to understand how our capability can benefit your Club, or via the link below.

A 2023 Snapshot – The Diversification and Evolution of Future Food

What a huge year it has been in the world of Food & Hospitality Consulting.

Just over a year ago, we – Allan Forsdick, David Mallon and I (Ash Cooke) completed a management buyout of Future Food. After over 6 years as the Senior Consultant team researching, writing and presenting our recommendations to clients, stakeholders, executive and company boards – we have realised our ambition to drive Future Food forward under our stewardship.

From a workload perspective, we have seen an increase in pre-eminent and high-profile projects being awarded to Future Food. Our team has grown in size and stature, and we have finished the year on a high, completing an immense range of diverse food & hospitality consultancies over our first 12 months of management.

Future Food has experienced its largest shift since the pandemic, with a further diversification of consulting services and growth in sectors. As industry advocates, we could not be more upbeat about the opportunity to work with clients and F&B operators. A return to normality in the first full year of post-Covid conditions has been uplifting; there is an overall positivity that is being felt across the industry.

Our team has experienced the best of food service and hospitality on offer as we travelled extensively this year, visiting clients in all capital cities, regional centres and rural towns across Australia with international travel to New Zealand, North America and Asia. We are loving getting back out to see our clients and a range of projects that we have diligently consulted on over the past 4 years.

One of the real privileges of being a Food & Hospitality Consultant is being exposed to such an assortment of remarkable projects around Australia and across the world. There is no substitute for working each and every day on projects and being on site and immersed into the project, experiencing its working parts firsthand.

Breaking new F&B ground in Auckland — the ongoing Commercial Bay waterfront project, in conjunction with Future Food. Image credit: Warren and Mahoney

A Snapshot of Future Food 2023 Projects

• To be able to reconnect with our amazing project ‘Commercial Bay’ in Auckland this year has been incredible, and we are so proud of the project outcome that Precinct Properties have achieved with this world-class precinct.

• Celebrating the success of our client, All Saint’s Estate, with Kin being awarded “New Regional Restaurant of the Year” in the Good Food Guide 2024 awards. It is enlivening to see restaurants in regional Victoria lifting the bar and delivering such a quality restaurant and cellar door experience for Wahgunyah and the broader region.

Future Food continue to provide guidance and work closely with the Queen Victoria Market vendors on F&B operational and design standards. Image credit: Queen Victoria Market

• Having our ‘Fresh Food & Specialty Produce’ Strategy endorsed by the Board of Queen Victoria Market, complementing the ‘Prepared Food’ Strategy that we successfully delivered for QVM back in 2020. The future of QVM is bright.

• Being appointed as Crown Resort Melbourne's Food & Hospitality Consultancy, collaborating on the redevelopment of food and hospitality in one of Australia’s most iconic entertainment precincts.

• The emergence of ‘Built To Rent’ developments and the significance they are placing on F&B as a key component of their value proposition and resident amenity. Working alongside reputable companies such as Gurner, Local Residential and Novus Property has been a privilege, and we look forward to many future developments in this space from 2024 onwards.

The new Sydney Fish Market – due to open in 2024. Image credit Sydney Fish Market

• Working alongside Sydney Fish Market and their key stakeholders on the New Sydney Fish Market, currently under construction in Blackwattle Bay; due to open in 2024.

• Our continued partnership with Royal Botanic Gardens Victoria as we further the new F&B strategy securing Curtis Stone Events for the Gardens on top of the Darling Group last year at The Terrace.

• Joining the project team with Grimshaw on the development of 12 Apostles Visitor Centre on the Great Ocean road and masterplaning the food and hospitality across the highly anticipated and high volume centre.

• Being selected to join forces with Duo Projects, Woods Bagot and Melbourne Racing Club for the ‘Caulfield Grandstand’ redevelopment as part of the overall Caulfield Racetrack regeneration project, further solidifying our position as leaders in food and hospitality planning within stadiums, grandstands and the sporting facility sector.

• Working in partnership with leading Architectural company ‘Architectus’ and their client on the redevelopment of Canberra Theatre and establishing a tiered food and hospitality strategy across the many levels and venues in the precinct.

• Leading a significant Hospitality & Catering EOI and Tender process on behalf of Museums Victoria to appoint a new partner to deliver catering, events and retail across Melbourne Museum, Science Works & Royal Exhibition Buildings.  

The Canberra Theatre redevelopment will be a nationally significant destination for arts companies, artists and audiences in the heart of the city’s Civic and Culture District. Image credit: Architecture AU

Over the last 6 years Future Food has been driven by a diversification strategy providing a wider range of services across all sectors of hospitality to become a truly full-service hospitality consultancy firm. Our depth of experience across a wide range of projects and services gives us unparalleled capability to deliver the best outcomes for our clients’ projects. 

The below infographic provides insight into the range and diversity of sectors that we have had the pleasure of consulting in for 2023. The size and flexibility of our team allows us to diversify and cross pollenate best practice across all of our consultancies.

Speaking more broadly, we have experienced a very enjoyable and prosperous year, building further proficiency in some niche areas and strengthening our reputation as food and hospitality market leaders in others.  We have forged new partnerships and relationships with a host of new clients, whilst concurrently servicing our existing clients across their range of projects.

Regardless of sector, Future Food continues to apply the principles to maximise the value food and hospitality can bring to our clients’ projects and seek to establish best practice outcomes on each and every project we consult on.

We thank you for your support in 2023 and look forward to working with you again in the new year.

The Devil is in The Detail – providing avenues for asset growth through F&B operational excellence

As a Food and Hospitality Consultant working with shopping centres, mixed-use developments and stand-alone businesses in Australia, I share with you the many operational challenges I see across different sectors.

It is critical that within broader centres and precincts, operators are encouraged to express their individual brand to the best of their ability, whilst maintaining exemplary professional food & hospitality standards. These achievements combined can underwrite an eclectic mix of well-presented venues which contribute to the distinct experiences that customers are seeking in a modern hospitality environment.

Future Food and the new Sydney Fish Market are working together to ensure an exceptional level of operating standards. Image credit: Alana Dimou Sydney Fish Market

Design is a major contributor in influencing a customer’s perception of a brand. In many cases a high degree of consideration (and expenditure) has been applied to the overall look, feel and materiality of large-scale centres. Much of this good work can be compromised when individual operators do not demonstrate the operational standards which they set out to achieve – whether it be a damaged menu board, inconsistent food display standards, inefficient service, poor cleanliness & hygiene standards or lack of uniform standards. It is essential that property managers and landlords have the tools to maintain a high standard of customer experience across all F&B operators.

Breaking new F&B ground in Auckland — the ongoing Commercial Bay waterfront project, in conjunction with Future Food. Image credit: Izzard Commercial Bay

Getting it right from the start

F&B consumers are likely to support or discriminate equally across hospitality venues depending on the experience – regardless of whether you are a start-up or are carrying an established brand. We understand there is a great deal of emotion, effort and expenditure that is invested into the design of bricks and mortar of the business. Often, many details are either missed or overlooked and at times. Operators simply do not have the experience to undertake such a large project.

Providing each lessee (and their interior designer/architect) with a centre-specific Design Considerations Manual with the critical design success factors that will conform to the broader strategy for the centre with specific requirements is essential for each individual tenancy. Many considerations can be addressed, such as:

• Floor & Wall Coverings

• Fixtures, Furniture and Installations

• Lighting

• Signage & Menu Boards

Future Food continue to provide guidance and work closely with the Queen Victoria Market vendors on F&B operational and design standards. Image credit: Queen Victoria Market

The opportunities to communicate these standards from the outset offer a path to successful relationships between all parties, whilst establishing clear design guidelines for each tenancy. The manual also provides a valuable resource to aid in the operator’s execution in building out their space and communicating its brand in the most effective way possible. In establishing industry-specific standards through a range of targeted recommendations, this manual also serves as a tangible reference point to support landlords and property managers through challenging circumstances which may arise throughout the operator’s tenure, should standards diminish.

Industry leaders understand the value of developed operator standards to ensure great customer experiences.

In addition, a Recommended Standards of Operation manual addresses a variety of hospitality specific principles and practices which can set a benchmark for the tenant. This tailored document will provide operational foundation for each operator, exemplifying the recommended standard for topics such as uniform and grooming, visual merchandising, food ticketing and safe food handling – and more. These recommendations underpin a visually-driven manual which assists both the operator and the landlord in achieving operational excellence.

When things don’t quite go to plan

In a highly competitive environment, food operators are required to deliver excellent professional standards and maximise revenue, day-in and day-out. The modern customer is discerning, knows what they want and typically does not have to travel far, or at all, with food delivery aggregators crowding the market. The hospitality industry, with low barriers to entry, is riddled with inexperience and can often present undesirable of food retail environments, in some cases, harmful.

Under-performing food businesses can develop a self-perpetuating spiral of diminishing operational standards that lead to lower revenue and profit. Once in the cycle, typically a significant ‘intervention’ is required to assist the F&B operator to reset. This is when an independent Operational Review and Recommendations Report is of the most benefit; and can provide the first building block for a positive change. The structured Operational Review has wide-ranging advantages – through its observations can instruct operators with easily applicable suggestions to maximise opportunities for the business. Equally, this report can often provide a tool for landlords looking to achieve more positive outcomes and improve the nature of the tenancy agreement. The basis of these reports addresses the operational shortcomings of each business through a range of in-person and research-driven observations, paired with a set of practical recommendations for the operator to consider.

The experience of going out to eat or drink is rarely just about the food for consumers. Future Food recently worked with Son In Law at Melbourne Central to review operations and successfully set benchmark standards for the venue. Image credit: Son In Law

As mixed-use developments and shopping centres continue to evolve toward an experientially-led offer, it is critical that operators and landlords are armed with the information required to produce the best possible outcomes for all stakeholders involved, both individually and collectively. Providing clear and relevant guidelines and feedback will establish a robust system which can be followed by staff to ensure a unified vision for years to come.