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.