Despite news articles reporting that inflation overall is reducing and the government is confident about achieving targets to halve inflation by the end of 2023 from its high of 10.7%, food costs still appear to be as high as ever, with very few opportunities to take advantage of falling prices.
Leading catering magazine, The Grocer reported that overall food and drink prices in September fell for the first time in two years, but food inflation still remains stubbornly high at 12.2%. Higher energy and fuel prices, heatwaves and other unfavourable weather conditions, crop shortages, effects from the Ukraine War and ongoing staff resourcing shortages following Brexit , including changes in policies and legislation are all contributors.
So with all these price pressures going on around us, is it feasible to be able to make cost savings?
Similar to our own food shopping, whilst many cost aspects are out of our control, spending some time to analyse food purchases could still identify some quick wins, and working with your supplier can also help greatly.
With 2 very popular Food Frameworks and a long list of food framework customers within our care, we share tips from our customers and suppliers who are doing their best to reduce food costs and take a bit of pressure off stretched budgets during these challenging times.
Work with your suppliers
A full supplier review can help immensely, or at least provide assurance that costs have been fully reviewed.
Ask your current supplier/suppliers to provide a report of your food purchases over the last 12 months, and ask them to sort in line value, highest to lowest. Use the 80/20 principle, that the top 20% of items probably account for the lion’s share of your total spend and concentrate more time looking at these.
Consider benchmarking these prices to check competitiveness and spot any obvious anomalies. Sometimes historic pricing errors can carry forwards for years without being noticed.
Ask your supplier what alternatives are available. Most suppliers carry a wide range of premium branded and food service branded lines. Whilst premium brands have a great reputation, there are some great own label products out there also, so it is always worth having a conversation. Any supplier will be more than happy to suggest a few suitable alternatives along with samples to test for taste, appearance, and yield, which may support the reduction in cost price per meal. Many more products are being manufactured which are compliant with food standards and suitable for all types of dietary requirements which will help consolidate products into one, such as gravy, custard, sauces, seasonings, marinades and mixes. Check out supplier’s websites for available alternatives or engage with your current supplier.
Subscribe to your supplier’s newsletters and industry professional organisations such as LACA The school food people, NACC (National Association of Care Catering), HCA ( Hospital Catering Association) and PSC (Public Sector Catering). All these newsletters and publications including their websites are promoting how to effectively reduce and save costs, reduce waste and create efficiencies within your business and service without compromising on quality and sustainability.
Whilst reading newsletters from suppliers, if you notice that certain commodities are reducing in price, consider which of your items contain these commodities and ask confidently whether there is a possibility of a price reduction on these lines. Even a tiny reduction can add up over time.
Where demand is high, carry out some research, whether there any larger pack sizes or volume discounts available from the supplier which you may be able to take advantage of but be careful not to create additional waste if spoilage occurs , which would be false economy.
Consider food waste:
- Are employees following recipes correctly and achieving the correct yield/portion size. Review and retrain where appropriate to reduce wastage.
- Check preparation waste such as peelings from potatoes, carrots and other root veg. Can these be used to prepare vegetable chips, crisps or made into a home-made soup?
- Question if you really need to peel e.g. boiled, crushed and roast potatoes such as Hasselback, roast and crushed potatoes look great with skin on. Chantenay carrots and new potatoes don’t require peeling, just wash.
- Parsnips and Carrots look great roasted with skins on which also retains more fibre, vitamins and minerals.
- Leftover carrots, courgettes, beetroot, butternut squash and pumpkins, can be grated or finely chopped and added to cakes, muffins and tray bakes to create a moister texture, besides adding additional nutrients.
- Rotate stock and don’t over stock store cupboards, utilising technology where possible to ensure effective stock control to prevent spoilage of ingredients.
- Adopt meal ordering systems where possible, again using technology to create efficiencies.
- Catering for small amounts or numbers , can you swap to a smaller size or ask your supplier to split cases? Are these on a regular order cycle which can be reviewed?
Our suppliers tell us that overall, the best way to save money is to consolidate products and use fewer suppliers, providing economy of scale. Reducing the number of delivery days will also help to reduce food miles. Can you store more in the freezer? Do you require ambient products every week? Or is it possible to move to a fortnightly delivery? This helps suppliers to offer lower pricing, as the delivery charges and delivery overheads, which may be built into the item price, may then be reduced.
Have an open conversation with your supplier and ask them what impact there would be on price if you ordered more from them or if you reduced delivery dates? If you don’t ask you won’t get! Or can they make suggestions how you can make savings and reduce food costs without compromising on quality, sustainability, or social value.
Using a framework
Finally, if you are using a framework to buy your food, then consider the supplier management fee charged to the supplier from the framework provider. Switching frameworks at the end of your contract to a framework with a lower management fee, could encourage your supplier to pass on any savings to your business, that they can make from a reduction in management fees. It’s worth a try!
If you would like to chat to YPO about our Food Deal frameworks, and how we may be able to save you procurement time, some money from your food spends and create efficiencies please get in touch.