Food, Service and Hospitality

Broker consolidation—like everything else in this life—is change and has numerous opportunities and challenges.

One of the biggest opportunities is the resources available with a large brokerage. Smaller manufacturers—like National Checking Company—get access to a broader group of customers and end-users and participation in food shows and sales meetings that on your own you couldn’t afford. And with more and more broadline distributors utilizing these brokers to be their sales force those benefits are substantial.

Larger brokerages also tend to be more data driven and technologically savvy, enhancing accountability to both the brokerage and vendors.

But with opportunities also come challenges.  Large brokerages tend to specialize in center of the plate and categories outside of that are foreign to them. More people and more manufacturers for a brokerage is good, but there is still only so much time in a day and resources tend get spread thin.

Broker hours are divided up and the majority goes to the largest food manufacturers who demand the time and pay by far the most commissions. Even in the nonfoods categories money buys time and the more you have the more you get.

The key for smaller manufacturers is effective management, messaging and marketing. Regardless of the size of the broker, manufacturers really have to effectively and efficiently manage the broker sales team.  If you rely on them to do the work for you, you will get pushed aside or completely lost.

Message reinforcement and adding value for all stakeholders is central in NCCO’s mission. Even as new challenges emerge with “Super Brokers” the opportunities presented—both with the brokerages and in the marketplace—are every bit as intriguing.

I was talking with one of sales managers the other day who mentioned that he thinks the emergence of Super Brokers has created an opportunity in the market for smaller startup brokerages with the ability to specialize, especially in the nonfoods category.

What are your thoughts on the evolution of the broker dynamic and where do you think its heading?

Spring in Minnesota always seems to take its sweet time. Today—March 29, 2013—the temperature is suppose to reach a balmy 53 degrees, which is hard earned as we’ve barely gotten above 40 since November.

But even in Minnesota, April 1^st is Major League Baseball’s Opening Day. I was reminded of that when I spent a day away my office window and worked the NCCO booth at a food service distributor’s recent food show, which was hosted at Target Field.

April 1^st isn’t just Opening Day for the Twins, it’s also opening day for NCCO, as it marks the beginning of our fiscal year. On Opening Day teams really fall into two buckets: some teams are looking to build on the past season’s success and some are looking for a fresh start after a disappointing previous year.

Unfortunately for the past few seasons the Twins have been in the latter of those two categories, but fortunately—and more importantly—National Checking Company is in the former group. NCCO achieved another successful fiscal year in 2013 and it is because of the hard work of myriad people.

I wanted to take this time to say thank you to our partners and employees who work so diligently to help achieve sustained success. I also want to thank our many customers who value our products and services and continue to rely on them.

NCCO is committed to providing the highest quality products and services possible. We pride ourselves on those quality products and our ability to meet whatever fulfillment and shipping demands we’re presented with.

As we start another fiscal year, I can guarantee that NCCO will continue to push forward, providing quality products and continually working to help meet customers needs and provide new solutions.

I hope I’m wrong, but I’m skeptical about the prospects of this year’s Twins season. But because of the hard work and continued dedication of NCCO’s employees and partners, I can say that I am excited about the prospects of this new fiscal year, and the future of NCCO.

The second month of 2013 is about to close, so it seems appropriate to close our 2013 Restaurant Industry Preview blog series as well. The first two posts in the series outlined what customers value and affects their decisions, and the second post discussed the trend of off-premise dining as an opportunity for all restaurants.

To wrap up the series we’re going to offer up a few trends that we think will play a significant role in the restaurant industry in 2013, but we’ll also throw out a couple that we don’t think will have a significant impact. Please note that for the latter trends we’re not saying that some of those trends won’t have an impact in 2013, we’re just saying the impact won’t be newsworthy. So let’s skip the big introduction and get right into the list.

Impactful Factor #1: Generational Marketing

In Nation’s Restaurant News’ Jan. 14 “2013 Forecast Industry & Trends” issue, the NRN asserts that baby boomers have been less affected by the adverse job market than millennials and also notes that younger people have proven to be less receptive to traditional deal-oriented marketing.

One great example (alluded to in the NRN’s article) is that younger tech savvy consumers respond less to regular deals than they do mobile driven loyalty programs for example; whereas an older generation is more responsive to traditional deals and might be apprehensive to participate in a loyalty program that utilizes mobile technology. Restaurants that recognize that different age groups value different opportunities will maximize the return on their marketing dollar investment.

Non-Impactful Factor #1: Locally Sourced Ingredients

Ok, let me say first that I love locally sourced ingredients as much as anyone. But (as mentioned before) this list is focused more on impact in 2013 than it is on just the trends of 2013. According to the National Restaurant Association’s “What’s Hot” survey, 3 of the top 7 menu trends of 2013 have to do with local sourcing, just like last year, and the year before, and the ye… You get the idea.

Local sourcing is great for the industry and the world, oftentimes promotes more healthy choices and saying it will have a significant impact in 2013 is like saying the sun will have a significant impact on crop production—it’s true but not exactly meaningful.

Impactful Factor #2: Food is Part of a Successful Plan

According to a recent Technomic survey, nearly three-quarters of respondents said dining out with friends helps to create memorable restaurant experiences. Data from the NRA’s National Household survey mirrors Technomic’s findings—93% of adults said they enjoy going to restaurants and 79% said it’s an opportunity to socialize and better use of leisure time than cooking and cleaning up.

What this—and myriad other data points—adds up to is that consumers desire good food, but along with that they are looking to experience and memorable, enjoyable experience with friends and family. The 2013 economy will be challenging, as has been discussed, but restaurants that focus on creating good food, enjoyable experiences with great service and offer a unique, friendly atmosphere will have an edge.

Non-Impactful Factor #2: Tablet/Mobile Payments and Order Processing

Tablets and mobile technology is undoubtedly changing the dining experience. While marketing opportunities are limitless within the tablet/mobile arena, payment processing will continue to lag behind. The reasons are twofold.

According to the NRA, a majority of fullservice restaurants will devote more resources to customer facing technology such as iPads/tablets, Wi-Fi, etc., while less than a third plan on bolstering point-of-sale or back-of-the-house technology.

Also, as previously mentioned, a very large amount of restaurant consumers are the older generation. This generation doesn’t represent much of an opportunity for mobile payment innovations. In the coming years mobile payment solutions will absolutely change the landscape of restaurant payments. But considering already razor thin margins for restaurants, demand for such systems will need to grow (which it will) and it will have to become more cost effective (which it also will), the change is happening, but it’s happening slowly.

What do you think are the factors that will shape (or won’t shape) the industry in 2013?

For the restaurant industry, each new year brings myriad statistics about consumer trends, employment outlooks, commodity prices and hundreds of other data points. Many a restaurateur has begun the process of sifting through this ocean of information only to end up overwhelmed and rocking back and forth in the fetal position in the far back corner of the freezer next to the properly labeled (shameless DateIt™ food safety products plug) dressings and vegetables.

I know how challenging it can be to synthesize all the data and turn it into meaningful, actionable information. With that in mind, this year we’re going to focus a few successive blog posts about 2013 restaurant industry preview data. But rather than regurgitate all the numbers that can be found from all sorts of outlets, we’re going to isolate a few common themes and trends and identify why they matter to restaurants or other industry professionals.

This week we’re going to focus on customers and customer loyalty in 2013. Customer loyalty has always been the lifeblood of the restaurant industry and it appears to be becoming an even more integral component of every restaurant’s bottom line.

According to the National Restaurant Association’s 2013 Restaurant Industry Forecast, repeat customers make up approximately two-thirds of a restaurant’s sales across nearly all segments (the exception being fine-dining, where repeat customers represent half of total sales).

But while restaurant operators report that repeat business made up a larger amount of sales in 2012 than it did in 2011, operators also said customer loyalty is more difficult to maintain than it was a few years ago.

Interesting data, right? Except, what does it all mean?

Well one thing it certainly means is that competition among restaurants is as high as it has ever been, and to emerge as a winner you must capitalize on your advocates. Repeat customers’ importance to individual restaurants is twofold: obviously they’re important because they make up the majority of sales for any given restaurant; but repeat customers also tend to be satisfied customers who are your restaurant’s biggest advocates.

While technology continues to change the face of every industry, it’s not really changing why people choose restaurants. Across all segments of people, the NRA’s forecast reports that far and away the number one factor for people choosing a restaurant is recommendations from family friends.

Interestingly the overwhelming second largest factor was “ease of parking at the restaurant,” but I’m not sure there is a larger takeaway with that one.

The final data point that must be mentioned from the NRA’s Industry Preview in regards to customers is the number one reason customers cite for choosing a restaurant: good service. Across all age groups and both men and women list good service as the number one reason for choosing restaurants.

I know, more data. But let’s add it up.

• Repeat customers make up the largest proportion of your business and are your biggest advocates.
• People choose restaurants most often on recommendations from family and friends.
• The most important thing to customers across all segments is quality service.

This year, as you’re focusing on introducing unique and interesting menu items and capitalizing on increased off-premise opportunities (blog foreshadowing); refocus efforts on increasing your service quality. Write down orders to ensure accurate processing and suggest different and interesting menu items (hey, we can help with that).

Providing a higher level of service than your competitors is the key to standing out in the industry, creating repeat customers and generating new customers.

Thanks,

Ben

You probably don’t think about it too often, but most every time you get a receipt or sign a credit card bill, you are using thermal receipt paper. And the thermal paper world has been abuzz this month.

Koehler Papers, a German-based manufacturer, announced that, beginning in April, it would no longer be selling thermal paper products in North America. This action was the result of an ongoing dispute with the US Department of Commerce (DOC), which recently levied a 75% tariff on Koehler’s thermal products.  Since Koehler’s share of this market was approximately 40%, its withdrawal will dramatically impact the availability and price of those thermal receipts.

Several converters, who relied heavily on Koehler, will be scrambling to find alternative sources in order to continue to produce thermal rolls.  Fortunately, NCCO works with a number of vendors and has obtained commitments from these partners to guarantee that our supply will not be disrupted.  We will continue to get BPA-free, high-quality, thermal paper, and be able to meet the needs of our customers.  Because of the decreased supply and increased demand for the available tonnage, it is likely that there will be pricing pressure on the raw material, and we will address that as the impact becomes clearer.

Although Koehler’s announcement has created uncertainty for other suppliers of thermal products, I am confident that NCCO will be able to continue to provide you the support you have come to expect as we work together to grow your business. We are committed to making sure you will get the products you need, when you need them at prices that will allow you to be competitive in this evolving and changing world.

Should you have any questions or comments, feel free to reply to this blog or contact your regional representative or me.