Selling to the foodservice channel

Being able to effectively communicate how your product can provide a solution for foodservice operators will require a certain amount of training for the sales person to be effective in detailing.

The foodservice market is back on track after being one of the industries hard-hit during the pandemic.  The comeback of major players and growth of new chains contributed to Philippine foodservice revenues an estimated $10.4 billion in 2022 and is expected to surge to $16.1 billion this year, based on Philippines Foodservice - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029), Mordor Intelligence Feb 2024.

These growth numbers provide a glimpse of how the foodservice segment remains to be a dynamic and fascinating channel. 

The vast array of food offerings and service differentiation allows suppliers to be creative in becoming partners of foodservice operators.  With the continuous growth of the industry, catering to these operators has become competitive as every supplier tries to call on the same people in the same food chains.  Identifying the right influencers and decision makers within the foodservice operation, establishing that contact and finally getting into a conversation with these people with their busy schedules will be the first hurdle.

The delivery of exactly what the foodservice customers need can begin with bucketing them by sub-segments — Hotels, Caterers, Canteens, Quick Service Restaurants, Full-Service Restaurants, Bakeshops, etc. However, the driver for each operator will be different, taking into consideration who the key decision makers are, the menu items they offer, what culinary trends may be applicable to them and ultimately, how your product will add value to their operation.  Being able to communicate how your product can provide a solution for them will require a certain amount of training for the sales person to be effective in detailing features and benefits.

While some basic sales fundamentals may be the same for retail and foodservice, selling and marketing to foodservice operators require a clear understanding of how each channel operates, who their target market is, their target food cost, their buying cycle and how they prepare their menu offerings.  This knowledge should be a primary focus when training each sales personnel in the route-to-market model employed by the supplier.

Since cost is a top-of-mind consideration, having a basic knowledge of food costing is a useful skill that allows for a productive conversation with the operator. Foodservice suppliers are expected to show a profit story to the operators not just by offering a lower priced product but how it can contribute to the efficiency in food preparation, thereby increasing the margins of their menu items.  These efficiencies and convenience may come in terms of product formulation, packaging, yield and overall product quality.  

Quality is a non-negotiable goal of a foodservice operator, and while a good product is the main selling point of a foodservice supplier, SERVICE is equally important and oftentimes, becomes a deal breaker. 

Before the pandemic, price and quality were the primary reasons for buying a product.  However, during and immediately after the pandemic, PRODUCT AVAILABILITY and CUSTOMER SERVICE were the top considerations of purchasers when choosing what product to buy and where to source it from, based on a study conducted by Acumen.  This pushed foodservice suppliers to review their route-to-market strategies and delivery services of their distributor partners to make sure operators can have easy access to their products when needed.

This is where foodservice distributors come into play. Delivery of goods to foodservice operators is mostly done thru distributor partners within a target area.  The ideal food service distributor can carry a vast number of products from food ingredients to kitchen essential items, offering a whole basket of goods to the foodservice operator. This helps strengthen their relationship with the operator as a “one-stop-shop” and becomes more efficient for both the operator and the distributor in delivering their orders.  Foodservice operators like the idea of ordering from one provider with a good track record in delivery services and price offerings.

One final point towards being a preferred foodservice supplier is being able to effectively communicate how your brand and product fits well into the account’s operation and how they get real value out of the partnership.  The key is to make sure that the operators are aware of how good your brand is and how they can increase usage across their menu.