How to Save on Food Costs
Learn how to save on food costs and how businesses can save money while preserving product quality and reducing administrative burdens.
By Mackenzie Oakley | February 16, 2023
What if you could save money on food purchasing while increasing operational efficiency, all without sacrificing quality or adding to administrative burdens? By joining a foodservice GPO like Una, you’re gaining a partner dedicated to saving you money and time for no added cost or commitment.
Across foodservice channels, GPOs similar to Una use collective buying power to obtain significant discounts from vendors while helping to increase your company’s productivity in procurement processes. GPOs have developed some innovative contracting practices that offer participating organizations considerable savings and volume discounts.
How to save on food costs
Amidst ongoing inflation and the continued rise of food costs, there are several ways businesses can lower food spend without sacrificing the quality of product served to their end customers, including:
- Leveraging aggregate spend
- Accessing the right food contracts
- Product optimization
- Ingredient substitutions
- Effective inventory management
- Comparing prices
- Sourcing locally
Businesses that have food-related spend can combat rising prices and ongoing inflation by implementing a variety of strategies that help lower costs without sacrificing product quality.
Leverage aggregate spend
Foodservice operators can often secure lower prices from suppliers when leveraging the collective buying power of a group purchasing organization.
GPOs negotiate favorable contract terms and prices on behalf of their membership. Businesses benefit from lower prices and alleviated administrative burdens that would normally fall to the procurement team since contracts are already set in place.
Access the right food contracts
Utilizing a foodservice GPO also helps ensure your business is purchasing from suppliers who understand the food category and contracts that have the products you need. Una’s team of food category experts has over 25 years of experience developing relationships with food distributors and addresses all areas of concern when negotiating contract terms with suppliers.
This means that each contract offered through Una’s food cost reduction programs takes guesswork out of pricing models, trucking, and food distribution, and gives our members the peace of mind that their food programs are operating as efficiently as possible.
Proper menu design and product selection can help businesses reduce food waste and minimize costs. This might involve identifying high-margin items, reducing portion sizes, or finding new ways to incorporate ingredients into multiple dishes.
By substituting less expensive ingredients for more costly ones, businesses can reduce their overall food costs. Use lower-priced cuts of meat, substitute seasonal produce, or think about using dried herbs instead of fresh as a means to cut costs.
Una members have access to quarterly reporting that identifies potential savings opportunities based on what food items they’ve been purchasing. Tailored to your region, our reports pinpoint in-stock items and alternatives and show how much money could be saved by switching brand names or ensuring you’re only purchasing on-contract items.
Effective inventory management
Regularly monitoring inventory levels, tracking spoilage and waste, and properly storing food to avoid waste in the first place can help businesses minimize food costs. Inventory tracking entails knowing which supplies you use and when, what products go in and out of your kitchen, what’s leftover at the end of any given day.
While there is no shame in taking inventory the manual way, technology has made it easier than ever to simplify the process and reduce errors (and costs!) thanks to a variety of inventory management software products available today.
Regularly comparing prices from different suppliers can help businesses identify opportunities to save on food costs. This might include shopping for ingredients at local farmers markets, seeking out sale items, or taking advantage of volume discounts.
As part of the discovery process upon joining Una, a market basket can be done to compare your current spend to Una’s contracted pricing. We have the ability to cross reference multiple national distributors and pre-negotiated contracts to find the best solutions for your organization. This helps visualize the savings that are possible via the group purchasing model and allows you to make informed decisions regarding food costs and product selection.
Typically, a food market basket will compare 25 – 50 line items depending on a member’s typical food order. Under special circumstances, a market basket may be able to contain 100+ line items. For more details, check out this sample cost analysis.
Sourcing food from local suppliers can help businesses reduce transportation costs, alleviate supply chain delays, promotes sustainability, provides the opportunity to develop meaningful relationships with local suppliers all while supporting the local economy. Additionally, locally sourced ingredients are often fresher and of higher quality.Looking to reduce spend and save money on food costs? Contact us to learn more about Una’s foodservice GPO model and how we can help you save money, time, and effort.