transitioning from retail to foodservice

[Tenny Avanesian]

hi, 

 

we are thinking about expanding our product sales channels from retail (already in stores nationally) to foodservice. how and where do we get started? i watched the webinars, but still wondering how we start. do we make cold calls to local restaurants and to the deli section of the chains that sell our product? 

 

more importantly, how do we price our products for food service? i hear that foodservice is less expensive for the foodmakers like us for various reasons (such as no need to offer freefills), but what is the generally accepted markup we should add to our production cost. if we are offering the products in standard retail size containers and not bulk/gallon size, should we be charging the same to foodservice as we do to retailers (when we sell directly) or distributors (when we sell through them to retailers)? please advise. 

 

thanks so much. our products are salad dressings. 

regards,

tenny

[Gary Gottfried]

Hi Tenny ... I am a big fan of looking at food service for many reasons including what you mentioned (lower cost of entry and marketing .. but there is more). I can give you some basic initial thoughts, but I probably would need to hear more on your current business status. Overall, two key areas to cover since you bring it up.

Packaging: it is likely that you will need to have larger pack size for food service and for a variety of reasons. Most establishments dress the salads or use alternative servers for dressings on the side. This is or may be for quality and/or portion control (not too little or too much dressing and know their cost per use). Also depending on your container, if glassware, that is a usually no-no (breakage). Depending on the market segment for your dressings, you may want to research what are the norms (size wise and container for those markets)

Pricing: Should have a good review of your current retail pricing and be sure you are margined where you want or need. Bulk should be more cost efficient for production ad marketing purposes, but nothing could be worse than making a decision based on relativity to retail without understanding your profitability as is. 

Happy to hop on  a quick call sometime if you'd like (440.463.4663). I'll probably not solve everything, but I can help you think some things through. Gary