Store Economics 101

It is the equipment package that supports the concept and helps dictate a store’s economic performance.

Foodservice Equipment & Supplies - September 2005

By Eddie Cerino
Executive Chef and Co-Founder
San Francisco Oven, Cleveland

The distribution model employed by the North American foodservice industry has, for the most part, served us well over the years. Each player has a role that continues to add value to the overall process. That model serves the foodservice industry at large but it does not define it. In order for the existing distribution model to remain viable well into the future, it needs to continue to evolve to help operators meet customer needs.

One of the easiest ways of doing so is by having reps from all segments of the industry take the time to learn more about the exact way we apply their products. Hotels use equipment differently than restaurants. That is because our kitchens need to be, in a sense, all things to all people. We have to do a variety of things from preparing meals for our restaurants to banquets to room service and much more. In contrast, restaurants focus on their specific menu and the style of cooking they call their own.

Many reps need to look at the bigger picture more often. They get focused on the sale of a particular product, which serves their company well. How many reps have asked me if this is the right application for a particular product? I can only think of a handful.

Reps from all segments of the industry need to know not only how the product works, but also the best way to use it. Some may be excited to sell a combi oven, which is a robust product with lots of uses. But this is an expensive piece of equipment and if an operator will not cash in on all of its features it may not be the wisest investment for them.

In keeping with that, it is frustrating for operators when it becomes obvious that we know more about the product then the rep does. It happens a minority of the time, but I am afraid this is a growing trend.

Of course, some of this is the natural byproduct of factories continuing to employ fewer and fewer reps. In turn, this lowers the product knowledge you see in the field. Rep groups as we know them today have too many product lines and it is impossible to know everything about every product they have.

A Hilton Hotel can get labeled as a “house account.” That’s good and bad. We get to deal with a factory person, which is good. But local reps get very little commission, which occasionally lessens their motivation when it comes to field service.

Reps need to love the after-sale. Sometimes it is not good enough just to refer us to the local service agent. Sometimes the reps have a rapport with the service agents and other times they don’t. Rep groups are not geared for after-sale efforts.

This is one reason why I have developed a working relationship with people at the factories. That way when problems arise, I can call them to discuss directly and I get great results. If you deal with your rep only, you are swimming upstream. But if you have that relationship with individuals at the factory, you are most likely swimming downstream and that can make things easier.

One way for reps to add value is to be better suited to train people in the field on their product. They do well when an operation opens but few come back a month later to see how things are going. That handholding would go a long way toward building a rapport with their customers.

In those instances where our relationship with the rep is solid, the rep group regularly interacts with some of the on-site people. And, occasionally, they have even had us test equipment for them. We welcome that spirit of partnership and the opportunity to share our thoughts on what product innovations would add value to our operation. But it seems more and more of the new product developments are aimed at chains. In the case of Hilton, though, we literally operate hundreds and hundreds of kitchens and have not seen anything all that innovative developed for our use, with the exception of a combi oven, in a long time.

In general, though, the industry’s level of professionalism is on the rise. And over the past 10 years we have seen a better quality of person come along. But we still need to continue to evolve to meet the changing needs of our ultimate customers: the consumers.