08 Sep Are Major Food Distributors Failing Small Restaurants?
The relationship between SMB restaurants and major food distributors has always been shaky. Now it seems that big distributors are squeezing their smaller clients at the worst possible time.
This recent example really brings the point home. Some restaurants working with Sysco are reporting outright cancellations via cold text messages, leaving them scrambling for produce and supplies.
No doubt, everyone across the food industry is weathering unprecedented hard times. But even during a crisis, there’s always a choice and it seems that major broadliners have made theirs.
The recent disruptions to the food supply chain have exposed just how deep the interdependencies between us are. Finding an honest and reliable distributor to supply your restaurant is now more important than ever.
Disruptions to Food Supply
According to some reports, major food distributors Sysco has stopped supplying small and remote restaurants with less than a day’s notice. They are basically ‘firing’ their small mom-and-pop clients. This is happening across the country, including in San Francisco and the Bay Area.
Weeks ago, deliveries of restaurant supplies started coming in late, wrong (e.g. whole milk labelled as yoghurt) or incomplete.
This month, Sysco, the largest broadline supplier in the US, notified many clients that their deliveries have been stopped until further notice, bringing many business owners to tears and sending them to voice their concerns on social media. Restaurant owners had to rush to expensive local stores buying at prices they can’t sustain.
Restaurants were hemorrhaging money, paying back-of-house employees to stand around with no food to prepare. And it’s not just food, even packaging for to-go items are scarce. In the midst of a new Covid-19 delta-wave, having their so-called partner dropping the ball like that makes their situation even worse.
Food Demand Is Surging
As more Americans are getting used to eating out again, restaurants are experiencing a surge of clients, higher than 2019 numbers some say.
It’s not only small restaurants that are experiencing this surge. Major franchises feel it too and they are going to war over every wing. If you haven’t heard of the “Wing Wars” – Google it. And it is said that soy and canola oil will be next.
The chicken shortage is mainly due to a harsh winter wiping out flocks. This is exacerbated by the surge in demand as major franchises celebrate national chicken wing day and struggle to get every breast for their new sandwiches. Needless to say, franchises hold major broadliners by the french-fries and have a stronger buying power than you.
This is hitting all parts of the supply chain. Manufacturers are experiencing raw material lag at their factories as well as high demand.
The Problem with Major Food Distributors
It all boils down to the fact that the relationship between your restaurant and a huge supplier is neither balanced nor fair.
These are publicly traded companies, where profit is king. Since the sharp drop in share prices of March 2020, they have become ruthless in order to get shares back up and provide value for their shareholders.
One way they do that is to cut off the small businesses rather than lose the national franchise contracts they have. It makes sense on paper, but ethically it is outrageous. They have many customers and can afford to treat the small ones badly or drop them altogether.
What’s more, customer service is lacking, to say the least. When a delivery is cancelled, late or incomplete, good luck getting someone on the phone. Drivers are worked to the bone and usually underpaid, making their interaction with your restaurant cold and disrespectful. It’s no surprise that some customers value Sysco’s service negatively.
A good evidence of this is Net Promoter Score (NPS). This is a widely used market research metric that indicates how likely it is that customers would recommend a company, product, or a service to a friend or colleague. Sysco Net Promoter Score is -7. To compare, Cheetah’s NPS is 28.
Remember: although you may have spent a lot of money with those suppliers over the years, it may count as nothing when push comes to shove, as many restaurateurs felt these past weeks.
What Alternatives Do Restaurants Have?
The recent reports of Sysco’s behavior are symptomatic of a broader phenomena. For years, small restaurants have had to deal with faceless big corporations that often do more harm than good. Both to the business and to the community.
It’s time for small food operators to demand more respect. Switching to an honest, reliable local supplier that practices ethical labor is not only good for business. It’s also sending the message that being let down is no longer acceptable.
In the Bay Area, Cheetah serves hundreds of its clients and we’re ready to support you too. Elsewhere, many restaurant owners have pivoted their business to become specialty suppliers to fill this gap.
Switching to an Honest Supplier
Cheetah is a wholesale supplier that specializes in SMB restaurants – the same ones that major broadliners are leaving behind. We founded the company on the values of reliability, honesty and ethical labor. Unlike corporate broadliners, we haven’t lost touch of what our clients really need.
Our customers see us as the honest distributor. Here’s why:
- With prices fully displayed on our app and no hidden costs added to purchases, we’re more transparent than water.
- We’re here for you at all times, with easy to reach customer support.
- We invest in building relationships with our customers so that we can grow together, in the long term.
- We’ve got your back with deliveries 6 days a week, and even urgent same day deliveries. Orders have a midnight cutoff and whatever you order by then, you will get.
- We love your business, big or small. We value every customer like a member of the Cheetah family, regardless of order size.
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