Restaurant and Institutional Sales

Written July, 2004					File C5-38

Mary Holz-Clause, Co-Director, Ag Marketing Resource Center, Iowa State University, 515-294-0648, mclause@iastate.edu

When combined with other direct sales methods, selling directly to restaurants often works well. The “rules” of direct selling that apply to restaurants are much the same as those for other direct channels.

Jim Goodman and Brian Boehm, both from Wisconsin, have successfully sold products to restaurants. They offer the following pointers and questions for consideration:

Know what type of products you will sell.
Do you have enough volume at a competitive price?
Are you featuring a premium product, such as sustainable, organic or product with other unique attributes?
Will selling to restaurants fit into your marketing plans? Generally, restaurants want only the best cuts. It will be harder to move lesser cuts fast enough to supply the restaurants’ needs. It may also not leave enough high-end cuts, such as steaks and chops, for your other customers.
What is your sales volume?
Is the restaurant’s menu flexible enough to take other products? This could be a place to move volume depending on the type of restaurant (i.e., burgers or white tablecloth).
Must all the meat be delivered fresh, or will the restaurant take frozen product? This will impact how many deliveries you must make.

In establishing a market with restaurants, Boehm and Goodman say you have to displace someone who is already selling. Furthermore, many restaurants buy all their food products from one source, such as Sysco or Marriott, and do not want multiple suppliers calling on them. Have patience. It can take up to seven years to establish good relationships. Ways to establish clients include:

door-to-door calling on restaurants;
referrals from other chefs;
linking with chef organizations and attending their meetings and trade shows; and
knowing what types of foods restaurants serve and seeing if you can be a supplier for them.

Communications with the owners, chefs and staff are imperative to have a positive supplier/buyer relationship. Boehm and Goodman recommend that you ask the restaurant when it is a good time to take orders and deliveries. Establish your communications so the following procedural issues are addressed:

Does the restaurant call you, or do you call someone there?
Is there a regular delivery schedule or is it on an as available/demand?
Determine how problems and complaints can be resolved.
Misunderstandings will occur; resolve them quickly.
How are payments made? What is your credit policy?
Go to staff dinners.
Invite the staff to your farm.
Insist on feedback, good and bad.

Boehm and Goodman say these problems may occur when selling to restaurants:

The restaurant business is very fluid. Success rate is rather low.
Staff changes often.
Menus change with customer demand, the season, the chefs and the availability of other items; thus demand for your product will change.
Eventually, some of your product will be below the usual high standards. How will you deal with it? How will the restaurant deal with it?
Can your processor follow your instructions?
Can you keep all your customers happy?

The following resources assisted with this section and may be of further help to you:

Brian, Boehm, Oregon, WI (608) 835-0264.
Jim Goodman, Northwood Farms, Wonemoc, WI; (608) 489-2291. r.j.goodman@mwt.net