Foodservice Advantage helps restaurateurs get smarter

The Grandview Tavern in Fort Mitchell is bustling and turning a profit these days, but running the 5-year-old restaurant has been among the most difficult tasks of Colleen Haws’ life.

The first-time restaurant owner passed up a salary for the first two and a half years. The recession in 2008 forced additional thriftiness and staffing changes. And today, she’s facing ever-rising food costs.

But the unexpected $103,000 in annual cost savings Haws will realize for the first time this year should make things easier.

In the last six months, a new company called Foodservice Advantage has helped local caterers, country clubs and restaurants like Grandview save more than $1.5 million on food costs, averaging a discount of 8.8 percent. Father and son Mike and Travis Wiedower, and partner Joe Condit are combining deep experience in the food distribution business with online tools to teach food businesses how to negotiate with suppliers for fairer prices and make their operations more efficient.

Benefactors include caterers Elegant Fare, Vonderhaar’s and McHale’s, Hyde Park Country Club and Receptions Conference Centers, Trio and Embers restaurants, the City Barbeque chain, restaurant/bar owner Four Entertainment Group and Cunningham Restaurant Group, which operates 11 restaurants including the new Moerlein Lager House.

Foodservice Advantage relies on Mike Wiedower’s 26 years working for major food suppliers. He spent 11 years as a local executive with Sysco and four as president of a division of Performance Food Group in Illinois. When he left the business in 2009, he wanted to use his knowledge to help companies on the other side of the table.

“Yesterday, my responsibility was for the profit and loss (P&L) of millions of shareholders of public companies,” he says. “Today it’s all about the independent restaurant and its survival.”

Haws was one of those opportunities. She’d ignored Condit’s calls for weeks in 2011. His proposition – to save her 3 to 5 percent on food purchases – seemed too good to be true.

Her chef had great relationships with food distributors, she thought. Grandview had to be getting the best deals out there.

But Condit wouldn’t stop calling, and Haws finally listened. Last November, she passed Foodservice her invoices from three local distributors. When she learned she could save up to 50 percent on items including provolone cheese, heavy cream, glassware and latex gloves, she was shocked.

“I was sick,” Haws says. “I couldn’t believe that the suppliers I was working with wouldn’t do more, knowing when you’re struggling, when gas was $4 a gallon and the economy was so bad.”

In February, the restaurant asked four local food distributors to bid for the bulk of Grandview’s business. One of those firms now supplies 80 percent of her food stock, items each of the same quality as before. The restaurant has made some adjustments to account for fewer weekly deliveries, but the savings are worth the trouble.

Haws will send her extra cash directly to the bottom line, helping to pay off debt and save for future needs.

Wiedower came up with the idea in 2010 and asked Travis, a recent Miami University entrepreneurship graduate, to write a business plan. In search of a partner and company president, Mike Wiedower contacted Condit after reading about the man’s successful business ventures. Several years prior, Condit had built and sold a website matching college students with housing. Among several businesses he owns today is CMG Booking, which represents and books hundreds of Catholic speakers and musicians around the nation. The younger Wiedower and Condit planned to expand the mission of Foodservice Advantage to include technologies like webinars and online education, software platforms that simplify restaurant operations and social media tools.

Two fee structures reflect the company’s dual mission. Clients that hire Foodservice Advantage for one-on-one consulting pay approximately 25 percent of the first year’s savings, and also receive access to online scheduling and ordering platforms; digital menu, website and newsletter design; an updated fresh commodity market report; and online courses offered by the elder Wiedower on how to better negotiate with vendors.

The company expects to grow nationally with a more affordable online-only membership worth $699 a year.

“We’re trying to take the second largest industry in the nation onto the Internet,” Condit says.

The partners feel their work is more important than ever. Restaurateurs responding to an annual National Restaurant Association survey cited rising food costs as a top concern for 2012.

About a third of a restaurant’s sales go toward food and beverage purchases, the report says. And wholesale food prices grew more in 2011 than any year of the previous three decades. The U.S. Department of Agriculture projects another 2 to 3 percent food inflation this year.

But there’s also a tremendous opportunity. Restaurant industry sales are expected to hit $632 billion in 2012, a 3.5 percent annual increase. And restaurants are looking to technology more than ever before, the report says.

With some early successes and feedback from members, Foodservice has begun to market itself. A series of testimonial videos from local restaurateurs and catering executives have been posted to YouTube and are beginning to generate new leads. About 200 memberships are pending, Condit says.

Soon the men will launch a national media campaign with ads in restaurant news publications. They plan to forge partnerships with restaurant associations in the nation’s largest 50 cities. They expect to meet with the Ohio Restaurant Association in June.

The men have received mixed reviews from local distributors. Three firms contacted for this story did not respond to requests for comment.

The partners say some distributors have lost business as a result of the competitive bid process. Others won more business from existing clients, or new business from clients they hadn’t supplied before. Distributors sign three-year deals and agree to twice annual audits so restaurateurs like Haws can ensure pricing is fair and accurate.

“Our process is all about being non-emotional,” Mike Wiedower says. “Distributors want them to make an emotional decision. We don’t do that. We help restaurants understand a business relationship.”