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Jim Klass shares a PDF on rethinking the food service model to reduce friction.

The essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary process… At the heart of capitalism is creative destruction. …Situations emerge in the process of creative destruction in which many firms may have to perish that nevertheless would be able to live on vigorously and usefully if they could weather a particular storm.”

—Joseph A. Schumpeter

Overview

The Foodservice Industry has traditionally focused on ways to extract revenue without adding value: This model is ripe for replacement, especially as consumers and operators adopt digital

An operator centric approach needs to replace the current model. Digital collaboration between trading partners will unlock value for all. To do so requires removing friction in foodservice. It is time for Frictionless Foodservice.

Operator Friction

Multiple distributors order sites consuming time and energy to navigate, DSR hidden cost. No trends data on consumer preferences. Hidden cost/price drivers – pallet allowances, false pricing- inflating cost + programs. Manufacturers’ overstated prices due toContract Management rebates not available to the independent operators. No true cost to serve visibility so operator can maximize saving. False costs on exclusive branded products Sysco, USF etc.

GPO gatekeeper to what products are “eligible” and only passing on a portion of the “savings”

Lack of integrated digital platform to manage business.

Key points include:

• Distributor friction
• Manufacturer friction
• Current transactional operator Support

Access the full PDF, Frictionless Foodservice — a new model, on MarketIntelligenceSolutions.