How to partner and succeed with your GPO and distributor
You’re not imagining it. Inflation is changing business.
If your operation has felt the squeeze of higher costs and slower supply chains, you’re not alone. Data substantiate the widespread impact of inflation across countries and industries:
Increases in the consumer price index
Up 8.5% in the US (a 40-year high)
Increases in global shipping rates
Up 540 index points for dry container aquatic shipping
Up 65 index points for truckload line haul shipping spending
Increases in wage growth
Up 2.1x in the US vs. pre-Covid
How inflation is impacting hospitality-driven businesses
For industries focusing on customer experience via food and beverages, inflation presents an ongoing challenge on three distinct fronts.
The supply chain is strained.
With pent up, increased demand as well as geopolitical conflict, traditional routes for attaining materials and goods have been significantly disrupted — if not broken outright.
For instance, flour indices are up 23.3% due to drought in the US Southern Plains, as well as ongoing conflict in Ukraine.1 Poultry indices are up 15.9%, primarily due to the Highly Pathogenic Avian Influenza (HPAI).1 And even when supplies are more readily available, an estimated shortage of over 80,000 truck drivers2 makes it difficult for businesses to keep up with demand.
1. Sources: Arrowstream, Bureau of Labor Standards (BLS), PPI, CPI Food Away from Home, Wall Street Journal
2. American Trucking Associations, Inc., Driver Shortage Update 2021
The labor market is more competitive.
Beyond labor shortages in areas like food processing and packaging driving costs higher, demand is growing as operators backfill more roles. For workers, that means competitive wages and benefits are table stakes as they consider more choices and more flexible work situations.
In a Technomic survey of 500 operators, 38% said while their labor situations have improved, they’re still having challenges filling some positions.
Source: Technomic, Ignite Special Analysis: Inflation, September 2022
Customers are more selective in how they spend.
As inflation rises, customers’ purchasing power declines — making them more likely to weigh menu options and value when deciding where to eat.
In a Technomic survey of 1,000 customers, 86% said they’d noticed higher menu prices, and 34% are seeking out more specials and deals. And 45% of customers said they are cooking at home more often as a result of those price increases.
Source: Technomic
Supply chain issues are causing product shortages
An increasing number of customers are frequenting restaurants and other hospitalitydriven businesses: Demand for food and beverage is up 50% since 2021.*
However, that demand continues to outpace the availability of key products. From popcorn to turkey, a shortage of staples is driving higher ingredient prices, smaller product selections and longer wait times.
Get the products you need by working with a GPO that offers a combination of local, direct sourcing and national reach.
Entegra has fostered deep relationships with distributors across the globe, each lending their own products and perspective on new and substitute products. The result is a broader array of products at your disposal.
Our advisors help find more direct, local distributors to replace products traditionally sourced by broadline distributors, and vice versa, helping clients access major savings. You can also set up a locked order guide ensuring consistent items and prices across all your locations.
And with the support of our Entegra Performance Kitchen, your team can develop menu alternatives — for instance, switching from fresh to frozen when the supply is optimal for your business. Our culinary experts also help come up with new menu items that leverage fewer, or more cost-effective, ingredients — conducting product cuttings and samplings to find substitutes that are as good or better than the original.
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” We have been recognizing ongoing shortages and challenges. For a lot of our clients, we have been able to begin recommending alternative products months in advance to help them plan ahead and mitigate change.
Justin Visser,
Increased costs are causing margin pressure
As businesses are forced to spend more, their profit margins are taking a hit. Costs for energy, occupancy, food and beverage are likely to present a continued challenge to already strained operators.
Furthermore, projections for bars and restaurants are lower for the year — though they’re still expected to grow at an average pace.*
Instead of navigating increased costs alone, smart businesses are accessing better prices and negotiation with a trusted GPO partner.
Entegra provides access to $24 billion of buying power — meaning better pricing, rebates that provide an alternate revenue stream for procurement departments, and expertise to save on energy, labor, capital expenditures and more.
From high-end linens for lodging to agronomy for golf courses, our trusted advisors know the products you need for your industry — and how to get them more quickly and affordably, with programs that work for you. And if you need something that’s not in our program, our custom contracting options allow you to reach out to suppliers for better pricing and deals.
We can also identify new ways to reduce costs. While higher energy spending can seem unavoidable, we’ve helped clients save six figures by auditing and managing all their energy bills in one place.
*Source: Urner Barry Consulting
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” We’ve recently been bringing in more niche and higher-end products with extremely favorable contracts for our hospitality clients. We’re also rapidly expanding our team to bring in more category procurement experts.
David Kourie, Senior Vice President of
Tight labor markets are causing staffing shortages
Across the board, businesses are rushing to backfill job positions: The accommodation and food service industry is still missing one million jobs.*
Even as operators find qualified job applicants, hiring and retaining workers presents an uphill battle. Today’s staff demand greater job flexibility and benefits — and longtime employees have more options for working elsewhere.
Bolster your team with a GPO that provides training and staffing solutions — and reduce labor needs with grab ‘n go offerings.
Entegra connects businesses to a variety of training programs that quickly get less experienced hires up to speed — and retain veteran workers with career advancement. We also offer temporary labor support from Anserteam and Instawork.
You can further streamline operations by swapping for products that rely on less labor, including selections that replace raw ingredients with prepared ones. Our experts can help implement grab ‘n go offerings that provide quick convenience, while keeping customer satisfaction high.
“Our grab-n-go offerings help solve a number of issues: reducing labor required, having standard SKUs and consistency across products, and allowing for retail and self-service options by consumers. And as the landscape shifts, we’ll also adapt to meet changing client needs.
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John Csukor, Head of Culinary, Entegra,
Procurement departments are spread thin, and short on time
Facing mounting supply chain issues, those in charge of procurement are having to work harder than ever to source the products they need.
With so much at stake, every minute that can be shaved off everyday tasks can free up teams to focus on running their businesses.
That’s why forward-thinking operators are using smarter software to automate their purchasing across multiple suppliers and locations.
When paired with Entegra’s expert advisors, an online platform like Entegra PurchasingIQ can help optimize your procurement process, delivering instant access to your spending, savings data and available suppliers.
Gain greater efficiency across your team. See savings opportunities by SKU down to the unit level — in real time. And easily identify payment discrepancies via our powerful contractor auditor capability. Our data and digital tools provide a faster, more efficient way reclaim unnecessary costs — and your team’s schedule.
“ ” By helping our clients identify substitute products through our purchasing dashboards, we enable them to save time and money – without having to rely on manual processes.
Adrian Cox, Vice President,
The right GPO can do more than help you save today. At Entegra, we operate as a performance improvement partner who can also help achieve your long-term goals — protecting your margins amidst inflation, and saving time with our industry and procurement expertise.
Backed by over 170 experts on our growing supply team, we’ll partner with you to ideate solutions early in your planning cycle, affecting tangible change. And by operating as a part of your team, or as an outsourced department, we can help your organization weather market volatility — while improving cost effectiveness and customer experience in the process.
Speak to our team or visit our website to learn how Entegra can help mitigate inflation’s impact on your business today.
