One segment of OCS that has not been covered very often is selling and servicing restaurants, delis, fast food outlets and convenience stores. All of these foodservice retailers need to be sold by a different approach from the methods used in selling "coffee service" to offices. Here are the differences between these two categories of customer.
Pricing is your first difference. Resellers are much more aware of pricing, since they look at coffee as a commodity that is sold by the pound. Your biggest competitors are the regional and national roasting companies that have dedicated sales teams, or the food brokers covering most towns and cities throughout the country.
While your typical gross profit in OCS is 48% to 52%, you are now looking at coffee for foodservice with a GP of approximately 30%. You can compete with the roasters if your typical reseller client is not one of the larger chain stores in your area. You're not just going to provide coffee and equipment, but also value-added services, which I will be covering.
Equipment is your second difference. Supplier the right equipment to a foodservice provider is essential. If you under-equip them, they will be unhappy, since their customers will complain that they are waiting too long for coffee to be made, and so your competition will have entrée into selling your account. If you over-equip them, your return on investment will take much longer. I have always felt that it is better to over-equip rather than under-equip your foodservice customers, since it helps keep your competition at bay.
An varying buying motivation is the third difference. When you are in the foodservice arena, you must show management that your coffee will appeal to the establishment's targeted customer base. If the client is a fast-food, lower-quality provider, you may want to keep its costs down by supplying your less expensive blends, but it has to be acceptable and without bitterness.
If your client is a high-quality restaurant, with white tablecloths, great ambiance, beautiful décor and superior service, you will want to provide them with your best coffee blends. Your brewing equipment may also include a French press and a high-quality espresso machine.
As a professional, you will be offering your expertise in teaching their staff the best ways to brew regular coffee and espresso. You also will be available to train new staff members on short notice, since employee turnover in the foodservice industry is rapid and continual.
If you make the commitment to build up your restaurant trade, you can offer a selection of benefits to your customers that will increase their businesses by attracting more people to try their establishment:
» Offer to print their menus and promote your coffee espresso drinks;
» Provide custom-made signs for their windows. Your brand must be listed;
» Gas station retail signage (purchase 12 gallons, get a free cup of coffee; purchase eight gallons, get any size coffee or tea for 50¢, among other offers);
» Supply signage for airpots and thermal dispensers;
» Offer co-op advertising allowances;
» Print "Frequent Buyer Cards" (buy 10 cups of coffee and get 11th free, etc.);
» Donate a free case of coffee for charitable events that the restaurant participates in locally;
» Host coffee tastings in their restaurants to attract new customers;
» Conduct seminars so their employees can learn more about coffee (more important in upscale locations);
» Help produce a "fax-in order menu" (or email) of their offerings and hot drinks;
» Provide point-of-purchase signs if they sell your private-label fractional packs to their patrons.
24/7 Equipment Service is the fourth difference. If you are going to supply the foodservice industry, you must have round-the-clock equipment service available. These businesses depend on selling food and beverages. If their equipment breaks down after hours or on weekends, the problem must be solved immediately. This is a key selling benefit over the roaster, who almost never has 24/7 service. We all have fully functional older brewers lying around the warehouse. Provide a three- warmer pourover wrapped in a see-through plastic bag, along with filling instructions. This is a good solution to back up your service, in case the client's equipment fails after hours. It gives you extra time to make the repair.
Providing this service does not have to be as expensive as it seems. Have your service team take turns being "on call" in case an emergency does come up. They can get time off at a later date by just being on standby; and if they do respond to an emergency, they get paid $75 for each call, but do not get subsequent time off.
Selling coffee by the pound (wholesale) rather than by the case, at a lower GP, does have its merits:
» You can make money by delivering multiple cases at one time;
» You will also be selling hot cocoa, teas, paper products, etc. in large quantities;
» Providing private-label coffee helps avoid price comparison to other coffees;
» Increased poundage may entitle you to a larger quantity discount from your roaster;
» A really large coffee poundage volume gives you the advantage of purchasing "coffee contracts," so you can lock in pricing for a year or more;
» Large poundage gives you clout to negotiate among roasters for your private label products.
Last -- but by no means least -- if you're selling coffee to foodservice customers, your product must be good enough so that their customers will come back for more. I have always used the following expression when presenting to the buyer in a foodservice establishment, "Your first impression is very important, but your last impression should be even stronger: the great taste of your coffee or tea."
I'd love to hear some of your tips that you use to sell foodservice establishments. Please call me at (516) 241-4883, or emailing email@example.com.
LEN RASHKIN is a pioneer in office coffee service. He founded Coffee Sip in 1968 and later merged it with Dell Coffee. He also founded the Eastern Coffee Service Association and National Beverage & Products Association.