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Can you reduce your costs by changing the way you buy?

Simon Gurney, Procurement Manager at Pelican Procurement Services, shares some practical tips that will help reduce costs

Posted by Ed Brown | June 09, 2017 | Catering & hospitality

Simon Gurney, Procurement Manager at Pelican Procurement Services, shares some practical tips that will help catering teams reduce purchasing costs. In many cases it’s the small details that make the biggest impact. Here are just a few simple examples of what can be done.

MEAT & FISH

1. Buy per portion weight, rather than by number of joints

So let’s say you are hosting a special event for 200 guests. You have decided to cook roast beef for the main course and you want each portion size to be 200g, so what’s your most cost effective option? To start with, order 200 x 230g portions to yield 200g plated portions as this allows for shrinkage and acceptable wastage. So, your total order requirement would be 46kg.

The beef roasting joints are available from your local butcher and weigh between 5 and 7kg at £12/kg.  Typically you might have always ordered 8 or 9 joints in order to cater for 200 people (on average you get about 25 portions per joint). At the 7kg end of the weight range you could receive up to 56kg costing you up to £672. By ordering per calculated portion, which is only 46kg, this would cost you £552 which would save up to 18%.

2. Buy pre-cut portions

Where possible buy meat and fish per portion rather than cutting them in-house. Supplier skill, speed and tolerances are refined and in many cases they use automated machines.  The cost of this service is small compared to the cost of manual labour and potential waste of margin, as it can be difficult even for the skilled caterer to cut meat to an exact portion size of 200g at all times.

Let’s say a server cuts slightly larger portions of 210g to 230g. This is great value for your customers but at what cost to your business? One ounce of meat at 35p cost [N1] might mean £1.50 of lost sales revenue.

3. Buy nett weight on nett price

Buy meat and fish nett weight and request a nett price excluding heads, bones and trim for accurate menu costing and full visibility of what you are buying. Unless you insist on receiving and dealing with salmon heads, bones and trim, how do you know that the 6kg invoice weight is correct for that fish? If you need bones, carcasses or frames buy them separately.

Understanding the nett price is also important when buying prawns. The size of the prawn is indicated by the count. Prawns are sold with ice glaze either IQF or in a block. In some cases the glaze can count for 40% of the weight! It is usually stated on the bag as gross and nett weight eg 1kg gross and 700g nett. So defrost the prawns, count them and work out the price per prawn from the invoice price - a different brand or origin might be a better option. It’s a bit fiddly, but over time these savings really add up.

4. Don’t get stuffed

What if your supplier is offering added-value services like marinades or stuffing? Find out the exact cost of these.  Are you being charged for the ingredients separately or are you being charged the per kg meat price? Presenting stuffing separately avoids this problem and increases plate coverage. Marinades are quick and easy to do in the kitchen and you can control the ingredients.

5. Buy meat to dish specification required

Speak to your supplier and find out if they offer imported meat at lower cost. If yes, review the most appropriate meat origin for your dish specification. Might it be suitable for some wet dishes like chilli con carne or stews?

FRUIT & VEG

6. Order by kg or case

Order per kg (or case) rather than ‘each’ when appropriate. Work out approximate number of pieces per kg as a guide.

7. Ensure that you pay the right price for the size of fruit you require

Heavy fruits, for example melons or pineapple, are often shipped in cases and each case could contain 6, 7, 8 or 9 pieces of fruit depending on their size. Fruits in a case of 6 might be termed large and cost £2 but fruits in a case of 9 may be termed medium and cost £1.50. Make sure you don’t pay for large fruit and receive medium.

8.  Would preparing fruit and vegetables in-house be cheaper?

The cost of buying prepared fruit and veg can be quite substantial if you purchase them in large quantities. So why not find out what produce could be easily prepared by your in-house team e.g. peeled carrots, sliced/diced onions, fresh fruit salad base?

If you buy large quantities of certain products, it might be more economical to invest in a prep machine. One of Pelican’s customers was buying fresh sliced mushrooms and we were able to calculate that by investing in a slicing machine and purchasing whole mushrooms, the machine would pay for itself in two months and the customer would then achieve 50% savings on the item.

9. Is extra garnish too costly?

Look at your cost and consumption of garnishes. It might seem trivial, but it all adds up. Some premium leaves and cresses can be a phenomenal cost per kg. Yes edible flowers look good, especially when your chefs want to showcase their dishes during events, but if they are not consumed and simply left on empty plates it may not make sense.

Other tips to consider…

  • Review what is being prepared and portioned in house on a cost-benefit basis. Are you spending time trimming and portioning meat and fish when the supplier can do this for you at little extra cost? The time saved could be used to invest in high margin production of desserts.
  • Are you paying a premium for pre-sliced cakes?
  • Are you incurring additional costs for split-case items?
  • Are you buying the most appropriate pack size/container for typical consumption rates, e.g. 1kg packs or jars compared to loose bulk flour, sugar, cereal, jam portions and yoghurt etc.
  • It is good to use branded products front of house, but why not top up table sauce bottles from bulk once or twice before its time to renew the bottle?

Need support?

If you are looking for the most effective way to buy your goods, our procurement experts will identify all possible opportunities to help you maximise long-term cost efficiencies. Our team is CIPS-qualified and possess a depth of knowledge, expertise and skills only gained through 27 years of providing support to a wide range of complex, often multi-site, operations from all sectors within the catering industry. You can call the Pelican Procurement team on 01252 705200 or, email info@pelicanprocurement.co.uk or visit www.pelicanprocurement.co.uk to find out how we can add value to your organisation.

About Simon Gurney

Simon has over 30 years of experience in the catering and hospitality industry, starting as a chef and then providing food consultancy to high-end hotel establishments including Park Plaza, Intercontinental and Red Carnation. Over the last two years Simon has been providing supply chain and procurement management to clients from across the education and hospitality sector.

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