Attaining sustained profitability in any industry is challenging. That time worn adage is especially true in the low margin, highly competitive US restaurant industry. However, with restaurant sales predicted to reach $863 billion this year, there is money to be made by suppliers with the best insights and practices. Lessons I’ve gathered over a career providing foodservice operators, middlemen, and manufacturers with products and information may open eyes to opportunities in foodservice and beyond.
Recently, I undertook a project with the broad objective of helping tabletop product suppliers grow their businesses. This article summarizes my observations and recommendations. Although focused on US foodservice, it is a case study on how to break into any rigid market, beginning with some key definitions.
The term “foodservice" refers to all food prepared and usually eaten away from home. Restaurants represent just one, albeit major, channel, and the terms are used here interchangeably. In turn, foodservice customers are often referred to by restaurateurs as “guests". Again, both terms are used here.
“Tabletop Products" broadly refer to all the cutlery, dinnerware, drinkware, servingware, tablecloths, napkins, candles, lamps, menu holders, vases and any of the other permanent or disposable “supplies" that enhance seated dining and drinking experiences. Cutlery, dinnerware and drinkware constitute the majority. US restaurant operators will purchase approximately $1.4 billion of durable goods from those three core categories this year.
Although tabletop products are critical to customer experiences for both their functionality and decorative attributes, they are usually taken for granted by guests and are seen as a necessary nuisance by restaurateurs. Nevertheless, suppliers have steadfastly competed largely on “shape and color" versus specialized value-added functionality. So, it is not surprising that price is often the most important selection factor, driving profits and innovation downwards.
It is therefore not surprising that the supply side is currently undergoing the same type of tectonic shifts disrupting many other industries. The once solid, staid manufacturers that characterized the industry are disappearing. Many are consolidating and domestic survivors are shifting production out of the country. Moreover, as we will see, customer behavior and other factors are constantly morphing, further mimicking the story familiar in many industries today.
Guests, the ultimate arbitrators of tabletop products, are a constantly moving target. Evermore fickle, restless and adventurous, they shift direction in an instant. As a group, they are always looking for the next “hot" idea and are willing to walk away from their comfort zones.
In general, guests seek total dining experiences which provide more than just the “tastes good" food and beverages that satisfied patrons in the past. For example, today’s foodservice customers increasingly want to engage in “hands-on" food preparation, customizing it to their exact preferences. Even simple actions such as dipping bread into assorted condiments, rare in mainstream dining just a few years ago, help satisfy their desire to customize meal experiences, and are now the norm.
Restaurant customers also welcome surprises, seek drama worthy of sharing, and want attention from other guests, staff, and - within seconds - social media contacts. Tabletop products actually help make these human connections in the dining setting. Nevertheless, even if pressed, few of today’s increasingly sophisticated patrons would relate tabletop products to their overall dining satisfaction. Consequently, the products remain part of the “background noise", most significantly apparent in their absence.
Expanding my scope, I initially found it surprising that operators are often opposed to new tabletop products regardless of how well they meet guest needs beyond the most basic functionality. As they struggle to survive and prosper, the main focus of restauranteurs and other foodservice operators is controlling cash outlays, keeping processes simple and dining spaces uncluttered.
That focus translates into daily tactics, such as how easily staff can utilize, maintain, and clean and store products. Correspondingly, it is difficult to entice this group to look beyond the core cutlery, dinnerware and drinkware categories, thus commoditizing the supply-side. The greater potential of tabletop products - to attract and satisfy guests, and ultimately, help build an establishment’s brand - is often an abstraction.
Middlemen further compound the tabletop challenges. Many products are sold through stocking distributors specializing in foodservice equipment and supplies. The group is leery of adding new products to their typically wide offerings, unless they are previously market proven. This makes it especially difficult to focus on unique, lower volume items.
Although the list of challenges can be expanded even further, it should be clear that introducing new tabletop products is a hard task. However, the ability to grab attention in dining settings, if genuine and demonstrable, provides an opening for suppliers to create dialogues with operators grasping for new ideas. More broadly, a winning product idea, even if the volume is relatively small, can create a hallow effect for other products in a line. This is especially critical as operators continue consolidating suppliers. In short, the correct products provide the proverbial “foot in the door".
That winning tabletop product must have the ability to turn heads and spur positive interactions. More specifically, the correct product must be based more on tangible, value-added attributes and innovations, that align with today’s dining trends than “color and shape". Given the enormous pressures operators are under, only truly viable solutions will attract and keep their attention, making second chances to leverage new ideas very rare.
Looking ahead, I screened against a wide array of tabletop products to identify those that can truly satisfy both operators and guests. As part of the process, I initially focused on products considered “on trend" by self-proclaimed culinary experts. However, I found many did not stand up to the real-world scrutiny of savvy operators.
Instead of flowing from solid primary research, I suspect many predictions are based on the conjecture of consumer-focused media. The resulting output includes nebulous, self-fueling “Predictions for the New Year" and the like, creating a circle of misinformation I’ve too often found to be passed off as solid market research. Accuracy makes a difference when so much success or failure is in the balance.
The first potentially successful candidate I identified, roasted bone marrow, was a big surprise. It exemplifies the type of obscure, but viable opportunities that take more than a mere internet search to uncover. Let’s take a closer look.
Roasted marrow was a popular food going back a long way in our gastronomical past. Although described variously as “deliciously rich and creamy, like meat-flavored butter" and “viscerally decadent", it fell out of favor here in the US. It is now experiencing a revival with enormous growth and implications that reach beyond the boundaries of US foodservice.
Many credit roasted marrow’s reemergence on groundbreaking “back to basics, nose-to-tail," to chef-restaurateurs, such as Fergus Henderson of London’s influential St. John, where it has remained a signature menu item since the establishment’s opening in the early 1990’s. Although, Mr. Henderson undoubtedly viewed it through more of a culinary lens than the structured analysis I’m outlining here, he obviously came to the same conclusions.
Most importantly, roasted marrow is delicious. Beyond its wonderful taste, guests find the process of scooping it from bones and spreading it on bread to be novel, engaging and fun. It also provides the potential for “look at me" theatrics, thus satisfying all the dining needs of guests outlined earlier.
However, also as discussed earlier, even enthusiastic customer acceptance wouldn’t be enough to sway operators to take on such a new menu item if it didn’t also meet their needs. In this case, operators like roasted marrow largely because food costs - it’s just bones! - are extremely low. Additionally, it’s easy to prepare and serve, further helping deliver exceptional margins. Therefore, once overlooked, lowly bone marrow provides an opportunity for tabletop product suppliers in the form of specialized spoons.
Marrow spoons began to appear in the late 1600’s. The functionality of the spoons, sometimes also referred to as marrow scoops, is made evident by the concept’s longevity. None other than “Domestic Diva" Martha Stewart demonstrated eighteenth century versions, identical to today’s, in one of her “Tool of the Week" videos. In the show she gives her stamp of approval by tasting marrow, recommending it, providing a recipe and explaining how the broader bowl ends of spoons are well suited to scooping from large bones and the long thinner ends are best for narrower bones.
Although, I assume, now ensconced among Martha’s adulating audience of early trend adaptors and readily available via the internet, the spoons are seldom seen on commercial tabletops. Case-in-point, an Eater.com article noted that the afore mentioned trendsetting St John started to consider developing customized versions only after serving roasted bones for many years with lobster picks. Clearly, there’s still a gap to fill.
Undoubtedly, most niche products like marrow spoons will never themselves represent major sales. However, if they truly fulfill both guest, and operator needs, it stands to reason they will help the supplier rise above the crowd and form the basis for strong dialogues with current, and often more critical, potential operator customers.
Surprisingly, many of the same tabletop product manufacturers and distributors that lament SKU and accompanying inventory proliferation already have marrow spoons in their product offerings, available for immediate delivery. More surprisingly, there appears to be little effort made to sell them.
Ironically, many of the manufacturer and distributor professionals making sales calls tend to view marrow spoons and other specialty niche products as small volume wastes of time. In fact, compensation plans, I’m told, often unwittingly incentivize resistance to presenting “specialty" products to operators in lieu of much bigger potential “hits". Unfortunately, it is again worthy to note, the core tabletop products, upon which everyone is basing their hopes, are often competing more on price and hard to measure aesthetics, than those satisfying quickly evolving operator and guest demands.
This mentality appears to permeate entire supplier organizations through the top echelons of management. Therefore, marrow spoons and the like, largely languish forgotten on warehouse shelves, eBay, and culinary history books. In many cases, they are literally “collecting dust".
Suppliers are already making relatively big investments advertising and promoting their mainline products with the hopes of creating those same dialogues. So, it seems logical that a portion of the resources should be shifted to building strong strategic bonds with operators by developing a reputation of actively identifying and sharing new market insights like the rise of roasted marrow. After all, who has a better perspective of the US restaurant scene than tabletop suppliers?
Aligning those insights with problem solving products is a natural next step in the supplier-operator relationship. The products’ rise-fromobscurity stories may actually be an advantage in attracting attention.
Of course, if you’ve reached this point of the narrative, it’s clear I’ve made sweeping generalizations. Those readers not acquainted with the US foodservice market may have felt overwhelmed with minutia. Those familiar with the market’s inner workings may find them overly simplistic. Both perspectives are reflected in my conclusions.
First and foremost, to succeed in any business, you need to know the details. Although this probably seems blatantly obvious, it is a rule not often practiced. Businesses, like people, often fall into routines that have been profitable in the past, and therefore, ignore changes taking place around them and become irrelevant. Rapidly changing restaurant customer demands are just one example.
Taking this idea a step further, information truly is power. Understanding the details provides an understanding of the market landscape, the changes taking place, their drivers, opportunities, and how best to exploit them. Moreover, this information is important to others and can be leveraged to build relationships as between tabletop suppliers and restaurateurs in my example. Nevertheless, solid research and analysis are often sidestepped in lieu of anecdotes and cursory internet searches.
Secondly, to utilize another cliché, there are no bad ideas, at least in early planning stages. Looking back, as into the 18th century for marrow spoons in this example, is a healthy endeavor as long as all the ideas are looked at with a critical eye towards the future. You may find solutions, as in the case of many tabletop product suppliers, already sitting on your shelves.
Finally, embrace a strategic, long term, invest-in-the-business perspective. This directive does not preclude the daily tactics needed to keep a business running. Instead, balance views to not just keep up with, but to actually leverage all the changes taking place in your market. Tabletop suppliers, for example, that can scan the horizon to satisfy emerging fads and trends such as the roasted marrow revival, have a great advantage over those that don’t.
Granted, these conclusions are not new to many. However, they are often forgotten and worthy of readdressing. Hopefully, they have been validated and made interesting by this real-world restaurant scenario. Greg Kirrish has held worldwide management roles at Kraft Foods, Sara Lee, Kerry Group, the National Restaurant Association and foodservice consultancy Technomic, Inc. He is currently involved in the consumer kitchen and dinnerware industry, consults and contributes to TabletopJournal.com, a forum for the international commercial tabletop products industry, from his home in Chicago.