Although a fundamental service in cities around the world, the restaurant industry is known for being particularly cutthroat. You may have heard the hard-to-believe statistic that 90 percent of restaurants fail in their first year of business.
In reality, that number is a little lower. A study by Ohio State University found that only about 60 percent of independent restaurants fail in the first year, not 90. Although that number is still a little on the high side, it does make your prospects a little more promising.
Positioning yourself for success requires a few non-negotiable elements: a good concept, great food and the forgotten part of the equation, the right restaurant suppliers.
In this post, we’ll go over:
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The importance of suppliers
In business, everything your employees and customers use or consume comes from somewhere. Unless you’re building your own chairs and tables from the trees out back or creating a menu with only items that you can grow yourself, suppliers will be an integral part of your operations. Restaurant supplies encompass just about every part of your business, from restaurant equipment to bar supplies. This can create a sizable margin of error if you’re not properly equipped.
The quality of supplies and suppliers, as well as how you manage them, can make or break a restaurant business. Overpriced supplies can ruin your budget before the doors even open. On the other hand, cutting corners on quality can destroy your reputation and leave your customers looking for better quality somewhere else.
Finding the perfect balance between affordability and quality can be crucial to the success of your business. That’s why we’re arming you with everything you need to get off on the best foot possible. Let’s jump in.
Identifying your needs
Before opening your doors, you’ll need to be prepared with equipment, furniture, food and standard restaurant supplies. This means creating a list of every single thing you will need to purchase to keep your restaurant in business. No detail is too small to include. Even seemingly minor obligations can leave your business in the lurch when neglected.
First, do your research. Before you make significant purchase decisions, do your research! Start with a simple internet search for restaurant suppliers. This query will yield your basic, or most common items such as a stainless steel ice machine, convection oven, pizza oven or miscellaneous small wares. This will give you an idea on some of the necessary items you’ll need to buy, as well as the costs you can expect to pay.
Also, don’t forget to also do a local search and see if there are any restaurant supply stores near you that you can check out in person. The internet is great, but sometimes you just need to talk to someone (even if it’s a salesperson) and see things in person to get you through the decision making process.
Another option to explore is looking for used equipment or pre-owned items, especially for large purchases like refrigeration or ovens. If you know of any local restaurants that have closed recently, see if you can get in touch with the owner and find out if they’re willing to sell some of their equipment.
Once you have an idea of what you need and a general idea of cost, set a budget (we’ll go into more detail on this later). Before getting on the phone with all of the suppliers you know and starting the process of obtaining supplies, you need to know exactly what to buy and how much you have to spend.
The exact logic behind these two elements will vary from one business to another—for example, a bar won’t need the same supplies as a coffee shop—but the process of selection will likely be similar.
Equipment and non-perishable supplies
Big ticket items, such as your walk-in cooler, grill, ovens or front-of-house furnishings, are usually one-time purchases. Or at the very least, infrequent purchases.
The hope for any restaurant owner is that they can buy them once, and they’ll continue to work without ever thinking much about them again. Unfortunately this scenario isn’t likely. Over time, heavily used equipment starts to break down. Parts begin to deteriorate, pieces start breaking off or maybe your cooler stops running efficiently. It’s not your fault, it’s just the general wear-and-tear of everyday use.
For these larger food service equipment items, make sure you find a supplier and manufacturer that offers a great warranty on their products and an excellent customer service policy. The last thing you want is for your dishwasher to stop working in the middle of a Saturday night rush and you’ve got nobody to call to fix it.
When it comes to some of the smaller items that you’ll purchase on a recurring basis, such as paper products or janitorial supplies, find a supplier that is reliable, priced reasonably, and of course, provides you with excellent customer service.
To get you on the right path, here is a list of the commercial restaurant equipment supplies you’ll need to consider—from back-of-house to front-of-house.
Kitchen, cooking utensils and appliances
- Cooking equipment, like stoves, ovens, microwaves, grills, griddles, fryers, pasta cookers, immersion cookers, steamers and broilers
- Kitchen equipment, like fridges, freezers, dishwashers, condensation hoods, heat lamps, soda fountains, espresso machines and ice machines
Food storage and work surfaces
- Counters, countertop warmers, storage spaces, cold food tables, steam tables, prep tables, walk-in cooler or freezer
- Cooking tools, like knives, spatulas, tongs, storage containers, microwavable containers, brushes, ladles and serving spoons
Servingware and paper products
- Food service items, like silverware, plates, napkins, glasses, placemats and tablecloths, paper products, including napkins, paper towels and toilet paper
- Bar tools, like glasses, napkins, swizzle sticks, shot glasses, containers for fruit and other garnishes, mixers, equipment to wash and manage glassware behind the bar, shelving for liquor, taps and keg space.
Point of sale system (POS)
- A high-quality restaurant point of sale (POS) system that can handle the needs of your business, like ringing in food, customizing orders, splitting checks and processing a variety of payment types. Consider modern upgrades to traditional point of sale systems, like iPad POS options that can improve the customer experience and expedite food service
Front-of-house furnishings and more
- Front of the house furniture, like tables, chairs, booths, bar furniture and a host stand. Be sure to measure your space to maximize capacity without breaking any local ordinances or fire codes.
- Decor, like paint, wallpaper, carpeting and window treatments
- Plumbing and associated hardware, like sinks and toilets
- Miscellaneous items, like coat racks, trash cans, mops and cleaning supplies, step stools, rags and buckets
Unlike equipment, food is something you’ll have to purchase on a more frequent basis such as monthly, weekly or even daily. This is where one of those non-negotiable items comes into play—great food.
If you want your restaurant or bar to succeed, you have to serve up some pretty great food and beverage. Customers can make a lousy meal at home for half the price it’ll cost them to dine at your establishment. If they’re spending their hard-earned money at your place, you better make sure it’s worth it. Or you probably won’t be seeing them again.
You can’t sacrifice food quality and expect customers to show up and spend their money. That’s why food quality should be on the top of your list when you’re creating your menu. Also at the top of the list is to try to consider minimizing inventory by using similar base components for multiple dishes. This cuts down on waste and unnecessary expenditures.
Unless you’re using a farm-to-table concept for specific dishes or daily specials, the majority of your food or ingredients will come from a local supplier. You need to make friends with these suppliers and quickly try to get to BFF status. Your food suppliers are the lifeline of your business. Without them, you have nothing to serve your customers.
When it comes to finding food and beverage supplies, other than wanting to find a supplier that is friendly and easy to work with, you also want to find one that provides top-notch customer service and is very reliable. A late delivery of key items can have a negative impact on your business and ultimately your sales.
To get you pointed in the right direction, here is a list of some food items and ingredients you’ll typically need to purchase from suppliers.
- Proteins and meats
- Seasonings, herbs and oils
- Starches and pasta
- Fruits and vegetables
- Grains and rice
- Sugar and other sweeteners
- Soda syrup
- Chocolate, ice cream and other dessert items
If you’re new to or have no experience in the restaurant business, you may be wondering how restaurants find the right vendors to source their food, beverages, and other items. Managing so many vendors can be somewhat of a balancing act, especially when everyone wants to get the freshest food at the best price.
We’ve broken down some of the different types of restaurant food and beverage suppliers and how restaurants work with them.
Whether a restaurant is a vegan fast food joint or a sit-down steakhouse, having a wide variety of vegetables and fruits on the menu is a must. Restaurants source their produce in several different ways, and usually combine more than one of the following methods to best suit their needs.
Larger and busier establishments may find it easier to get their produce from major food providers like US Foods, Sysco or Performance Food Group. Other restaurants may utilize local suppliers or purchase from nearby stores, while others (especially those that make organic meals a priority) often source their produce from local farmers markets. These farmers markets offer a unique opportunity to meet local suppliers, allowing restaurants to establish a connection and create the option to buy wholesale from them as well. There are also apps, such as Local Dirt, that connect restaurants with local suppliers.
While some restaurant’s source their poultry, beef and pork directly from local farms, others may choose to purchase through larger companies. These companies have a network of farms and butchers that get the meat restaurant-ready. Large-scale companies often have more resources to invest in sensor technology that can ensure proper food safety.
Restaurants may feel more secure going this route since these big companies provide some peace of mind with their technology systems. However, there are many advantages to sourcing meat directly from farmers or smaller suppliers. Restaurants can build relationships and obtain the freshest, best quality meats while simultaneously supporting their local economy. These farms may also practice more sustainable farming that is better for their animals and the environment. Some restaurants utilize these nearby farms and hire a third-party to ensure the safety of their ingredients, a DIY combination that brings together the best of both worlds.
Seafood suppliers aren’t always a one-stop shop. Some restaurants may find that they need to work with multiple sources, as each provider focuses on a different type of seafood.
Some fish suppliers will only sell fresh seafood, sourced locally or as part of an international network while other providers specialize in the frozen variety. One thing they are likely to have in common is that much of the seafood today comes from fish farms, with each farm dedicating itself to a different type of fish. In fact, the National Oceanic and Atmospheric Administration (NOAA) reports that nearly 50% of the fish we consume is now farmed.
Dry good vendors
From nuts and rice to flour and spice, a restaurant’s dry goods tend to be purchased—often in bulk—from a major supplier, such as the ones mentioned above for produce.
Sometimes a certain dish may call for a particular ingredient that is only available through a specialty supplier. A popular option in the United States is Crossings Fine Foods, where restaurants can purchase specialty items at wholesale prices.
Restaurants may also utilize special events like The Summer Fancy Food Show in New York to meet with different suppliers and explore their options for sourcing those extra special, dish-elevating ingredients.
Baked goods vendors
If a restaurant’s baked goods are not made in-house, the next best option is to source them from a local bakery. Specialty breads, cakes, and other bakery items can be obtained from big suppliers as well, but it’s common for bakeries to function as suppliers for nearby restaurants. The quality and freshness in locally sourcing these types of items is far superior. Bulk items like hamburger buns and other white breads are more commonly sourced from large-scale suppliers.
Sourcing beer for your restaurant can be done several different ways. Going straight to the big suppliers will net you the most popular, mass-produced beer. On the other hand, depending on the type of crowd in your restaurant, you might prefer to work with a specialty supplier to obtain craft beer, or even work directly with a popular local brewery to serve their lineup of brews. The best way to keep all your guests happy is to combine two or more of these sources.
Similar to beer, wine can be obtained straight from a local winery, or it can be sourced through one or more suppliers that work with wineries across the world. The best option for your restaurant depends on the width of the selection you’d like to offer.
Hard alcohol vendors
When it comes to hard liquor and other spirits, the most common option is for restaurants to go through large suppliers like Ultra Pure and Luxco. These providers specialize in a variety of alcohols from a wide range of companies, so you’re sure to find the selection you need to stock your restaurant’s bar.
Setting a budget
While elite equipment and designer decor are desirable, unless you have millions to pour into running a five-star establishment, you’re probably going to have to find a way to balance wants and needs in the beginning.
When crafting your budget, here are a few points to take into consideration.
- Support staff needs, like the number of servers, managers, cooks, bartenders, dishwashers and bussers you will need to keep your customers satisfied.
- Employee salaries and any benefits you may be obligated to pay by law, like vacation days and health insurance.
- The price point of your menu items and what margins you need to have to make a profit
- Service trends in your area such as online ordering or pay at the table technology
- Rent, utilities and other overhead expenses like payroll
- Regular supply deliveries, like food and paper products
- Start-up costs, like kitchen equipment and furniture
Evaluating your options
Once you know what you need, it’s time to contact restaurant suppliers, get price quotes and begin placing orders.
Like we mentioned before, research is essential when it comes to evaluating your options. Preparing to launch a new restaurant—or to upgrade or expand a current operation—requires significant time and analysis. Just as you wouldn’t hire an employee, implement a new POS system or try a whole new menu without due diligence, the same should apply to your approach to securing vendors.
In general, there are two ways to identify and secure supplies for your restaurant, traditional suppliers carrying new equipment and second-hand sales.
Traditional suppliers are companies that carry tools and equipment for commercial kitchens and focus on meeting the needs of those in the restaurant industry
There are many ways to identify supply sources, from asking around in the industry to online research. For novices without a clear starting point, your local restaurant association is a valuable resource. All states have one, and you can find yours through the National Restaurant Association. These professional organizations can connect you with trusted names, helping you make a responsible and educated choice.
Trade publications like Nation’s Restaurant News can also be a helpful resource. They provide insight into the state of the industry and leads on suppliers in your area. Online directories are also useful. FoodService Central, for example, offers a comprehensive marketplace of different kinds of suppliers for locations coast to coast.
Pre-owned and used equipment
For businesses on a budget, low-cost equipment may be a good compromise. Older products can often work just as well as newer models if they’ve been well maintained. This allows you to save money without sacrificing functionality and reliability.
While some resale marketplaces exist specifically for restaurants, many foodservice professionals can find great deals for pre-owned equipment on online marketplaces like eBay and Craigslist. However, it’s always important to exercise caution when purchasing from an independent seller. Be sure to do your homework before buying anything.
Restaurant suppliers aren’t created equally, so it’s essential to partner with a trusted name. Before signing any contracts, take the time to learn more about the businesses you are considering. Questions like the below are a great place to start.
How long has the company been in business?
While there’s no reason necessarily to disregard a new company, an experienced vendor is more likely to have the connections and business relationships needed to support your restaurant.
Can I see and taste samples?
Purchasing without knowing precisely what you’re getting is never a wise business move. From perishables to plates, samples can help you understand quality and functionality.
What are your payment terms and refund policy?
Some companies allow financing, while others do not. Some take all returns, while others have a strict policy after installation. Be sure you know what to expect before paying for equipment so you can budget accordingly.
What is the minimum order?
Some companies are willing to work with smaller operations, but others have minimums. Discuss the terms of a sale before allowing money to change hands.
Are there any discounts available?
In general, what you see is what you get. However, some suppliers may be willing to offer discounts for bulk orders, the frequency of requests, early payment or even cash orders. A little negotiation can save you a lot if you’re willing to ask.
Do you have a contingency plan?
Sometimes, deliveries are delayed, or other issues like bad weather arise. If your schedule isn’t flexible, then you need backups in case your primary vendor runs into issues.
Do you have any references?
Vendors work for you, not the other way around. Don’t be afraid to ask for references. Find out the other local restaurants they service and talk to those business owners about their experience with the vendor.
Final points of consideration
As you prepare to meet with vendors for your restaurant supplies and equipment, it’s important to keep these additional points in mind:
Savings later vs. savings now
A high price tag shouldn’t always be a cause for concern. A higher quality initial investment may mean a reduction in repair or replacement costs down the road.
Service quality counts
A company that can meet your needs quickly and appropriately is a significant advantage, especially when trouble arises.
Product quality counts
Fresh produce is always preferable to shipments with limited shelf-life. Be certain your vendors prioritize quality just as much as you do.
Your supplier is a major resource. Choose those who you can trust and depend on. And when your suppliers treat you right, do the same.
The food and beverage business may be a challenging one, but a strong network of restaurant suppliers can make all the difference. By arming yourself with the right business partners, it’s possible to set your restaurant on the right track from day one.
Let us help your restaurant reach its true potential. Find out how Lightspeed’s restaurant POS gives restaurateurs the tools they need to run and grow a successful food service business.