In part one of this Category Management series, I showcase the food service industry as a great example where Category Management strategies can benefit the business. In food service, as in many vertical industries, there are opportunities to improve the transactional relationships between suppliers, distributors, brokers and restaurant operators by developing a category management framework that will improve the guests’ dining experience, evolve the relationships with distributors and operators into a collaborative strategic partnerships, reduce costs and improve profit margins.
Any business that is focused on customer experience can also benefit from this framework.
The Benefits of Category Management in Food Service:
- The consumer / restaurant guest becomes the center of focus, meeting their ever-changing needs and dining occasions and analyzing and mining consumer and industry data for actionable insights.
- Sharing of data between restaurant operators, distributors and suppliers will begin to build trusting partnerships, especially within established category KPIs with distributor and operator transactional data.
- Supply chain efficiencies will be driven by more proficient forecasting and purchasing.
- Product assortment optimization benefits diners/guests as well as buyers.
- New category growth areas identified “white space” for new types of products and foodstuffs.
- Collaborative and strategic partnerships develop with manufacturers, distributors and operators. Suppliers who are early adopters and lead the industry change may have the opportunity to be “category captains” for their respective categories.
Recommended Action Steps
- Discuss category management with the senior leaders at the large national food service distributors;
- Review other updates from industry sources: IFMA, Restaurant News and TopRight;
- Review your company’s history of category management in retail if applicable;
- Evaluate the opportunity for leading your respective categories and establishing best practices within food service category management.
Let TopRight Partners Assist
Our team includes experienced market development professionals with relevant foodservice and retail category management experience. For several clients we’ve developed a comprehensive Playbook for Growth through Food Service Category Management which includes:
- Current state assessment
- Insights and Analysis: consumer, channel, competitors
- Alignment with key distributors and operators (data, KPIs etc.)
- Strategies development
- Resource review and required improvements (personnel, supply chain etc.)
- Development, training and implementation tools.
If your business is struggling with lower revenue and a lack of consistency among distribution partners, it may be time to invest in an effective Category Management optimization program. Let us know your thoughts on these ideas, and always Stay #TopRight.