2Bits: Tips for Farmers Selling Wholesale to Restaurants in…
12.5 % of our income is spent on food. 43% of those dollars are for dining out!
Bureau of Labor Statistics
Americans are spending over 40% of their food dollars dining out. Farm-to-table restaurants want a share of this. And, these restaurants are important customers for local farms; however, farmers must be aware of some challenges these restaurants face to successfully sell to them!
2018 Trends that will impact our favorite locally owned farm-to-table restaurants:
Rising healthcare costs and minimum wage, low unemployment, and new overtime regulations all contribute to higher restaurant staffing costs. In some cities, restaurants are paying well above the minimum wage at $13 – $14 per hour. Higher staffing costs impact restaurant profitability, which in turn impacts the price chefs can pay for locally-raised produce and products.
The number of ghost restaurants or “delivery-only restaurants” is increasing. With no physical location, rent, overhead, and staff costs are less. Often food for these ghost restaurants are prepared at commercial kitchens that service multiple “delivery-only restaurants.
These kitchens’ staff specialize in portioning, grilling, salad preparations, and order assembling. Menus change quickly and sourcing from locally-owned farms is not as important as efficiency and economies of scale.
UberEats has grown by 2400% between March 2016 and March 2017. The article, “Uber is replacing local restaurants with big data, and they’re coming sooner than you think”, states that UberEats has eclipsed its ridesharing profits in 3 major cities: Tokyo, Taipei, and Seoul. UberEats is coming to a city close to you!
Uber collects customer data from its new Uber Credit Card, and tracks where customers go and the dining out choices made. This data helps Uber market dine-out ordering from ghost restaurants it owns, as well as restaurants it has marketing agreements with. Uber already owns and operates ghost restaurants in San Francisco, Chicago, Atlanta, Denver, Philadelphia, and Toronto.
Uber’s vast delivery network makes delivering meals from these ghost restaurants to customers easy. Ordered meals arrive in less time than other “take-out” or delivery services, and, Uber may not be interested in sourcing food for its ghost restaurants from local farmers.
What can you do about these 2018 trends?
Keep these trends in mind as you talk with and sell to farm-to-table restaurant chefs. Be aware of how these trends impact the price chefs can pay for your produce and products.
Join an online marketplace that expands your market options and sales channels. Once you’ve joined an online marketplace, be responsive to online customer communications and learn how to use the marketplace technology effectively. The time spent doing this will be critical to your future sustainability.
Continue supporting locally-owned farm-to-table restaurants you love to eat at! Join an online marketplace and help local and regional farmers expand their markets by buying directly from them on this online marketplace. Farmers need to be online and need you to help them want to do business online!
We think the best way to support locally owned farm-to-table restaurants and local farmers is to join 2BuyAg’s online community and marketplace today!