Food service is a fragmented and highly specialized market, with specific dynamics and challenges, which players must be able navigate with agility and precision.

Survival and success in the food service market often depends on an organizations’ ability to navigate a large number of specific challenges which are relevant to this sector; such as:

• Dealing with a fragmented market: local restaurants represent up to 80% of the market, depending on the country, and they are highly specialized, including bakeries, cafés, restaurant chains, industrial kitchens and others.
• Managing a complex supply chain: making and delivering perishable or frozen/refrigerated products with minimal waste.
• Local players tend to be less sophisticated in terms of management and have less working capital / storage capacity, which results in a high frequency purchases, which can be weekly or even higher.
• Products are specific, in terms of packaging volume, and demand a high degree of standardization/uniformity – format, thickness, color, etc. that allows dishes to be replicated.
• Brand development is a challenge – as the brand does not reach the final consumer – and what drives the purchase is the quality and price of the product itself.
• Categories have different dynamics: those with a high price per kg and a high volume of consumption, such as proteins and beverages, is where the POS spends most of it’s energy to obtain products with good quality for a lower price.
• For large restaurant chains, the challenge is to ensure standardization and efficiency. Discussions center around central kitchen models, centralized versus decentralized purchase and production, and optimization of the timetables of the restaurant and management team.
• Qualification of the workforce and management of operation: raw materials, purchases etc … are also challenges, especially in the case of large networks, which requires control systems, clear KPIs, constant training and a corporate structure that promotes standardization.

Our experience along the value chain in different markets allows us to address these challenges with a focus on our client’s specific context and objectives.

Integration has worked with a broad range of clients including food manufacturers, distribution partners, logistics operators, and food service chains, in a variety of geographies. We have been involved in strategic GTM projects and market scans; as well more operational improvement projects such as cost efficiency projects, logistics network redesigns and implementation of systems and process projects, among others.

In recent years we have helped food service clients address broad and multifaceted challenges such as:

1. How to create differentiation in a fragmented, specialized market with a high expectation of service level?

Here, we have determined alongside our clients the levers for differentiation based on their customer base – this could be assortment, logistic service level, price, commercial policy, sales service etc.  Leveraging our GTM methodology we are able to identify market clusters who could be served in a similar manner, and the cost of serving each one.

2. How to optimize efficiency in the management of food service chains?

Integration has expertise in many efficiency projects, working, for example, in optimizing the central kitchen model, with business cases for automation of production processes.

We have also delivered projects with POS teams, implementing systems to ensure greater control; and decreasing the idle capacity of restaurants, making studies of staff adjustments, working hours, and span of control to adjust for daily peaks and troughs.

3. How to meet the logistics needs of the POS; which has high frequency of purchase and low storage space?

In this scenario, Integration has well-established methodologies to ensure good diagnosis, design, and delivery of optimized logistics networks, whether from industry, distributors or other operators.

By understanding qualitatively and quantitatively what adds value to the customer we can  define what to increase and what to reduce in customer service from a logistical point of view: punctuality, fulfillment, minimum order, frequency of delivery, lead time, prioritization of customers, and add-on services (FOB, palletization, etc.). With this clarity, our clients can act prepare to offer a better-quality service at a lower cost.

We have worked with clients in different categories, geographies and positions along the value chain: