COVID-19 has increased the pressure on businesses and procurement departments to find new ways to optimize cost structures. Due to greater revenue uncertainty, operating budgets and staff are leaner than ever before. Distributors are having trouble keeping items in stock as they deal with abrupt changes in demand. And these supply shortages make purchasing more of a challenge and often result in higher-priced items and items that are not on contract. Given these unique circumstances, it’s even more critical for foodservice operators to look for new sources of revenue. Where can you find new revenue streams in the COVID era? Here are a few places to start looking:


Price Auditing

1. Price Auditing

Because you may have many contracts with your suppliers and distributors, the pricing matrix can be difficult to verify. Foodservice operators with little spare time will often sacrifice invoice auditing for other activities like local marketing or quality management. Although time-consuming, auditing your invoices can be a huge revenue stream for your operation. If resources are tight, this is also an area where a good GPO service provider can provide extra value, especially if they offer a fully automated solution.


Improving Contract Coverage

2. Improving Contract Coverage 

As your food service operation grows, your purchases become more diverse and extensive. Menus evolve and may require more SKUs to satisfy customer demand. This can present many issues for the procurement team of a growing brand. Many items purchased do not have the volume to become contracted. Joining a group purchasing organization (GPO) can not only expand your contract coverage but can provide you with more contracted options with which to build your menu. GPOs like Foodbuy aggregate purchasing power from many operators, making a wider array of suppliers and products available at better net costs.

Develop a MOG or APL

3. Developing a MOG or APL

As brands grow, enforcing brand standards can be a daunting task. Unit operators might not have regional access to the same items as other units. Operators may be trying to cut costs with lower-quality products, creating lower-quality menu items. Conversely, chefs might also start using higher-quality ingredients in the hopes of creating better experiences. Although these experiences might be better, they are not reflected in menu pricing and can overshadow the same items in other units.

Operators that do not limit the purchasing options at the location level may find their contracted spend significantly reduced. As operators stray away from brand standards, quality and consistency may vary, and aggregate spend on specific items becomes diluted, minimizing contract utilization.

A managed order guide (MOG) is a list of brand-approved items that can be purchased by units. These can include food, smallwares, chemicals, and even equipment. In order to deliver the best overall value and ensure more purchases are contracted, utilize MOGs or APLs (approved product lists). These can be deployed via eProcurement platforms and managed by the procurement team or your procurement services partner.


Read More: What are Managed Order Guides (MOGs)?

Revisiting Your Distribution Agreement

4. Revisiting Your Distribution Agreement

With the ever-changing COVID landscape, consider revisiting your existing agreement to make sure it meets your needs. For example, lower current volumes may allow you to utilize fewer delivery days with larger drop sizes. Additionally, taking advantage of distributor private label programs (DPL) provides the same quality products for a lower cost. Due to obstacles suppliers have faced as a result of COVID, a 2-hour delivery window can be a challenge for distributors to consistently hit. Because your needs might have changed, it might be time to work with your distribution or procurement services team to find a better win-win agreement with your distribution partner. This might include lower drop size minimums, lower stocking thresholds, or other considerations to make your distributor relationship more successful.

COVID has changed the business landscape for many food service establishments across the United States, making finding new sources of revenue more important than ever to meet financial goals for your business. For more information on how these strategies and others can prepare your operation for success and increase your number of revenue streams in the COVID era, please visit

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