ALEXANDRIA, Va. – We’ve heard it time and time again: Foodservice is the future. With its steep learning curve and generous profit margins, it’s viewed by industry experts as a high-risk, high-reward offering for convenience retailers. During a free NACS CAFÉ webinar yesterday, foodservice veterans provided their insight on how to minimize the risk and maximize the reward by optimizing the foodservice supply chain.

Speakers Joe Chiovera, principal of XS Foodservice and Marketing Solutions; Chris Chila, senior category marketing manager for Hess; and Tim Barry, corporate director of foodservice and fresh for Core-Mark all emphasized the importance of commitment and communication when it comes to implementing a fresh food program.

“There are great opportunities, but we have to take some disciplined steps,” said Chiovera, who believes in the motto “foundation before differentiation.” He advises that a strong foodservice supply chain starts with a strong base of internal and transparent commitment from senior executives on down, including standards, training and supplier relations.

The presenters also offered specific insights into foodservice distribution.Distribution, they noted, is an essential element of the foodservice operation — and perhaps the most complicated one. Chila suggested starting the conversation with existing distributors, considering questions like: How will you get product from the manufacturer to a distributor to a retail location? How will you account for distribution in product costs? Who will own the supply chain process? What will the ordering process look like? Can they provide online ordering and predictive ordering? And above all else: food safety first.

Core-Mark’s Barry also emphasized the importance of choosing the right distributor: “If your supply chain doesn’t have integrity, the retailer is the one who will take the biggest hit,” he said. “You need a vendor who is a true partner.”

The right supply chain partner offers a fit between your offer/consumer needs and can help execute your goals. For instance, a distribution partner that can handle a broad line of fresh products on one truck can increase delivery frequency, increase freshness of products, reduce cost of goods, improve out-of-stocks, decrease carrying costs and improve capital utilization, said Barry.

And, as the “high-risk” part would imply, retailers should expect to get some key learnings as they go, and likely lose some money on both product and labor as their foodservice programs get off the ground. “It’s not just another product into the store, expect some surprises,” advised Chila. For instance, as one participant noted, it’s not unusual to expect more than 20% waste when launching a foodservice program. “Just be transparent with senior management. Don’t aim for 5% to 8% waste, but expect high and then work to stabilize,” advised Chila.

For more lessons on implementing or improving your foodservice program, tune in to NACS CAFÉ’s next live webinar on Foodservice Packaging. The free session will be held on Thursday, September 4 at 1 pm EDT. To register for this webinar or to explore the complete list of upcoming NACS CAFÉ foodservice programs, including face-to-face sessions, visit nacscafe.com.