As a restaurant owner, you are pulled in many directions on a daily basis. You are responsible for staffing, training, inventories, menu creation, and a multitude of other duties that are vital to your restaurant running smoothly and being profitable. Comparing and negotiating product costs can also take up a significant amount of your time, but it doesn’t have to.
Becoming part of a group that ensures you get the best pricing on products for your restaurant can increase profitability and create a streamlined process for your purchasing. Knowing you are getting competitive prices with little time and effort on your part will allow you to invest your energy into other aspects of running your restaurant.
Group Purchasing Organizations (GPOs) have been around for quite some time. The healthcare industry was the first to take advantage of the power of the many over the inefficiencies of the few. Hospitals in New York formed the first GPO in 1910 and construction companies soon followed. Today, independent restaurant owners are coming to understand the many benefits of a foodservice GPO.
What is a Foodservice GPO?
A food service GPO, or Group Purchasing Organization, is a collective of restaurants that join together to increase their purchasing power to negotiate better pricing on everything imaginable to run your restaurant. The GPO negotiates prices on everything from food items to uniforms to payment processors. Becoming a part of a GPO that includes your peers gives you incredible benefits you would not be able to negotiate independently.
Why A Food GPO Is A Powerful Business Tool
A food GPO allows you to pool together with other restaurant owners to negotiate prices with national manufacturers and distributors. This allows you to utilize buying power that as a stand-alone purchaser, would not have. There is power in numbers, and the purchasing volume created by joining together with your peers gives you leverage to negotiate lower pricing. It also allows you access to larger manufacturers who may not have been willing to service your restaurant alone.
The main goal of a restaurant buying group is to help independent restauranteurs gain leverage through the combined purchasing power of all the members in a food GPO. This collective buying power results in tremendous discounts that would otherwise be unavailable.
Think about the savings that institutions such as McDonald’s receive with over 40,472 locations around the world. Imagine the negotiations suppliers enter into in order to get their business. As Ray Kroc, McDonald’s founder, so eloquently stated, “None of us is as good as all of us.”
A GPO enables you, the independent restauranteur, to be as powerful as the big chains in rlation to prices and contract terms.
While most operators think of the savings associated with food and beverage, a “Food GPO” creates savings in many more categories than its name implies.
Indirect Spend
All of the expenditures required to run a business “behind the lines” such as office and safety supplies.
Non-Food Items
Suppliers include those in the non-food sector that provide paper products, kitchen supplies and containers, as well as other disposable items.
Technology
While not all GPOs offer technology solutions, Dining Alliance is a GPO technology leader in the restaurant industry and serves as a resource for their members to discover innovative technology solutions.
Employee Perks
Dining Alliance knows that your employees are the seed of your success. Top brands have joined their efforts in supplying your employees with discounted shoes and apparel as well as cell phones.
Save Time and Open Up Internal Procurement Resources with a Food Service GPO
Procuring resources and supplies is an extensive undertaking. The first task is tracking down the suppliers that provide the product at the quality level you’re looking for. The second task is comparing prices, and the third involves negotiating. Price comparison shopping can take up a great deal of your time. Having to seek out, discuss options with, and compare pricing with multiple vendors can be time-consuming and a headache. As a part of a GPO, you know you are getting the best deal without dedicating hours of your time to reviewing cost-comparison spreadsheets.
While mega-chains have massive internal procurement resources, these tasks, for independent operators, are often delegated to chefs and owners.
A restaurant buying group has sourced suppliers that are both high-quality and cost-effective. Best-in-class GPOs work with broadline suppliers. Just as important, they include their member’s local vendors which is particularly important in our world’s growing awareness of the importance of sustainability and the farm-to-table movement.
A GPO manages the relationship between suppliers and their members while obtaining better pricing and contract terms. They’re also apprised of market changes caused by shortages, excess supply, and markets disrupted by weather phenomena. Members know what to expect in advance and can act on this knowledge, preparing for price changes and shortages by changing strategies and altering menus.
Quality, Safety, & Traceability with Restaurant GPOs
Each month seems to bring yet another breaking news story of foodborne illnesses whose source was a restaurant or deli. The FDA reported on several outbreaks in 2020 including Cyclospora from bagged salad in June, Salmonella from red onions in July, and peaches in August. Most recently, multistate outbreaks of E. coli from romaine lettuce led to a recall on Tanimura & Antle, Inc. brand packaged single-head romaine lettuce with a pack date of 10/15/20 and 10/16/20.
Traceability and supply chain visibility are key to providing safe food. A reputable foodservice GPO ensures that their suppliers have procedures and technology in place that enable them to trace their products from farm to table.
Because of their relationship with thousands of suppliers and members, a foodservice purchasing group is well-abreast of the industry’s food and beverage trends. Restaurants are able to offer high-demand menu items, such as the recent movement towards medicinal spices and high-nutrient food, before their competitors.
Is a GPO Right for Your Operation?
Every restaurant operates differently, but most owners share the same goals: controlling costs, improving efficiency, and creating a stronger foundation for growth. A foodservice GPO can be a valuable tool for operators who want to save on purchasing, simplify procurement, and gain access to resources that support both day-to-day operations and long-term success. Whether you run a single location or multiple units, the right GPO can help you strengthen your bottom line while freeing up time to focus on your team, your guests, and your business.
You’re an independent restaurant owner
Dining Alliance is one of the nation’s largest and fastest growing Group Purchasing Organization. As such, we work with operations with anywhere from 1-10 units. We’re here to help you navigate the growing pains and questions that come with expansion. From purchasing decisions to supply chain management, we have a wide network of resources that can help you grow successfully. And if you’re looking to stay close to your single unit, we have resources to aid you in that as well—we support all local independent operations!
You’re interested in learning about ways to save on your bottom line
One of the largest benefits of Dining Alliance is our Manufacturer Agreement Programs (MAP) which helps operators – and distributor relationships to make the most of what they’re currently buying and identify areas where they can save. If cost-savings in your restaurant are important to you, our rebates are available on everything from tomatoes to tablecloths.
Employee retention is important to you
As every restaurant owner knows, hiring and retaining top talent is one of the biggest problems in the industry. In fact, the U.S. Bureau of Labor Statistics reported the turnover rate for restaurants and hospitality was 72.9%! So how can you boost your retention and hiring efforts? Offering employees incentives is one way to share GPO benefits with the team. GPOs like ours have access to non-food programs like discounts on cellular service providers and high-quality shoes that your employees can take advantage of. Our added value programs offer a variety of exclusive incentives that not only save you money, but also have worth for your whole team.
You’re curious about the rise of technology in the industry
The restaurant industry is quickly joining the ranks of the technology age. Staying curious about technology will help you succeed. At Dining Alliance, we can connect you with cutting-edge technology and services, share insights into market trends, and even offer discounts on the technology that you ask for.
You’re Interested in learning more about manufacturers
With relationships with over 350+ manufacturers servicing everything from apples to zucchini bread, our GPO offers you exclusive access to rebates and samples on products your customers will love. Quarterly rebates on items you already purchase will help you save money and also give you access to other time-saving items you may not know exist.
Join Dining Alliance
Dining Alliance is the industry’s largest GPO, with 56k+ members that make up $100B+ in buying power.
Dining Alliance is here to help you receive the best prices for your restaurant purchases and give you the negotiation power you have been looking for. We are the largest Group Purchasing Organization in the country and know the specific needs of restaurant owners. If you have been considering joining a GPO, contact us for more information or to join today.
Frequently Asked Questions
How does a GPO save restaurants money?
A GPO saves restaurants money by combining the purchasing power of thousands of operators to negotiate better pricing, rebates, and contract terms with manufacturers and distributors. With Dining Alliance, members can reduce costs across food, supplies, technology, and other operational essentials.
Is it free to join a GPO like Dining Alliance?
Yes. Dining Alliance is free to join, making it easy for independent restaurant operators to access cost-saving programs, supplier relationships, and value-added resources without added membership costs.
What types of restaurants can benefit from a foodservice GPO?
Independent restaurants of all kinds can benefit from a foodservice GPO, whether you operate a single location or multiple units. Dining Alliance supports a wide range of operators looking to improve profitability, simplify purchasing, and access trusted industry resources.
What products and services can you access through a foodservice GPO?
Through a foodservice GPO like Dining Alliance, restaurants can access savings on food and beverage, paper goods, kitchen supplies, uniforms, technology, payment processing, office and safety supplies, and employee perk programs.
Can a foodservice GPO help with more than purchasing?
Absolutely. Dining Alliance helps beyond purchasing by connecting members with technology solutions, market insights, supplier support, employee savings programs, and resources that support growth, retention, and day-to-day operations.
