Almost everywhere you turn, at many levels of consumerism, there is a convergence of product and service offerings that is growing and building. And within the jan/san industry, the combination of offerings has been leaning toward foodservice products for some time.
“Two decades ago the barriers between foodservice and jan/san were very defined,” recalls Dan Merkel, executive director of RDA Advantage Marketing Associates Inc., a Ripon, Calif.-based independent jan/san and foodservice redistributor. “Today, both sides have blurred those barriers considerably.”
For jan/san distributors, that means they can now offer their end-user customers far more than cleaning products and tools, including many foodservice products such as clear can liners, hot and cold beverage cups, cutlery and napkins.
But that isn’t to say jan/san distributors should jump headfirst into foodservice product offerings. Instead, wholesalers and redistributors who offer both product lines say that thought and careful considerations should be made.
“Most jan/san distributors should carry a basic offering of foodservice disposable items,” says Christopher Healy, director of vendor and product management - foodservice for LagasseSweet, Deerfield, Ill. “Cutterbox film and foil, plastic cups, disposable cutlery, hot and cold paper cups, foam cups, plates and hinged lid containers are all items that many customers buy on a regular basis. I wouldn’t recommend expanding foodservice items beyond disposables.”
Another product line that may help jan/san distributors break into the foodservice market are items commonly found in break rooms, says Carol Butler, vice president and general manager of Loveland, Ohio-based Saalfeld Redistribution.
“Jan/san distributors will find the most opportunity with break room supplies, specifically non-perishable, foodservice disposables such as cups, plates, utensils, and napkins; condiments, like ketchup and mustard, or salt and pepper packets; even bottled water, coffee and associated products, including filters, stirrers, sugar and non-dairy creamer,” she explains.
There are also foodservice items jan/san distributors should stay away from.
“Perishable foodservice items are not ideal for jan/san distributors because they are not equipped with on-site coolers and refrigerated vehicles,” Butler notes. “They would need to comply with Federal Drug Administration (FDA) guidelines.”
Wealth Of Opportunity
The opportunity for jan/san distributors to enter the foodservice market is wide open.
“There is a distinction between end-user segments that are big purchasers of foodservice supplies, and the type of segments that are typically serviced by jan/san distributors offering an expanded bundle of products,” Butler says. “Large users — like restaurants, chain supermarkets, caterers — will purchase from foodservice distributors, but small to medium users will realize many benefits when purchasing foodservice items from their jan/san distributors.”
These end-user segments include churches, schools, office buildings, manufacturing plants, small independent supermarkets, bakeries and convenience stores.
“Wherever there is an eating facility — a kitchen, lunch room, break area, coffee or vending machine there is an opportunity to service the customer with foodservice products,” says Jim Merfeld, director of redistribution sales development for R3 Redistribution. “The office buildings, schools, hospitals, nursing homes, restaurants, shopping malls — any facility that uses chemicals to maintain itself is a potential user of food service products.”
Wholesalers and redistributors agree that jan/san distributors should waste no time in expanding their product line. Simply tell the end-user customer what every customer wants to hear: buying foodservice products from them will save them money, time, headaches and hassle.
“The jan/san distributor could show his customer that by purchasing his foodservice items from the jan/san source, that he will be able to save money,” says Merfeld. “Resources spent handling multiple purchase orders, multiple deliveries, put-away efforts and cutting payable checks for numerous invoices can be reduced when the procurement process is streamlined and consolidated.”
Paying close attention to end-users’ current foodservice product needs is a must.
“The more you can offer your customer, the more valuable to that customer you become,” Merfeld says. “Talking with your customer, reviewing his needs and showing you understand them is the first step. Make sure your customer knows you are sincerely interested in helping him fill his needs and dig deeper to develop a good understanding of your customer’s concerns.”
Establishing relationships with end users is the best way to market foodservice items.
“They should begin by surveying the location — where are the opportunities to add on break room and cafeteria supplies?” Butler advises. “How is the end user currently filling the need? If it’s a monthly run to the local warehouse club, they are paying more than they should and taking up their employee’s time unnecessarily.”
Merkel agrees that distributors should explain to their customers what the disadvantages are of purchasing from big warehouse stores.
“One thing that’s lost by those [who shop at warehouse stores] is they don’t calibrate their time — which is substantial,” he says. “[If they shop at these stores] the end-user is performing the delivery service, the selection service and all of that, but they get no assistance or support.”
Distributors should also take into consideration their sales force.
“If you’re really serious, you have to invest in the personnel,” Merkel says.
And in the beginning, it makes sense to keep it simple.
“You’ve got to start with the basics: knives, forks, plates,” explains Aaron Leibowitz, vice president of Norshel Industries, Croydon, Pa. “You’ve got to stock 20 percent of the big selling items to start.”
One Size Fits All
Wholesalers and redistributors agree that jan/san distributors of any size can do well in the foodservice market.
“Any jan/san distributor, large or small, can do well with foodservice items,” Healy explains. “It all depends on the distributor’s mix of business and the relationships they have with their customers. If the customer is buying foodservice items, it gives the jan/san distributor a chance to grow sales, increase account penetration and build average order size.”
Butler says that in the end, it’s about profitability.
“Success in this category is not dependent on size,” she offers. “There is tremendous opportunity for all jan/san distributors because it is a high-margin, high-demand, value-added sale for the customers they are already serving.”
Foodservice products are an add-on to their established bundle of goods, so distributors are increasing their average order.
“What’s more, businesses reorder these products more often than they do many other jan/san products, so there is additional opportunity to serve customers,” Butler says. “Food service items have a higher margin, and everyone wants to improve profitability.”
While it is possible for jan/san distributors to make money selling foodservice products, they should still keep an eye on what their customers need and not put the cart before the horse, says Charles Moon, director of marketing communications at Sheppard Redistribution Inc., Oaks, Pa.
“We’re continuing with our core jan/san product offering and will add more foodservice items as the customers demand it,” Healy says. “The vast majority of the foodservice items we offer have been because the customer has demanded them.”
As the convergence of jan/san distributors offering foodservice products continues, success stories are also becoming known to LagasseSweet’s Healy and others.
“I hear stories every day from our sales team about how our growing foodservice line has helped our customers, the distribution community, grow their business,” he says. “Recently, we were able to help a distributor reduce their inventory with a specific supplier by being able to sell them one case of product at the same price point they were paying for taking in several hundred cases of product at a time. In today’s world of cash flow and inventory turns, that’s huge.”
Healy also recalls that another industrial catalog supply distributor was able to grow their monthly sales by over 15 percent by expanding into some basic break room supplies at higher margins than their core business.
Sometime in the near future, the convergence may not only be an option, but instead a mandate, says Leibowitz.
“Many years down the line, you’re going to have to be a one-stop shop,” he explains. “Anyone who is trying to survive with any substantial size business is going to have to have a full mix of products down the line.”
Steven Potter is a freelance writer based in Milwaukee.
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