These posts get long. So splitting into 2 for my sanity and yours. First 5 today, next 5 tomorrow.
1) Food tech is really fragmented
Because it is fragmented, the tech/experience stack we're building has heavy reliance on 3rd parties.
And the more reliance on 3rd parties, the harder things get from an operations standpoint. I can execute flawlessly, stay on schedule, and have things perfectly planned... but trusting all these 3rd parties to act on time and as desired is just not realistic.
Almost always, things are slow or behind, or things are broken, or you're waiting on support tickets or calls back from tech and sales teams all while the clock is ticking down.
Dependencies stack, and you have 0 control to influence things.
2) Food supply chains are insane
Beef prices change wildly all the time. Items go out of stock. Items are delayed. Its hard to bootstrap a business with 100% niche ingredients from local farms or suppliers, so we use the big guys for most kitchen staples (GFS, RD, Sysco), etc.
And oftentimes we can't get 100% of items from 1 of the above, they're always missing just a few things. So even with the big guys, we have to shop with all 3.
Then we get our buns from Martins. We tried to purchase these through a 3rd party distributor, but they came completely smushed and ruined. Only option is from martins directly. So thats another new supplier.
And its not just for food, but for utensils, sauce cups, box liners, etc.
Over time things will continue to get crazy if we don't REALLY keep a tight grip on our supply chain. Especially because we'd like to up-trade certain ingredients from large vendors in exchange for more locally produced or sustainable ingredients.
Sweetgreen uses almost exclusively regional/local providers, and is why they introduce into new markets at a slower pace -- they build relationships with farmers before they establish a new location, and then order from those farmers for the new locations.
Kudos to Sweetgreen, that is a moat thats impossible to copy. I can't imagine what its like to manage their supplier portal.
3) SKU count is a runaway train if you aren't careful
We are a 16 item concept. 4 mains, 3 sides, 5 sauce options, and 4 drinks. And we need 25 unique food SKUs for this.
Then we have 2 premium box types, a few generic side boxes, a sauce cup, kitchen supplies/ingredients, bags, stamps, gloves, etc. In general, the # supplies that power the kitchen should stay constant, but if food SKUs are 25 per concept, it becomes unmanageable by ~3 concepts.
Menu design for concepts 2+ needs to be REALLY focused on introducing a low number of new SKUs.
4) Being "the little guy" means i'm almost always operating with no leverage
This means i'm directly opposite the incentives of large tech players or food suppliers.
When volume is the name of the game, and I'm a business running a test pop-up for 3 days a week, i immediately go to the bottom of these guys priority list.
I have to believe thats why it took me 4-6 weeks from each of the 3rd party delivery apps to be properly onboarded.
The only places I seem to have leverage are when its directly related to my local market.
A local small business story gives me PR leverage. And an understanding of the food truck market in Columbus gave us a leg to stand on when looking for a place to operate.
For this reason, I think leaning into "local" is crucial to helping us grow in the early days. Knowing our market better than a big player is how we can win, especially in terms of location sourcing, localized marketing, and partnership development.
Which we'll need CRITICALLY while we lack scale for purchasing power / better commission rates.
5) Keeping labor under control is critical
So many areas where labor can get crazy fast: food prep, packaging prep, transport, setting up / tearing down a food truck… I talked about most of these yesterday, so not going to write about this again.
But on packaging prep:
Folding boxes takes 30-45 seconds per box (pull flat box, crease all folds, tuck in flaps, place in inventory stack). With a small buffer, lets say its 1 minute per box. For a $15/hour employee, thats $0.25 cost per box. An employee at $20/hr is $0.33/box.
Then we're doing stickers on inside of box for social shares/drawing attention to our presence online.
Then stamping bags with a custom stamp in case someone orders multiple slider combos.
Then adding tamper-seal stickers to each box once the food is in.
It all adds up.
Need to keep this in mind when thinking about packaging. We absolutely think our packaging is making a difference and setting us apart.
The reaction on social channels and in-person for deliveries has been REALLY good. But it is a lot of manual steps.
Oh, and something else we learned on cooking group orders:
15 slider pack probably isn't a good idea
Takes up almost the entire flat top
Its only sliders, which is bad because tot margin > slider margin
So while it is a group box so we can spread the box cost out over more people eating, its not a great margin because its 100% sliders. No chance to upsell to garlic parm, and a way lower margin than tots.
Until we were "in the heat of the cooking process" to get things out the door live, we planned to serve this. For now, we're putting it on the backburner.
Way too disruptive to the operation without much benefit to us. So we think we are going to nix it from the menu.
Thats enough for today. Learnings #6-10 tomorrow.