Foodservice companies form alliance to leverage services

It’s the first of its kind, and food product manufacturers are hoping the Foodservice Brands Alliance will lead to more innovation in the industry.

“What keeps me up at night is the prospect of becoming irrelevant,” said Craig Gentry, vice president and general manager for Idahoan Foodservice. “You almost never recognize you are irrelevant until you are. We are trying to address that hopefully even before, but even as, it arises.”

How the alliance was formed

Idahoan Foodservice and three other food product manufacturers have partnered with a strategic consulting firm to launch the first dedicated network for manufacturers in the foodservice industry, stakeholders announced in a recent press release. The Foodservice Brands Alliance is expected to help these four companies — and others that join in the future — to have increased priority with brokers and more standardization in industry practices through simplification that will also benefit distributor and operator customers of each manufacturer.

“This is a game changing moment for the foodservice industry,” Gentry said. “It doesn’t come without a lot of risk and work, (but) almost always all work comes with (some of that). Ultimately, it’s about improving the return on investment; we think there’s a significant opportunity (to accelerate growth).”

The Foodservice Brands Alliance companies are Diamond Crystal Brands (a seasonings and condiments company), Idahoan Foodservice, (a potato product manufacturer), Knouse Foods (apple products) and Mount Franklin Foods (snacks), “smaller, locally rooted” companies with typical markets retail, and service institutions like hospitals and schools that have a consistent food service element. The four companies do not have products that compete with each other. There is room to grow the Foodservice Brands Alliance, according to Rob Veidenheimer, president of Pentallect Inc., the food industry strategic consulting firm for the Foodservice Brands Alliance.

“Over time we plan to expand; we don’t have a target number in mind,” Veidenheimer said. “We are going to be very (selective of) who we add to make sure any new members strategically align, including with brokers. At some point (we) lose the strategic advantage if we get too big.”

Why the alliance is needed

Today, one of the challenges small to medium-sized food product manufacturing companies face is not standing out among the five, 10, 20 or more other companies brokers try to leverage sales for; bigger clients typically receive higher priority. The Foodservice Brands Alliance “gives them scale and ability to engage at the broker level” in the “go-to-market strategies” around a shared set of five selected brokers (in the Broker Sales Agencies model across regions), said Veidenheimer. Pentallect will assist by analyzing data from the new partnership and presenting regular performance reports, among other duties.

“We are more important to those brokers chosen to represent (us), and we want to be more collaborative with those brokers and treat them as true partners,” Gentry said. “It’s about executing a simple strategy (with) the idea that doing simpler wins in this environment.”

When it comes to more standardization in industry practices, the current opportunity is described as cross-functionally across regulations, marketing, finances and similar areas, and the goal is increased accountability, simplicity and transparency among stakeholders.

The alliance’s next steps

The model is intended to go live July 1. In the meantime, the brokers and their teams of people will be trained on the new collaborative model. Some time after the launch, Foodservice Brands Alliance stakeholders will evaluate processes to identify areas that need enhancement or improvement.

“We have a (shared) set of measurement criteria,” Veidenheimer said. One of the other challenges in the manufacturer/broker relationship is the broker may have many different manufacturers, each one having its own set of criteria and priorities.

“All broker partners now (have) four metrics (being measured) against, related to overall growth, priority product growth and some other ones (that are) a bit more proprietary,” he added. “It’s about quantifiable growth.”

The other hope is to get away from changing brokers too quickly if performance goals are not being met.

“(That is) not always effective because change costs money,” Gentry said. “We said we are going to share in the success, and there will be challenges, but we decided to go with the carrot approach rather than the stick.”

Why now?

Gentry and Veidenheimer describe the Foodservice Brands Alliance’s conception as something considered in industry for years, but effects of the recent pandemic have presented a timely opportunity to launch it. Conversations among others in the industry last April lead to the intended July launch.

“We certainly came in with no preconceived notions of the scope that would become (the Alliance), or who would be involved, or what broker partners would look like,” Veidenheimer said. “None of that stuff was resolved until we sat around the table many times, rolled up our sleeves, and worked through it.”

“I think we all bring something different to the table,” Gentry said of all the manufacturing partners. “I think one of the important things of the alliance and the strength of it is how we have all contributed in different ways. One of the things that probably contributed to the time it took to launch was working through those strengths and (figuring out) how we are going to maximize those together.”