Why is local sourcing for farm-to-restaurant partnerships so difficult?
Recently, at the bustling Sichuan Chengdu Agricultural Expo, a signing ceremony of about 60 people was held quietly. One party to the agreement was Chengdu's major star-rated rural farmstays, and the other was Chengdu's local ecological agriculture bases, and the two sides established a green channel for direct food ingredient supply. Among the Agricultural Expo's 4-day total transaction value of 182 million yuan, this “farm-restaurant” matchmaking project initiated by the Chengdu Rural Tourism Industry Chamber of Commerce had a signed amount reaching 10 million yuan, drawing attention.
It was not an isolated case. An Maocheng, president of the Chengdu Tourism Hotel Association, also brought a team to the Agricultural Expo site. These heads of star-rated hotels specially took time to tour the Agricultural Expo, hoping to gather the highest-quality food ingredients in order to improve the hotel catering business.
In theory, direct “farm-restaurant” matchmaking can not only shorten intermediate links, but also better help ensure the quality and safety of agricultural products, achieving a win-win situation for agricultural producers and catering enterprises. So, what is the current situation of farm-restaurant matchmaking? What difficulties exist? The reporter conducted in-depth interviews.
The proportion of ingredients supplied exclusively by bases is low; large-market distribution remains mainstream
Where do food ingredients in the catering industry mainly come from? Du Li, a professor at Chengdu Tourism College, has taught catering industry courses for many years. She told the reporter that the sources of food ingredients for catering enterprises are currently very complex. Some ingredients with relatively large usage may have fixed suppliers, while some with relatively small usage are purchased directly from farmers' markets. There is no fixed pattern in terms of either time or the source of agricultural products.
Among catering formats at various levels, hotel catering is undoubtedly at the high-end end, and it is more particular about the selection and purchase of food ingredients. What are the main forms of kitchen ingredient supply for them? The reporter visited multiple hotels. Zhao Yanbin, general manager of Yuxiuyuan Hotel, told the reporter that at present the kitchen ingredient supply at the Yuxiuyuan store is mainly handled by cooperative suppliers responsible for procurement and distribution, or ingredients that have been processed are purchased from Metro, but the cost is relatively high. Du Hua, general manager of Jingchuan Hotel, said that Jingchuan's annual food ingredient procurement cost is around 5 million yuan, and suppliers are mainly determined through bidding.
The reporter learned that some high-end hotels have already tried to establish cooperation with production bases, and Chengdu Wangjiang Hotel is one example. Ren Lin, general manager of Wangjiang Hotel, introduced that Wangjiang Hotel is the only garden-style five-star hotel in downtown Chengdu, with a total of 1,600 dining seats, and annual food ingredient purchase expenditure of around 20 million yuan. In addition to supplier distribution, Wangjiang has already begun to establish cooperation with local production bases in Chengdu and build exclusive supply chains.
“Actually, in high-end catering, examples of direct matchmaking with places of origin are not uncommon.” Du Li told the reporter, but this kind of matchmaking is more to ensure the flavor of a certain specialty dish, rather than from the perspective of supply chain management.
An Maocheng said that because the catering industry's demand for food ingredients is very rich, while the varieties of production bases are often relatively single and affected by seasonality, most hotels still purchase from the large market through suppliers, and the proportion of ingredients supplied exclusively by bases is relatively small.
Multiple demands converge; catering industry ingredient supply seeks transformation
“The situation is changing.” Zhang Jiao, secretary-general of the Catering Branch of the Chengdu Tourism Association, believes that as society pays more and more attention to food safety and the concept of healthy living becomes widespread, market consumer demand is upgrading, which imposes new requirements on catering enterprises' food ingredient supply management.
Noticing the shift in customer consumption demand, Wangjiang Hotel has already made some attempts in its catering business——the creation of an ecological restaurant is one of them. “Ecological restaurants emerged along with the vigorous development of the ecological health industry.” Ren Lin said that fresh agricultural products purchased from the large market naturally cannot reflect an ecological restaurant's high requirements for ingredients, so cooperation with production bases whose product quality is traceable becomes inevitable.
At the same time, as market competition intensifies, more and more catering enterprises have realized the importance of establishing a multi-level and multi-dimensional food ingredient supply chain. “Walking on multiple legs is an important approach to hotel food ingredient supply chain management.” Ren Lin said that if supply channels are too single, hotels can easily be passive in business negotiations. Moreover, in recent years, affected by relatively large fluctuations in agricultural product prices, enterprises' controllability of procurement costs has been weakened. Developing contract farming with production bases can effectively control the impact of market fluctuations on enterprise operations.
With social development, the functional positioning of tourism catering enterprises is also continuously extending. Beyond traditional business, major catering enterprises and tourism hotel businesses are seeking new profit points. Selling mooncakes during the Mid-Autumn Festival and selling hairy crabs in golden autumn are typical examples of business expansion.
In the view of Huang Ting, director of the Market Division of the Chengdu Agricultural Commission, this “game” can be played even better. “Hotels and catering enterprises are city windows and images. The large amount of high-quality customer flow they gather not only means business opportunities, but also opens up new models and carriers for the marketing of local high-quality specialty agricultural products.” Huang Ting said.
Build resource-sharing platforms and gradually matchmake in layers and steps
Based on multiple considerations, the enthusiasm of catering enterprises for matchmaking with bases is gradually rising. For most production bases, being able to establish long-term cooperation with large hotels and large restaurants means stable revenue expectations, so it is naturally something they could only wish for. However, how should the old problem of the richness of food ingredients versus the limited varieties of bases be solved? It is impossible for an enterprise to determine one supplier for just a few varieties. Calculating only ingredient costs may be lower, but negotiation costs and management costs may suddenly increase.
Du Li believes that farm-restaurant matchmaking cannot replace the logistics and distribution function of the large market, but layered and step-by-step farm-restaurant matchmaking is not only conducive to a win-win situation for the catering side and the agricultural production side, but also conducive to ensuring food safety and enriching and improving the agricultural product circulation system.
“Intensive, group-based matchmaking is an important approach.” Du Li said that from the policy level, many local governments hold a positive supportive attitude toward farm-restaurant matchmaking, calling for and organizing farm-restaurant matchmaking activities, but it is difficult to form a long-term mechanism; from the micro level, information asymmetry between industries and between individuals causes individual market entities to often pay very high time and energy costs when conducting farm-restaurant matchmaking. Therefore, group formation among market entities is particularly important.
Industry associations have already taken action. Recently, the Chengdu Agricultural Products Market Circulation Association and the Chengdu Tourism Hotel Association discussed the “Chengdu High-Quality Specialty Agricultural Products Enter Hotels” activity, attempting to graft Chengdu's agricultural resources with its tourism resources to achieve a win-win result. “Building platform resources is the first task for the two industry associations.” A relevant person in charge of the Chengdu Agricultural Products Market Circulation Association said that a platform realizing resource sharing will break down information barriers and create conditions for smooth and efficient “farm-restaurant matchmaking.”