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Restaurant Buying Groups  - What is restaurant buying group

top food group purchasing organizations in the US

 

Top foodservice gpo or group purchasing organization

 

Their time has definitely arrived.

 

We've seen an explosion in restaurant food service group purchasing organizations in the last few years.

 

And they're only getting started!

 

 

The stats are pretty impressive.

As are the savings.

 

On average, we're seeing between 10 - 30% savings for restaurants

 

As for the growth, that's only accelerating and with good reason.

 

Hospitality businesses are being hit with a series of cross-winds:

 

  • Food price inflation
  • Labor tightness
  • Increased regulation and rules
  • Shifting customer preferences (better food at less cost!!)
  • Decreasing per capita visits

 

Lots of pressure.

 

If there's ever been a time to investigate the savings of using a gpo or restaurant buying group, it's now!

 

But which one?

 

Great question and place to start.

We've already created a comparison of the major restaurant buying groups here but let's jump right to the question on hand.

 

What are the top food service GPO's?

Maybe more importantly, what is THE top GPO.

 

You can jump to any of the subtopics here:

 

 

Let's get started.

There is literally $1000's at stake for your restaurant.

 

A quick refresher first...


First, what is a foodservice GPO?

 

Better yet, what is a GPO or Group purchasing organization?

 

Essentially, a GPO is a 3rd party entity that has negotiated a preferential contract with suppliers.

 

Sometimes, it's one major supplier (think US Foods).

Other times, it can be 100's of suppliers.

 

It depends on the foodservice gpo and that definitely figures into our consideration.

 

Most of your day to day processing is still with the supplier.

 

  • Ordering
  • Tracking
  • Delivery
  • Payment
  • Etc

 

What we're really after is the purchasing agreement.

 

The GPO's will talk about bells and whistles but we're not in a band!

 

We want pricing that will save us up to 30%!

 

That's the ONLY reason we're here.

 

Think of a GPO as a sports agent.

 

They negotiate and contract with the suppliers to get big chain pricing for smaller restaurants and hospitality customers.

 

The savings is significant.

 

The suppliers won't tell you this but they can make double the margin with an independent restaurant or chain versus a larger customer.

 

The GPO aggregates all this smaller purchasing to provide the same or similar pricing structure.

It's a slam dunk.

 

You can quickly see what this pricing difference means to you here:

 

 

It's also a reason why we we're seeing double digit growth for foodservice GPOs.

 

Let's take a look at the direction the whole market is going now.


Quick stats on state of foodservice sourcing market

 

Up, up, up and away.

 

The food service gpo market is still young.

 

Compared to the hospital or medical gpo market at least.

 

That started way back in the 60's and went through a period of rapid adoption.

 

The foodservice segment is trailing behind but about to have a similar explosion.

In fact, we're right in the middle of that period now!

 

Here's an estimated view of where we are for foodservice:

 

 

So...who are main players in this space?


List of top foodservice group purchasing organizations

 

Let's look at the dominant players in the space.

 

 

Each has different strengths and weaknesses.

Let's look at each one.

 

We'll start with the two that focus on the restaurant segment of food service...Leverage Buying Group and Dining Alliance.



 


Leverage Buying Group GPO

 

LBG is a relatively new addition to the foodservice GPO but they're growing quickly and have one huge advantage.

 

One of the top 2 US Nationwide Food Suppliers

 

Their contract with US Foods is a significant reason to consider them as a foodservice GPO.

 

Here's the deal...

 

All the GPO's talk about their bells and whistles (market trends, purchase analysis, etc) but really, we want the preferential purchasing contract.

 

We want to save between 10 and 30% on our foodservice purchases.

 

POINT!

 

Now, what we can buy and from whom becomes really important.

 

That's why LVG's top supplier as a partner is so important.

 

We'll talk more about this in the which foodservice GPO is best section below.

 

For now, just remember food distributor partner is king!

 

You can quote LVG's pricing on actual invoices here:


 

Next, the other big restaurant player in foodservice...Dining Alliance



Dining Alliance Foodservice GPO

 

Dining Alliance is really the big player for restaurants specifically.

 

They are growing very quickly and have spread into other foodservice segments but their strength is still in the restaurant and hospitality sector.

 

They contract with Aramark as a food distributor as well as many other smaller players.

 

LVG's supplier is definitely the bigger player for foodservice distribution but Aramark is right up there.

 

It's a solid addition partner as well.

 

Founded in 1998, estimated revenue of $41M makes it a contender in the foodservice space.

You can quote Dining Alliance for invoice pricing here.


Food Buy Foodservice GPO

 

Foodbuy was originally created to address the purchasing needs of the massive Compass group.

 

As a result, it's massive itself!

 

Foodbuy is strong across many sectors including restaurant, hospitality, hotels, and hospitals.

 

Their core strength has really been healthcare.

 

Think hospitals, long term care facilities, and the like.

It takes a real expertise to pull off this type of purchasing and they definitely have it.

 

Of the three that are not restaurant focused, Foodbuy is the biggest with an estimated $27M in revenue primarily driven by fees from its contract negotiations.


Entegra Foodservice GPO

 

Entegra is a monster player in the hospital sector.

They also participate in the hospitality and multi-unit housing sectors as well.

 

Entegra combines over 800 suppliers under one roof which is different than some of the other GPO's who have one very large partner.

 

Think LVG and their top 2 US Supplier.

 

Sodexo purchased Entegra in 2017 making it an even bigger player.

 

Again, Entegra's strength has been in health care (hospitals, senior living centers, etc) for food service.

 

Speaking of dominating a sector, let's look at Avendra.


Avendra GPO

 

Avendra is the largest GPO for the hotel sector.

 

They are actually an Aramark subsidiary with a footprint in:

  • Lodging
  • Multi-unit housing
  • Private clubs
  • Higher education
  • Gaming
  • Individual associations

 

Boasting over $4B purchasing power and $127M in revenue, they are definitely a contender.

 

You have to be in the hotel space which is very competitive.

 

Over 8000 customers and self-reported 99% retention speaks to their effectiveness in that space.


Comparison of top foodservice gpos

 

As you can see above, each gpo has strengths based on the sector (health care, hotel, restaurant, etc).


They all offer food service discounted pricing and other bells and whistles?

 

So how do we compare them?

 

We have an entire article on how to compare the major restaurant gpo's and buying groups here.

 

Here's the first concern:

Partner/Supplier

 

In the end, the GPO is really a contract.

 

A contract to purchase at a discounted, group rate.

 

But from whom?

 

THAT is the key question.

 

The supplier(s) that you have access to is the key question.

 

All your day-to-day process will be with the supplier:

  • Choice of products
  • Quality options
  • Ordering
  • Tracking
  • Shipping
  • Billing/Payment

 

What good is a discount if you don't like the actual process!

 

For this reason, we're partial to Leverage Buying Group or Dining Alliance for restaurants and hospitality.

 

This brings up the second consideration...

 

Market Segment!

 

The five food service gpo's have certain market segments that they really focus on.

  • Think Avendra for hotels.
  • Entegra for health care.

 

Supplier strength takes priority but there can be advantages based on market segment.

 

Here's the comparison for the top foodservice GPO's:

 

 

So...which is the best food service gpo?


What is the best foodservice gpo?

 

This can depend on your market segment but two stand out.

 

Let's look at it based on segment.

 

Restaurant/Hospitality:

  • Leverage Buying Group
  • Dining Alliance

 

Hotel/Lodging:

  • Avendra

     

Health Care:

  • Entegra
  • Foodbuy

 

If we have to choose one...we'll choose a top US supplier!

 

That means Leverage Buying Group.

 

We want the supplier with the broadest sku availability. 

A one-stop shop for almost everything we need.

 

LVG currently has that contract and that's hard to beat!


What criteria should we look at when picking a food service gpo?

 

We've mentioned how to compare the gpo's throughout this article but here's the list in decreasing importance:

 

  • Discounted pricing
  • Supplier/partner
  • Requirements (minimum order)
  • Online ordering and tracking options
  • Shipping/Tracking ease and options

 

Those are the key factors.

 

Many of these are dependent on the supplier or suppliers that the food service gpo works with.

 

That's one of the reasons we're partial to LVG or Dining Alliance (Top 2 US supplier and Aramark respectively).

 

The discounted pricing is probably comparable across the GPO's since the raw margin is about the same with the suppliers versus street costs (direct to independent restaurant).

 

This makes supplier our key concern.

 

Who do we have access to?

That's the real question.


How to Quote top foodservice GPO's

 

It's easy!

 

Just upload your invoice or a sample range of items here:



 

You'll get a quote with discounted GPO pricing to see if it makes sense for your business.

 

It's that easy.

 

Of course, if you have questions, we're happy to help.


How to enroll in a top foodservice GPO?

 

This depends on the GPO but it's pretty simple.

 

In some cases, it can take 10 minutes!

 

Each is slightly different but basically, we're just signing a contract.

 

We can still buy outside the contract but in most cases, it won't make sense to due to the pricing.

 

There are requirements for minimum orders depending on the food service gpo but these are rarely an issue for most restaurants.

 

Of course, we're happy to help!


 

As least, see what the pricing looks like for your situation here:


 

Quote a food invoice to see your ACTUAL Savings

 

Again, there is absolutely no cost to you for our services.  Call 800-325-0268Today!

 


 

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1000's of Restaurants
$Million's SAVED

from ML

"No... Thank you.  I wish I had found group purchasing earlier.  It's a no-brainer"

from SO

"We have seen a reduction of 18% for last quarter for one location.  Can't wait to roll it out other sites."

from PA

"The cost savings I realized on purchasing went right back into upgrading our meat and produce quality.  We basically subsidized the needed move to higher grade at no cost."

from TM

"Thank you so much!  Very happy with service.  If there is any way I can contact supervisors to let them know about your great service let me know"

from TR

"I'll be honest...I didn't believe the pre-rollout saving estimates.  Seemed to good to be true.  I'm pleasantly wrong on that"

from CH

"After test at one location, we're ready to move forward across chain.  Great resource to have. "

from SD

"Wow, I can't thank you guys enough for your help...I couldn't imagine trying to tackle this on my own!"

from EF

"Thank you so much for your marvelous work.  I don't want to tell any of my restaurant buddies so this stays with us"

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