January 24, 2011
No full-service restaurant trend is hotter right now that the use of locally grown and produced ingredients. They’re magic on menus, but does it cost operators more to use them than similar items sourced from afar and transported by a broadline distributor? A trio of academics puts this question to a real-world test.
“Assessing Costs of Using Local Foods in Independent Restaurants” appears in the latest issue of the Journal of Foodservice Business Research. Its co-authors are Penn State’s Amit Sharma, Rush-University Medical Center’s Mary Gregoire and Iowa State’s Catherine Strohbehn.
The goal of their research? “This article assesses successive process and production stage time and monetary costs of using local ingredients to prepare menu dishes, and compares these with costs of similar dishes prepared using ingredients purchased through nonlocal suppliers. This article is timely as many restaurants consider using locally grown foods as a differentiation strategy.”
Indeed they are and operators are wondering what, if any, additional costs the use of local ingredients entails. Anecdotal evidence abounds, but this study provides a systematic look at the issue.
The researchers interviewed restaurant operators whose offerings spanned a wide range of restaurant food and service styles. The average number of seats in these restaurants was 136, with a high of 250 and low of 85. Six menu items from each restaurant (a mix of starters, main dishes, side dishes and desserts) were studied. Three were made with local ingredients, three with nonlocal.
We’ll spare you the details of the research methodology from there, but take our word for it that this inquiry was thorough, its methodology rigorous and the ensuing data was handled using high-level academic protocols and social science research tools.
So what did the researchers find out?
“There does appear to be a statistically significant difference in the delivery times of primary local ingredients versus those purchased nonlocally; however, there was no statistically significant difference in the sourcing time of local and nonlocal ingredients; there appeared to be no statistically significant difference in the food cost of local and nonlocal primary ingredients used to prepare the selected dishes for this study; and there does appear to be an ‘establishment effect’ suggesting that certain restaurants were found to be producing menu items using local ingredients more efficiently than others. Statistically significant differences were found in receiving times and portion sizes of efficient versus inefficient restaurants.”
Which is to say, because restaurants get a large number of smaller deliveries when buying locally, it costs them more time than simply receiving one big drop from a broadliner and paying one bill. Also, the “establishment effect” term indicates that some kitchens are better than others when it comes to handling and breaking down products they get from local growers and purveyors.
The three professors see this implication from their work:
“Probably the most significant result that needs to be highlighted is that the actual costs as measured by food costs…were not significantly different between locally grown and produced items and other items. This is an important result for restaurants wanting to increase use of locally grown and produced foods. Another way to state these results would be that while it possibly won’t cost more to use local foods, the dishes using such items will need to be promoted so that restaurants can increase the production volume of local food dishes to maximize on production efficiencies.”
Translation: If using locally grown ingredients will help you sell more food and attract more customers, then go for it. The cost implications are minimal to zero. Now let’s hope the professors follow up this study with one about how much the use of locally sourced ingredients does or doesn’t contribute to restaurant revenue growth.
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