Interview Transcription Below
The food service market is on the rise, especially right here in the Middle East. We’re seeing unprecedented growth with the vision of 2030 for the Saudi market, with the vision of growth within the Arab Emirates and many of the GCC markets. And this is a channel that is hot and that many companies are looking to capture at this moment.
So, you know, today I am with a dear friend, a partner, somebody that I work with quite closely. And we’re going to share with you some true insights that can really help you and your businesses to help to maximize your growth within that field. So how are you doing? Very well, thank you. It’s a pleasant day today.
Amazing. So Dr. Ellie Daher and I have worked on multiple food service projects, whether it’s food manufacturers, food distribution organizations within this geography and here. So there’s just a you know, just some of some of our discoveries and findings. What are some of the elements that we can share with our audiences that can make a difference in terms of a successful food service organization from an unsuccessful food service organization?
What are we finding today? Very good. I’m glad we were talking about this because the first call that we normally receive, you and I, is how do I increase my sales or my sales are lagging or I have good growth on sales but is not structured. The other question that we typically have, how do I make it sustainable?
So these are three or four questions that always come to us as a first call of the order of the day. Then when we engage further and we discuss with the leaders the root causes of why they don’t have an increase in sales or why it is not structured or why they cannot be dominant in the market, which they wish to do.
We find five key elements that need to be addressed. The first one is really from the overall vision and mission of the company. Do they have a clear direction of where they want to be in the next few years? They want to be dominant in the market. Let’s take that as an example. Right. Right. And a lot of organizations have this as their aim, you know, to be the preferred food service distribution company, to be the go to partner.
And this is easier said than done. Always. Number one, why can’t we be number two or number three? Right. But the question is dominant and what right is it dominant in? The fine food market is dominant in the QSR market and is dominant in coffee shops. You need to define that dominance because that takes a lot of actions after that to really restructure the organization, match your your channels to the products that you have, to the distribution channels that you have to the language that you will have with the sales professionals that you have put there on the floor, on the ground, because they have different acumen, different competencies and so forth, to really
be able to be efficient in ensuring the growth and the penetration. So one of the things is this is quite interesting. One of the the elements of a mission and vision and a lot of time it gets to be a bit ambiguous. I want to be the number one in this within what they call the CAT channel.
What I’m hearing from you here is, you know what, Orica’s quite, quite broad and maybe internally there is a part of like structuring even that vision further to say, we want to win in this market, we want to win in this channel, we want to win with with this type of customers. And from that premise, we then work backwards to saying, well, what do we need in order to be dominant here?
How do we better serve the coffee shops? Because the needs of a coffee shop might be different than the needs of a hotel. And the needs of a hotel are different from the needs of the QSR. Or today some of the casual dining that is coming and popping up left and right within the market.
Great. So once you define really where you want to be dominant, which channel you want to be in, then really, then you have to focus your organization. So how do you focus on innovation? Basically, you understand the market. So analyze your current customers. You have two sections, right? Phase one and phase two. First, let’s understand your house.
Let’s understand your current customers. Right. How are they distributed? How are you serving them? What’s the commonality between them? What’s the difference between them? Where is your 8020 rule? That’s coming up. But 80 to 80% of revenue comes from normally 20% of your customers or 20% of your US SKUs. So you do this deep analysis to understand really where your house is and where your market is currently, and develop a market strategy to increase that footprint with the current existing market.
Right. So this is where segmentation, targeting and positioning phase one comes into play, addressing the current existing customers and asking used. You know, it’s great that you’re sharing this because what we find is that what we’re finding is a lot of organizations that have built large, I would say, volumes haphazardly. In other words, they started acquiring customers left and right.
And then all of a sudden they block all that organization from serving these customers. And administratively, operationally, they become I don’t want to say the word slaves, but they become slaves because these customers are paying the bills. So how do we free up time? How do we actually be able to grow? The market is growing.
I mean, some of the things we know, if you go on any of the platforms that offer food, there are thousands and thousands of restaurants. And one of the questions that distributors or or food service organizations you want to always ask is what’s your grip? What’s your current coverage? How many customers are buying from you?
And if you don’t know that, you know, compared, how many are buying compared to how many can can buy, then you’re pretty much giving away that for others to to take advantage of. Absolutely. And the way when we do this analysis and you’ll find the distribution of customers per salesperson is not correct because if you want to focus on a certain channel, you need to really have efficiency in the selling process.
So typically, and I’ve seen this and we’ve seen that together, customers that have 150 kilometer long journey for a sales professional, I’m going between coffee shops, restaurants, gas hours and and other institution in a in a in a wide geographical area where you can if you challenge that, you could have, you know, a smaller geographical area. And if you focus only on, let’s say, fast food, you will find 500 restaurants and fast food in a very small geographical area.
So the question is, why do you have to have the journey from A to B, covering hundred 50 kilometers, covering the three, four different channels, selling a number of SKUs because they’re not always coming. Right. The coffee shops need Sirups and all the other stuff where the fast food needs some cooking material and ingredients to serve their fast food food.
So you cover a wider range of use, a longer trajectory, and various channels. And this is inefficient. Challenge is how can you segment that and target properly. So you have to create efficiency with less SKUs, more footprint in the particular channel or to and efficiency and productivity also in the selling process. I think this is music to my ears.
The concept of one is a sales professional selling, driving that’s not selling. They’re selling when they are face to face with customers. And what you’re talking here is a bit about specialization and further penetration. So really having that better coverage within certain areas. So this has been quite useful. Great. So we’ve covered the vision mission.
We’ve talked a little bit about the way that the sales team is structured and what they’re focusing on, what else we’ve done. Yeah, I think we also found organizational issues. What do you mean? Okay, So if you look at so typically when you create a company, you have a certain ideal culture that you want to embrace and put forward a lot of constructive elements in that culture.
People help each other. People support each other, People go to work as great as a team. As one team, As one team. Collaborative. Collaborative, Exactly. And along the way, we start putting processes and systems. We hire leaders, we hire supervisors. We’re h.r. We put finance. We have a supply chain. There’s a supply chain. You know, the infamous word, right?
So we tend to skew that ideal, the ideal culture to a current culture. And these current cultures are not always aligned with the current with the ideal one. So they become more passive or more aggressive in nature. And so if I can just kind of clarify this. So today, the business we want to be the number one food service organization.
We want to be customer centric, but one second products are not delivered on time. Forecast is not properly communicated. So of course, now the customer is calling, complaining, and then the salesman or this, you know, is blaming this or is blaming that. And then all of a sudden we’re like trying to play. We’re trying to play. It’s not my fault, you know, it’s his fault.
Yeah. And you also lose a lot of trust in each other, in each function, if you want to say. Because if the sales person goes to the field and sells and then the supply chain does not deliver because they don’t have the product or the demand planner does not forecast those and have them in and the customer will not wait, then they will flock and then go to some other supplier.
So then you have the mistrust in the organization that creates what we call it, a defensive organization where people are just waiting for somebody else to make a decision. They avoid making decisions, they avoid making the first step, and it basically restrains the organization. And this is what we find when we get approached by companies, by company leaders. You know, that is kind of like a silent killer.
You know, it’s like it’s there. And the leader is wondering what we want to do. We have resources, we have money, we have structure. But what’s going on? You know, absolutely. And, you know, it’s like an iceberg, right? So the tip of the iceberg is what you see. But the issues are really buried underwater.
Yes. Right. So you’ll see people resigning. You see people not happy. People are basically doing it because they have a cold. They’re not taking the extra mile. It’s like hiring them for their hands, not for their brains as well. Right. And this is when we hear things like, you know what? What does it matter? What does my opinion matter?
Where I’ve shared that a couple of times and no one is doing anything, The boss ends up doing what’s in his mind and you wonder why its sales are not increasing, for example. Yeah. Yeah. So. So that’s really an issue. So when you understand the culture and the causal factors of what’s causing this culture, particularly, I will give you some examples.
How is your recruiting process? If, for example, your sales people, you need to expand in the territory and it takes 30 days to find a sales person and another 30 days to onboard and another 30 days to really get him in the business. You lost three months of production and if one salesperson makes X number of dollars in sales, you lost three months times X of sales Y because your recruiting process is rigid.
The other one Y people are y. You have a high turnover in sales in the first place. Yeah. Why are people leaving? Are you paying the right way? Are you motivating them the right way? In terms of compensation, how are you placed within the benchmark of the food service? Right. Are you in the top 25 percentile, 50th percentile, 75 or you’re out of scale?
And what happened and, you know, we have that a lot. We see that a lot of companies take the food service as retail food. And then they benchmark everything on their processes, their pay scale, their recruiting, their competencies of salespeople based on the old model of retail. But it’s not clear to the food service business element.
Absolutely. So I want to maybe tackle one other element here. You know, you spoke a bit about maybe compensation. You spoke a bit about the scale of retail compared to food service. But you note today that as a person, I’m not just attracted to money. There are other things that attract me to the job. And among them is, is the sense of belonging, is the sense of family.
It’s the collaborative approach that I’m having with my leader, with my colleagues, and of course, how do we see this actually reflected when we end up interacting and getting to see what’s going on within the organization? Very, very good point. Very good point, because that’s what you see when you analyze the culture, right? You see people are coming just to do that job, get the salary and go home rather than being, you know, excited to come to the work because they feel they’re part of the second home for them.
The company is their second home. They feel productive. They feel that the company they can trust, their company and their development in and making sure that they grow and in a right way, they develop in the right way and they produce in the right way. Right. And this is really an element, an element of trust between organization and the employee.
And we see that lacking in a lot of places. They think, okay, well, if you don’t sell, if you don’t deliver and replace you, But let’s understand the root cause why this person is not delivering or selling and delivering their results. Right. I think there’s a lot of a lot of gap when I also look at sales leaders and what I mean by sales leaders are the line managers of the direct sales force.
And today the gap we’ve also identified is people that are managing a sales force are not necessarily people managers. They were salespeople that were good at their job and they got promoted and now they are completely out of their comfort zone because, you know, we’ve lost a good salesperson. Now they have to manage other individuals. Or if that’s the case, you’d still put a sales target for that.
Sales sales leader and you give them responsibility to manage others. And that can be quite daunting, you know, for that, for that person. Yes. I just wanted to give you an example. I would reflect on that example. So let’s take a salesperson person. Yep. Take any dominant currency here, whether it’s in Saudi Arabia, either about the same level of currency, Saudi Riyal or Emirates.
They’re both back to the dollar now. So let’s say a salary, a solid person gets 10,000 a month. He delivers in a month. What do you think? A number of sales? Probably about a million. Million? Million plus depending on million and a million. Million plus a profit margin of a normal. You would be, what, 20, 25?
25%. So that’s 250,000. GROSS. GROSS. Right. 10,000 people. Yeah. So let’s do the challenge. If I want to motivate the guy and if I increase him 20%, that’s 12,000. That’s 12,000 is quite generous. So I gave him 12, 12,000. He’s probably now placing us as a salary scale on the 25% that So I can attract, I can motivate.
The guy is more productive. The guy is more efficient. The million becomes what, 1.51.55 or even 1.2. Let’s say it went up by 20%, went up by 20%, became 1.2 at 20% or 2045. We utilized that. So it’s an additional 50,000 additional 50,000 at the 2000 and I got 50,000 of gross. Take all the net that goes that still has a, you know, a ratio of 1 to 100 of that.
So we are blocked in our thought process and this is where I see organizations lacking that, lacking of being thinking out of the box, thinking, putting these challenges on the table and brainstorming and thinking, okay, I want to be dominant in that market. Now it’s still down to dominant in what market and how.
So let me align the organization so I give them the right marching order and then I look at what is inhibiting that marching orders to deliver and your organizational assessment. Right. Whether it’s a culture or whether it’s a process, whether it’s discipline, whether it’s leadership behavior as well. So we look at the underlining and we try to remove those inhibiting factors.
Now, you have basically all you have is now the salesperson flourishing, having the right training, having the right motivation to go sell. And that’s the recipe for success. You know, this really is a very powerful concept here where, you know, they say money is like oxygen and give little of it and you pretty much choke on your team.
And there, you know, they’re doing the work, but they’re looking left and right and they are possibly looking for this potential increment. While what you’ve just mentioned is, you know, let’s just make our people, let’s say, comfortable first, that allows us to be more selective in getting the better quality individuals, those that are more able and more willing to, let’s say, learn and adapt.
Then I can focus on building their competencies, their skills. We can, you know, expect more from my people. I can hold them more accountable. So as you said, the issues of discipline, of communication, of actually commitment to go out and do the work are all gone, you know, And of course, if that is not improving, then that’s a really simple prescription.
Maybe that person is not fit for this role. And you’ve got to do what you got to do. Absolutely. The other angle. The other angle you actually mentioned, we talked about it briefly that I wanted to really emphasize is the retail food versus food service. You have to approach it really as a food service business mind. What does it entail?
Entails a lot of changes, the level of competencies, the level of requirement. You got to do your first, your segmentation targeting and positioning. You’ve got to understand where the gaps are. You have to know the menu of your customers. You have to be able to know the product’s functionality. It’s not about going and selling based on price.
It’s being able to understand the impact of the item on someone’s menu, how it’s going to help them improve the number of customers, improve the average spend, reduce, you know, increased frequency. And as I said this is all about the product selling story. And in a detailed conversation it’s a little bit about eye level.
Let me just fight for this level of space and yeah I mean it does have its challenges, but the complexity is a lot less. None of the stuff I mentioned matters in retail, you know? Absolutely. Yeah. You hate it. You hear that? You hit it on the head. Right. And it’s called a really consultative selling approach. You want to be the partner of choice for the customer, right?
So you want to come and don’t just sell what we call don’t vomit on the person, don’t vomit or what we call it in our common language. Don’t back up the truck and then drop the goods. Yeah, dump the whole thing on that. Like, you know, so you really want to understand and how this customer, you want to work as an ally to the customer.
And you mentioned the golden formula. Can you repeat that? Yes. The sales result formula every single operator out there, the customer doesn’t care about the product. They care about what the product will do for them. So I’m in business to make money, and how I make money is number one is I have to get sales. So every single operator has to call off the NRF.
They want to get more customers. They want to get an improved average spend in the outlets and they want increased frequency and they get more customers by innovating So and this so this is where insight led sales conversations. So today there are so many trends in the market. Consumers are demanding certain products to be offered in an outlet.
And if they’re not, then guess what is death by choice? If the operator does not evolve, his menu does not innovate, does not keep driving. These new innovations are based on insights and trends that’ll be replaced by somebody else on that. Just if you pause here, I just want to share let you remember one experience we did when we took the sales professionals.
We put them in a room and we taught them ideation techniques from the design thinking method. Yes. What was the experience like? So here we want the sales professional to not just talk about a product but what the product can do and just being able to put the you know, I remember the spoon, if that was the example you’re referring to, you’re seeing what can be done with this, with the spoon.
What else could you do? Or the circles you know, and seeing how you can come up with more options. So it really pushed people to go completely out of their comfort zone, to innovate, to keep reiterating and coming up with absolutes. Then we walk them through four steps, Right? The first one is observation, empathy, you know, gathering inspiration. So we give them some pictures of a restaurant and then, okay, tell us what you see.
What is the environment like? Who are the customers, how they’re eating, others interacting are the families of their young couples, their children and whatever. Right. So that’s the observations. And then to come up with ideas. Okay, Well, you saw all this. Now look at what other ideas that you can have. I mean, some ideas came up from this exercise which were great even changing or adapting the concept.
So maybe including some more ideas for families and things that are completely non-product related. So now this is where the consultancy, the ability to think as an equal as opposed and actually the operator might be inspired by what the salesperson is coming in and they can’t wait to see what they’re going to bring for them.
Yeah, I mean, some of the ideas let’s, you know, they noticed that they’ve got kids coming with the family, right? They don’t have a small area for play, but also they don’t have a lot on the kids menu. Right. So, okay, now let’s inspire. So let’s come up with some solutions. So these are the solutions and they had the discussion with the customer.
That’s good. But that brings in a skill use that brings in the whole menu choices, that will bring in a lot of more sales and that becomes the consultative selling approach and you become the partner of choice. You did not just pack up the truck and dumped everything. You actually work with him to do the effective enough formula.
Absolutely. Great. Some great insights there. Thanks. Thanks, doc. You know, today, if you know, the saying goes, if you keep on doing what you’re doing, you’ll keep on getting what you’re getting. Now, we know in the food service this definition of insanity, but, you know, because of change, because of competition and the evolution of technology, if you keep doing what you’re doing, you’re no longer going to be getting the same.
You’re going to be getting less. And less. So we’re seeing today players coming into the market with technologies that are allowing operators to place orders. A lot of the food service distribution cannot have doesn’t have full reach. So they’re relying on these more on these partners that not have I made the mistake of throwing the word small. They actually become bigger in some occasions because they have more accurate identification of these various outlets.
And that is quite, quite valuable. So if today I’m blocked, I currently have my team and I handle it. I have a salesperson handling, you know, 75 people, 75 clients and they ‘re going left, right, left, right and center. Okay. So I maybe want to redirect his or her time. And, you know, the question is, how do I really, you know, like have a step change in a way, stop doing what I’m doing to be able to really take it to the next level for me and my team and my business to go and become this dominant player in the market.
Absolutely. And the word dominant is key. Again, we go back to the same word of dominance, but just one open parenthesis here. So you’ve talked about the definition of insanity. I am recently going to be launching a book called Prosper or Perish, and really it’s about either you have to take that step change in changing your organization, looking at it from out of out of the box, be agile, be flexible, and work with your team to as one one engine for growth, you will just perish.
The market requires that the market is very agile and it’s growing at an alarming rate. Now back to our earlier question is how do we take it to the next step and become more dominant? Well, I challenge everybody and throw a question on the table. So what about if money is no object? You can have an infinite amount of money.
Are you going to recruit 50 salespeople? Where do you play? Where would you put those salespeople to be the highest efficiency and the highest productivity and the highest sales? That’s the question. If you would be able to answer this, and that’s really looking at, okay, where I want to be dominant. So start from your vision. Vision and where do I want to be dominant?
Is it in the fast food service? Is it in the coffee shop? Is it fine food? Let’s discuss that and let’s put that objective to what is the market? Where is it segmented? Where are the clusters? Where is the growth area? Do you have any fingers on the pulse? You know, there’s an I understand in KFC, I was reading a report in 2023, there will be 40% growth in hotels alone and hotels bring in luxury restaurants.
Now, if you segment that you want to play in a five star, four star or you want to play in the budget hotels. One that tells you where you grow. But who is watching that? Who’s your market analyst to be having the finger on the pulse? So define your market, define where you want to play. And then let’s say I’m going to now distribute my soldiers to the right place so they can go and get the business now.
But do you have the right soldiers? Are they trained properly? Do they have the right acumen? Do they have the right behavior and do I have the right competencies? And are they supported by business development people? If you’re, you know, going to focus on coffee shops. Do you have support from the barista, for example, that will help you if you’re going off to find food?
Do you have a chef that goes with you and talks the language and supports your sales guys? Remember, these clusters or these channels are what we call a matrix selling because they need specialty discussion, they need the language, but also you need the sales icon. So you have a vertical, which is your language, your technical language, I would call it.
And you’ve got the horizontal, which is your sales skills, because both of them come together. A chef is a chef. He is great and technical. He is great at creating recipes and putting, you know, the right flavors in the right plates. However, not all of them are good salespeople. The same thing with a salesperson. A sales person has a lot of sales skills that needs to open, find an opportunity, manage it, and close it at an alarming fast rate.
But he doesn’t have the right acumen or deep enough knowledge to really discuss with a chef of a five star restaurant. Therefore, you need a matrix telling Absolutely. And this in a way, is the magic formula. You know, a lot of time you in food service sales, you find either people with the right food service or you know, chef experience, barista experience, or they have this functional expertise, but they don’t have the behavioral or the sales skills.
And we can teach, we can break it down and in a way help bring this common language so that they can fit in within the proper sales language. And then, of course, the salespeople, chefs can be with them all the time. They also got up there their skill level, and that’s where the continuous training, I call this the p i C.
S formula. So the sales team needs product knowledge, industry knowledge and competitive knowledge, and they get that from the chefs because they work with products on a regular basis. And then we build on that sales knowledge. And that brings us to the transformation we started. We started saying that, you know, you need to have a mind shift from retail food to a food service, and that’s basically the crux of the food service.
So if you still behave as a retail food, you don’t have all these elements, you don’t have those complexities. Well, this you need to really understand the food service business and shift, and that’s the secret recipe of success. Absolutely. I want to just bring attention to one small element, see, I love this exercise. If money was no object and you could bring in 50 brand new people to your business, where would you place that you see?
If you asked this question? So if you ask someone, where can you get growth, existing sales leaders or even business owners, a lot of time. If that question isn’t asked first, they’ll start looking at limitations. They’ll see, well, if you know, I cannot stop servicing my existing customers, I, I cannot do this. And for years we don’t want to think of what can’t be done.
We want to think of what could be done. And that is the magical question is to suspend any beliefs, suspend any old patterns, because this is how we’ve grown. We gradually started getting and growing. But today, you know, in a market like, for example, the UAE, well, in the Dubai market, there are probably more than ten, 10,000 plus potential customers out there, if not if not more.
I don’t know if any of the food service operators, if any one person, any one company has 10,000 plus outlets that they visit and service, I doubt and I work with a lot of those organizations. Same thing in the Saudi market. We know that the size of the universe is over 30 plus thousand. Then that number is growing at.
I mean, just on Hunger Station, we went the other day and we saw a total of 20,000 registered outputs from Burger shops to pizza stores to sandwich stores. To me, you just name it, right, that is available, 20,000 registered on Hunger Station or some of the other platforms. And again, same number. There is a huge gap between the number of outlets being serviced by any one distributor and and the potential in the market.
So the key is to stop doing what’s what we’re doing, suspend and then you can say identify and target where to go and then simply do the right steps to make it happen. I want to take this one step further. I don’t know your views on Elon Musk. Do you like him? I don’t like him. I don’t dislike him.
Neutral. Yeah, I’m sure everybody else was listening to us. Has different views on that. Absolutely. But one thing you get from Elon Musk is as a sentence unlearned to relearn. And that’s important because unlearning, you know, that’s how his secret of success on the space mission, that’s how his secret of success in building those electric vehicles with the batteries.
So you unlearn if you are set in your ways because you’ve been 20 years in the food service industry, would return it right to you. Right. You’ve been there for 20 years. You’re set in your own ways. You have your processes, your systems and whatever. And what you’re trying to do is twist them and match the food service.
You’re not going to succeed. You have to unlearn. You have to think about it as, let’s put this on the site. This is a different baggage. Let me do a startup that is exciting, that it’s nice and it’s completely different. So I’m learning to physically and mentally take the accepted action. I’m not going to put any of my assumptions and any of my previous 20 years of experience into this.
Let’s unlearn, let’s bring the fresh ideas together and let’s involve your team, sit with them, brainstorm. How do we put it together? And that’s the return factor. And then you’ll have a much more agile organization fit for purpose and that you’re on the path of dominance, if you like. And when people are contributing to this vision, when they’re contributing with ideas, then that becomes full ownership.
I am completely, completely brought on board to it to make it happen. Wonderful. So that has been just a small segment of some value addition that we wanted to share with you today. If any of what we’ve shared sounds familiar to you and you’d like us to do a you’d like to have a conversation identify potential fit in terms of being able to help you unlearn, to relearn and and help actually drive to help you achieve your objectives, your goals.
Feel free to go ahead and reach us. So until next time. Until next time. Yeah. Sell more, sell faster and profitably. Thank you.
Recent Comments