There is no better time to re-examine your business model to ensure it's designed for success. Here, we examine how foodservice manufacturers should plan, structure, engage with customers, and go to market to be successful in this quickly evolving environment. To do that, Kinetic12 has outlined eight business success factors that define best-in-class. This framework provides a lens through which firms can examine their business models and identify areas of change needed to set their organization up for continued relevance, growth, and profitability.



As forward-thinking leaders, we must guard against complacency and continuously evaluate our business models in light of the ever-changing market. Never has that been truer than it is today.

So, what is best in class?

Here, we look at eight business success factors that Kinetic12 believes define the Foodservice Manufacturer of the Future.

1. Integrated Planning for Growth 
2. Differentiated Innovation 
3. Customer-First Sales & Marketing 
4. Targeted Solution Selling
5. Smart Outsourcing
6. Omnichannel Integrated Org-Design
7. Technology-Driven Transparent Supply-Chain
8. Digital-Forward Mindset 
   

3. Customer-First Sales & Marketing

Putting the customer first is not a novel idea, but the idea of marketing and sales functions being strategically integrated has become an integral part of the process. Typically, the larger an organization is, the more challenging this integration becomes. For the manufacturer of the future, both sales and marketing functions point in the same direction. Customer-focused alignment is achieved against priority customers and targets through solution-selling messaging, innovation strategy based on customer and consumer needs, and innovation execution aligns with the promotion calendar.

Best-in-class manufacturers achieve a high level of marketing-sales partnership with a common set of goals, transparency of ideas and data, and a shared vision of success. This alignment is crucial to success and can be a major stumbling block to prioritization and execution if not optimized.

4. Targeted Solution Selling

Targeted Solution Selling – Over the past four decades, we've seen selling philosophies evolve from transactional buy-sell to feature-benefit selling, to collaborative, solution-based customer engagement. The fact is, all these approaches are valid, but for different customers and situations. In the manufacturer of the future's organization, customers and prospects are segmented based on an equation of value and opportunity, compared with the cost to serve that account. Organizations simply don't have the resources to treat all customers like "strategic" accounts. Resources are not limitless. Choices must be made.

Best-in-class customer targeting involves identifying the highest opportunity "best-match" prospects using characteristics, including behavioral criteria, that have the greatest correlation to previous success. It is not left up to the individual salespeople to scroll down a spreadsheet of operators and choose who to go after.

An effective go-to-market strategy utilizes a matrixed approach to solution selling that's been customized based on a sophisticated segmentation model of existing customers and a next-gen, data-driven targeting model for prospects.

The Operator Collaboration Model, developed by Kinetic12 and IFMA, is an example of a customer segmentation tool that uses a quantitative scorecard approach to assess existing relationships based on the value the business creates versus the resources required to service it. The scorecard output places each account into one of four segments or relationship types: transactional, preferred, collaborative, or strategic. This allows an organization to understand their current mix of customers, assess the ROI for each, and re-allocate resources to drive greater customer value and growth.

5. Smart Outsourcing

Over the past twenty years, outsourcing has become increasingly popular. Outsourcing is less expensive than hiring an employee, allows for a greater degree of specialization, avoids large capital investments needed to build internal capabilities, provides greater P&L flexibility, and can drive greater organizational focus.   

• More than 94% of organizations use some form of IT outsourcing (Orient)
• Leaders can no longer afford to view outsourcing as a mere business tactic; it is now essential to remaining competitive on the world stage. (getAbstract)

Smart outsourcing involves a broad strategic assessment to build external value networks that leverage third-party resources, expertise, systems, services, technology, and people to optimize and extend your solutions.

The Foodservice Manufacturer of the Future must examine its organization to determine where it can build internal expertise versus having a third-party manage it and determine which delivers greater value and the best ROI.

In foodservice, sales have traditionally been a function that is either fully or partially outsourced to brokers. The challenge is in finding the right sales mix of internal and external resources.

Foodservice divisions are responsible for an increasingly complex customer base, including independent operators, restaurant chains, hospitals, schools, entertainment venues, hotels, commissaries, C-stores and grocery prepared foods. This multichannel landscape can only be fully served through a multi-faceted sales/marketing and support organization. Thus, smart outsourcing will likely be part of the solution for many companies for years to come.

6. Omnichannel Integrated Org Design 

Omnichannel commerce is a multichannel approach to customer engagement that focuses on providing a seamless customer experience. For organizations that go to market through legacy division structures, the blurring of channels is causing both customer confusion and internal misalignment. Needless to say, it's not good for business! This, however, is not a unique problem.

• 55% of companies have no cross-channel strategy in place. (CMO Council)

The Foodservice Manufacturer of the Future understands this and has aligned internally across divisions to clarify customer ownership and shared sales responsibilities so that for the customer, their supplier contacts are clearly understood. Portfolio expertise still resides within each division, but there is a collaborative and transparent approach to sales and marketing that allows the manufacturer to present an integrated story. 

• The results have been proven. Companies with extremely strong omnichannel customer engagement retain, on average, 89% of their customers, compared to 33% for companies with weak omnichannel customer engagement. (Aberdeen Group)
  

7. Technology-Driven Transparent Supply Chain 

Over the last four years, supply-chain issues have been significant and highly disruptive. This has underscored the need to improve supply-chain visibility, transparency, trust, and data reliability. The technology that is driving these improvement efforts is both emerging and mature, from warehouse and transportation management to robotics and blockchain-backed transaction recording.

Consumers are also driving supply-chain optimization efforts. Their desire to know where their food comes from, how it was processed, what's in it, and the route it took to their table is growing exponentially. Food safety and food hygiene are terms that have now been stamped into our landscape. The savvy Foodservice Manufacturer of the Future is fully versed in the supply-chain terrain and how it is evolving. They have a supply-chain optimization strategy and a network of technology and service providers building towards a future of full-value chain transparency, leveraging that available insight to their operator customers and through them to the foodservice patron.

The importance of these efforts moving forward cannot be overstated. The domestic and global supply-chain issues of the past four years have required each manufacturer's full attention to solve. Success will be defined by more than just supply-chain transparency. Success now requires crisis management expertise and risk mitigation strategies, which now have a direct impact on customer choice and brand trust. Additionally, new FDA regulations around supply chain transparency and traceability will make this a legal requirement.

8. Digital-Forward Mindset 

Business success now demands a digital-forward mindset, however – "nine out of 10 business leaders are either puzzled, hesitant, or investing too much on a piecemeal basis to realize success in the digital realm." (Forbes)

A best-in-class foodservice manufacturer understands this. They have a comprehensive digital strategy and invest in bringing their food-away-from-home organization up to par with their retail counterparts and other industries regarding the technological sophistication of e-commerce, data gathering, analytics, and social media. 

According to a recent Accenture study, the best habits among 8,300 top business leaders who are achieving results from their digital transformation effort include the following mindset:

• "Leaders understand the need for blurred lines in the technology stack – data, infrastructure and applications."
• "They see how unraveling tightly integrated systems makes them more flexible."
• "They understand that by minimizing the difference among processes, their company will be better able to leverage all of its data."
• "And they believe that these elements add up to strategic agility."

Culture is the final component of attaining a digital transformation. Many organizations invest in technology and train their people to use it, but they fail to understand the value of creating a "digitally savvy culture." Building a broader, company-wide understanding and alignment to the adoption and value of new technologies is also crucial to success. 

Looking forward 

The Manufacturer of the Future can be defined by the eight business success factors outlined above and is taking action today to plan and invest both thoughtfully and aggressively to build best-in-class capabilities.

"In today's era of volatility, there is no other way but to re-invent. The only sustainable advantage you can have over others is agility."

- Jeff Bezos

About Kinetic12: Tim Hand, Gary Schachter, Art Bell, and Bruce Reinstein are partners with Kinetic12 Consulting, a Chicago-based Foodservice and general management consulting firm. The firm guides multiple best practice projects and forums, and consults with leading Foodservice suppliers, operators, PE firms and associations on strategic initiatives. Their previous leadership roles at Foodservice manufacturers and restaurant chain operations provide a balanced perspective and insight into how the industry is evolving and what must be done to stay relevant.

Contact us to discuss or learn more about how we can help your organization understand the Restaurant of the Future and how Emerging and Growth Chains will define the future of foodservice.