The Food Production Process - Part 2

Structure of the Food Market
The path of food products from the grower or producer to the end user is quite complex. The route begins with the producers or growers, who sell their products to processors. Often, an intermediary (a concentrator) is necessary to gather the output of numerous, widely dipersed producers into transportable quantities. Concentrators maybe grain elevators, receiving plants, or cooperative marketing organizations, such as sunkist growers in California. Processors may be divided into primary processors such as flour mills and secondary producers such as bakers. Producer may use a food broker to sell their processed product. A broker is an independent sales agant who works on commission and does not take tittle to the goods. From the processor, the goods are shipped to major distribution centers and wholesellers around the country or region. The processor himself may maintain regional warehouses and act as wholeseller. The wholesellers are ussually specialized according to the markets they serve - institutional or retail stores. Institutional distributors may be specialized even further, dealing only with top quality hotels and restaurants or specializing in a very few products or just one product.
Although the marketing channel may vary somewhat for different types of food products, generally follows the same pattern. The restaurant or institutional buyer may buy the product at various stages in the channel. If he/she buys from a local farmer, he/she is buying from the producer. He/she may buy from a local or district office of the processor, or from a variety of wholeseller distributorss. He/she may even enter the channel farther down and buy from a few items from a retail store, although this is ussually a poor practice.
Marketing food products through channels is an enormous and costly task. Approximately 60 % of the consumer food dollar goes to the cost of marketing, and about 40% goes to the farmer. Labor has always been the largest cost in marketing, with transportation second. Packaging is another cost that is increasing in importance.
Marketing cost have been viewd suspiciously by the consumer and food service operator alike as pure profit to many unnecessary middlemen; but this middlemen provide the following important services: storage, grading, and identification of products, transportation, transfer of ownership, (buying and selling), packaging, advertising and financing.
(Part 3- Receiving and Store Management)

The Food Production Process - Part 1

Purchasing:
The character of the product the resulting product cost begin with the purchasing of the raw materials. Although poor preparation practices may destroy the quality of a good product, good preparation practices cannot instill quality where it never existed. The best menu merchandising policies cannot compensate for purchasing that is not alert to new products, new markets, and new trends. And cost control cannot be wholly effective in production or service if buying is inefficient.
Buying must always be judged by its overall effectiveness and never by price comparison alone. An item’s purchase price is only as important as the item itself; it may be five cents less per pound or 15 percent cheaper by price but 30 percent more expensive in actual yield. The buyer should be interested in the lowest price only when the items are comparable in quality and yield. Good buying procedures provide a food operation with the products most suited to its merchandising policy at the most economical price.
“Buying” is not to be confused with “ordering”. Buying involves making decisions and setting policies about what products to buy and how to buy them, approving the vendors to be used and determining the frequency of the purchases and the quantities to be bought. Ordering is clerical activity which is done within the buying policy.
There are two approaches to commercial food buying: the needs of the operation and the availability of products in the market. When the food service operation is located at some distance from a food distribution point, the buyer may have to begin with what is available to him and make adjustments in the menu and preparation accordingly. When product availability is not a problem, the buyer first analyses the needs of the operation and searches out the products he needs. Most often, the products ultimately purchased are a compromise between need and availability. Whatever the approach, the food buyer should have some understanding of the market in which he/she is dealing.
(Next Part 2- Structure of the Food Market)

Service Excellence: The Food Production Process - Part 1

Service Excellence: The Food Production Process - Part 1

The Food Production Process - Part 1

Purchasing:

The character of the product the resulting product cost begin with the purchasing of the raw materials. Although poor preparation practices may destroy the quality of a good product, good preparation practices cannot instill quality where it never existed. The best menu merchandising policies cannot compensate for purchasing that is not alert to new products, new markets, and new trends. And cost control cannot be wholly effective in production or service if buying is inefficient.
Buying must always be judged by its overall effectiveness and never by price comparison alone. An item’s purchase price is only as important as the item itself; it may be five cents less per pound or 15 percent cheaper by price but 30 percent more expensive in actual yield. The buyer should be interested in the lowest price only when the items are comparable in quality and yield. Good buying procedures provide a food operation with the products most suited to its merchandising policy at the most economical price.
“Buying” is not to be confused with “ordering”. Buying involves making decisions and setting policies about what products to buy and how to buy them, approving the vendors to be used and determining the frequency of the purchases and the quantities to be bought. Ordering is clerical activity which is done within the buying policy.
There are two approaches to commercial food buying: the needs of the operation and the availability of products in the market. When the food service operation is located at some distance from a food distribution point, the buyer may have to begin with what is available to him and make adjustments in the menu and preparation accordingly. When product availability is not a problem, the buyer first analyses the needs of the operation and searches out the products he needs. Most often, the products ultimately purchased are a compromise between need and availability. Whatever the approach, the food buyer should have some understanding of the market in which he/she is dealing.
(Next Part 2- Structure of the Food Market)