November 30, 2020

Why Every Food Business Needs A Food ERP Software In 2021 And Beyond

November 30, 2020

Why Every Food Business Needs A Food ERP Software In 2021 And Beyond

When you hear “food ERP software”, you probably think of clunky corporate software that everyone (including management) hates to use. It’s ugly, difficult to understand, and feels disconnected from the food industry. And for the most part, you’re right.

Food ERP (enterprise resource planning) software has traditionally been a massive pain, and not so much a helpful tool. It feels like paperwork drudgery, more like boring data-entry than something that actually helps the business—but things are changing. Fast.

Modern food ERPs feel nothing like their punishing legacy ancestors. And with how the competitive landscape of 2021 is shaping up, it’s clear that businesses who use ERPs effectively will have a massive leg up on their competition.

We’re eager to get into the details of what we’re seeing unfold, like…

  • Why businesses of all sizes are investing in ERP software (not just mega-corporations)
  • The opportunity of cost of using DIY spreadsheets for complex food cost calculations
  • 6 red flags to look for as you evaluate food ERP systems

The direction of the food industry is clearer and clearer by the day. Are you ready for it?

The Winners Of The 2020 Pandemic Are The Precise Planners

We worked closely with our customers and network to help food businesses of all types find ways to adapt to and survive the COVID-19 pandemic—and as a food ERP software company, we were able to see some trends on a macro-level.

While the virus ravaged much of the food industry, and an estimated 1 in 6 restaurants closed around the United States due to the pandemic, most of our customers grew stronger and more resilient.

Why the big difference?

After some reflection, we’ve identified a few reasons.

Food ERP Software Gave Operators Clarity Over Key Food Cost Metrics

The food industry as a whole is notorious for costing food in old spreadsheets—a practice ripe for human error, outdated insights, and inflexibility.

Businesses with precise, real-time food costing, however, were able to precisely measure overnight how changes in the supply chain, buying behavior, and operating costs would impact their business in the coming weeks and months.

You can’t understate the value of real-time data.

These contract dining operators, self-operated campuses, meal kits, and ghost kitchens were among the first to minimize their menus and focus on items that would match shifting demand—while keeping a watchful eye on all their key metrics.

One of these winners was Savory Kitchen, a NYC-based caterer that turned to delivered meals and premade pantry items when corporate sales dried up.

“I can just say, ‘I need 2,500 boxes’ and it’ll spit out my food costs. And I don’t have to worry about it anymore. I can put all the boxes we want to offer on one menu, add quantities to them, and it’ll tell me exact food costs for the whole thing.”

Using a food ERP gave Joe and his team the ability to pivot offerings quickly when they needed it. And thanks to this, Savory was able to make multiple large deals they might have lost if they’d been slower to react.

Investing In Clean Food Data Will Make Recovery Smoother

In the world of contract catering and foodservice, the impact of COVID-19 was severe. Meriwether Godsey had so many customers close their kitchens, the business was forced to scale back to less than 10% of the normal staff.

The remaining team immediately got to work refining their internal processes. Marcus Nucci, CTO, told us they successfully cleaned and updated 6,000+ recipes, loaded 2,500+ vendor products with allergen and nutrition data, and updated the menu cycle to show plate costs and budgeting.

“Having already implemented Galley, we achieved something in several months that would have taken years any other way.  There was so much data to clean up, we would never have had the time, resources, or focus to achieve what we did. It was a nice silver lining in an otherwise very dark cloud that hung over the company for the summer.”

With greater clarity over their food data, costs and margins, Meriwether Godsey is positioned for a smoother recovery than most. There’s still a challenging road ahead, but Marcus and his team will be working with data-driven precision, rather than outdated spreadsheets.

2020 Left No Room For Lost Margins, But ERPs Saved The Day

When customer preferences and behaviors changed overnight at the start of the pandemic, restaurants, caterers, and other food businesses were left with kitchens full of food they weren’t sure they’d be able to sell. They had to get creative about how to use ingredients so their investment wouldn’t be lost to spoilage.

One of our customers, Beehive Catering, was able to use the Galley ERP to reposition their existing stock for new items with rapid recipe development.

“Galley has been a big help in minimizing waste, as we’re able to adapt production to hit our exact orders easier. We can have vastly different order volumes each day while still being able to communicate clearly to our crew. We’re also now able to produce new products using excess inventory we wouldn’t have used otherwise.”

This meant they not only were able to use their excess stock before it spoiled, but the improved efficiency (and boosted profit margins) was set in stone, even after the initial shock of the pandemic.

It’s A Paradigm Shift: Food ERPs Are Here To Stay

We’ve discussed 2020, now let’s look forward.

Food ERPs helped many food businesses pivot and thrive during the pandemic’s most troublesome months—and in 2021, those gains are still going to compound.

The COVID-19 pandemic forced many to get ultra-prices with their food costing, waste and spoilage, labor, and operations—and ERPs helped. Would you stop using your ERP at this point, or keep leveraging it to make your business more profitable and efficient?

The cat’s out of the bag. Modern food ERP systems are no longer niche tools, secret weapons, or just for mega-corporations anymore either. Innovative technologies (and huge leaps in experience design and usability) are making it easier for businesses of all sizes—individual commissary kitchens to enterprise meal kits—to access the organizational power of ERPs.

What once cost millions of dollars and years to develop can now be leveraged by mid-market businesses in a matter of weeks.

Skeptical? Just look at the growing awareness of the importance of customer data for food businesses. Five years ago, the focus for restaurants and other businesses was generating orders (one of the big value propositions of delivery platforms). But today, it’s clear that more delivery orders won’t save restaurants—it’s customer data that offers food businesses the keys to new growth levers, like…

  • Remarketing to existing customers
  • Creating better / personalized experiences that boost loyalty
  • Increasing retention and profit margins

Data is power, whether that’s customer, recipe, inventory, or operational data.

Customer data awareness may be a few years ahead of the rest—but they’re catching up quickly. And so is food ERP software.

Red Flags: 6 Things To Look For When ERP Shopping

We’re in a transition period in the food ERP space. Legacy tools have name recognition among the old guard, clunky spreadsheets still dominate the industry, and modern platforms are ramping up quickly. There are a lot of avenues to travel, but they’re not all equal. 

As you explore the food ERP options, look closely for these red flags:

  • Repurposed Accounting Software — Reskinned tools from other industries make up the bulk of food ERPs. They’re not ideal for the use cases we experience in our industry, and things like trim yield, managing hundreds of ingredients from dozens of suppliers, and tweaking recipes on the fly all fall by the wayside.
  • No Auto-Conversions — Chefs, buyers, and test kitchen operators all need to be able to convert units at a moment’s notice, without having to pull out the calculator. If an ERP can’t automatically convert grams to ounces or cups to kilos for various ingredients, you end up with messy food data, inactive and outdated recipes, and a lot of frustration.
  • Clunky Recipe Development — Every ERP will allow recipe edits, but very few actually enhance the development process. While you innovate, you should be able to cost those recipe adjustments automatically so that you can instantly measure the impact of substitutions, quantity adjustments, and other types of changes.
  • Past-Looking Food Costing — Moving forward, there’s no reason to cost food for weeks or months past. You want to be able to cost food right now, then be able to make adjustments to your menu or purchase orders in real-time. That’s how food businesses go from reactive to proactive.
  • Zero Concept of Trim Yield — Not all food that’s purchased gets used. Onion trimmings, potato skins, spoiled ingredients—there’s almost always something that doesn’t make it to the plate. But you still pay for that trim. A great ERP will help you account for the cost of that trim, then make decisions that help minimize it to boost margins.
  • Poor User Interface — Let’s face it. Ugly software isn’t fun to use, is challenging to navigate, and contributes to low adoption rates among your staff (which means the data is less clean, and your investment has a lower ROI). Looks and feel are important.

We built the Galley Food ERP to address all of these red flags. From instant food costing to an award-winning user interface, we’re crossing all the T’s and dotting all the I’s.

Our team of chefs and culinary experts knows first-hand how difficult it is to run a profitable food business, so we didn’t just set out to create another modern food ER

We set out to create a whole new kind of food data infrastructure for food businesses that want to master every part of their culinary operation—from innovative recipe development, to open food data API, world-class training, and award-winning UI..

And so far, it’s working.

We’re already helping businesses like yours take command like never before.

Want to see how? Check out the Galley ERP here.

Photo by
Jason Jarrach on Unsplash

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