Cheese Market and Roma

I have started to pay closer attention to the cheese market lately.
Roma Rep says, that if prices go up week one, then my cost will go up on week two. This sounds fair.
I just went through my invoice for the last year, cheese has never gone down. Only up.
I see the market has been down a little the last two weeks, shouldn’t my price come down also?

ours will reflect that this coming week…according to our rep

I have heard the same thing crusher. The week after the posted price.

I know one thing, we tend to lacks on prices when all seems well, but I think keeping an eye on the market when things are “normal” and the ol “so cheese prices are going down, what good news” helps. Let’s the rep know we keep an eye on the market.

Despite the food rep’s efforts…, our prices only go down when we call them on it and price shop the other companies. If they know you are “sole source” the can not always get the company they work for to move on prices. Also, due to they way different companies handle inventory and pricing, the difference from one vendor to the other can be as much as 30 cents a pound on cheese in any given week. (Normally not that big a difference, but it was that big two weeks ago for us).

Sysco prices seem to lag the market by about two weeks, US Foods about three weeks… so we end up buying from US while prices are rising and Sysco when they are falling. When they are stable we buy from whoever has the best price. Normally, I look for 20 cents above the Chicago block price (with the 2-3 week lag built in). I do not allways get it, but that is a good goal.

The good news, when you see a big jump in pricing in the cheese market, you can stock up heavy as the product has a 6-8 week shelf life. We brought in 1500 pounds at $1.96 a couple of weeks ago. With prices in the market dropping now I am expecting to buy again in about 2 weeks, hopefully at less than the $2.29 our US food rep is quoting now.

Several times you have expressed this idea that all sole source customers will get gouged as a matter of “fact”. There is no substitute in our business for strong working relationships with our vendors based on mutual respect. I make efforts to make my rep’s job simpler, and she returns the favor bymaking my job easier. I recruit customers for her, and she keeps pricing managable for me. I check the database weekly when I place orders, and she realizes I am a conscientious and aware customer who seeks the best prcing I can get.

Trust . . . and verify. Trust . . . and compare services. Above all, though, I have ot trust. Anything else is an adversarial relationship that leads to conflict and ultimately unproductive/inefficient work to get food in the house. In other words, "You will find whatever it is that you are looking for in your relationships . . . be it gouging crooks, or assertive salespeople looking to make a living without cleaning out your wallet.

Nick, we have very nice relationships with both of the companies we deal with and have had the same rep with each company for nine years. The relationship is one of respect and, while each would like to have all the business, they understand that they need to get me good pricing to compete. I trust the reps to do what they can but I have had many examples each year of instances when a rep asked why we were buying something from “the other guy” and when the answer was price they were able to improve the price. It is not only the rep that controls the pricing. They go through their companies and to the brokers to get deviated pricing. On products like tomatos (sauce, puree, concentrated crushed whatever) I am able to improve the pricing by $2-$4 per case.

Good service is an expected baseline. Both companies have reps that live in town, call on us in person a couple times a week and deliver reliably. What I am saying is that, in this case, service is not a differentiator. If one had poor service I would not buy from them. In an environment where both companies offer identical or essentially identical products and have good service, the differentiator is price.

I know many of the other restaurant owners in town (there are about 90). A handful (maybe 5 in all) are sole source buyers. In the specific cases where I know them well enough to discuss pricing, (two of which where pizza is part of the mix) they are paying higher prices than I do. They choose to do that because they believe they are getting something back in service. That is an “eyes open” decision which I have no problem with. For my part, I do not find that there is truely an upgraded level of service… Your experience may be different. You are entirely right with the “verify” part of your comments.

My only point has been that reps generally do NOT get you the best pricing unless you work it. In the end, most buyers that go sole source do not actually verify. It gets tedious and the competition will not keep giving you pricing if you are only using it to beat up your sole source vendor.

When one of my vendors solves a problem or brings a new product to us, we will buy that item from them exclusively for quite a while… not forever but for a year or two. Longer if they keep the price in line.