Farm-to-table sourcing for restaurant operators
Hot trend requires close attention to risk factors
The farm-to-table movement appeals to restaurants eager to adapt to consumer demand for locally grown foods with a more “natural” profile. However, several factors make food from small local suppliers a possible source of operational and reputational risk, especially for quick service restaurant (QSR) and fast casual operations.
From RSM’s work advising middle market restaurant clients, we think these trends warrant close attention from operators adding farm-to-table to their product sourcing:
- Supply chain issues. The federal Food Safety Modernization Act (FSMA) requires monitoring and inspection for farm operations of a certain size. Smaller food suppliers not covered by FSMA are less scrutinized. This doesn’t mean local suppliers lack safety procedures, just that they are less regulated. This could increase the potential risk of tainted foods entering the supply chain.
- Workforce safety awareness. QSR and fast casual operations tend to attract a transient work force: individuals between other jobs, students, retirees and those who are new to the work force. Many of these individuals lack a background in food safety and might be supervised by managers who themselves have limited industry experience. This limited awareness raises the risk of fresh foods being mishandled on-site, during storage or preparation.
- Regulatory and brand risk. With the increasing popularity of social media, issues are rarely resolved discreetly. A bad customer experience or a food-borne illness linked to a particular operator or supplier can go viral—in every sense of the word—in minutes. Regulators and the public know about the problems instantly. With higher levels of scrutiny at the federal, state and local levels, operators need to know how to assess and report problems promptly, lest ramifications become even more significant. More important, problems go beyond the regulatory level. Customers and the media will demand to be informed. A faulty crisis communications strategy can result in severe damage to brand identity and overall reputation if rumors and wrong information capture and stick in the public’s mind.
Operators know about the risks. Our discussions with them focus on how farm-to-table makes business sense so long as you tackle those risks in a systematic way, rather than as unrelated parts of an operations manual.
Smart operators manage risks with a layered approach, building food safety into daily operations. That’s not a new message, but the trend toward locally sourced products and the related focus on food safety assumes new urgency—particularly for smaller middle market operators that might lack the brand loyalty to survive the fallout resulting from a major food safety issue or related botched communication. A three-step framework addresses each trend:
Prevention: Reassess your training approach (and trainers) to ensure you cover essential practices and explain why they are important. Have refresher courses to emphasize safety for all, not just new hires. Look at your food handling cycle and note potential gaps related to staffing trends; where are the more transient staffers; where has turnover been most significant? Visit vendors in your supply chain to check their safety practices; pay special attention to new vendors or those not covered by the FSMA. Also critical: Create a location-level crisis response plan and include it in training so staffers know their roles before an emergency hits. The plan should cover everything from standardized signage that alerts customers about temporary closings (avoid ad hoc, scribbled signs taped to doors) to contacts with regulators, whose requirements vary by state and must be tailored by location.
Detection: Have systems in place to identify issues quickly; monitor equipment for temperature and cleanliness; provide customers with ways to alert you to problems.
Remediation: If problems happen—and they may well happen despite everyone’s best efforts—take immediate corrective steps in conjunction with corporate management and alert regulators who must know. Launch the crisis response plan mentioned above. Talk with insurance carriers, legal counsel, crisis communications advisors and others who need to weigh in and manage the ramifications. Take a multi-pronged approach to fix the safety problem and consider the broader implications. Assess what caused the problem and how it can be prevented; update all safety processes and measures to reflect what you learned. On the brand side, think about how to reassure consumers that you’ve resolved the issue and that they can be confident in a positive dining experience. What market misinformation demands a clarifying response?
To summarize: food safety comes down to identifying and addressing risks that might exist in an evolving supply chain, in your workforce and in your processes. Risk-savvy operators are paying attention to these potential hazards. Discussions in the industry about the moving parts mean that best practices will emerge, so what’s new and challenging will become more settled. Operators who take a sensible approach to providing locally sourced products will benefit from meeting consumer interests while building reputations for quality and safety.