GPO cost savings and mitigation strategies from the Cost Outlook webinar

Q&A with Dr. Henry Zerby and Chef John Csukor

Twice a year, GPO and business performance company Entegra publishes its Cost Outlook, a forward projection of where economists, supply chain experts and culinarians from Entegra and AES—Advanced Economic Strategies—think costs will be in the coming six months.

In addition to this critical resource, the team here at Entegra hosts a twice-yearly webinar to talk through mitigation strategies and take audience questions on the report. If you missed it, you can check it out here.

Answers to your top questions about GPOs

Below is a round-up of the top questions that Chef John Csukor and VP of Supply Management Dr. Henry Zerby received, along with the answers to help hospitality businesses cut costs and operate more efficiently.

Understandably, one of the biggest questions we received revolved around tariffs; Entegra is closely monitoring policy shifts and assessing their potential effects on costs, product supply and overall market dynamics.

1. How does Entegra’s Cost Outlook report help operators with their food procurement?
2. How can clients leverage Entegra to help mitigate cost increases?
3. How can food service operators balance F&B cost-savings with maintaining high-quality ingredients and innovative menu offerings?
4. Do you have any tips or recommendations for food service operators to continue to offer beef without decreasing profitability?
5. What recommendations do you have for foodservice operators to protect margins on chicken while sustaining customer satisfaction?
6. Do you have any suggestions regarding eggs since the price keeps escalating?
7. Are avocado prices rising or will they be harder to source?
8. How have bell pepper prices and supply changed?

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How does Entegra’s Cost Outlook report help operators with their food procurement?

Henry: “The Cost Outlook is a forward-looking price forecast for the key ingredients and materials our industry relies on. It shows where prices will be heading over the next six months.

It can be used as a starting point for exploring what the different commodity prices mean for your business and how you can begin to adjust your food procurement strategy.”
Download the Cost Outlook report.

How can clients leverage Entegra to help mitigate cost increases?

Henry: “We talk a lot about trying to plan ahead and make contingency plans. We try to keep in front of these markets and understand where they’re going. We share that intel with our clients. We talk about risk management. Risk management isn't always about trying to beat the marketplace—it's about assuring supply and taking some of the volatility out of the markets."

John: “At the very least, join a GPO. Our size, our buying power can really help.”

As the world’s largest food GPO, and a strategic partner to help hospitality and food service businesses grow, Entegra has $42 billion of purchasing power and a vast network of international, national and local and direct supply partners. Contact Entegra to talk about putting the power of group purchasing to work for you.

How can food service operators balance F&B cost-savings with maintaining high-quality ingredients and innovative menu offerings?

John: “Taking a look at your portion sizes is really important. Don't wait until you’re in distress with commodity costs. Right now, with a strategic approach to your menu, make pricing and portion decisions. Think of the things you can control: great service, great delivery of your proteins, refining cooking styles and techniques, sharpening skills, taking care of your staff. Shop your own business and compare it to your competition. Think of the overall customer experience as a great way to bring value to the plate when you’re fighting costs.”

Do you have any tips or recommendations for food service operators to continue to offer beef without decreasing profitability?

Henry: “Beef is a staple on a lot of menus. Supply is low, holding a lot of these prices high. Luckily feed prices are low right now, but there’s not a lot of relief in sight. It’s taking a lot longer to recover prices.”

John: “I’m thinking of mixed grills. Things that compliment a beautiful piece of beef coming off the grill to create a mixed grill platter. According to data from Technomic, 74% of operators today include beef on their menu. It’s not going to go anyplace anytime soon. Customers are still looking for that umami mouth feel, the deliciousness of animal protein. Partner beef with lamb. Pork is a great cost-reducer as well.”

What recommendations do you have for foodservice operators to protect margins on chicken while sustaining customer satisfaction?

Henry: “Chicken is a bright spot as I look across all the proteins. We see some strong demand, particularly driven by higher prices of other protein options. The other thing helping is that corn prices coming back down in the $4 to $4.50 range per bushel. Soybean meal is reasonable as well. The industry is still struggling with hatch rates to meet the demand.”

John: “With chicken, operators need to maintain higher standards of presentation and quality and safety standards with cooking. If you’re looking for creative ways to enhance the value, bring in international recipes and preparation methods. Know your consumer to know if they’re looking for antibiotic-free chicken. Do you need to buy and serve No Antibiotics Ever (NAE) chicken? It’s for the health-conscious consumer and you’ll pay a lot more and if your consumer doesn’t demand it, do you need to buy and serve it?”

Do you have any suggestions regarding eggs since the price keeps escalating?

Henry: “Egg prices have been soaring. Right now, there should be 350 million egg layers. But because of HPAI, we’ve seen significant hits [to egg laying flocks]. We’re down to below 300 million layers. As this number continues to go down, prices go up. We’re seeing limited availability in stores. It’s going to take some time for the layer industry to come back up. Eggs are going to be a challenge for a while. The question remains as we move into the holiday season of Easter, if we think supply will pick back up. But it’s still going to be a challenge.”

John: “There are great egg substitutes and wonderful innovation, but nothing beats the flavor and texture of a fresh egg. Substitutes with baking and battering include a microalgae-based egg substitute. There are solutions but innovation is key. It’s worth experimenting with egg substitutes. That little bit of R&D you put in now may prepare you for prices going even higher. Eggs tend to lean heavier in the breakfast category. Think of how you can create a menu item to lure someone to a grain bowl or another dish. Try attracting them to an alternative.”

Are avocado prices rising or will they be harder to source?

Henry: “Growers are not expecting any major interruptions with avocado supply. Due to inclement weather, sizing is trending slightly towards larger fruit. During the fall and winter seasons, the avocado market relies almost exclusively on Mexico for production, so any weather or harvest issues that Mexican growers run into would inevitably have a major impact on the overall avocado market. In the first quarter of the year, there is historically a significant uptick in demand due to the Superbowl, which causes pricing to increase around that timeframe. In the spring there’s typically a slight gap in harvests during Mexico’s Holy Week, which occurs in mid-April. This harvest gap can also have a brief impact on pricing.”

John: “The top guidance I can give in this scenario is to value the seasons. Again, if avocadoes are foundational to your menu, there have been advancements in processing and preserving the fruit. High-pressure processing (HPP) is the cornerstone of extending avocado lifespan and stabilizing cost.”

How have bell pepper prices and supply changed?

Henry: “Right now, red bell peppers are in limited supply, and these conditions are expected to remain. But growers will transition to the winter growing region, at which point supplies are expected to remain stable through May 2025.”

​John: “Depending on the precision of the operators’ recipe development, a little adjustment might need to be made. Slightly juicier, sweeter and clearly a color difference all need to be considered. I tend to see less seeds in the goldens I purchase. But it is a GREAT addition to recipes, bringing a golden hue to sauces like romescu.

Want even more tips? Watch the full webinar.

As the world’s largest food GPO with $42B in annual purchasing power worldwide, Entegra is ready to help restaurant, hotel, senior living, leisure, education and faith-based communities operate more efficiently and maximize their buying dollars. In fact, with Entegra as an extension of your procurement arm, you can save up to 30%*.

Looking to elevate F&B while keeping costs down and increasing profit margins? Check out Entegra Culinary Consulting. And if you want to learn more about putting Entegra’s supply chain and procurement expertise to work for you, contact us.

^{*Savings based when compared to supplier list prices.}