Getting started in the fresh foods business
Published: Sunday | April 12, 2009
Winsome Armstrong, business development officer with the Jamaica Business Development Corporation. - Ian Allen/Staff Photographer
Vaughn has written in to say he has developed a detailed proposal outlining his plans to supply local hotels and fast food outlets with fresh produce - including fruits and vegetables - for their operations and restaurants.
He wants to be guided as to how to proceed with implementation.
Providing advice this week is Winsome Armstrong, business development officer with the Jamaica Business Development corporation (JBDC).
She states that before this business is started the necessary licensing and permits must be obtained. These licences and permits, once obtained, should be displayed at the place of business.
Next, Vaughn will need to seek out and pull together a pool of farmers who he can rely on to supply the products.
In creating his 'supply chain', a number of factors must be considered such as locating and mobilising farmers who have a track record.
From these farmers, he should then carefully select reliable suppliers, creating a group and programme for of high-quality products as it relates to cost, quality and quantity. Membership fees and payment requirements must also be worked out.
To have a truly successful relationship with farmers, a firm commitment must be given to them, including support services.
This commitment must include a legally binding contract between all parties agreeing to abide by agreements.
A payment plan, along with transportation and delivering of products should be outlined.
Other pointers from Armstrong are as follows:
Negotiate price with farmers
The best way to establish a price is to base them on the cost of production bearing in mind a win-win outcome for both parties - farmer and buyer.
Therefore, one must seek information on the pro-ducts to be procured. The more educated a person is about how a product is grown; the better able that person will be to negotiate prices.
Buy the highest-quality products in bulk at the negotiated price from farmers. Existing guidance for good procurement practice should be used when purchasing these products.
This guidance will follow well-established principles developed from experience including purchasing the most cost-effective products in the right quantities and ensuring timely delivery.
Package products at source
Packaging fresh fruits and vegetables is one of the more important steps in the long and complex journey from farmer to consumer. Bags, crates, baskets, cartons, bulk bins and palletised containers are convenient containers for handling, transporting, and marketing fresh produce. In order to reduce cost, container standardisation (one type of packaging) should be employed.
Create a pool of hotels and restaurants
A market survey should be carried out among hotels and fast-food chains on the south and north coast.
This survey would communicate the need of the various hotels and fast food chains. Approach your target clients and pitch your products, along with your terms and conditions.
Start building a productive relationship with your intended market by speaking frankly about quality, source and price of products.
Make sure to provide an early warning system for hotels and restaurants about potential or actual problems in the supply chain which will affect the short-term or long-term availability of individual products.
Deliver high-quality packaged products
Packing and packaging materials contribute significant cost, but is an important investment.
An unswerving delivery system is also needed, and reliable transport is essential.
Create a website with e-commerce facility
Engage the service of a web designer who has experience in designer this type of service.
Establish systems that will allow hotels and restaurants to email their order, fax in their orders telephone in their orders.
Obtain an office with the necessary equipment. This service could also be outsourced to a provider thus reducing cost. However, this could be a disadvantage to the business.
Do periodic checks with hotels and restaurants to analyse their current stock levels to give an indication as to when to deliver more products.
Know their inventory, reorder point and quantity.
Continually liaise with farmers to ascertain what pro-ducts are in season, through telephone calls, emails along with scheduled and unscheduled visits.
Unscheduled visits will verify if the farmers are producing at the standards agreed.
Email Winsome: firstname.lastname@example.org