On the one hand, restaurants have become much more digital since the start of the pandemic. Mobile ordering has moved from the realm of early adopters to the mainstream, and digital technologies are being integrated into restaurants online and in the physical world. However, for all the tabletop QR codes and artificial intelligence (AI)-enabled drive-throughs, the B2B side of the industry has been largely stuck in the past.
“The problem on the buyer side is that the supply is offline,” Jordan Huck, chief executive of restaurant supply chain technology company Notch, told PYMNTS in a recent interview. “The problem on the distributor side is that their order desk is offline – they get orders by email, text, phone, fax, carrier pigeons. Their order desks are completely offline, so they have to have two or three people a week who just manually enter orders into their systems.”
Notch, formerly known as ChefHero, recently launched its all-in-one supply chain solution, which provides restaurants and distributors with an integrated, one-stop-shop digital ecosystem for every step of the process.
Bring back the technology
Specifically, Notch is bringing technology to the back of the house. “Technology has exploded on the front of the house and it’s well documented,” Huck noted.
He cited Toast’s point-of-sale (POS) technology as an example of cutting-edge technology for consumer-facing restaurants, and the proliferation of advanced inventory management systems and third-party delivery apps as examples of how whose restaurant facades have benefited from the digital shift.
“It’s great, but most of the income statement is at the back of the house,” he said, adding that 35-40% of a restaurant’s costs go to paying for ingredients, which remains an offline process. For restaurant groups, this lack of digital integration makes it more difficult to track what products are currently available at a given distributor, in addition to adding unnecessary labor.
“We really believe there is a tailwind, from a supply chain perspective, for the back of the house,” he said.
Huck notes that Notch’s product allows distributors to invite shoppers to order from them, be discovered by shoppers, and process payments digitally. “If you can build an audience in B2B, you can be in FinTech,” he said.
On the restaurant side, he said, the product creates “complete digital connectivity from the moment a customer enters a restaurant,” integrating digital ordering tools, point-of-sale software and payment systems. inventory management, and providing access to supplier inventory information. .
A supply chain solution for a supply chain problem
“We are a company that was forged during the pandemic,” Huck said, explaining that Notch saw the need to digitally integrate every step of the process for buyers and distributors after the company suffered a major blow – an 80% drop in revenue – in April 2020. “So it was the pandemic that gave us the clarity to understand the problem that needs to be fixed.”
He added that the unique toll of the COVID-19 pandemic on the restaurant supply chain has caused not only a need, but also a demand. He explained that, like the restaurants they work with, distributors are also facing “huge talent shortages right now”, making inefficient pen-and-paper systems a more pressing issue than before.
Huck explained, “It just means our product really has to be consumer-grade, even if it’s B2B, it really has to be so easy to use for our distributors and our restaurants.”
He added that there is also a “growing demand” across industries for “tailor-made technology for this vertical.” In counterpoint, he cited QuickBooks Desktop (adding that the software, as an accounting system, is “different, obviously, from what we do”) as an example of a horizontal product that uses a single model for all verticals. Notch’s solution, on the other hand, appeals to the generalized need for increasing verticalization.
The smart future of restaurant supply
Over the next few years, Huck predicts that more companies “will use data to improve the efficiency of their operations.”
As more restoration technologies become integrated and data can be passed between systems, he believes those systems will be better able to make “intelligent recommendations” about how events external events – for example, holidays – will affect the availability of a given product. Businesses will “use the technology stack in foodservice operations to power predictive decisions in your supply chain.”
For Notch’s immediate future, the goal is expansion. Currently, the company operates in its hometown of Toronto, as well as Chicago and several cities in Texas. Over the next year, the company plans to expand to California, New York, Boston, Florida and other parts of the East Coast.
“The technology stack on the restaurant side and retail side is very fragmented, and we’re trying and will be the first company that will provide full visibility,” Huck said. “Think Google for ingredients – full supply chain visibility that will be available in a given market.”