What should we buy-in vs making on site?

I have written about the economic changes in the pub gaming industry, and the need for the pub companies to restructure their food service to restore profitability in the past. My predictions have come true sooner than I thought. If you have been reading the trade press you might have noticed that a number of the large hospitality corporates have signalled their intention to move to a ‘knifeless kitchen’ operation.

What is a knifeless kitchen?

For those who haven’t kept up, some caterers and a few pubs will be converting their kitchens to what I call assembly kitchens, where the majority of food products will be purchased from contract suppliers in as close to their finished state as is practical. Their logic is reasonable — the believe that by doing this they will reduce wage costs and food costs, improve product consistency and transfer workplace liability for a raft of health and safety issues back to their suppliers.

Cost cutting

This could reduce your wage costs

The stimulus for contemplating this change is that a number of issues have come together that create both a problem and a potential solution for the pub companies particularly. The problem is that with gaming revenue under threat from Government regulation, pub operators are looking to address the severely declining profit margins in their bistros and restaurants. In other words, economic circumstance has brought about the need for radical change.

The potential solution is that there are a large number of suppliers out there, some with very efficient national distribution, who have developed comprehensive ranges of quality, ready to eat and semi-finished food products. In other words, if you wanted to run a kitchen without a chef you now have the means to do it. Of course, you are unlikely to win any hats in the Good Food Guide, but that’s not the pub market, they do food for the masses and they currently turnover an estimated $4 billion dollars each year in food revenue right across Australia.

This potential is very, very interesting to the food suppliers and manufacturers. Let’s assume a 33% average food cost — that equates to $5 billion worth of food purchases each year. Seeing this sales potential, foodservice manufacturers are researching industry needs very carefully and getting extremely innovative with their product ranges.

What is a convenience product?

We’re already seeing these new ‘convenience products’ in our supermarkets and have been doing it for some years. The average untrained domestic cook has a cupboard full of commercial sauces, soups, stir fry bases, etc; as well as a freezer full of thaw, heat and serve products. These products enable an untrained cook to put food that is way beyond their skill levels on to the family dinner table. Some sections of our industry are proposing to do something similar, but on a massive, commercial scale.
It’s interesting the term ‘knifeless kitchen’ is being used to describe the proposed change. It’s a good bit of spin on what I think is the real intention to create a ‘chefless kitchen’, but they daren’t say that for obvious reasons — knives don’t fight back the way chefs do. I think a subtle little war is underway.

The issue here is the demise of a traditional craft. Will chefs go the way of the cooper, blacksmith and farrier eventually? I think it’s inevitable to some degree, but they won’t go without a fight, and they won’t all go; they’ll still be needed in the top end of the industry, just as some businesses still need farriers, blacksmiths and coopers. We train lots of chefs at our training workshops and I have had many talks to them about this issue, especially over the last year or so. The smarter ones know what is happening — they’ve discussed it with me.

Convenience products

You use them at home; why not at work?

I have to be fair and recognise that to a certain extent they are the authors of their own destiny. A high percentage of chefs are demanding significant salary packages but at the same time resisting gaining cost control and management skills, and rejecting the notion of buying-in and using convenience products for no better reason than it is artistically offensive to them.

Are commercial products inferior quality?

They argue that their food is better quality than the commercial products, but at the same time they do buy in their bread, desserts, crumbed meat and fish, etc; when it suits them because it is ‘convenient’, while resisting buying in sauces, stocks and ready to eat products. We may have tolerated this resistance to moving with the times while we were making money, but now it has become an issue of commercial survival, not just artistic integrity.

The problem coming will be in the conversion from the traditional system to the new system being proposed. I expect it will not be at all easy because the parties involved in the changes will probably try to sabotage in order to protect their own self interest. It’s not only the chefs who stand to lose, but a large group of traditional suppliers who have not moved with the times. There are powerful vested interests intent on preserving the status quo.

I’ll be very interested in watching if the big boys can pull it off without taking a commercial step backwards. If they do it will open the floodgates for a flow on to many other companies who are watching their bottom lines decline. The one thing the industry has in its favour is that we are not heavily unionised at the chef level, otherwise we may have another prolonged industrial battle on our hands. Watch this space.