Exclusivity with vendors can benefit a club or resort’s food and beverage program in myriad ways.
A primary vendor agreement is a contract between a buyer and a broadline distributor. The agreement highlights a note of exclusivity committing the buyer to purchase a majority of their rolling inventory from a distributor. There are pros and cons to having a primary vendor program in place.
In private club F&B operations, Chefs will often take advantage of primary vendor programs to help maintain budgeted costs. Established pricing on the cost of goods is set up at an agreed-upon percentage over cost that is a mutually beneficial and realistic goal between the Chef and the distributor.
In F&B operations, having a set pricing can help to minimize significant price fluctuations on paper goods, supplies, and chemicals, as well as on standard produce and pantry items. Set pricing with minimal fluctuation can aid in streamlining the inventory process by minimizing cost updating procedures.
In addition to established pricing benefits, primary vendor agreements can also include special rebate discounts that come directly from the manufacturer. Often times these rebates are rewarded to the buyer in either monthly or quarterly increments.
Primary vendor programs also streamline the ordering process for chefs and/or purchasing directors. To simplify the process, chefs and purchasers are able to place a majority of their weekly food and supply orders through one vendor, rather than having to connect with three or more vendors to complete their weekly orders.
Having a primary vendor agreement in place can also impose limitations on purchasing abilities. Because a primary vendor agreement enforces the buyer to purchase the majority of rolling inventory from one distributor, chefs are limited to the product inventory of their primary distributor.
Typically, a primary vendor program will require a commitment of at least 80-85% of purchases from the distributor. However, this allows purchasing managers a small window of opportunity to purchase more important inventory items such as fresh seafood and locally sourced meats from the purveyor of their choice.
