Tag Archives: Strategic management

May 29, 2020 · 3:29 pm

That Tonnato Sauce

This Foodie Friday, I want to write about one of my favorite summer dishes, vitello tonnato. When I first had it at some fancy lunch many years ago, I thought it was something thought up by a clever chef. As it turns out, it isn’t a new dish at all. One can find it in the 130-year-old Italian cookbook Science In The Kitchen and the Art Of Eating by Pellegrino Artusi (it’s on page 271 of my edition).

The dish is veal, generally a shoulder or rump portion, that’s been boiled and thinly sliced. It’s topped by a sauce that’s basically a tuna and caper-infused mayonnaise. Trust me – it tastes a lot better than it sounds. The veal is really just a canvas for the sauce in my book.

I was pleasantly surprised when one of my friends emailed my a recipe for a vegetable plate of crudites that was served with a sauce that wasn’t called tonnato sauce but absolutely was the same as what one would put on the veal down to the capers and anchovies in the sauce. The chef described it as a “garlicky aioli bolstered with oil-packed tuna.” Uh, yes, please.

It got me thinking about special sauces since the tonnato sauce is clearly special to me. Every business needs a special sauce if it’s not going to be a commodity. If you’ve not done a competitive set analysis, that’s a great place to start to see how you’re different. Then ask yourself why you exist. What’s the problem you’re solving and why is your solution unique/better? Check your assumptions against what your customers and employees think. 

Is your sauce really yours? Can it be duplicated or is it unique and defensible? Back in the day, we used to call something that you marketed around a USP – Unique Selling Proposition but I think your secret sauce is more than that. It gets to the heart of what your business is, including the culture. It’s what makes you you!

You can put tonnato on sliced pork tenderloin, vegetables, and of course veal. I suspect it’s great on grilled foods – veggies and proteins. As I’m thinking about it, it’s not far from a Caesar Salad dressing but with tuna. You see? Once you have a secret sauce, you can’t really tell how far it will take you!

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May 22, 2020 · 2:37 pm

Not Delivering At All

If it’s Friday, the topic is food here on the screed. This week, it’s the food delivery services I suspect many of you have been using to support your favorite restaurants during the time we’re supposed to stay at home. Food delivery is not a new phenomenon. I know a lot of folks, myself included, who used it before all of this when they had nothing planned or bought for dinner and couldn’t bear the thought of pulling themselves together to go out.

What’s different with these services is that they’re third parties. One of my first jobs back in the day was as a food delivery guy (before I graduated to cook) for a local pizza place. Who hasn’t ordered Chinese food and had it delivered? But I worked for the pizza place and the kid making the Chinese food delivery was generally the owner’s son from the place I frequented. These services – Grubhub, Seamless, and others – are a relatively new business. For restaurants that didn’t do a large enough takeout business to hire a delivery person, they opened up new revenue streams. Of course, they come with a cost.

First, there is a human cost. These services pay very low wages and don’t make tipping mandatory (don’t be that guy – tip well, ok?). Then they charge exorbitant, often hidden fees to the restaurants. You might have read about one restaurant owner’s experience. In March, she got 93 orders through Grubhub, totaling to $6,626 in revenue. From that, GrubHub took $1,208 in commission, a $592 delivery fee, and $230 in processing fees, totaling to over 30% of the revenue. In an industry where margins are often low double digits, that’s not sustainable.

We could continue the discussion beginning with why restaurants don’t hire their own delivery people but the point I want to make today which might just apply to your business is about using third parties, especially third parties who end up owning the customer relationship. What is to stop Grubhub from promoting another restaurant to someone who is looking at your menu? Do a search on Yelp for a specific restaurant and you’ll usually see a couple of other promoted alternatives first in the listings. I don’t know what data the restaurant sees when an order comes in via one of these services but at a minimum someone else is privy to a portion of your customer base, their preferences, addresses, etc.

You might have heard of third-party cookies. Third-party cookies are created by domains other than the one you are visiting directly, hence the name third-party. They are used for cross-site tracking, retargeting, and ad-serving. They’re what makes it possible for you to see an Amazon ad for a product you just searched Amazon for on another, unrelated website. They’re going away, in part because of privacy concerns and, I believe, in part because marketers are waking up to the fact that having someone else own data that you help to generate so that they can sell it back to you as well as to your competition is silly.

Industries outsource all the time. Generally, this is because they don’t want to deal with solving a particular problem themselves for whatever reason and it becomes easier to let someone else deal with it. That’s often shortsighted, particularly when it ends up with someone else owning the customer relationship. After all, in business, that’s probably the most important relationship you have, right?

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May 1, 2020 · 3:51 pm

Pivoting From Cocktails To Cleaning

Happy Foodie Friday! This week our food-themed screed takes us to the land of alcohol, a place that I have a feeling many of you have visited several times over the last few weeks as a scenic detour in your home confinement. Like many of you, part of my very limited activities over the last little bit has been the often quixotic search for hand sanitizer and toilet paper. The good news is that toilet paper seems to be much easier to find of late while sanitizer remains elusive.

There are many small distilleries near where I live which make everything from vodka to rum to moonshine (hey, it is the South!). Many of them have converted their processes over to produce hand sanitizer which is after all, alcohol-based. One place nearby is selling their sanitizer by the gallon at prices which are reasonable, thereby doing both their shareholders and our community a service. Why the shareholders? Because many of their customers, along with those of their competitors, happen to be restaurants and bars, which are closed except for carry-out. Booze sales are confined to beer and wine in the carry-out world for the most part. That’s our thinking point today.

These businesses have managed to pivot from making one in-demand product to another. This pandemic has caused many other businesses to rethink how they do things as well and to make some changes. For example, I represent a number of companies that run after-school programs. With no school (and no gatherings allowed), most of them have pivoted to providing those programs online. When things calm down, they’ll return to their old model but most indicate they’ll keep the new, online model as well since it seems to be working quite well.

Another example. Companies are cutting down on non-essential costs.  They are reallocating their budget from physical in-person processes such as travel, conventions, etc. into digital or virtual tactics. If your primary sales channel is trade shows, are you ready to pivot to some other model since consumers might be wary of large gatherings such as home shows and business buyers may not be allowed to travel to whatever conventions remain?

Has online commerce been an afterthought for your business? My guess is that many brick and mortar firms are rethinking how they approach digital. Yes, all retail sales have dropped. Consumers are restricting their purchasing to essentials, understandably. But it won’t be this way forever. As CNBC quoted one analyst,

“Major retailers who sell goods outside of apparel and furniture – two of the hardest-hit categories – will likely weather the downturn, along with many direct-to-consumer brands that were doing well before the pandemic. Instead of bulldozing the entire retail market, the pandemic is more likely to accelerate the decline of the “boring middle of retail,” such as Sears, J.C. Penney, Macy’s and Kohl’s.”

Those are companies that didn’t invest in the online space before and who can’t keep up with the big guys or the specialty online brands. They can’t pivot.

Being able to pivot is going to be critical as the new world emerges. Can you turn your booze into sanitizer without missing a beat or will you have to rip the whole business down and start over?

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