Food purchasing moves online
Instill has moved its e?store electronic purchasing system for restaurants and food distributors to the Internet.
A Windows version of the subscription service, which costs $40 per month per distributor, is now used by more than 1,000 food service operators and distributors nationwide.
"These are existing or contact relationships, not a bidding relationship," said Mack Tilling, Instill's cofounder and president. "These are purchase orders with several hundred lines scheduled two or three times a week."
Instill's move to the Web points to a growing trend: Niche industries are adopting Internet technologies for business-to-business commerce between suppliers and manufacturers--or, in this case, restaurants.
Most of the $150 billion in food ordered annually by restaurants, cafeterias, hospitals, and hotels is handled via phone or fax, at an average cost of $20 per order, compared to Instill's cost of several dollars per order, said Andy Cohen, Instill's vice president of marketing.
Restaurants using the Windows version of the e?store service found they cut in half the time they spent preparing and sending orders. Distributors have reported order-filling errors cut as much as 60 percent, in addition to the time savings.
Food distributors are Instill's chief market.
"Distributors are being required today, particularly by large customers, to provide direct order-entry," said Tilling. "We have had a lot of interest to purchase licenses for our system."
"Large distributors have either bought or developed in-house proprietary order-entry systems, but it's a tremendous investment to develop and then maintain these things. They can't get the economies of scale," he said.
KinderCare Learning Centers, which runs 1,150 child care centers, this week began testing the system at 40 units. Other customers include several units of Marriott.
Instill, founded in 1993, also offers e?store advantage, an analysis tool for checking chain-wide purchasing trends.