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David Bickerstaff 29 June 2023 3 min read

PunchOut – The secret sauce for Foodservice ecommerce

You could call it a recipe for pain - 12 interest rate rises from the RBA in the last 13 months has belts tightening across the country, as mortgage payments climb along with the cost of everything else. And the squeeze is set to continue, as many fixed-term mortgages expire and monthly payments jump dramatically from what they were 2 years ago.  

But of course it’s not just the general population feeling the pinch - retailers are also copping it as discretionary spending drops, particularly across the hospitality industry. Australians are used to spending a significant portion of their food budget on dining out, but that looks set to change as cost of living pressures increase.  

And while cafes and restaurants brace for continued pain, the implications for foodservice distributors aren't actually all doom and gloom.  


Institutions are key for foodservice distributors 

If there’s one segment of the market less likely to be impacted, it’s institutions – hospitals, aged care, correctional facilities, and schools.  

Some 23,000+ organisations across Australia still need to provide nutrition, regardless of whether the cash rate is 1% or 5%. The scale of this market segment represents a significant spend, and a sizeable opportunity for foodservice wholesalers and distributors.  

As a foodservice distributor, you may be wondering how to target this sector and get what I like to call ‘your unfair share’ of this business...

We believe it all comes down to understanding the way many of these institutions prefer to buy.  


Unique buying behaviour needs unique solutions 

Large organisations and government institutions are often subject to strict procurement rules. They will commonly work with suppliers on a contract basis, settled through formal processes such as RFP or Tender.  

Foodservice distributors must bid to win these contracts, and in many cases it’s not just the best pricing or delivery terms that win the day. Increasingly, the ability to comply with the institution’s way of doing business is a deciding factor.  

Online ordering via PunchOut is one of the key capabilities many institutions look for. If you’re not familiar with PunchOut, don’t worry – most distributors aren’t. But therein lies the opportunity.  


What is PunchOut?  

In simple terms, PunchOut is a B2B ecommerce feature that allows your customer to visit your ecommerce website from within their own procurement system. The buyer gets the benefit of the personalisation, custom catalogues, contract pricing and other features your ecommerce platform offers. But they never leave their own ERP (or other purchasing system), and they stop short of submitting their order on your website.  

Once they’ve built their cart full of products on your website, the magic happens. The buyer ‘punches out’, back to their own system to complete their internal procurement process. This might involve raising a requisition or purchase order in their system, or following approval procedures for budgeting.  

At the end of the process, you as the supplier would receive the customer's order via email, EDI, or similar channel.     


Why PunchOut matters 

Now that you understand the mechanics of PunchOut, let’s talk about why it’s important – not just for the buying institution, but for you as the distributor.  

It’s no secret that institutions like to tightly control their budgets and spend. If they can lock in a catalogue of items on contract with a foodservice supplier, they can reduce maverick spend by their procurement staff. This type of governance will only grow stronger as inflation drives up costs and erodes the institution’s spending power. 

As a foodservice distributor, understanding and being able to speak to these constraints with potential customers in this market gives you a competitive advantage. Supporting buyers with B2B ecommerce PunchOut capability often ticks important boxes in the RFP and Tender process, so it’s a wise idea to make sure your ecommerce platform supports it. 

Superior Food Services know the value of PunchOut from first-hand experience.  


Capability is key to becoming supplier of choice 

As the economy continues to force consumers to reign in spending, cafes and restaurants become increasingly worried. As suppliers to this sector, foodservice distributors are also concerned that the outlook is grim. But the savvy among you will continue to find ways to reduce your own cost to serve, whilst innovating to win new business. Larger institutions are a perfect place to start the conversation.

Want to know more?  

At Commerce Vision we’ve worked with customers across all industries - including Foodservice – to implement PunchOut capability. The result is that they’re able to serve a wider market and win their ‘unfair share of business’.

We’d love to talk about how we can help you do the same.... why not get in touch