As an experienced supplier operating within the hospitality industry, what are the 5 biggest challenges that I face in my role? I suspect if you asked various other suppliers this question you would get a broad range of suggestions.
Challenges are dependent on an individual businesses needs, and with Riviera Drinks being a relatively small and streamlined business, we'll face completely different challenges than much larger corporations who would probably list the current political environment as a number 1 challenge. The truth is though, to a business of our size, this just doesn't impact on us a huge amount. Of course, the impact of the current political environment has an effect on consumers and spending which impacts on us, but that's a much more inwardly looking approach, which I've chosen to write about here.
So with that caveat, OUR top 5 challenges in no particular order, I would probably say are:
Perhaps a brave point to admit, but of course we always have one eye on the competition, and of course, our competitors are consistently trying to entice our customers to change supplier. I've previously written about customer retention, which we always work to improve and manage accordingly.
2. Monitoring Costs
With any business, monitoring costs are significant, and from a suppliers perspective can quickly become a problematic issue to resolve. Naturally, we have a number of variable costs which we can influence, such as expenses which are consistently monitored and budgeted for. We have the usual fix costs such as rents and rates, but the most significant challenge can come in the form of what I'd class as semi-fixed costs.
Obviously, we have excellent terms with all our suppliers, but there are instances where our production costs may increase, such as sugar costs, cardboard and various other raw materials. A sudden increase in costs may mean we have to absorb these costs for a while but eventually, and unfortunately, have to pass them on.
3. Consumer Trends
It's a constant challenge always to have products which appeal to our customers and end consumers. Fortunately, our current ranges consist of soft drinks and cocktail liqueurs and syrups, two categories which are in growth and very much on-trend at the moment. Consumer trends obviously change and can change very quickly in this industry. We're continually looking at new product development and trying to envisage new products which consumers will want.
4. Employee retention
I'm sure this will be a challenge to most businesses in most industries - keeping your best people! It's a fine balance when managing people to have your business needs at heart while always wanting to develop a person's individual needs. At Riviera Drinks, we try to provide an environment where our sales team have a huge amount of autonomy and really 'own their patches'. This, in turn, gives them a lot of diary flexibility, meaning our team can manage their work/life balance well. We find this works, with minimal employee turnover.
5. Credit Risks
Particularly in today's uncertain environment, credit risk is at the forefront of a lot of businesses minds and always is. It's a fine line with this because you want to give customers plenty of headspace and breathing room with their credit limits, while also keeping tight control and managing your internal cash flow.