5 Common Food And Beverage Industry Pitfalls

The food and beverage industry is tough. Not only is it a highly competitive industry to find work in, once you are established it continues to be a competition. Food quality, menus, service, and supplies all need to fall into place for you to stay at least on pace with all the other restaurants or pubs that are doing pretty much the same thing. It is tough to be successful in this industry, although it is possible – provided you don’t make any of the mistakes we will explore in this article.

Why The Food And Beverage Industry Is So Challenging

Statistics about the food and beverage industry are daunting. Profit margins in the industry are very low, and overhead—the cost of employees, location, supplies—can be high. Statistics indicate that within the first several years, up to 90% of food and beverage industries fail. That is a lot of broken dreams and a lot of money and effort down the drain. But you may be able to prevent your food and beverage start-up from becoming one of these statistics. All you have to do is avoid the following common mistakes made in the industry.

1 – Not Doing Homework On Your Competition

Maybe you do have the best-tasting appetizers. Maybe your prices are the best in and around your community. Maybe your servers are the most attractive and attentive young people around. But those things are not going to save your business if you haven’t spent much time researching who else has a piece of the food and beverage pie in your chosen market. Researching your competition goes far and beyond just knowing the names and addresses of who they are and what they serve.

To battle your competition – and in all reality, this is what you are going to have to do if you plan on being successful – you need a plan. But not just a simple plan that says you’ll be open later and have cheaper drinks and more items on the menu. You have to develop a competitive analysis and competition research plan that you can execute completely. That plan can be to explore what they are doing that works and try to do it a whole lot better. It sounds simple, but it isn’t.

2 – Not Having A Strong Mission Statement

You may not see this as having much to do with winning the battle against your competition, but a Mission Statement is vital. It essentially describes your goals and plans for your food and beverage business in a simple statement or two. The importance of this exercise is that as time passes, you can revisit the Mission Statement to either modify it or use it to get back on track if things have veered off. Admittedly, it isn’t rocket science, but if you have a Mission Statement that all staff can follow, it keeps the team on track focusing on the same goals.

3 – Not Conducting Proper Temperature Monitoring

This is one of those things that can end up being a very costly mistake for food and supplies in cold storage. There are monitoring devices available called data loggers and they do the job of tracking conditions in your freezer such as temperature and humidity, according to Dickson. The best thing about these monitoring devices is that they are portable, operate on batteries, and can store data onboard for a substantial amount of time. Some of the higher-end models can send you push notifications or let you interface with the data on a tablet or smartphone. 

When you fail to have an accurate means to monitor the temperature of your meat locker or walk-in freezer or wherever you store the food you use for your daily menu, you increase risk. The main risk is serving food that has spoiled and can cause your customers to get ill. The other risk is the loss of inventory due to spoilage. Either risk can be costly. New entities in the food and beverage industry point to reliable and accurate data loggers as being partly responsible for their success.

4 – Not Having An Online Presence

Nowadays being online is a lot more than just having an email address and a website. That doesn’t mean that either of those is no longer necessary. If anything, email and a website should be just part of the online extension of your business. Considering that handheld devices are slowly taking over the electronic landscape, it only makes sense to have pages and sites for your food and beverage business that can reach potential customers where they spend most of their time online. A Google My Business page should be your top priority.

5 – Not Keeping A Solid Supply Chain

The industrial food production part of the food and beverage industry is where everything originates. When supply and demand are far apart on the scale, it creates several issues further down the line, much like a chain reaction. This means that contracts signed with suppliers must have the means to react to outside forces that can slow down the production of food. This can range from poor growing seasons to high production costs and any other impactful situation between those two positions on the scale. 

In Conclusion

The food and beverage industry is a tough one to get into, establish yourself in, and become successful in. This is true not only when it comes to a restaurant/bar but is also true for the industrial food production end of the scale. Competition is fierce with pricing, marketing, and, for those closer to the start of the supply line, transporting or accessing goods.

The industry is particularly hard on those who own and operate the food and beverage establishments. To have success, you have to be able to avoid some of the major mistakes made within the industry and stay ahead of the trends. The list above outlines five of the main ones. Others are more specific to market, location, transportation, and more. If you can avoid the ones on this list, you are far more likely to see success in your specific business.


Annika Bansal

Annika "The Chick Geek" is the founder of AnnikaBansal.com. Small Business Sense shares small business ideas, tips and resources for independent Entrepreneurs and Small Business owners.