Independent Operators Find Relief in Local Buying Group

Sacramento, California – As the economy continues to deteriorate and costs remain sky high, operators looking to cut costs and avoid menu price hikes are seeking strength in numbers as it applies to purchasing.

Across the country, purchasing groups that harness the buying clout of smaller and midsize companies, as well as independents, are gaining favor as they help take some of the sting out of purchasing through buying efficiencies.

In Sacramento, Mark Scribner and Dave Virga owner operators of Paesanos, Pronto and Uncle Vito’s, along with Ernesto Jimenez and Jimmy Johnson, owner operators of Zocalo and Ernesto’s, have joined forces to form an independent purchasing group called Leverage Buying Group, LLC. It’s a new direction for independent restaurants. “We look at it as a way to combat inflation and move the model from competition to cooperation,” Jimenez said.

Leverage is working with independent restaurateurs that spend between $200 and $250 thousand annually on purchases from the broadline distributor. The goal is to combine the power of volume and the strength in numbers to gain an advantage over manufacturers and distributors.

“We’re committed to finding ways in which to address the rising costs. As one of the nation’s largest food service distributors, US Foodservice will go a long way in helping us achieve efficiency initiatives and realize true savings,” Scribner said.

US Foodservice recently signed a five-year agreement to provide contract pricing to the members of Leverage Buying Group, LLC, a group purchasing organization developed to serve independent restaurant owners. The agreement provides significant savings to all members and covers a multitude of products including dry groceries, produce, dairy, meats, paper, disposables, chemicals, equipment and supplies.

Jimenez believes that restaurateurs have developed their skills as great operators, but are now forced to vigilantly monitor all aspects of purchasing. The perception is changing, he said, and the tight economy is now forcing everyone to look at how to reduce costs without sacrificing quality.

“What we do is all about negotiating the best price for the best product,” Jimenez continued. “This goes not just for food products but for credit cards fees, janitorial services and other local vendors.” The program currently involves savings on US Foodservice as the food distributor, Chase Paymentech as the credit card processing company, and a national contract with Coca Cola. “Once this works out, we’ll move on to other suppliers, but we want to get it right,” Virga said. These other suppliers include linen services, music/internet service, waste removal, beer, liquor, wine and much more. “We’re just getting started,” Virga added.

Leverage points out that vendors to, could benefit from this partnership too. “What they sacrifice on margin, they make up on volume, so they love working with our group since they care about how many locations they get to service,” Johnson said Leverage Buying Group thus far has roughly 25 members, though this number is expected to be more than a 100 by next year.

Website: http://www.lbgbuyinggroup.com

Contact Information:
Leverage Buying Group, LLC
1717 Captiol Ave Sacramento, CA 95816

Tara Alam 916-469-9227
Ernesto Jimenez 916-601-7004
Jimmy Johnson 916-601-4584
Mark Scribner 916-600-3213
Dave Virga 916-320-0887