Chefs from Abu Dhabi discuss the issues facing hotel F&B supply chains, the potential for a local produce market and the problem with pineapples at Stratos, Abu Dhabi.
What is the primary challenge in sourcing ingredients for restaurants in Abu Dhabi and how does this compare to other
Danny Kattar: To be honest I have worked in Kuwait, Qatar and Saudi Arabia but I didn’t see a big difference. When I worked in Qatar and Kuwait it was difficult to get products in and you have to source on a weekly basis, especially from overseas. We don’t see any difference between Dubai and Abu Dhabi on products because most companies do both.
Narayanan Jaya: I’m quite new in Abu Dhabi and still learning the market here. The primary challenges I face are finding local products, which are high quality and sustainable.
Saco Musch: There is no issue when you compare to Dubai. I worked in RAK as well and they don’t come to you for small deliveries, but here the suppliers come every day.
Danny: Then you have companies delivering products to both Dubai and Abu Dhabi
Saco: The majority of suppliers are still in Dubai but I don’t see it as an issue. We have a sizeable operation and the suppliers come here from Dubai every day.
Danny: Most companies want to do good business and so dedicate two teams, one to each main city. And that means you deliver faster than sending the same team to both places.
Malcolm Webster: Most of our deliveries from Dubai arrive in the afternoon because they do the city drops first. I think the challenge I find is that not all suppliers deliver six days a week to Abu Dhabi so you have to get your head around the delivery schedule as well. I think previously in Abu Dhabi the purchasing director has gone out and tendered out all the products and we are buying from the cheapest source, so we will have four suppliers delivering frozen seafood, each with around AED150 of goods because one has the cheapest scallop, one the cheapest calamari, and so on.
Saco: I have the same, but sometimes you don’t see the benefit because of the volume of suppliers.
Malcolm: We have cheese coming from seven different companies and so we are working on consolidating that. Our frozen seafood spend is around AED2m a year so we make big savings in consolidating big suppliers. And from their point of view, it doesn’t make sense to deliver such small volumes to multiple properties.
I have been in the region 18 months and I came from Europe so it’s very different. The whole sustainability of supply chains and local purchasing isn’t viable. You have to change how you operate and change your style. A lot of local vegetables are decent for certain things and we use as many as possible, but it isn’t viable all the time.
Saco: Some of the local farms are very inconsistent.
Danny: There is a new vegetable company launching next year and they will be able to supply a variety of produce. Most of the fish will be fished locally also, but everything is double price.
Narayanan: Development in the local market is urgently needed because it can really transform how we work, but there is nobody coming to the hotels to speak to us.
How do you compensate for inconsistencies in the supply chain and the availability of items?
Malcolm: For me the biggest issue I have had has been with pineapples and I have been complaining to suppliers on a daily basis – it’s not ripe, not ready to eat, not the quality I want to eat – so now we import them from Kenya.
Narayanan: I have had so many problems with pineapples. They are awful. The prices are going up and the quality is going down and there are very few alternatives. It isn’t just about buying it’s also about how you can prepare it, because many fruits are cut straight and not with the curve of the fruit so there is a lot of waste.
Kenyan pineapples are very small so you cannot use them for the bulk requirements. The fruit is good from Thailand.
Danny: Sometimes the supermarket is the only place to source pineapples from.
Saco: Sometimes you have to accept the product isn’t available.
Jordan Annabi: We change our lunch menu almost daily and do all the printing in-house so if something isn’t available we just substitute and arrange in-house. We have a recipe database to choose from to avoid telling customers that something isn’t available.
Narayanan: I can buy from a supermarket if I am really struggling to find something. There are times when you can be left up to a week with no delivery from suppliers but you can’t just exclude those ingredients from the menu – sometimes there is no choice but to source a product from a store, so long as the quality is right. We are a business, we can’t stop.
Danny: We also have a strategy, with a basic menu and 10 signatures, which are also seasonal. And these 10 signatures will be the daily playground. Like Jordan said, you see what is available, check for alternatives, have the basics, and play with the rest.
How does the ad hoc sourcing of ingredients impact on profit margins and how is that impact managed?
Saco: Sometimes you have to bite the bullet – let’s be honest you can’t mark up a price regularly – other times you have to re-price the menu.
Danny: There should always be room to play with because you need to think about the guest satisfaction. In a 5-star establishment you need to meet the guest demand. You can’t tell them you don’t have pineapples.
Malcolm: When it comes to some ingredients though, especially things like fresh fish, I would rather explain that the fish wasn’t fresh enough today, rather than serve something which isn’t the highest quality. I think the customer appreciates that as well, rather than paying for a product that they aren’t happy about and you aren’t happy serving.
Jordan: There are issues with freshness also, one week something will be under ripe and the next, over.
Malcolm: The question is, can you charge more to the customer and are they going to notice it? Some will, some won’t
Saco: Are you dealing directly with suppliers or does purchasing take care of things? If I had an issue I would call the supplier straight away because building a relationship with them means they will go the extra mile.
Danny: This isn’t something you can delegate to purchasing. If somebody is charging AED7 for an item, they will attempt to source it for AED5 regardless of quality, not AED8 for guaranteed quality.
Malcolm: We are a large account for some of our suppliers but I strongly believe there is no account management; no specialists talking to you. It’s the same scenario as the pineapples; they’re less than AED6 per kilo, of course it’s going to be mediocre. If they’re only buying and selling one type from the Philippines, they’re selling it to 5-star hotels, but also shops, cafes and there is no consideration for the quality difference between those establishments. They can’t deal with the finer edge of the operation and the everyday consumer with the same pineapple.
Returning to the pricing issue, personally would you prefer to charge the guest more or serve slightly less in order to preserve the profit margin under different overheads?
Jordan: If you pay more for produce you have the balance the menu so you’re making more on other dishes. You can’t get away with serving less here because people want more.
Danny: It would damage your reputation to serve less or remove ingredients here. I would rather compensate on other dishes than say no or change the dish.
Do the food miles of internationally sourced ingredients every impact your busying decisions?
Saco: Yes and no. Certain products, things that have to be perfect, for example Mozzarella, cannot be imported because it doesn’t taste the same once it gets here. For fish it takes three days to transport and specialty ingredients sometimes are difficult to get on time.
Danny: In our Belgian Beer Café, our weekly consumption is 600kg per week of mussels. During the season it comes from Holland, and out of that season, Australia. So imagine the products come to me with a seven day shelf life from the day they leave Holland, so I’m left with four days of shelf life for 600kg. Imagine you have one dry night or don’t sell for other reasons. What do you do with all the product? It’s going to be on the buffet, in all the specials.
Saco: Here you need to plan in advance. In Europe you can buy and take delivery the next day but it doesn’t work like that here.
Jordan: I think for everyone it’s a yes and a no. I’m not comfortable with the miles on a personal level because coming from the UK you source as much as you can locally, but here there isn’t the infrastructure. There are things popping up like the organic farms but the hotels are growing so they can’t keep up with the demand. Things will have to continue to be imported.
Narayanan: The food miles impact my buying decisions and the guests today are very smart. They want to know where their food comes from. So for our events we have cocktail, buffet and coffee break menus which are all designed around sustainably sourced ingredients and when guests for example request something like hammour we have to explain that it isn’t sustainable. Instead we serve red snapper and other fish.
There is a trend emerging, specifically in fresh produce rather than seafood or meats, and hydroponic farming is being used in the UAE increasingly as an alternative to imports. Is the cost and quality viable for your requirements?
Malcolm: It’s more expensive.
Danny: In 2016 there will be a new regulation specifying that between five to 20% of ingredients will have to be locally sourced. I have heard this from various sources for Abu Dhabi, but nothing official.
Narayanan: The regulation for sustainably sourced ingredients will have a huge impact on price. We are already planning for this but we really need local suppliers to approach us and show us their products, in the hotel. We want to buy, but the market is too small.
Saco: I would love to purchase locally, it would be great, but the supply needs to be there. The products need to be available.
Malcolm: The cost has to be right also and if you’re using swimming pools full of water to grow the things, what is the real benefit? The flight is coming over anyway.
When you are looking for new suppliers, what is the criteria you need them to meet and how easy is it to find partners who can match those requirements?
Jordan: Consistency, availability, quality.
Malcolm: I like to meet them. I like to visit the warehouse facilities, meet the people, see the place and the produce. I don’t think enough chefs do that. You need to know who they are, who they’re supplying and have conversations with them. It’s the only way to judge the character of the person you’re dealing with.
Here you have the barrier of the purchasing department.
Danny: And the hygiene people with a 100 point check list
Saco: Let them find it, if they believe in the product it will come in.
Jordan: We looked to use one of the organic farms in order to do an organic menu but when we came back to the purchasing department they had a whole number of reasons as to why we couldn’t use them. It was stopped at different points, but the produce was good and the tomatoes tasted like tomatoes – which is an issue here.
Danny: It’s about protecting the consumer and if something happens to the consumer it’s a big liability to the hotels. You serve 100 guests and then one gets sick and it’s reported and they want to know everything. So it goes back to traceability and supply chains and who your suppliers are, their approvals. All that falls back on the hotel.
Narayanan: The first thing is quality, followed by price, then we consider their ability to deliver what we need when we need it. The level of customer service we receive has varied so much between suppliers. Even last week when our supplier visited they had most of the products we needed but on other occasions they can’t provide everything.
If we order 150kg of something for a set menu or banqueting, then they can’t provide, that provides many issues for us.
Regardless of the strength of that relationship, there is still a huge trust element and you both depend on each other to ensure everything is perfect for the people who will eat the food.
Saco: The thing is though, the more suppliers you have delivering fish for AED200 per drop, the higher your risk. The longer and more complicated the supply chain, the less you can trace. The fewer the suppliers, the easier it is to manage everything.
But how easy is it to consolidate supply chains in the current market? Is there room for growth and a demand for diversified suppliers who can deliver everything, or on the other hand should suppliers be specialist?
Danny: You find a new company and they only supply to one hotel, do you think they can sustain that supply for you? That’s why we go for the big names.
Saco: I find it strange that they can deliver you fish and mushrooms. For me I would prefer one fish supplier who delivers all the fish. One meat supplier, who delivers all the meat. But here they all offer everything and clients buy on price. No, they should focus.
Malcolm: When it comes to the dry and frozen, there is one main importer for all these brands and then a group of different re-sellers who buy from them and then sell it on to you. So you have to understand who is importing the product so you can go direct to that supplier and get the better price. Nobody has a very big basket, it’s all quite limited and they all key segments, which means you have to use different suppliers, unless you buy from someone else at a higher price.
Narayanan: There are a few elements to this. The first is the budget and SOP; we have certain standards that need to be adhered to. If you have multiple suppliers we will buy the best quality for the best price. We aren’t a luxury hotel so we don’t buy expensive ingredients all from the same supplier, we get the highest quality at the best price, from multiple sources.
We can’t not have ingredients for days on end. We have repeat MICE business and they come for conferences which include catering and they can’t go the entire conference without a certain ingredient, so we have to make sure we can procure everything we need and that means dealing with multiple suppliers. We even have two suppliers just for dates.
It’s a catch 22 situation – you want to consolidate but you also want the specialists to supply to you, but what is the most difficult ingredient to source?
Saco: Good game is difficult to import. European, fresh, difficult to source.
Danny: One night a week we have a game night at our steakhouse, but we can’t source enough to have it on the menu every night.
Jordan: Also game. We too tried to do one special game dish but we couldn’t source anything worth putting on the menu.
Saco: I wanted to incorporate some Dutch products, like smoked eel but couldn’t find a supplier. It was for a permanent fixture on the menu, rather than seasonal or special.
Danny: Tenderloin is very expensive and difficult to obtain at quality also.
Malcom: good quality chicken. The market is flooded with chicken from Brazil and it’s very bad quality.
Narayanan: We always have problems with chicken. We had a banqueting function for 1,000 people and part of the order was frozen so we couldn’t use it. We spoke to them about it and they denied all responsibility. I check everything personally as much as possible, but mixing frozen and fresh is a widespread issue.
Saco: What about the meat market, isn’t it just over produced? The most available products are meat.
Malcolm: I have suppliers knocking on the door trying to sell me Wagyu and I took some to sample, medium rib eye, and it was disgusting. There is so much fat it has to be cooked well done.
Danny: Smoked salmon – everybody is trying to sell that now.
Narayanan: I find it’s caviar and honey products – especially the flower honey honeycomb, not the date one found locally. People don’t mind paying for a high quality product, but the quality has to be there, especially with the honey.
Sometimes we have to source from abroad, so that adds time to the delivery and additional complications to the sourcing.
What do you predict to be the greatest challenge facing the market right now?
Danny: You do a blind tasting then you choose a product on price and quality but then after two weeks they don’t have any more and you need to start all over again.
Malcolm: Since I joined Saadiyat we changed a lot of the ingredients, so you have to give your suppliers notice because there is an issue with their ability to react quickly to demand.
Saco: Exclusivity. You used to be able to put something on the menu and it would be only you who has it. Now that is no longer the case
Closing the conversation, it is said that globally no more than 500 companies control 70% of the world’s entire food supply chain. Is the dominance of some companies posing an issue to you and what is the impact of this on your business?
Saco: It’s all about the other 30%
Danny: Small companies who don’t become one of the 500 won’t be able to sustain business, but if you look at those 500 companies they are all fighting with each other.
Malcolm: Sometimes you need the bigger people in order to secure better conditions for your own purchases and if you know you have one supplier delivering a large volume, it’s much more efficient.
Danny: There are also economies of scale in buying bulk and not jumping from one to the other.
Do you have any apprehension over “placing all your eggs in one basket” by depending on so few suppliers?
Malcolm: Not at all. If there is an issue they can trace, they have the documentation, alternative products; they do the work. Many others would just say it isn’t available.