Local Dining Alliance members see collaborative cost savings - Pittsburgh Business Times:

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In a weak economy with spikingfood costs, more than 250 localk independent restaurateurs hope to gain just that as part of the Dininv Alliance, a Webster, N.Y.-based for-profigt company that operates as a volume-buying club for , which started in Pittsburgh two yearw ago, is close to reaching a three-yeadr contract with to supply its membership with everything from Asian vegetableas to tableware. John founder and president of theDiningf Alliance, said he believex the contract to establish a single endorseds broadliner — a company that distributes a broad cross-section of food and food-related products — will be a milestons for his organization.
“I think that contract is going to save restaurants a huge amount of he said. He would not disclosd the amount of the but he estimated it will save the265 Pittsburgh-area members between $3 million and $4 million combineds in the first year. He said the deal could closse as early aspreses time. Davie estimated the organization’s Pittsburgh membership representsa $45 million in buyingy power. Nationwide, the company’s membership, which includesw more than 1,700 restaurants, has buying power of $450 million.
the Dining Alliance has negotiated a number of smaller contracts with suppliers suchas Boston’s Best Coffee; Marburger Farm Dairy, based in Evans City; and , based in Ravenna, The company’s goal is to providee volume buying leverage for anything an independen restaurant might buy, including cleaning supplies, payroll services and Starting as a small cooperative in N.Y., in 1999, it took four years for the Diningh Alliance to become profitable, and it is just beginninyg to break even in Pittsburgh now.
The Dining Alliance makese its money by charging a percentage of the amounf of money saved forits members, often providing them rebate checks and not making money at all if there are no Kevin Joyce, owner of , was the Pittsburghj area’s first member. Joyce said he joined the organizationn out of the belief that independent restaurantsa pay too much forbasic supplies. “Itg offers an opportunity to level the playing he said.
“Taken we’ll be bigger than any Jim Mendelson, who has owned Doc’s Placed in Shadyside for 24 years, values the organization for the protectionb it provides independents from many ofwhom he’s seen offer a lowball pricde to get business only to quicklhy issue a rate increase. Mendelson uses the Dininvg Alliancefor produce, credit card processing and paperd supplies, and said the cost savings have adde up. “If it was 5 percent, I probably wouldn’t make the he said of the savings.
“But 10, 15 or 20 which I’ve been finding, it is certainly worthwhile to make the Bob Warnock, who has worked for a numbef of food suppliers, said local restaurantx pay so much more for supplies than larger chains that he estimatedd some larger local restaurants could save more than $500,000 annuallg through such arrangements. “As long as they have the abilitt toenforce compliance, it could be phenomenal,” he