Celebrity chefs and other food maestros who oversee four- and five-star restaurants are a discerning and confident lot who typically don’t like anyone outside interfering with — let alone offering advice on — how they buy ingredients for their menus.
So when two entrepreneurs from the upstart Dine Market approached some of them with a new technology they said could save restaurants tens of thousands, or even millions, of dollars a year, the chefs were more than a little skeptical.
“I’ve been in this business for 30 years and we’re approached by these kinds of things every day,” said celebrity chef Josh Capon, host of Spike TV’s “Frankenfood” and a partner in Lure Fishbar of New York and Miami.
But after agreeing to give it a try in 2012, Capon said, he now uses the technology in all four of his restaurants.
The same is true for renowned chef Daniel Boulud.
“I met Daniel about 12 times before he finally signed up,” said Adi Dror, co-founder of Dine Market, who said he finally got Boulud on board after 13 months of phone calls and meetings. “I still have the voice mail, where he agreed,” Dror said.
“We have it in our company and use it,” acknowledged Boulud, owner of six upscale restaurants, including the much-lauded Daniel.
Boulud and Capon are among a small but growing number of restaurateurs using Dine Market’s technology to streamline the way they buy food. Le Cirque, the Blockheads restaurants, Michael White’s restaurant group and celebrity chef Bobby Flay have all signed on. Schools like Brooklyn College and hotels like Le Parker Meridien in New York are also using the Dine Market app.
Dine Market connects restaurants with food suppliers in the cloud. Its online service allows restaurants big and small to compare prices and order food supplies from more than 100 vendors. It’s a one-stop shopping approach, where both A-listers, such as Boulud, as well as restaurant startups can buy everything from lemons to flour and find the lowest prices. By streamlining the buying process, tracking orders and finding the best prices for items, the app can cut restaurant costs 7 to 15 percent on average, said Guy Praisler, Dine Market’s co-founder.
Dine Market makes money by charging vendors a 2 percent commission on each sale. Its revenue, when adjusted for incentives and free trials, is projected to reach $700,000 this year, up from $180,000 in 2012, its first full year.
While those amounts are modest, Praisler has a lofty goal of getting Dine Market into restaurants in all major markets in the United States within three years. He is aiming for 20,000 restaurants by 2018.
Restaurants spend about $270 billion a year on food supplies, Praisler estimates. “This is our market,” he said.
But there are challenges.
Many upscale restaurants won’t use Dine Market for buying fish and meat, which often represent more than half the value of their food purchases. Instead, they rely on preferred suppliers, whose quality and reliability they can trust, even if the price is higher. And most of those suppliers are not on Dine Market’s list.
Then there is the competition. Rivals including Sourcery, Improvonia and ChefMod have popped up. But most don’t offer a real-time price comparison tool, and some charge monthly subscription fees.
Felipe Donnelly, executive chef and partner at Colonia Verde and Cómodo, said he signed up with Dine Market in part because it did not charge fees to restaurants. “We were saving 10 percent within the first order,” he said.
Early investors in Dine Market compare its potential to the way OpenTable transformed the restaurant reservation system. (OpenTable, which offers online restaurant reservations, was ultimately sold to the Priceline Group in July 2014 for $2.6 billion).
Edmundo Gonzalez of the venture capital firm Columbus Nova Technology Partners, based in Menlo Park, California, was among a group of six people who invested $1.2 million in Dine Market in 2014. He tested the Dine Market app at two restaurants he co-owned.
“Would you buy that case of avocados at $200 if it was available for $140 and it’s the same product and same quality? Of course you would” buy it for $140, Gonzalez said of his decision to back Dine Market.
Praisler, who was born in the port city of Ashdod, Israel, in 1968, moved to the United States in 1993. He graduated from Boston University with a bachelor’s degree in computer science in 1999 and from New York Institute of Technology in 2000 with a master’s degree in business administration.
He jumped into tech startups, partnering — and later selling his interest — in Centore, a consumer electronics website; Devix, a maker of software for retailers; and Envite, an online fashion store.
But it was a stint as a consultant with Chef Driven Group, a chain of 16 restaurants, that inspired Praisler’s latest effort. He found the food-ordering process costly and time-consuming, and decided to create software and the company Dine Market to automate and digitize the process.
“I realized there could be an opportunity industrywide,” he said. So, he hired Chef Driven’s purchasing director, Dror, as well as a programming friend, Gabriel Rusu, and the three built out Praisler’s concept.
Dror, born in Rishon LeZion, Israel, in 1986, had worked in restaurants his entire career, from a job as a busboy at age 14 to an eventual position as a restaurant manager. He moved to the United States in 2007 and graduated from Brooklyn College this year with a Bachelor of Arts degree.
Getting new restaurants and chefs to join Dine Market was rough going at the start.
Just getting a phone call returned or setting up a meeting was a feat, Praisler said. “Only about one out of every seven would sign up,” he said. The founders were confident that if they could get chefs on the platform, they would see the savings and benefits and use it.
So they got creative.
“I would go to dinner at the same place every day for a week just to see the chef every day,” Dror said.
Sometimes, an owner was amenable but a chef was not. So Dror would then spend extra time with the chef, building his trust.
He recalls getting a kitchen tour from a chef who bragged about his tasty octopus dish. “He then took a live baby octopus, threw it into the microwave for two minutes, cut me a piece, and served it to me,” said Dror, who recalled watching in horror. “I had to swallow it and keep a smile on my face.”
The chef ultimately signed up for Dine Market.
Another hurdle is that restaurateurs often get comfortable with certain suppliers and are inclined to experiment slowly. Kevin Del Casale, director of purchasing for Le Cirque, said that he had been able to save 15 percent on cleaning supplies and 5 to 10 percent on produce using Dine Market. However, he still turns to preferred vendors — not on Dine Market — for meat and fish.
It has helped that prominent names, such as Boulud and Le Cirque, have signed on.
“I figured if someone at that high caliber was using a platform like this, then we could probably do it also,” said Amador Acosta, corporate chef and operations manager at AltaMarea Group, which owns Michael White’s restaurants. AltaMarea is saving 5 to 8 percent on produce and dry goods on Dine Market, estimated Arthur Li, the company’s chief financial officer.
Still, is growing from 300 restaurants to 20,000 in three years realistic?
Dine Market has been focused on getting restaurants to sign on. But now it is expending more energy recruiting suppliers in the hope that they will bring their restaurant customers with them.
The average large vendor has more than 200 restaurants, Praisler said. “Even 100 vendors using our tool in the next three years, we’ll get to the 20,000 restaurants,” he said.
But won’t food suppliers complain about having to pay a 2 percent fee on each transaction? Some integrate the fee into the food prices. Others say the benefits offset the commission.
“It increased our exposure,” said Jon Hansburg, a vice president at Baldor Specialty Foods. “It adds about five or six new customers on a monthly basis. So we’ve helped them grow and they helped us grow.”
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