Experts Offer Recipes for Success for the Food & Beverages Industry

Experts Offer Recipes for Success for the Food & Beverages Industry

COMPILED BY JOHN JOSEPH PARKER, CONTRIBUTING EDITOR

GIVEN A GROWING LIST OF challenges—from an increasing minimum wage to rising food costs to changing dining paradigms—COMMERCE asked a panel of experts to discuss best practices for the food and beverages industry. Here are some strategies for success.

EisnerAmper LLP By Richard R. Colloca, CPA, CMA, Partner, Co-Leader, Food and Beverage Group

We examine financial metrics such as product gross margins, inventory turns and cash flow timing. This data can help food and beverage companies sell to their strengths. We recommend clients manage buy- and sell-side logistic costs via bulk purchasing or offering volume discounts to customers to increase profitability per delivery. We may suggest third-party logistics brokers to manage the process and create efficiencies. Leveraging technology is another key component of enhancing client operations. Blockchain technology can be used to facilitate both purchase and sales transactions, thereby improving transaction timing, leading to better controls and more timely data. Artificial intelligence can facilitate routine tasks such as order picking and packing. Relating to the NJ market specifically, we can propose the need for location feasibility studies on the proximity to Garden State infrastructure and warehousing space. Furthermore, we can help clients take advantage of NJEDA programs and incentives.

Marcum LLP By Louis J. Biscotti, CPA, MBA, CITP, National Food & Beverage Leader

Our experience with more than 300 food and beverage clients in all sectors of the industry, from farm to fork, enables us to advise a nine-store restaurant chain on restructuring its individual entities into a streamlined holding company with subsidiaries. This will allow the company to file a single tax return, save taxes and preparation fees, and not be concerned with how to aggregate profits and losses for tax purposes. Our services include creating a standard reporting system and helping establish policies and procedures for all entities. We will also integrate all point of sale, purchasing, and accounting programs to generate timely reports to management through our technology company. And we will evaluate each of the restaurants and implement changes to improve profitability. Other projects involve securing bank lines of credit, amending shareholder agreements, implementing employee benefit plans, helping to secure new vendors, and adding key personnel through our search firm.

Mazars USA LLP By Howard Dorman, CPA, Partner, Food & Beverage Practice Leader

As in many other states, restaurants and food service companies in New Jersey are under constant pressure to re-engineer themselves. Business owners must assess risk every day. Addressing rising commodity costs is critical. Cybersecurity is another risk that we work closely with restaurants and other food service companies to mitigate by ensuring their systems and processes are safe from intruders. The leading salient risk our clients always talk about is human capital. Minimum wage increases have been enacted in New Jersey. That coupled with other recent legislation surrounding paid leave adds to the growing labor cost issue. Because of the increase in home delivery services, we are finding that many food establishments are experiencing fewer “instore” sales. Coupled with the higher cost of labor, many restaurants are reducing their total number of employees. One way that companies can generally improve performance is by having a good ERP system. This allows us to extract valuable information from their POS system, so that we can perform much-needed analytical data mining, which can result in valuable ways to become more efficient and deliver more dollars to the bottom line.

Norris McLauhlin, P.A. By Danielle M. DeFilippis, Esq., Co-Chair, Intellectual Property Law Practice Group

Food is big business in New Jersey, and with the industry constantly evolv­ing to meet changing consumer demands, businesses need to be adapt­able, but also maintain the consistency that keeps their loyal customers. Our attorneys help clients stay on top of the trends and protect and promote their valuable assets through branding guidance; securing and protecting intellectual property and trade secrets; and negotiating contractual relation­ships. Our attorneys are regularly pre­senting on the most relevant topics in the industry and taking the time to lis­ten to industry developments in order to anticipate the legal work clients will need. For example, one of the hottest growth sectors right now is plant-based proteins. While food inno­vation is nothing new, the remarkable rise in disruptive food products could bring many advertising and branding challenges in the future. Through our contacts in the industry, both domesti­cally and abroad, and constant educa­tion on developments, we are able to counsel clients on the latest trends, provide guidance with advertising, and help them structure relationships in a way to poise them for growth and sustainability in a dynamic and evolving industry.

Sax LLP By Kathleen Alexander, CPA, MST, CFE, Partner, Food & Beverage

We understand that con­sumers are in the driver’s seat and there is a critical need for New Jersey’s food and beverage companies to evolve quickly to meet their increasing demands. It is important that companies address the shift to online distribution of goods, and to make an investment in technology to remain players in the food and beverage market. There is no real end in sight for new approaches to buying and selling food and beverages, such as Amazon, Walmart, and other online grocery stores. We help clients evaluate what is necessary for their business and identify the right balance between brick and mortar and an online presence, so they can meet customer expectations for easy access to quality products. This requires a new way of thinking, and an advisor that knows the industry to lend a guiding hand in these changing times. That’s what we strive to be for our food and beverage clients.

SobelCo By John R. Mellage, CPA, CGMA, Member of the Firm

We have been working with our clients in the area of cash flow projections and navigating the law to ensure they are able to take advantage of all allowable benefits to reduce their tax impact and maintaining positive cash flow. For instance, we have been closely reviewing the financial impacts of the wage increases and their effects on cash flows and margins and analyzing those areas where automation may be an alternative. Because of increased labor costs, business owners are looking to advancements in technol­ogy which are now becoming more fea­sible as a long-term savings plan. In addition, the Tax Cuts and Jobs Act has afforded many tax-saving opportunities, including the increase in bonus depreci­ation for purchases of qualified property from 50 percent to 100 percent. We have been educating our clients on these laws and analyzing scenarios, so they have the proper decision-making tools for potential investments in new improvements and technologies.

WithumSmith+Brown, PC By Terry Moncrief, CPA, Partner, Team Leader, Food and Beverage, Restaurants and Bars Practice

Our Food and Beverage team is a true business partner to our restaurant clients. In addition to the “normal” tax, audit, assurance and advisory engage­ments, our team has extensive experi­ence in accounting and advisory services that are industry specific. Not only does our team include expert professionals, but those who have also owned and operated their own restaurants. As the industry evolves with concepts such as third-party delivery and online ordering, we are there for our client’s needs. Our team is often assisting with strategic planning, analysis and implementation of POS and inventory control systems, payroll, tip and minimum wage issues, scheduling and other matters specific to the industry and the individual client. Our skilled advisors have even aided in operational issues down to menu pric­ing, wine list enhancements and peak scheduling issues. We value our client’s time and they value our advice.

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