Customer Information, Who is King Food Service?

Advantages of a Protein Specialist

Disadvantages of Certain Prime Vendor Agreements

KFS Mission Statement

Hours of Operation & Directions

Review KFS Credit

Who is King Food Service?

KFS is a licensed food distributor, broker, importer and USDA inspected meat-processing facility that services wholesale distributors, restaurants, grocers, and other food buyers. Our USDA plant number is P-2525.

KFS is a specialist in Seafood, Poultry, and Meat . These food categories represent the largest portion of most food budgets and probably include 20-30 of your highest cost items.

Our purpose is to help you source and receive the highest quality Seafood, Poultry and Meat direct from leading domestic and foreign processing companies at the least cost possible. We source the product YOU want, not push the product that the distributor wants to sell.

KFS is recognized nationally as a source of information as well as products due to the depth of our knowledge and over 60 years experience in the industry. We believe our ability to succeed in business since 1945 testifies to our integrity and credibility in servicing our customers.

• Better solutions, information, and advice on protein products due to our specialized knowledge & focus

• Better service and flexibility in responding to Customer needs as a local, medium sized organization

• Better prices and quality from our concentrated purchasing power as an importer and broker, superior knowledge of protein market cycles, and lower overhead structure

• Stonger work ethic to help Customers ahieve success

• Our competitive advantages and services are summarized at www.kingfoodservice.com

• Strong Values of Trust, Professionalism, Competence & Confidence with Customers and Others

• Strong Customer Relationships & Flexibility that puts Customer Needs First

• Positive Customer Perceptions that KFS is the Best Source for Seafood, Poultry and Meat

• Engaged Employees that Care and are Trained and Motivated to Satisfy Customer Needs

• Effective & Efficient Systems to Consistently Perform at a Higher Level with a Lower Overhead Cost

Please contact King Food Service at 309-787-4488 to obtain password for review of credit information. Then click on this link to open a PDF file. KFS CREDIT.pdf

Financial Benefits:

Protein purchases are the largest food category in terms of dollars spent and have the biggest impact on your bottom line. Our 1,000 item product list includes at least 2-3 dozen of your highest cost items.

It pays to use a protein specialist that is focused exclusively on minimizing your center of the plate cost in this critical area. You will earn a better return on your investment by using a specialist compared to buying these items strictly from a broad line distributor (BLD) that is more of a generalist.

Protein market prices are more volatile than other food groups. They routinely change by 10% or more in relatively short periods of time as a result of changes in global demand and global supply. 

Protein specialists are better able to stay ahead of the cost curve through specialized market knowledge, vigorous research, and experience. Specialists know more about WHEN, WHERE, and WHAT to buy to deliver superior cost and quality to you. BLD managing 10,000 products in many different industries don’t have the same focus needed to keep up with ever changing market conditions.

KFS purchases at full container load prices and all purchasing power is concentrated in proteins. In seafood, we go direct to the source overseas & leverage our nationwide volume to minimize your cost. KFS passes on every discount & rebate that we source to you in a lower net invoice price.

KFS is an efficient family owned business, operating for over 60 years. We operate on a lower gross margin compared to BLD because all of our fixed assets are paid for and we control overhead costs.

BLD realize the advantages of specialists and often devise prime vendor agreement marketing schemes to try to shelter them from this competition. But buyers end up funding their own rebate at a higher long term cost.

Quality Benefits:

Protein specialists have superior product knowledge to better meet your quality goals. There are many variations in protein product specifications and product quality in the global supply chain. You benefit from the knowledge of a specialist that is better able to manage these variations on an ongoing basis and match you with product specifications that meet your needs.

Proteins are a high risk category for food borne illness. Protein specialists provide added peace of mind because management is focused on reducing this risk. Specialists know more about buying quality and proper storage compared to BLD that have a broader focus.

KFS is a USDA inspected processing facility operating under daily USDA inspection, giving you peace of mind that your product is under strict Quality Control. Unlike most BLDs, we also open boxes to inspect quality and use independent labs for additional testing on many products. Specialists also turn inventory faster on fresh products for longer shelf life compared to BLD.

Service Benefits:

Specialists can tailor Customer Service to meet your needs better than more bureaucratic BLDs.

KFS cuts the red tape to get your needs addressed quickly. We provide fast response to all your service needs, including but not limited to specials orders, new items, and requests for information. KFS customer service systems are efficient and minimize you administrative time.

Buyers should beware of restrictive prime vendor agreements (PVA) with broad line distributors (BLD) that:

Customer audits show that this leads to higher total food cost due to less competition, as explained below.

Restrictive prime vendor agreements eliminate the benefits of free market competition
-BLD want these restrictions to drive other vendors out of the account to lower competition.
-BLD often lose business in food categories where there is competition by line item from specialists that have a competitive advantage. As a result, many BLD tell customers that they will get a large rebate or lower price on other items if they buy all the items on the PO from them, or agree to some arbitrary percentage requirement.

We think it is important to remind food buyers of the following:

1) Food buyers can still get the same net prices and rebates from a BLD without these restrictions on purchasing freedom, if they demand it.
-It is a “buyer’s market”. There is a long line of other BLD that would offer the same net pricing or rebates regardless if purchases are 40% or 80% (all rebates are self funded anyway).
-It is not a “sellers market” that would allow a BLD to tie their customer’s hands in this fashion with these restrictions.
-There are many examples of this throughout the foodservice industry.  There are also examples of buyers that have given in to these restrictions, and their food cost and quality have suffered due to a lack of competition by line item.

2) Nothing lowers prices like free market line item competition, the foundation of our economy
a) But there is no price competition in a restrictive PVA, after the initial look. The BLD has no incentive to provide the best individual “line item” price on every invoice because there is no competition.
b) The BLD gets the sale whether their price is high or low. Line item price competition among more than one vendor, on a regular basis, is the ONLY way to achieve cost minimization. Most PVAs over 50% usually have a very short life because the buyer’s total cost increases compared to when food buyers are empowered to make vendors compete. The PVA may still exist, but there are no percentage restrictions.

3) “Cost plus” PVAs are impossible to verify and prime vendors do not use their true cost
a) Some agreements are on a “cost plus” basis, where the vendor tells the customer they will work on a certain % over cost if the customer buys a certain % of their products from them.
b) But BLD do not use their true net cost and the food buyer never knows the vendors true cost. This can be attested by anyone in the distributor or manufacturer level of the foodservice industry. PVAs make their money on rebates from the manufacturers that are added to their invoice price for the purpose of sheltering it from customers. An item that is said to be 6% over cost may in fact be 16% over true net cost. This is especially true on meat, poultry and seafood products where vendor costs are determined by published market prices that change weekly.
c) PVA’s often include the following language in small print: “Delivered cost has no association with the actual cost of goods”.
d) This concept is the same as the car dealer that says they will sell a car for $100 over cost. The car distributor’s invoice that shows their “cost” is meaningless; they are getting money back from the car manufacturer. “Audit privileges” are really meaningless too.

4) Rebates and off invoice price deductions are funded by the customer
a) Rebates are simply off invoice deductions that are paid later. They are available anyway if the customer negotiates, but are often used as smoke and mirrors to make it appear the buyer is getting a great deal.
b) Receiving the best NET price is most important, but with no regular competition this cannot be assured.

5) There is no economic basis to justify lower prices “ONLY IF” a buyer agrees to a restrictive PVA, as long as POs exceed the point of diminishing return.
a)  The point of diminishing return is the level at which no matter how much more money you spend your costs cannot decrease any further.
b) The point of diminishing returns is usually reached below 50% of customer purchases, unless the customer is very small. There is no additional reduction in truck route costs, deliverymen costs, or salesman costs regardless if purchases are 40% or 80% for most customers.

6) Other disadvantages of a restrictive PVA
a) Service levels may suffer due to no competition.

b) BLD may charge more on items not ordered in case quantities or special order items.

c) Over time sales reps may become less attentive to buyers needs due to no competition.

d) It is easy to hide price increases due to the number of items bought.

e) The buyer is often asked to sign a long term agreement.

“Just say no” to a PVA that restricts your purchasing freedom!

The only way to minimize cost and maximize quality is through free market competition.