For the past few years, Andre Pellerin and Andre LeBlanc have watched their friends in the restaurant industry get squeezed by rising food costs. This year, they started a business to help out restaurant owners.
The two Moncton food services execs have started FoodTender Solutions, an online marketplace on which restaurateurs can buy food supplies. The two Andres launched the company in August in New Brunswick and P.E.I. and have about 75 customers, comprising restaurants and suppliers.
“Thirty-five or 40 cents out of every dollar that restaurants spend is on food costs, and those costs have been soaring,” said Pellerin in an interview. “For the last couple of years, I’ve been watching restaurants struggle.”
He and LeBlanc have been working for several years for a major food supplier and came up with the idea that the restaurant industry needed an online marketplace to buy ingredients.
Restaurateurs post online what ingredients they need, and suppliers bid on them. As LeBlanc and Pellerin expected, the platform has allowed restaurants to find the best price possible and hold down their food bills.
What they’ve learned is that it also has benefits for the suppliers. Their sales reps often have difficulty reaching a chef or other restaurant decision-maker, who are given to buying from existing contacts. FoodTender helps suppliers gain such clients because they enter an open bidding process.
After brainstorming on the project for several months, they launched FoodTender in August with a $270,000 investment from friends and family. The company was then accepted into the Launch36 accelerator, where they met a range of mentors who have helped them with their business development strategy.
“Launch36 was a blessing for us,” said Pellerin.
“Before Launch36, we didn’t have any mentorship or coaches. It felt good to crawl out of the basement and talk to people who have gone through this before.”
They excelled in the program. Last week, the audience at the Launch36 graduation, known as DemoDay, awarded them the people’s choice award for the best pitch.
So far, LeBlanc and Pellerin have demonstrated that the product works, and they have adjusted some features, such as the payment system.
“We’ve validated the product within our customer group,” said LeBlanc, who began his career as a chef. “What we’ve learned is that our clients like it.”
They are tapping their network of contacts through restaurants in Halifax so they can expand into the largest city in the region. Within a year, they hope to take the next step and move into a larger market, likely Toronto.
At the Launch36 DemoDay, LeBlanc told potential investors the company is looking for about $800,000 in equity investment to finance expansion and hire programmers.
“With the mentorship that we now have, we think that we’re able to hire young high-energy people and have people who are able to guide them.”