Germany has a tradition of out-of-home catering in companies, education, and public administration. In 2021 the German Federal Ministry of Food and Agriculture passed a law to increase the proportion of organic food in out-of-home catering up to 20 percent until 2025 (Federal Ministry of Food and Agriculture 2021). The southwestern state Baden-Württemberg wants to increase the share of regionally organic food in their state canteens up to 40 percent until 2030. The proportion of regional food will increase up to 75 percent (State of Baden-Württemberg 2024). The current out-of-home catering process involves the kitchen management to compose a menu as well as the shopping list and send the list to one or more wholesalers. Depending on the size of the kitchen the last step is executed with an enterprise resource planning software via interfaces to several wholesalers. However, smaller kitchens still place their order via fax device or phone. The wholesaler processes the order by purchasing all goods with the highest margin from (non-)regional agricultural producers or other wholesalers. In most cases, the wholesaler purchases organic products on explicit request by the kitchen. This request highly depends on the financial or management situation. The wholesaler receives products and refines them kitchen ready. In some cases, a specialized refinement company is involved or farmers clean and peel the vegetables on site. Ideally, the kitchen only gets one delivery. In this current situation, barely any kitchen interacts with a regional producer of agricultural products. The supply process highly depends on the basis of information by the wholesaler. Hence, our research question is: How does the role of wholesale in the digital transformation of German out-of-home catering change?
Wholesale in Germany is characterized by a high degree of diversity with traditional business models. In almost every branch of industry or trade a wholesaler supplies and distributes all necessary products to manufacturers and retailers. During the last few decades, the core business model in wholesale – cost-efficient purchasing and selling products in large numbers – has been amended with product specific services (Samadi, 2009, Weber et. al 2019).
Currently, we scientifically accompany an out-of-home catering project subsidized by the EU to answer this question. The single case study includes the whole chain: agriculturists, wholesalers, and kitchens. According to Yin (2018) we gather data by conducting participant observation (Kawulich 2005) and problem-centered interviews (Witzel 2000). In almost two years the group creates together with IT developers a digital solution. The goal of this project is to digitally transform the process of menu composition in catering kitchens. In this research digital transformation is regarded as an improvement of value adding processes enabled by digital technologies (Fitzgerald et al. 2014; Liere-Netheler et al. 2018). In addition, digital transformation refers to the networking of any objects using Internet technology on digital platforms through which data, products and services can be shared. This means that digital technologies enable partner ecosystems (Werth et al. 2021, Uckelmann et al. 2011). On this basis, companies from different disciplines, areas and industries can work together in appropriate ecosystems. In our case, the transformation is that kitchens will create their menus with digitally compositions of menu suggestions. These suggestions are generated through the combination of at least two data bases: the first data base consists of agricultural producers, their products, and addresses. The other data base consists of recipes, the recipes of the kitchen or shared by the community. The kitchen sets its preferences, such as regionality, organic, or food preferences by the consumer. The suggested menu shows full transparency on what is possible to serve regionally and organic to their guests.
The wholesaler is now confronted by a market dynamic change. We assume the transparency on products and prices lead to an adjustment in market behavior by wholesalers. New information about supply and demand in out-of-home kitchens will change the way of interactions in the supply chain. Farmers, aware of the demand, will change their cropping plan. The kitchens on the other side of the chain will increase the regional and organic supply to do justice to the political motivation. We see different outcomes for wholesales and their role in the chain: wholesalers will still be necessary for the distribution and the refinement of the supplies. Kitchens have no interest in receiving individual deliveries with the high amount of different food items they need. Neither will kitchen refine the products as they used to in the past. Not every farmer will integrate a refinement in their process since the acquisition costs for the necessary machines are unaffordable. The role of wholesale will, however, change in creating new supply chains based on the farmer data base provided by the digital service. A decentralization of their logistics and refinement will do justice to the regionality in the political motivation.