This is the full transcript of US Foods’ Menu IQ: Snap a Recipe, See Your Food Cost — James Jones | RTG Ep. 353. Lightly edited for readability; the substance is unchanged.
Summary. James Jones, Senior Vice President of Digital Commerce at US Foods, joins Jeremy Julian for a conversation about why broadline food service distribution digitized so much later than retail or grocery, and what US Foods has been building to close that gap. Jones came up through product technology at Dell and Microsoft, moved into e‑commerce and then technology distribution, and has spent about two and a half years at US Foods running the MOXē e‑commerce platform, the sales CRM transformation, and most recently pricing. The bulk of the conversation is about Menu IQ, the AI‑powered menu profitability tool embedded in MOXē: an operator photographs a typed or handwritten recipe, and Menu IQ scans the ingredients and amounts, matches them against what the restaurant actually purchases, and produces a costed menu item in five minutes instead of the 30 to 40 minutes the old manual process required. Jones explains why the previous menu profitability tool only reached seven to eight percent of independent restaurants, how out‑of‑stocks and substitutions are handled with primary and fallback items plus seller‑routed alerts, and answers Jeremy’s direct challenge about whether an operator can trust their distributor to calculate their food cost. He closes on where predictive analytics take this next — forward price signals on ingredients like avocados and eggs, and margin‑erosion alerts once menu, inventory and point‑of‑sale data connect.
In this transcript
- From Dell and Microsoft to Food Service Distribution
- Why Broadline Distribution Fell Behind on Technology
- What US Foods Is Investing In Behind the Truck
- Why the Ordering Platform Is Built Mobile‑First
- MOXē, Menu IQ, and What Sits Inside What
- How AI Turns a Photographed Recipe Into a Costed Menu Item
- Why the Old Menu Profitability Tool Only Reached Eight Percent
- Handling Out‑of‑Stocks, Substitutions and Inventory Transparency
- Can You Trust Your Distributor With Your Food Cost?
- What Ride‑Alongs Reveal About Independent Restaurant Margins
- Where AI Takes Menu Decisions Next
- The Amazon Expectation and Flexible Delivery
- How to Get Started With MOXē and Menu IQ
From Dell and Microsoft to Food Service Distribution (0:01)
Jeremy Julian: Welcome back to the Restaurant Technology Guys Podcast. I thank everyone out there for joining us. As I like to say each and every time, I know you guys have got lots of choices, so thank you for hanging out with me. Today is a fun topic and one that we get to talk about somewhat often, at least on the solo episodes that I do, but I don’t often get a chance to talk to technologists that are solving this problem. So I’m going to let James dig in a little bit to his background and history, and then we’ll talk a little bit about what they’ve been building. So, James, why don’t you introduce yourself to our listeners, a little bit about where you’ve been the last few years, and then we’ll jump right into what you’ve been doing most lately.
James Jones: Yeah, absolutely. Thanks, and great to be here and appreciate you having me, Jeremy. So I have probably, I’d say, 30 years of technology experience in my background. I actually started out more in the product technology space, places like Dell, Microsoft, that type of thing. And then about 15 years in, I started to find a love of e-commerce. And so I helped lead some rebuilds at some big companies in the product technology space. But then from there I jumped into what I would call technology distribution and really enjoyed that space, working with a lot of different suppliers and kind of being in the middle between the customer and the product. And then from there it was a pretty natural slide into food service distribution and technology.
James Jones: I’ve been at US Foods here about two and a half years. I’ve loved it. And there’s actually a lot of similarities, and US Foods is a very technology-forward company. If you listen to Dave Flitman, our CEO, or our chief information and digital officer in our earnings announcements, et cetera, there’s always a technology reference, an investment, because we really think that by helping our customers with technology, make it simple, put it in their hands, that we give them more time to focus on their restaurant, their business. And so that is an area where we think that we really differentiate ourselves from our competitors.
James Jones: And then within US Foods, I’m specifically responsible for MOXē, our e-commerce platform, as well as our sales CRM transformation. So I try to bring our sellers and our e-commerce technology together, because we want our customers feeling like they can rely on our sellers to be that extra hand and help them. And then I’m also just recently taken over in our pricing space as well, to make sure that sales, pricing and digital all work together for our customers.
Why Broadline Distribution Fell Behind on Technology (2:26)
Jeremy Julian: I love it. And longtime listeners have heard me say this at least a thousand times: technology for technology’s sake is worthless. Technology that’s truly solving business challenges is where we want to go. And I know that you guys are really solving some things. Before we jump into what you guys have been building, James, I’d love a little bit of opinion on why broadline distributors, which is really where US Foods is at, have been so far behind the adoption curve on technology. And I’m not saying that to pick on you — you’ve only been there for a couple of years, but it’s hard. Restaurants are typically laggards, but traditionally, at least in a lot of the restaurants I still walk into today, the guy shows up at the back door and they’ve got handwritten invoices, and so few of the systems have been digitized. Whereas I look at retail and I look at grocery and so much more of those things are connected. So I’d love to have you talk a little bit about why you think it’s been that way, and then let’s talk about the evolution as you’ve been there the last few years, because I’ve seen a lot more investment on your guys’ side and really in the adoption curve at the restaurant side.
James Jones: Yeah, so that is an excellent question, and something when I came in here I thought about a lot as well. I think there’s a number of different reasons. I think first, food service, food companies, restaurants — obviously these things have been around for decades, hundreds of years, right? And so the idea of having that long history — when you’re a company that’s starting from scratch, you can blue-sky it a bit and you can automate and you don’t have all that baggage. So I think a lot of companies carry ways of working that didn’t lend themselves to technology at first. And so there’s been a slower curve there. I think you see that sometimes in healthcare and other industries as well. However, that being said, I think COVID, first of all, was a big accelerator. When people are forced to think, people can’t always come in, I’m going to do takeout, how do I do this? That was a huge accelerator and even predates me at US Foods. But I know that that was an exponential jump in that curve.
James Jones: But I would also say that there’s a lot of complexities in food service. There’s an immediacy. I’m a restaurant. I’m ordering today what I anticipate to get tomorrow. There’s not a long lead time on that. There’s a lot of volatility, right?
Jeremy Julian: It’s perishable. When I’m ordering shirts, they can sit on the shelf for six weeks, eight weeks, ten weeks. Chicken breasts aren’t going to last that long. Sorry to interrupt you, but yeah.
James Jones: No, no, that’s a great call. Absolutely. So there’s that aspect of it. And then you get into things like cold chain supply and all the things that are required to manage that as well. The technology, when you put technology in a freezer, it doesn’t do as well as when it’s sitting in a temperature-controlled warehouse at a certain level. And so there is a lot of complexity, and then there’s a lot of hands that it moves through by the time it comes in from the farm all the way to the table in the restaurant. And there’s a lot of players in that mix as well. The food service industry is very distributed, very fragmented. Even at the top level, you’ve got what, 25 percent of the market, and then a few three big players, and then it drops significantly from there in the food service space. So I think that those are all things that contribute to that complexity.
James Jones: However, I will say that the investment that US Foods is making is really focused on trying to automate as many of those things as possible — not take people out of the mix, but help make sure that technology is helping connect things. Because a lot of times when you get in food service, everyone has a position to play, and it passes through a hundred hands to get to the customer. And how do I make sure that every one of those handoffs happens seamlessly? And if there is a drop of the ball somewhere, is technology helping identify that problem, pick it up? Because as you know, a restaurant — if you’re an hour late, if you drop a case off the back of the truck that doesn’t get there on time, that impacts their business. They may not be able to offer that meal. And restaurants don’t easily forget those mistakes. And so I think getting to that high degree of automation and service is super important in the food service space. So even though it’s lagged behind traditionally, I would say COVID, this move into AI that’s happening now, those are all — you will see the acceleration, not just in the tools and things that customers order with, but in the back end in the warehouses, you’ll see it there as well, I think.
What US Foods Is Investing In Behind the Truck (6:56)
Jeremy Julian: Yeah, and I love that you called out some of those things, because the other thing I would say I’ve seen as an acceleration — and I’d love your thoughts on this — is we’re also getting more youth into the brands. I think COVID pushed a lot of people out of the business, unfortunately, that had been there for a long time. So you’ve got a lot of youth coming in and they look at it and go, this can’t be this hard. Like we can’t do this. And so you’ve got people coming in from tech, you’ve got people coming in from different industries going, there’s got to be a better way to do this. And so they’re more apt to try these changes, because to your point, they’re having to. They don’t have a choice. Let me take a step back and let’s talk about your guys’ overall strategy, James. You said that you guys have been investing. Why don’t you talk about the technology investment as a whole before we jump into specifically what you get to be in charge of? US Foods, you guys have always been one of the best distribution networks out there. And again, technology — whether it was you guys or it was the consumers or it was both — wasn’t necessarily always at the forefront. But as you’ve said, you guys have been investing a lot. So I’d love for you to talk about the overview, and then let’s talk about the newest product that you want to get out to let everybody know about.
James Jones: Yeah, absolutely. And I’m going to extend a little bit beyond e-commerce as well, if you don’t mind. So when I think about our technology strategy broadly at the company, one of the things you’ll hear talked about very often is, traditionally it was broadline. And now as you start to see in distribution, they’re starting to go to shorter trucks, what we call our Pronto strategy. You see others looking at retail or van lines. I think as a lot of younger people start coming into the restaurant space, and even the traditional ones, they want more options. I mean, if I think about the way I shop today, I can order from my local grocery store, I can pick it up today, tomorrow someone’s going to shop for me, I drive up, pick it up. That sort of almost Amazon-like thinking or experience has gone into grocery and it’s coming into food service as well. So I think from a technology standpoint, how do you plan for that? How do you deliver it in a cost-effective way so that you meet those customers’ needs? That is an area of investment that US Foods is certainly getting into. And you’ll see those are one of the top three things, I think, that the company talks about often.
James Jones: And then also I would say with that, delivery expectations. I order from Amazon, tomorrow it’s on my doorstep. Another expectation of customers is that you hit the delivery window that you’ve given that customer or that they’ve signed up for. And so there’s a lot of technology on the back end that goes into that, into the trucks, into the warehouse, showing the product as it’s moving through the system. Did the supplier show up on time? Did it get on the shelf? Did it get picked? Is it on the truck? Is there traffic? The technology has been there to do that, but I think investing in reliable technology, and now we’re starting to use AI — technology can tell you when someone scanned it, but they can’t tell you that a thunderstorm’s coming, a driver takes a smoke break at this time every day, or there’s additional traffic on the road. And we’re starting to use AI and predictive models to show what is the trend of this so that we can give better windows to our customers. Because one of the things that really drives the loyalty of customers is: who’s my driver? Who’s my seller? Do they show up every time with all the products I ordered?
James Jones: And so technology in those areas of forecasting, prediction of delivery models, et cetera, that’s an area we’re investing in. And that’s all outside of just direct e-commerce. Now it shows up in e-commerce, but it’s definitely behind the scenes.
Why the Ordering Platform Is Built Mobile-First (10:30)
James Jones: Now, within e-commerce, the investment we’ve made there is — when we look at both just software that delivers in the food service space that may not be a distributor, and then also our competitors in the distribution space itself — I would say that our investment there is about building a single unified platform for our customers. A lot of our competitors have many different platforms. They may partner with someone to bring a certain technology to life, but we want to have one tool in our customers’ hands. And we know that, as an example, within the independent restaurant space, more than 60 percent of those customers use their mobile device every day. They’re living on it.
Jeremy Julian: Yeah, I was going to go there. How are you guys delivering it? Because all too often it used to be, I’m calling my guy, he’s going to deliver what I need today. But now more and more they’ve got this computer — as Dave Ramsey calls it, they’ve got a magic wand in their pocket — that they expect to push a button and have stuff just show up. So I’d love for you to talk a little bit about the digital mobile strategy, because I think that’s critical to meet them where they are at the time that they need it.
James Jones: Absolutely. And so what we’ve done is systematically make sure we build mobile first. We always do that in the design concept. We obviously support web and desktop and all of those things as well, but we really think mobile first and we think very simply. We know not all of our customers are as technology forward as we are. I live and breathe it every day. So we know we want to make it simple, but bring the power of AI, the power of e-commerce to the customer.
James Jones: So we have just systematically gone through the customer experience. Is it easy to get set up as a US Foods customer? Is it easy for me to add users? Because there’s a lot of churn in the restaurant space. So I may need to add someone today, remove someone tomorrow. So is all that account management easy? Is it easy for me to find my products? You would think it would be simple — hey, I want to go in and search a product, I want to build a list — but restaurants are very busy. Even building a shopping list that you’re going to reuse all the time can be a bit of a burden. So things like intelligently knowing what the customer buys and just showing them those without even having to build a full shopping list every time is something that is important to us. We try to use AI, use our technology to make it very simple to order, to reorder, to add to your favorites, to build a shopping list.
James Jones: We also build customer tools. Some of our competitors may have separate tools for the customer, but we start to build in technology not only to be able to order, but we also do customer tools. So you can look at your inventory, you can check your inventory, par levels, you can build a menu with your recipes, look at your food cost calculation. We run all sorts of reporting so you can see your trending spend and those types of things as well. And we try to make those as easy on the customer as possible. And then we also provide recommendations and things like that. So when we see product is going to be out of stock, if it’s not possible to get it and we know the supplier’s not going to be there, we allow them to set up fallback recommendations. We even recommend other products as well so that they don’t necessarily get that cut on the floor before it goes out. They get that alternative, it ships out to them, and they don’t miss that case for the day.
James Jones: So we invest a lot in our e-commerce technology, put it in the palm of their hand to make it easy to order, to manage their business, to create menu items, to look at the food cost calculation and the profitability of those items and things like that as well.
MOXē, Menu IQ, and What Sits Inside What (14:27)
Jeremy Julian: Awesome. I appreciate that. And again, I think all too often, at least when I talk to operators, there’s this fear factor of, oh my gosh, it’s so much, can I just go back to the way that… And I said it earlier. Before we get too much farther in, talk about — you’ve got really two products that you guys are building. We’ve talked a lot about what it is that you guys are trying to solve for, and I love that you’re starting there, because I think all too often people are like, let me just push the product at you, here’s the name, buy something or use our stuff. But what are the two products that you guys have built? And then go through those a little bit more in depth, James, and how they work together, and then we can tie it back to what you just shared from the P&L and food costing and availability and in your pocket and all of the stuff that you just shared.
James Jones: Absolutely. Yeah. So our single platform, if you will, for e-commerce and our customer tools is MOXē. I mean, that’s our branding. So think of that as our ordering platform, if you will. You can do everything from account management, shopping list, ordering, looking at invoices, paying your bill, et cetera. All of that is in MOXē. And then within our MOXē e-commerce platform is a specifically branded set of tools around our customer tools. And one of those customer tools is Menu IQ. And the reason it’s got the IQ at the end is that’s where we started to embed some AI within our customer tools.
How AI Turns a Photographed Recipe Into a Costed Menu Item (15:45)
James Jones: So in the past, when you wanted to recreate your menu in your ordering platform, you would have to go in and say, I’m creating this menu item, this menu item is made up of this recipe with these ingredients. And then every ingredient you had to enter in the amount, the weight, the portion size, and then roll all that up. And to create a menu item might take you 30 minutes, right? To put all the ingredients in it, roll it up, get it in there. And then you would have other problems as well. If you had three menu items that had the same ingredients, could I just change that ingredient out, swap it out, or did I have to go into three items to swap those out? So those are some of the pain points in the past when we’ve had a menu profitability tool in the system, which we did before Menu IQ.
Why the Old Menu Profitability Tool Only Reached Eight Percent (16:38)
James Jones: And I think the barrier to adoption there was that level of manual effort and setup. We know that restaurant operators are busy and only those that are really focused on profitability are going to go in there and do that. And our adoption rate back then was probably around seven, eight percent of independent restaurants. And so what did we want to do with Menu IQ? We knew AI was coming along. We experiment with it a lot. And one of the things that we observed early on is that with Menu IQ and with AI, I can go into my phone, I can open up my recipe book — because so many restaurants still have recipe books, right, that they fold open — they can go in now, you can take a picture, whether it’s typed out or handwritten, you can take a picture of that recipe and it will automatically scan that recipe, the ingredient amounts, the ingredients themselves, and it will pull those into your MOXē e-commerce application.
James Jones: And then it’ll match it against the things that you purchase. If there’s something missing there, it’ll go look at restaurants with your same menu type and your area, et cetera, pull the most likely. And then it basically walks you through to verify that menu item to make sure — did we pick the right product, the right ingredient, and the right measurements? And then you can tweak and adjust it if you want, but those things are usually 80, 90 percent accurate. And so you’ve taken something that may have taken 30 to 40 minutes in the past and it’s five minutes or less for the operator to do that.
James Jones: And then once you get that menu item in there, you can start setting things like what do I want the price to be? That’s price I’m setting. And what is the cost of that? So then we start to pull in the food that you buy, and that’s your cost. And then you can look at that theoretical profitability that you’re going to get on each menu item. And then as you buy from US Foods, you can start to see your inventory go down and then we put in the actual cost. And then you can see your theoretical versus your actual costs, what we call food cost calculation. And then you can see that trend over time.
James Jones: And so I work with a lot of operators just as someone who passionately likes to go down the road and see how my customers are using their tools. It is really cool when people start using Menu IQ — their food costs may be 35 to 40 percent, and they’re not doing things like food portioning, right? They’re just grabbing a handful of fries and putting them on there. And then when they start to say, hey, why is my theoretical profitability doesn’t match the actual? And then we start talking about those types of things, like use the same amount of fries every time, they start to see their cost trend down and then their profitability goes up. So I think Menu IQ has been transformative in the sense that operators are busy. There’s a lot of tool fragmentation. They don’t have time to learn 50 new tools to let someone order from their restaurant, back-of-house things. They want something that is simple, and Menu IQ delivers that.
Handling Out-of-Stocks, Substitutions and Inventory Transparency (19:32)
Jeremy Julian: Yeah, and I love that you guys are looking at usage. One of the biggest things that I talk to our operators often about is they’ve got stuff that’s spoiling, they’ve got stuff that they’ve overordered because they don’t know what they’re using. So the fact that you guys are part of that entire supply chain, that you’re saying, hey, this is what you ordered, this is what you use, this is what you’re reordering, this is what your point of sale might have said your theoretical should have been, is a huge game changer for people. I guess there’s something else I’m thinking about, James, that I’d love for you to talk through, and it’s really wrapped around substitutions. You talked about sometimes the supply chain might not have the product that you need. And so how do you guys deal with that in the Menu IQ platform? I’m getting X, Y, Z tomatoes and now I need to replace them with different tomatoes. Have you guys dealt with that? Because that’s always historically been an area of opportunity where you can struggle. Because you’ve got a substitution. Now your portion sizes might be different, your product names are different, your SKUs are different, your costs are different. That’s a big manual process that I’d love to hear how you guys have tackled. Because I’ll get the operators that are going to be listening to this going, yeah, that’s great on a Tuesday when nothing else is broken, but that’s not a normal shift. What happens on the normal day in and day out?
James Jones: Yeah, absolutely. So somewhere in here, like, you have your menu, then you also have a shopping list, right, to order all those items of the ingredients that go into your menu. And so within those shopping lists, you can have primary and fallbacks, and you can decide what those are. For many of our customers, the other thing I will tell you is we have a lot of alerts and notification. So if you say on a Tuesday, I order all these things to make chicken parmesan, and one of those items is out, you are going to get an alert that that is potentially out of stock. And then it’s going to give you a set of substitutes and fallbacks. You can pick one of those substitute fallbacks, or you can go in and search and find an alternative if you prefer that other alternative. So that’s something that we have a lot of focus on, is around making sure we set up alerts to our customers, so they’re not having to go, remember, before my order cutoff at four PM today, I’ve got to go and just make sure everything is in inventory.
James Jones: And by the way, I would say that’s another thing that US Foods distinguishes itself on, is we do have a lot of inventory transparency. So when our customers go in, they see exactly how many cases are in that particular distribution center that’s near them. So they see, is it in stock, is it out? I know it’s coming in before my order submits. And if it’s out of stock, what’s the alternative? I can pick a substitute, add that in, and then keep going. And if something happens in between the last time I looked, they can set up an alert, they’ll get notified, and they can also have their seller notified, and then either they or their seller can help them pick that alternative and make sure that they don’t get shorted for that day for what they need.
Can You Trust Your Distributor With Your Food Cost? (22:36)
Jeremy Julian: I love that. And then — you’re not on the sales side, you’re more on the technical side — what do you say to the listeners that are out there that are like, sure, I’m going to let my distribution warehouse also give me my food cost? How do I know that they’re going to be honest with me about the cost, knowing that I’m trying to hit a 30 percent food cost? And if this price comes in and it’s higher than it should be in the warehouse… I’d love for you to tackle that objection that you might get from a listener that’s sitting out there where it’s like, well, they can charge me whatever they want if they know that my food cost is going to come in at 30 points for whatever the products are that go into that ingredient.
James Jones: Yeah, I think that’s a fair question. I think one other thing I did mention as well is, with our tools, they’re not just US Foods. I mean, we know that most restaurant operators and other hospitality, they are multi-source. They may order from us, they may order from a competitor. So all of our tools are open. It’s obviously easy to pull in US Foods items because we know the price, the item, but you’re also open and free to put in your competitors, et cetera. So you get that whole view.
James Jones: Now to your question around food costs, I mean at the end of the day, we provide as much transparency to our customers as we possibly can. You always have your invoice, your food costs. When you put that food cost piece in there, that is not something that we pull on the back end and say, they want to get a higher margin, so how do we charge more, or what have you. Someone might speculate. That is something that is completely on the customer’s side. And in fact, if you’re a restaurant, as an example, then you might have two different chefs and they’re setting up different types of menu items and they may be looking at a different cost. Like someone may want to run it 28 percent of food cost. Someone may want to run it 32 percent. Those things get saved specifically to the user that created that menu item. And again, there’s no way to prove that obviously as an operator, but that is not something on the back end that we look at. At the end of the day, our food costs come in and our pricing is set totally irrespective. It has really nothing to do with how our customer tools operate.
What Ride-Alongs Reveal About Independent Restaurant Margins (24:42)
Jeremy Julian: Awesome. I appreciate that. And again, I could just see those operators going, yeah, sure, the guy that’s telling it to me is also the one that’s telling me how profitable I’m going to be. They’re going to drive those things to benefit them. I appreciate you overcoming that objection. James, do you have any case studies or people that have gone through this journey and what the benefit has been to them that you’re willing to share? I’m sure you guys have them. Are you at liberty to share some of the benefits? What are they seeing once they implement these solutions?
James Jones: Yeah, absolutely. I’m not going to name names, but I do go on ride-alongs, what we would call ride-alongs, with our sellers, the customers, fairly frequently. And I think the thing that I observe the most, and even most recently — I go on ride-alongs in Austin, Texas, which is where I’m from — and what I see and what I observe is especially when you get into the independent restaurant space where they may have one concept, one building, what you see a lot is you’ll walk in and they may not do any food cost. Like they may have the restaurant and the bar and they’re like, well, my bar is profitable, but I think my restaurant is, or I break even and that’s okay, or whatever. And so what we tend to do — and our sellers at US Foods do such a great job of this — is you come in and we will often sit with customers, and the seller up front will help them get all this set up in the beginning. So they’ll take that burden on of sitting with the customer, getting some menu items set up.
James Jones: And then what we often see is that their food cost may be 40, 45 percent, just really high. And then when we sit and work with them and we see that their overall profitability as a restaurant, because they’ll bring other things into the equation, they may not even be profitable, right? They may just be break even. And so one of the things that when we get the food cost in there and we look at their inventory and their theoretical versus their actual food costs, they start to say, wow, I can’t believe I offer this hamburger at a five dollar loss every time I plate it out there. And so we start working with them on portion sizes and things like that. And then as they start to see those costs come down, they see it hit their bottom line. And I think the reality of that effort is that extra effort that our sellers go through, when we know our customers are busy, to help them get that set up.
James Jones: And then they start to see that their overall profit may go from four percent to eight percent, which is kind of where we see our better-performing restaurants. That difference, that material difference just in their portioning, making sure they’re pricing at the right level, observing their food cost trending over time — because again, we want to provide that transparency — that’s the real value we see, is helping restaurants improve their margin so that they can invest that money in new dishes and additional staff, the other things that are important to them.
James Jones: And then I think the hurdle that we overcome there is, a lot of times when you’re an operator, you’ve got — you’re doing back of house, you’re greeting customers, you’re making sure the truck shows up on time. And they just don’t have time to get these things set up. And so once they get set up and they see that it’s dropping to their bottom line in value, then they’re often willing to make a little bit of time to make sure someone’s actually ticking off the inventory in the back, that they’re updating their food costs when they add a new menu item, and that incremental piece becomes much easier. And then again, as their overall profitability goes from maybe four, five, six to eight percent through the seller helping them do that, that impact is what helps build the relationship, but also helps just make them more profitable as a company. So those are things that I do as I go on ride-alongs. It’s just the number of restaurants that don’t do that always surprises me. And then if there’s things that US Foods can do, our sellers can do to help them get set up, get them started, we view that as a win-win, because when our customers are more profitable, we’re more profitable, right? Those customers stay in business longer. So that’s the real difference that we try to see in helping our customers — it’s around that food cost calculation, monitoring their food costs and how they can do that in a way that doesn’t detract from the other things that they do in their business. It’s a value add.
Where AI Takes Menu Decisions Next (29:01)
Jeremy Julian: I love that. Before we ask you how do they get in touch, and for US Foods’ existing clients — where do you see it going, James? You guys have taken some of the new technology, allowed people to build out recipes in ways that we never could do before, allowing them to do some predictive analytics on what they’re going to need for tomorrow and their next delivery. All of these things 10 years ago, 15 years ago were next to impossible to do. They took schools and schools of people to figure these things out. And oftentimes, as I said at the onset, or maybe even before we hit the record button, a lot of the really big guys have done it, but you guys are commercializing it down to the independent restaurant that really opened up their restaurant because they wanted to serve people but didn’t want to sit in the office for hours. You guys are giving them the tools in their hands. Where do you see it going to be able to help these operators to continue to be even more successful than you guys are already helping them be?
James Jones: Yeah, absolutely. So one of the things we mentioned — and this is just one specific example, I like to use concrete examples where possible — today, one of the things we do is we can tell you the day of that an item is going to be out of stock, right? And then you can make a decision, you have a substitute, an alternative. Where we’re going is, if we know that the price of avocados is going to go up next week, next month, we want to give our customers a heads up. Because if they’re thinking about building a new menu item and it’s going to be heavily weighted to more avocado use or eggs, and they know the price of that is going up, that may affect their timing on how they do something, or they may want to subtly remove a few things from their menu and add something else that is more cost effective.
James Jones: And so where I see this technology going is getting further and further in the future of where we can help our customers identify that there’s going to be a break in kind of the value chain, like the status quo, right? It’s like, I offer these items at these prices. And where I see this going is more looking further in the future to help them make food decisions around ingredients, food choices, alternatives, to make sure that they are profitable and stay in the mainstream there. So I think that’s one area.
James Jones: Another area that I see this going is just being able to use predictive analytics. As I said, we do inventory, we do menu profitability, we help build menus. But I think as you see more and more of these tools connect to point of sale systems and other things, and you’re bringing all those things together, you’re going to be able to look at analytics and start messaging them in the future, like, hey, we see the profitability of this slowly eroding, you might want to take a look at that. And so I think that idea of looking further out into the future of when might I not have an item, a price is going up in a week, or a price is coming down, maybe I want to use more of that product — I see AI helping us look further and further into the future in a business that has traditionally been day of, next day, et cetera, and giving them better tools to look in the future and make better decisions instead of having it be at the last minute. I think that’s really one of the more profound things that we’re already working on internally with our sellers: how do we give our sellers that view? And then once we’re confident in that, how do we allow our customers to have that same view as well?
The Amazon Expectation and Flexible Delivery (32:24)
Jeremy Julian: That’s awesome. And you said it early in the show, James. I’d love to double click real quick — to use one of those silly podcast phrases, or webinar phrases — but the whole idea of being able to be flexible about menu innovation and having multiple deliveries with different things. Are you guys thinking through that as well? That’s like, hey, what’s trending in our space? What are some things I should be thinking about? As an operator, I could see them looking to you guys. I know at the corporate level with some of the enterprise clients that we work with, but that work with you guys, they have innovation labs where they’re working with your sellers all the time on new products, but they don’t necessarily have that in the independent space. Are you guys at a place where you’re like, hey, here’s some things that might be coming that you can help steer them? Is that kind of where you’re thinking as you talk about looking into the future?
James Jones: Absolutely. And I don’t want to give too much away, but I will say absolutely, broadline is our tradition. What we call Pronto, our short trucks that do mid-day, mid-delivery stops, that is an area where we invest and continue to invest in. And then to answer your question, I think maybe more generally, is yes, we look at what’s the next stage beyond that? Where do we go beyond that? Again, you see in grocery store chains and things like that, like how do I be flexible in my delivery? I pick the day I want it delivered on, and then I get a series of options. If I want to get delivered every day, how do I do that? Can I do that? And I think those are questions we’re starting to ask ourselves and figure out, how do we get there?
James Jones: Because one thing that you clearly see post-COVID is, wherever Amazon, wherever some of these players that are in a maybe more straightforward distribution space, where they don’t have to worry about cold chain and spoilage quite as much — where they go suddenly becomes the expectation of the customer. Because half our business is small and independent restaurants. And so that is a very important thing for us. And those customers act like and behave like consumers. And so that is their expectation, and we want to make sure that we meet our customers where they expect. So absolutely we’re thinking about how do we give our customers the most flexible number and set of delivery options as possible.
How to Get Started With MOXē and Menu IQ (34:42)
Jeremy Julian: I love that. Thanks for sharing. And I know I pushed you a little bit hard on that, but I love it. Amazon truly is changing the game and I think all of us have gotten — well, why is this not here this afternoon? And to your point, many restaurants are saying, if I can do it with Amazon, if I can do it with Walmart, if I can do it with some of these other retailers, why can’t I do it with my food supply chain? And it impacts us too, because people are like, well, I can get all of these numbers in my pocket, why can’t you just build it and I could just do it? Talk to me a little bit about existing US Foods customers that you guys have — how do they engage? How do they get started with this tool? And then those that might be listening, they’re like, who’s US Foods? How do they get engaged and how do they learn more?
James Jones: Yeah, absolutely. There’s a couple of things there. So, one, if you are a US Foods customer, that means that you have a seller. You can go to usfoods.com slash moxe — M-O-X-E — or you can go to usfoods.com slash menu-iq. And that is a place where you can get started learning about Menu IQ. There’s a great set of help documentation. If you are a US Foods customer and you have MOXē, it’s already in MOXē. You just have to go to the business tools drop-down, and Menu IQ is there. And either you can get started or you can talk to your seller and they would love to help you get started on it.
James Jones: Now, if you’re not a US Foods customer, if you just go to usfoods.com, become-a-customer is a really large focus for us as a company right now. If you submit that form, it’s only a few questions, someone will get in contact with you, and we’d love to get you started on the US Foods journey. Again, even though Menu IQ is embedded in our e-commerce tool, we know that you’re probably going to be multi-distributor. You do not have to be an exclusive US Foods customer to use those tools. We love that, obviously — that makes it easy. But when we build our tools, we want them to be free for our customers as a value add. And we know that they’re probably multi-sourced and we want to make sure we support them in their business. So that’s the two easiest ways.
Jeremy Julian: Awesome. Well, genuinely appreciate what you guys are building. I talk about it often on the show. Managing your prime costs — labor costs, food costs — are the two biggest things that restaurants struggle with. And the fact that you guys are trying to build tools so that restaurants can continue to succeed is really the reason why I created this show. I’ve been in this space for the same 30 years in restaurant tech. And so it’s like, how do I help see restaurants that I love and I’m passionate about continue to succeed? So the fact that you guys are building these tools — very grateful for that. Very grateful that you were able to show up. We only made it like nine minutes in before we used the word AI. So that’s not quite a record in 2026, but we’re close. Most of the time it’s in the first two or three minutes. So James, thank you for creating what you guys are doing. Thank you for continuing to invest in the restaurant space. And to our listeners, guys, like I said at the onset, I know you guys got lots of choices. So thank you for hanging out. If you haven’t already subscribed, please do so, and make it a great day.
Listen to the episode, read the show notes and find the links mentioned here: US Foods’ Menu IQ: Snap a Recipe, See Your Food Cost — James Jones | RTG Ep. 353. Subscribe to the Restaurant Technology Guys Podcast wherever you listen, and email jeremy@restauranttechnologyguys.com with who you want to hear from next.
