It’s been a busy few months for St. Petersburg entrepreneur Michael Otis.
After founding Procoto — a Tampa Bay Inno Deal of the Year honoree — in 2019, the procurement software company was acquired by St. Pete-based Bedrock Technology in late July. Otis told Tampa Bay Inno this summer he would stay on in an advisory role before moving on to work on a new startup.
That startup is FareFood, an app that allows restaurants to order from multiple food distributors in one place.
Fulfilling a need
Earlier this year, Otis was looking around for the “next idea” when a friend proposed he dive into menu engineering — essentially, what changes can be made to optimize a restaurant’s performance.
After working with two restaurants in the area, profit increased by 60% and 100% the next month.
“At this point, I’m thinking this is the business,” Otis said. “I brought on an engineer, and we started talking through it. He comes from the startup world, too, and we agreed we must learn from our past mistakes and talk to as many potential users as possible before committing to this.”
Otis cold-called 47 restaurant owners in the greater Tampa area to ask them.
The result? A new idea.
“I was pulling all their different costs when they’re buying all their ingredients, and I realized, [restaurant owners are] not just buying [ingredients] from one place,” Otis said. “It’s not like going to your favorite grocery store. Almost all restaurants are buying from multiple food suppliers, and that is a huge hassle.”
Not only is it a lot to keep track of when buying from different sales reps using many ordering processes, but if a restaurant orders from four or five suppliers in a week, that adds hours of work to a general manager’s day, Otis said.
In addition, the average full-service restaurant in the U.S. carried $51,863 in debt by the end of 2023, according to the most recent State of Restaurants report, with nearly all citing higher food costs as the leading factor.
“We started to ask, ‘If there was a central place where you could buy from all your suppliers and all the billing and the invoicing and the relationships with the sales reps was in one spot, would that make your life a lot easier?’ And we got a universal ‘yes,’” Otis said.
Streamlining supply chain
Otis said FareFood’s goal is to help Tampa Bay restaurants save money on food supply and save time placing orders.
“Labor and overhead are largely dictated by the market and regulation, but restaurants can do something about their food spend. That’s where FareFood comes in,” Otis said.
Otis said FareFood has saved three restaurants in Tampa Bay as much as 27% on their food spend.
Before launching the product, the team was approached by major national distributors Gordon Food Service and US Foods to form partnerships. They have also forged ties with Sysco and Performance Food Group.
“They get the convenience of one distributor but the competitive pricing of multiple distributors,” Otis said.
Currently a team of three, FareFood is focused on staying local with plans to expand throughout the Southeast. They haven’t raised a seed round yet but are “entertaining conversations.”
Despite not knowing the problem existed six months ago, Otis said his familiarity with the model at Procoto and while working at unicorns STORD and Rubicon in Atlanta has been key.
“Procoto was a procurement software company, and this is procurement for restaurants,” Otis said. “It’s a culmination of what I’ve done really my entire career, and a culmination of my personal interests, too.”
