Part 1 of this series on ingredient sourcing reviewed options, examined challenges faced by operators and explored a notable success story of the farm-to-table establishment in Chicago. In this article, we delve deeper into hybrid sourcing, transparency and how technology has factored into ingredient sourcing with the advent of artificial intelligence.
While local sourcing of fresh ingredients remains perhaps the most significant element of successful ingredient sourcing, the restaurant industry is evolving based on a myriad of circumstances that involve, economics, the environment and global geopolitical tremors.
Surrounding a restaurant may be verdant grazing ranges, colorful local farms and artisan local producers of such products as cheeses and sauces—or an eatery could have long-term agreements in place with a dependable broadline distributor as well as a growing mountain of purchasing data. That said, the owner/operator may still find themselves struggling to answer a deceptively simple question: What should we buy next week?
As mentioned in Part 1, obstacles in ingredient sourcing emerge often without warning: Inclement and unseasonal weather can wipe out a crop, a distributor might suddenly face a shortage, the price of fuel can spike prices and demand may fluctuate. Further, an ingredient may arrive too late, sit too long in storage—and ultimately end up in a trash heap, being un-servable.
Even Chicago’s Feld, which is a Michelin starred farm-to-table restaurant that sources exclusively within a four-hour radius of the establishment has faced such challenges. According to owner, Chef Jake Potashnick, local sourcing may be smooth or rocky, depending on circumstances.
“A farmer thinks a piece of produce will be ready and then it’s not ready, or it’s destroyed by the weather, or their van breaks down on the way to the market, so we show up to the market and it’s not there,” Potashnick said. “We are constantly rethinking our menu on the spot."
All the while, the inquisitiveness of customers about where their food has been sourced, whether the produce has any certifications and how sustainability claims can be substantiated—all put increased pressure on operators to demonstrate freshness, authenticity and tell the kind of story that can whet the appetite.
These factors have influenced the formation of more novel model of foodservice procurement, namely hybrid sourcing, in which restaurants combine local and regional producers with established distribution networks. The model is burnished by using digital traceability, predictive analytics and even artificial intelligence to make purchasing decisions.
For farmers, this can provide opportunities to insert offerings directly into foodservice operations while becoming part of a more sophisticated supplier network. Simultaneously, distributors can evolve from focusing solely on logistics to becoming a powerful source of data, giving them more flexibility and supply-chain resilience. This may leave the restaurant operators a means to balance the three pressures that rarely coexist comfortably: Cost, consistency and sustainability.
For Potashnick, these pressures are themselves an opportunity to innovate. “The creativity of those moments [when an unexpected lapse in the supply chain occurs] is the exciting part of a restaurant like Feld! We love then getting to look at what else is at the market and create around that fresh produce instead,” he said.
Local Still Matters—But It Pays to Have a Backup
Restaurants like Feld, once exceptional, are moving closer to the norm. Far from diminishing, the local-food movement is becoming much more commercially relevant than in the past.
The National Restaurant Association's 2026 What's Hot Culinary Forecast ranked local sourcing as the top overall restaurant trend, with culinary professionals pointing to ingredients from nearby farms and producers as emphasizing freshness, sustainability and community connections.
Relying on what’s nearby, however, can increase risk as Potashnick explained. A farm may have an exceptional season, or it may not. A drought, flood, disease outbreak or unexpected demand can change availability quickly. A small producer may also lack the volume or delivery infrastructure required by a restaurant group.
Operators like Michael Shemtov of several successful culinary establishments such as Nashville’s Butcher & Bee, Fancypants and The Daily chain of restaurants, said the answer isn't to be scared away from local sourcing. Rather, it’s to build redundancy around it, offering the operator quick and viable alternatives when local sourcing either isn’t delivering the product or is not economically feasible.
First, essential items are needed, which can’t really be locally sourced: “butter, flour, cream cheese, these things that are really commodity items… there's nobody locally producing these… and we've gotten very aggressive on negotiating those and price matching those,” Shemtov asserted. “You know, one of the things that I've said is that I want to source well, then price the menu accordingly. And if people don't want to pay those prices, then I want to move on from those dishes.”
In addition, there are certain agricultural commodities which, while can be sourced locally, don’t really provide the value to consumers for them to pay extra for them as menu offerings. Shemtov explained that he has found chicken to be one such product.
“We used to buy all our chicken from a local farmer and it was quite expensive. I mean… to put a 30 percent food cost on it would be at $60 for a whole chicken before we put anything else on the plate,” Shemtov said. “And so…we switched to Joyce Farms, which is still a high-quality chicken—it's, you know, a network of family farms in North Carolina. But it's not a guy driving a pickup truck to deliver it, you know. He's not waiting for our order to slaughter the chickens. It's not as fresh; it's not as local, I can't tell you the person's name, who raised the stock. But I can put a chicken on the menu at a price that people will pay for it. It's just that chicken is an item that's kind of stuck in people's minds such that they think, ‘I can get a whole one at Costco for $7 and so why would I pay, you know, $60 for chicken in a restaurant?’ So, that's the one place where we've really made an adjustment in our sourcing, because we find that it sells well, it's popular and the product is good enough.”
For chicken, consistency is also an issue, Shemtov said. People are used to a chicken breast being a certain size. Locally sourced chickens come invariably in different sizes and shapes. They are, after all, a bird. Animals come in different shapes and sizes. Consumers find it hard to accept that they should pay the same amount for a chicken breast that appears smaller or not perfectly shaped on their plate. Chickens bought from a distributor are essentially homogenized—and most people don’t tend to ask what’s in the chicken feed.
In another instance, a chef might buy seasonal tomatoes directly from a nearby grower, while maintaining a relationship with a regional distributor to be prepared for periods when the local crop cannot meet demand. A restaurant may source its leafy greens from several farms within a defined radius—but rely on a national supplier for specialty ingredients that are unavailable locally. This approach can benefit all three sides of the supply chain.
Multiple forms of sourcing enable farmers to gain access to restaurant customers without having to guarantee year-round supply. It permits distributors to retain their role as a reliable backbone while potentially adding regional and specialty producers to their networks. Lastly, restaurants gain flexibility without giving up the provenance and storytelling that local sourcing provides.
The strategy is particularly relevant as food costs remain elevated. According to the National Restaurant Association, wholesale food prices were 35 percent above their February 2020 level in June 2026.
For an operator working with narrow margins, having multiple sourcing options isn't simply a matter of implementing a sustainability strategy, it is a key means of implementing effective risk management.
Not everyone is subject to such conditions. For Shemtov, a case in point lies in the humble eggplant. It’s harvested only in the summer. Shemtov’s Butcher & Bee is a Middle Eastern-themed restaurant serving Baba Ghanoush, in which eggplant is a key ingredient. While most West Asian eateries feature the dish as an in-demand staple on the menu year-round, meaning they have to source either imported eggplant or something from the freezer, Shemtov only offers it on his summer menu. He refuses to include a vital ingredient to this dish that isn’t fresh. He has the luxury of doing so because, after running for ten years, The Bee (as it’s known locally) has built a customer base that comfortable with Shemtov’s seasonal menus.
Sustainability Must Be Economical
The sustainability discussion in foodservice is becoming more sophisticated and has moved beyond the term, “local.” This is demonstrable by food waste. The Food and Agriculture Organization estimates that while 30 percent of food is wasted in the restaurant industry, 13 percent of food (or roughly 50 percent of all wasted food in the industry) is lost in the supply chain after harvest. The FAO estimates that food loss and waste generate 8 percent to 10 percent of global greenhouse-gas emissions, which is significant.
Variables like wastage are necessarily injected into the sustainability equation for restaurant operators. A locally grown ingredient that spoils before it reaches the menu may not deliver the sustainability benefit assumed by a “local” label. Conversely, a product traveling a greater distance but arriving reliably, with a long shelf life and high utilization, may perform better and ultimately be considered more sustainable compared to the spoiled local produce.
Therefore, the more prescient question is not simply: How far did it travel? Rather, it is: How efficiently did the entire system perform in moving it from producer to plate? Hence, sustainability strategies increasingly encompass supplier selection, packaging, transportation, storage, yield, energy, water and waste. Sustainability questions then have moved far beyond mere geography.
Evidence exists that the business case for this is intensifying as well. Deloitte Consulting and the NYU Stern Center for Sustainable Business surveyed 350 executives across the food and agriculture value chain and for their joint report, Unleashing Sustainable Value in Food and Agriculture. They found that sustainability investments were generating real-world financial benefits.
Among foodservice providers, 86 percent reported at least 2 percent revenue growth associated solely with sustainability investments, while sustainable and responsible supply-chain sourcing ranked among the leading revenue-generating strategies. That may seem small—but in an industry with thin margins, restaurant owner/operators will certainly take in the added revenue as a win.
Transparency Is Becoming a Supply-Chain Asset
The the question that increasingly sits behind every sustainability claim is: Can you prove it—or rather How can you prove it?
Consumers are showing a growing interest in provenance and traceability. Deloitte has reported that 68 percent of consumers surveyed in 2023 considered traceability important and indicated they might pay a premium for traceable products. They went on to conclude that digitization of the supply chain can provide deep insight into the origin and movement of food and help companies substantiate sustainability claims. They also found that 80 percent of consumers surveyed preferred food retailers that source from local farms while 57 percent preferred retailers that were meaningfully reducing food waste.
Restaurants operate differently from retailers, but the underlying expectation is relevant: People want the story behind their food to be credible.
For a restaurant, transparency could be as simple as naming the farm supplying its seasonal greens or it considerably more sophisticated by including picking and packaging dates, batch number, etc..
PricewaterhouceCoopers’ consumer research points toward technology-enabled transparency, recommending a move from static information toward interactive experiences such as employing QR codes to link consumers to additional product data.
An example of how this would work would entail use of an electronic menu in which a guest could tap an ingredient, dish or small “trace this dish” icon and access a digital provenance page. Similarly, a QR code on a menu, which can be scanned by a handheld device, can provide details directly to the consumer’s handset. This, naturally, requires real time updating. Depending on how much information the restaurant and its suppliers capture, the consumer could learn about the sourcing farm or fishery, region of origin, harvest or delivery information, production practices, certifications and even the restaurant's relationship with the producer.
A dish such as a seasonal vegetable salad could, for example, provide a digital trail showing the farm that supplied the greens, the producer responsible for the cheese and the distributor that handled another ingredient.
The same technology could work in reverse. A QR code attached to a batch or case during procurement could connect supplier information to the restaurant's inventory system. If that information is carried through the kitchen and linked to the electronic menu, the customer-facing QR code becomes the final layer of a much larger traceability system.
That distinction is important: a QR code by itself does not create traceability. It is simply the portal through which traceability information can be disseminated. The underlying data still must be captured accurately by farms, processors, distributors and restaurants.
Traceability doesn't have to be presented as a compliance exercise. It can become an inherent part of the dining experience. A chef can tell the story of a farmer. The farmer can reach the diner directly. A distributor can demonstrate the breadth and reliability of its supply network. And the restaurant can substantiate claims that might otherwise be regarded as little more than marketing copy.
The challenge in this approach remains in ensuring that the information remains current. If a dish changes suppliers because of availability, the digital record needs updated on a timely basis. If a seasonal ingredient is substituted, the customer should not be presented with yesterday's provenance story. Here integration with procurement and inventory systems becomes a key element for successful to digital traceability.
The implication for suppliers is significant. Farmers and producers who can provide reliable digital information about their products may become more valuable partners. Distributors that can offer customers better visibility into provenance, inventory and supplier performance can differentiate themselves beyond price.
How AI Fits into Sourcing and the Supply Chain
Artificial intelligence has attracted the curiosity if not captured the imagination of business leaders across the globe. How machine learning can benefit the restaurant industry stands as a subject that intrigues the restaurant industry, too—and the sector has been adapting to its use steadily as users have become more confident in the technology.
With ingredient sourcing, historically restaurant managers, chefs and buyers have been required to forecast demand. Although people working in these roles for decades bring a wealth of expertise and experience to ingredient sourcing that no algorithm can substitute, they also have certain limitations. A human purchasing manager cannot simultaneously analyze every sales pattern, weather forecast, promotion, supplier lead time and inventory movement—and integrate all the analytics. AI, on the other hand, was built to do such expansive data processing.
Deloitte’s State of AI in Restaurants survey of 375 restaurant executives across 11 countries found that 82 percent of respondents expected their AI investment to increase in the following fiscal year. Restaurant executives revealed, too, that they have high expectations for a return on their investments. Among the top three areas in which AI was expected to make its mark is in supply chain management. In point of fact, the research has identified inventory management already as one of the industry's leading areas of AI adoption with 55 percent of respondents reporting that they were using AI in inventory management daily, while another 25 percent were testing applications in this area.
AI can be a powerful practical tool in supply-demand management on the sourcing side of a restaurant’s operations. An AI system can analyze historical sales and recommend purchasing quantities. It can identify demand patterns that might indicate an upcoming shortage. It can flag inventory that is approaching its use-by date. Predictive analytics can help reduce over-ordering and improve waste management.
Connecting that capability to a hybrid supplier network is almost certain to drive sourcing forward to improve restaurant operations and impact the bottom line. It can also enhance the customer experience and their overall satisfaction level.
Suppose a restaurant expects unusually strong demand for a particular vegetable. The system could identify that its preferred local farm is unlikely to have sufficient volume, compare available alternatives and alert the purchasing team before the shortage becomes a major issue.
For a distributor, similar technology could improve demand forecasting across hundreds or thousands of restaurant customers. For a farmer, better demand visibility could potentially make production planning more predictable.
The value isn't necessarily in letting AI make the purchasing decision. It is in giving the people making that decision better information before the decision is made.
The AI Promise is Not Perfect
With the computing power of data mining, deep learning and machine learning at the disposal of AI, one envisions a system that can work flawlessly. Unfortunately, AI comes with a significant caveat that it is only as good as the data is fed into the model.
If inventory counts are inaccurate, supplier records are incomplete or purchasing systems do not communicate with one another, an AI model may simply automate bad assumptions.
Deloitte's research highlights that challenge. Although restaurant executives are increasing their AI investments, fewer than half of respondents said their organizations were ready for AI adoption in areas such as strategy, technology infrastructure and operations. Readiness was even lower for risk and governance, at 28 percent and talent, at 27 percent.
For independent restaurants, this may mean starting small: digitizing purchasing records, establishing reliable inventory counts and standardizing supplier information before attempting sophisticated AI forecasting.
For large distributors and restaurant groups, the challenge is different. They may already possess enormous quantities of data, but that data can exist in disconnected systems.
The next competitive advantage may therefore belong not to the business largest pool of data, but rather to the one that can integrate it intelligently with existing metrics.
Maintaining the Right Balance
As the debates about local vs. global, independent vs. distributor and human judgment vs. technology continue to rage on, the operator will find success when they have the knowledge of when to buy locally, when to call the distributor, when to secure a second supplier, when to change the menu—and when the data is telling it to do something radically different.
The successful farmer needs not only to provide exceptional produce but also must be capable of supplying in predictable volumes, maintaining timely delivery information and be ready to provide digital provenance.
While distributors tend to have an advantage in size and reach within the market, they can edge out other distributors by offering restaurants more than just availability and price—inclusion of traceability, alternatives and intelligence are opportunities that can be availed.
Responding to a supply chain that has become too complex to manage by instinct alone, consideration of sustainability, transparency and AI converge will become progressively necessary. The danger of replacing the relationships that traditionally backed foodservice is low. Rather, modernizing ingredient sourcing are likely to evolve those relationships and the decisions around them, making them more resilient, measurable and commercially intelligent.