Alongside our very popular Food Deal DPS (Dynamic Purchasing System), we have now added a direct award framework which includes 17 well-established, dedicated food suppliers across 6 categories; Ambient foods, Frozen Foods, Chilled Foods, Fresh Fruit & Vegetables, Meat and Baked Goods.
Public sector organisations, just like other customer groups, and indeed ourselves, are facing increasing food costs due to inflationary pressures, the ongoing Ukraine conflict and supply issues caused by the weather, especially overseas. This places additional pressure on already stretched budgets.
Now, more than ever, it is important for customers to achieve the best value with their food purchases, but a common question is when the best time is to run a food procurement, and indeed is it worth parking this and waiting until later when market conditions return to normal? Or is now, in fact, the new normal?
YPO’s experience tells us that any time is a good time to run a food procurement, and being in a contract certainly gives more cost control than being out of one. Customers may in fact have no choice but to run a procurement if out of contract and over the threshold. We do recommend that customers consider flexibility, however, and if you are thinking of running a food procurement, some things to consider are below:
- Where possible, consider consolidation of different product families. Whilst using local and specialist suppliers obviously carries particular benefits, especially in relation to social value and localism, there may be instances where categories of food can be merged and bought from the same supplier. This helps to achieve economy of scale and also has the advantage of reducing delivery miles. Our frameworks have a catch-all category to allow customers to do exactly this.
- Consider reduced delivery days – some suppliers factor in a higher cost to serve the more delivery days the customer requests. Whilst some products may need to be bought a few times a week, some categories, especially ambient and frozen foods could be delivered weekly or even fortnightly in some instances. This can really help customers to trim built-in costs and again impacts positively on delivery miles.
- Suppliers may be unwilling to offer long term fixed price periods, or if they are willing, may need to factor in a risk premium in case prices rise unexpectedly. With current market conditions, YPO is seeing a customer trend in fixing prices for no more than 6 months. To protect customers, however, stringent processes tend to be included to ensure price changes after the fixed price period are fully justified by the supplier with underpinning evidence and an expectation that prices will also fall when market conditions allow. Some customers are also reserving the right to have a backup supplier, just in case.
- As with our own food shopping, alternative brands are available, which can make budgets stretch further, so ask to see the supplier’s full range of products and ask for a range review meeting to discuss possible alternatives where savings could be made, if you are flexible on certain items.
If you'd like to chat to our team about the food frameworks and how they may help you to control your costs, please click here.