What makes food purchasing such an emotional category?
For many organizations, the food they serve represents care, community, and connection.
Whether it’s making sure kids eat healthy meals at school or crafting unforgettable dining experiences in hotels, food procurement captures the heart of what an organization stands for and reflects the emotional ties to those they serve.
It’s also a category in which it is very difficult to get away with cutting costs by reducing quality. Consumers (your end customers) understandably have strong opinions on the food they’re offered, meaning that food procurement is one of the closest-watched and most-criticized categories in terms of quality and satisfaction.
Food Purchasing, Savings, and More
Procurement has to tread very carefully when considering ways to offset high commodity prices in this area.
Marissa Muzik, Senior Manager of Strategic Accounts at Una, joined Art of Procurement’s Kelly Barner in a webinar to explore this topic further. With her extensive experience and keen insight into the emotional side of food procurement, Marissa shares how food buyers can make better purchasing decisions with the help of a group purchasing organization (GPO).
GPOs Provide Stability & Long-Term Cost Protection
One of the best ways a GPO can help with food purchasing is our ability to act as “stabilizers” for commodity items. The pricing on your standard commodity products will still fluctuate, of course, but the benefit of a GPO is that those fluctuations will be mitigated. A GPO member will see less volatility compared to a non-GPO member.
This long-term stability allows organizations to plan their budgets with confidence, even when market conditions are unpredictable. Marissa explains:
“[The supplier] is locked into that pricing for the term of the agreement. When it’s renegotiated, it’s done with all the members purchasing behind the same contract. This allows organizations to navigate uncertain economic climates with greater ease.”
Insights that Matter in Food Procurement
How do you know if a GPO will really save you money? By running the numbers.
“We start everything with an analysis,” says Marissa. “We want to be able to say, ‘Hey, here [are] the savings or here’s how to optimize your purchasing, without changing what you’re currently buying.’ By showing our members what they could be saving, it opens their eyes to new possibilities. We can do the homework for them, which makes the decision-making process a lot easier.”
Una keeps it simple. If the organization is already purchasing from a Costco or a Sam’s Club, for example, then we’ll show them the areas where we can help, and where we can’t. In short, we arm them with all the information they need up front to decide if they want to move over to one of our suppliers.
Savings Without Compromising Quality
Nobody wants to sacrifice food quality for savings, but this doesn’t mean a balance can’t be found. As Marissa puts it, “Nobody wants to stop purchasing products that meet the requirements of their standard services, especially when it comes to the kids we serve. Our goal for new members is to always find an item that is going to best match with what you’re currently purchasing, while also being the best-quality item.”
Bottom line, members should never have to choose between quality and savings. Our job is to find you high-quality alternatives that fit within budget constraints. We work hard to ensure that members are serving not only items that match their budget but items that also meet the standards they’ve set for their clientele.
The good news is that balancing cost and quality is definitely possible. As a GPO, we make it happen every day.
Leveling the Playing Field
GPOs level the playing field for small organizations that previously struggled to access supplier discounts.
For these small organizations, negotiating pricing on their own can be daunting. Marissa explains:
“The power dynamics of negotiation typically lie with larger distributors, making it harder for small organizations to get the attention they deserve. A GPO [is] able to work with virtually any size account, making sure they’re getting the exact same pricing as larger accounts."
In the GPO world, this means that an account spending $35,000 a year on food is given the same pricing as an account spending $3 million a year on food.
In an industry often skewed in favor of larger players, GPOs provide a lifeline for smaller organizations seeking big discounts. Una believes every business should have access to the resources and pricing that larger enterprises enjoy. Procurement - and especially food procurement - should not be a game just for the big players.
Streamlining Menus Through Standardization
If you’re a fan of The Bear, you might remember that the dysfunctional chef Carmy Berzatto runs a ‘chaos menu’ that changes every day in his quest to earn a Michelin Star. The result is an overwhelmed team and out-of-control costs.
From a procurement perspective, cost savings can be achieved through a quality, consistent menu offering, with a consolidated supply base.
“A lot of times we're speaking to actual chefs who are the ones placing the orders”, says Marissa. “It becomes cumbersome for them to be ordering from five or six different suppliers to try and get the best price for the same product. Our goal is always to help centralize and make it easier for the in-house folks, [while] making sure the quality and the consistency are there for their customers. If we're not able to achieve something for our members, we're always very upfront and honest in saying so.”
“The benefit of being on a national GPO contract is that it moves a 30,000-item catalog down to the core 10,000. This means organizations can streamline their orders, reducing complexity while ensuring they access quality products at the best prices.”
Standardization not only improves operational efficiency but also enhances the customer experience. “When our members are utilizing the contracted products, they will see a more consistent menu and, ultimately, a better service for their customers,” she adds.
Leverage Combined Food Purchasing with Una
Take advantage of unprecedented contract value and savings on food purchases with Una. Leverage the power of group purchasing and save 15-20% on food purchases via valuable contracts in Una's food service GPO portfolio.
Contact us to get started and don't forget to watch the full webinar with Una and Art of Procurement:
