Procurement in times of crisis: food and beverage

The latest in a string of mishaps and disagreements within consumer markets food and beverage items comes between Tesco and giant manufacturers Heinz and Mars. After a row that saw Heinz pull its products from Tesco’s shelves, the two entities have since resolved their differences. Mars, however, is still haggling with the supermarket giant. Supplies of Whiskas pet food were halted and the product still hasn’t returned to Tesco. In the face of impending recession, this stalemate is forcing consumers to shop at alternatives to Tesco, which is something no business wants at this time.  

It is no secret that costs are rising inordinately – from energy and manufacturing to raw ingredients. With all these ingredient shortages, subsequent rising costs, and overall chaos, CPOs are fighting to keep things stable. With even the biggest of businesses struggling to keep food on the shelves is having a good CPO enough to navigate the seemingly endless supply chain issues within food and beverage? And how are leading Food & Beverage companies supporting their procurement teams in these troubled times? 

The Position of a CPO 

Strong procurement leadership can have a real impact on an organisation, but in today’s climate, simply having a great Chief Procurement Officer may not be enough to navigate the various curveballs faced by food and beverage companies.  

Any food and beverage business looking to hire talented individuals to their procurement teams should be looking for a few key criteria in their candidates: adaptability, attention to detail, an in-depth understanding of their niche category, and the ability to think on their feet, not to mention a penchant for spend analysis and a strong network of supplier relations.  

Supplier Relations 

Supplier relations have never been more important. As the food and beverage industry depends on so many different suppliers to keep it running, this is even more of a pressing issue than it is for other sectors of consumer markets. Even smaller businesses require multiple sources – one or two is never enough.  

However, it may be in business’ best interests to work with fewer suppliers, but across a diverse range of products and with strong relationships.  

Sustainability  

Another caveat is that while food and beverage industries are re-evaluating their procurement strategies, they need to do so sustainably. Businesses are now in the unique position where they find themselves able to restructure their supply chains somewhat; the smart businesses will do so sustainably, setting them up for longer-term success. Ability to do this will also heavily depend on the suppliers available for each business – for ultimate transparency, there needs to be visibility on all parts of the supply chain; it therefore falls on procurement teams to ensure that they have eyes on their supplier’s practices. This is notoriously difficult, but there are several things your team can undertake to ensure the best chance at maximum visibility. 

Be sure to follow us on Linkedin to stay up-to-date with all the latest trends and developments taking place across the end-to-end supply chain. Proco Global remains available to discuss any of the market conditions mentioned above and how we can help you navigate the complexities of the supply chain through talent. For more insights, visit https://www.procoglobal.com/insights 

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