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A case for produce management

Produce is hard to benchmark what you should be paying on a regular basis because there is no regularity to the product category.

October 16, 2014 by John Krebs — President, Axis Purchasing

Managing produce is a mixed bag of success and failure that requires attention to detail, timing and pricing. If you get any of these things wrong, you can spoil the whole bag.

Unlike manufactured products, produce changes from week to week. The weather has major impact on quality, the growing fields change, freight fluctuates and because of the variables, prices are ever changing.  As such, you have to monitor produce purchases continually or it can be very costly. Ultimately, produce is very hard to benchmark what you should be paying on a regular basis because there is no regularity to this ever-changing product category.

Produce is handled by numerous people along the supply line before it reaches your restaurant. Different companies grow it, pick it, ship it, broker it, repack it, distribute it and deliver it. Your costs can also be influenced by the way it is shipped – on mixed pallets or in full trucks. Even the quality grade of produce can have major impact on price.

So, how do you control a product with so many variables attached to it?

Many people use a bid system and put together two or three different produce distributors. This can be inefficient and extremely time consuming.  Such a system will not cover you when the markets are difficult or inflamed. If you are not an expert, misinformation can confuse and take advantage of you. What’s the solution?

1. Team with experts - Find a company that understands the markets, freight costs and price variables.
2. Normalize costs – Find someone who has established contracts with growers and shippers so that you can protect and stabilize your costs. Work with them to establish quality grades that best meet your needs.
3. Gain visibility – Find a team who has visibility to true produce costs and can audit your final invoices.
4. Join a group purchasing organization – If you team with a group purchasing organization that is aligned with a produce management company, you will eliminate the issues that come with fresh produce purchasing.

A produce management company works closely with distributors so that they can get produce to you in an efficient and high quality manner. They audit the suppliers, know the market and handle the most important details surrounding produce purchasing.

Don’t let a bad produce program wilt your sales or your bottom line. Find a nationally recognized produce company that can help you keep your pricing in line, your deliveries on time and your produce always fresh.

About John Krebs

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