The food industry has seen recent successes in many areas, however could that success be further amplified?
The food Industry has seen great success in many sectors of the industry. In recent years, the Industry has even broke records. In 2013, U.S. sales of specialty food and beverages reached $88.3 billion setting a record high for the fourth year in a row. (add in 2014 total industry sales numbers).
Along with major industry success, however, comes additional obstacles to overcome. While the food industry appears to be on an upward trajectory, there are still a few issues that continue to impede full realization of growth initiatives.
Speaking with our members in the food industry – who represent $135 billion in annual sales – CoVest has found that many of them continue to face challenges in several areas, that have been affecting margins, overall pricing and market share. Based on our solid track record, CoVest is able to assist companies through these modern day hurdles.
Food Ingredient Transparency and Traceability
There is a demand for more ingredient information visibility. Transparency is an important factor in purchase decisions across key categories, while tracability provides greater visibility into a supply chain when planning for an emergency situation. The Grocery Manufacturers Association (GMA) has established a program to ensure the FDA has increased visibility to the ingredients that are assessed as Generally Recognized As Safe (GRAS) by members of the food industry. Implementing these two factors will enhance preparedness, recovery and prevention while also appeasing the educational demands of the buyer.
How CoVest Can Help
Ensuring transparency and tracability will force manufacturers to adjust product packaging for updated nutrition labels, which would cost the industry an estimated $2.3 billion. Because of these new cost, those in the food industry must optimize savings in other areas. CoVest aims to do just that by providing group purchasing agreements that typically generate 7% to 16% ongoing savings. These savings will touch many sectors of a company, including labels.
Companies that take control of their complex procurement processes can release hidden financial potential. Through CoVest’s in-depth category management, companies are provided comprehensive analytics to maintain savings. While other companies find comfort in initial savings achieved, our goal is to find a way to not only obtain the best savings but to maintain them as well. We do this through a 5 step category management process which consists of:
- Data collection
- Core list rewrites
- Annual price change analysis
- Quarterly savings analysis and reporting
Mergers and Acquisitions Effect on the Workforce
During the late 1900s, 100,000 workers in seven food-related industries (meatpacking, meat processing, cheese, fluid milk, flour milling, feed, and oilseed processing) lost their jobs due to mergers and acquisitions. (Need to add in the total number of industry mergers and acquisitions and the total number of employees affected)
How CoVest Can Help
CoVest provides access to a well-established network of highly skilled temporary labor, hourly, professional and technical business resources that can be made available in a compressed timeframe.
Recently, CoVest unveiled the CoVest Talent Exchange. This partnership with HCMWorks brings a new bundle of benefits to our members. From having the ability to competitively source temporary labor requests (eliminating the direct supplier relationships) to obtaining access to a cloud-based technology that allows hiring managers to manage their temporary labor activity, members now have a very unique sourcing capability.
The CoVest Value
Providing indirect spend management through analytics and leveraged supplier partnerships, CoVest assists with more than just savings. Our current food industry members maximize benefits achieved by employing many of CoVest’s features and advantages. These members utilize 18 categories and account for 13% of total spend under management. With so many different sectors within the food industry, there are plenty of opportunities to further the industry’s growth objectives through engaging a provider of indirect spend management.
Find out if CoVest is right for you by visiting our website, www.covest.com or contacting us directly, (216) 325-5128