Buyers need to go back to basics

10/15/2013 09:13:00 AM
Tom Karst

Tom KarstWhy is everybody concerned with rating suppliers and no one cares about ranking buyers?

Suppliers get multiple food safety audits, increasing scrutiny of their sustainability practices, stern notes about Produce Traceability Initiative progress, and even an occasional interested glance from buyers about their employee relations.

Turn the tables; if a supplier was creating a matrix for their best customers, what factors should be on the scorecard?

A short list of some attributes I would probably track would include pay practices, profitability, growth potential, minimum orders, and most importantly, longevity as a loyal customer.

Also big: was the buyer there when the market went in the tank or did they bail and book elsewhere?

I know some suppliers do rate the pay practices of their buyers. Credit rating services like the Red Book help put a common value on the pay practices and other financial attributes of produce buyers. Beyond buying power and prompt payment, what other factors could be on the matrix?

Someone said that “what is good for the goose is good for the gander.” So, should issues like sustainability practices, social media savvy, food safety training, creativity in consumer promotions, history of labor relations, PTI compliance and community charity efforts also be a part of a supplier’s matrix of how he “scores” a buyer?

The mere idea is laugh-out-loud funny.

The party in a transaction with the most power usually sets the rules. For most of the time, the ones wielding the power are buyers because there is typically more supply than demand.

For that reason, suppliers must submit to multiple audits for food safety and the likelihood of increasing paperwork requirements for sustainability and social issues like worker welfare. You already do a Primus audit? We don’t care, you must do the SQF or GlobalGAP.

But suppliers sometimes hold the edge. With a hard to get variety like honeycrisp or perhaps a niche variety of apple or other fruit, the shipper enjoys the prospect of choosing who to sell to.

Faced with a scenario of choosing between two buyers willing to pay the same amount for a carton of honeycrisp apples, why don’t shippers put their buyers under the microscope? “I’d love to sell you this load of organic honeycrisp, but could you fax me a copy of your chain store’s progress report on PTI?” No, PTI would have nothing to do with the selling decision. If two buyers were competing with the same market, the one who has been a regular customer will get the business over the buyer who just called from out of the blue.

Suppliers care most about seeing their produce shipped out of their packinghouse and with a firm sale, with the higher price the better.

Though some shippers may bask in the glow of supplying Whole Foods, their bottom line happiness is no less than if they supplied a hard discounter that pays in 21 days.

In the same way, buyers care most about having quality, safe product on their shelves. There is a playground of pretend, executive-level concern about sustainability and other extraneous matters because it is good public relations to act concerned.

The rules change if food becomes scarce. If you are a corporate buyer for Wal-Mart and you have no apples in the warehouse, are you going to go though the sustainability audits with a fine-tooth comb when you choose the supplier? Sustainability practices are not “do or die” and may never be.

In fact, should it matter to the supermarket buyer if the strawberry supplier has a Primus or a GlobalGAP audit, or a third option approved by the chain?

No, in an ideal world, such distinctions shouldn’t matter.

The buying community needs to untangle itself from the maze of noble-sounding demands it is putting on suppliers. Ask for a common harmonized food safety audit - for domestic and imported produce - and pay for the best quality you can afford to buy. If you demand PTI, demand it for everyone. Do what is in your power to help your loyal suppliers stay in business, and they will do the same for you. That is sustainability in its purest form.



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bob hughes    
October, 23, 2013 at 03:04 PM

You appeal to the environmental concerns of customers by stating on the plastic packaging for "Handy Candy Grape Tomatoes" that the cup and lid are made from plants - why are they not recyclable? bearing a number 7

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