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6 Rules for Powerful Purchasing in the Beverage Industry

Rules Powerful Purchasing Beverage Industry

By Steve McCullough, Vice President of Business Development, BevSource

Success in the beverage industry doesn’t always come to the companies with the strongest sales team or the biggest marketing budget. A sustainable beverage brand will dedicate time and resources to managing their inputs as well as their outputs.  They have a strategy and goals for working with their vendors, and they play the long game. Here are a few guidelines for strategically building your purchasing power and setting your beverage company up for supply chain success.

1. Be relentless

Set aggressive supply chain goals, revisit them often, and push to reach them. Stay ahead of trends, watch for new ideas on how to do things better, and then take action. Don’t wait for an issue or negative situation to engage with your vendors. Instead, approach them with thoughts, ideas, and requests. Your work will benefit not only your business but your vendors’ businesses as well.Steve McCullough Beverage Industry Veteran

Keep improving and keep pushing your company and your suppliers forward. I believe it’s GM, who said, “We love our suppliers, but we love our customers more.” The truth is, it’s not an either-or situation. When you push your vendors to achieve better outcomes, you’re giving them an opportunity to build additional value as well. Don’t hesitate to ask informed questions about runtimes, cost reductions, lead times, and to suggest more efficient ways of doing business. The best suppliers will consider every available avenue to improve.

2. Make them look good

Your suppliers have goals and dreams too. The better you understand those objectives and how you can contribute to them, the stronger the relationship becomes, and the more both parties will benefit. Ask about your vendors’ business goals and challenges, give public praise when earned, provide timely updates, and find ways to contribute to mutually beneficial outcomes.

Many people falsely believe that they can maintain a relationship with a yearly golf game. A real partnership means having a long-term view, communicating in good times and in bad, and spending the time to get to know your suppliers. When you focus on being a good partner and invest in your vendors’ success, they will go above and beyond to help you succeed as well.  

3. Focus on the forecast

Predictability in the beverage business is tough. When you’re organized enough to accurately forecast what you’llAccurate Credible Forecasting need from your vendors and when you’ll need it, they are more likely to want to work with you. The key here is accuracy and credibility. Don’t forecast further out than you’re confident you can predict and be prepared to back up your forecast with a commitment to make it happen. Doing business involves some level of risk, but when you demonstrate a good faith effort to mitigate as much uncertainty as possible and share in the risk when you can, suppliers are more willing to bet on you.  

4. Keep your word

A supplier relationship, just like any other relationship, is built on trust and credibility. Stick to your forecasts as tightly as you can, deliver information when you say you will, and follow through on your end of the agreement.  When a vendor starts to trust you and the type of business you bring, they’ll be more likely to choose to work with you, even when another company may bring a higher volume of work their way. This suggestion may seem trite, but it’s not commonplace and will help you stand out. Suppliers have told us that many companies will not willingly stick to an agreement. When you’re honest, consistent, and reliable, vendors recognize and appreciate that fact.

5. Share your story and your plan

Share Your Story PlanEveryone loves a good story. Make sure your suppliers know the story behind your brand, why you’re in business, and what you’re planning to accomplish. The more you can bring them along on your journey, the more dedicated and committed they will be to helping you reach your goals. Share your business plan with your vendors and strategic partners and provide them with updates on your progress.  Be receptive to suggestions and ideas from outside your company. Your openness will strengthen the relationship and create a shared vision for success.

6. Master reverse marketing

Reverse marketing, although not a new idea, isn’t discussed as often as other strategies. The idea behind reverse marketing is to take the focus off competing through product features, and instead focus on building a brand that resonates with prospective customers.  A popular example of reverse marketing is Patagonia’s “Don’t Buy This” campaign, that helped to build Patagonia’s brand as an environmentally responsible organization. The campaign succeeded in creating connections – and sales- with potential customers. Elevating the visibility and power of your brand in the marketplace creates another reason for suppliers to want to work with and be associated with your company. In today’s environment, it’s more important than ever to focus on the ethics and credibility of your brand. It will affect both the sales and supply side of your business.  

If you’re looking for a proven way to get a leg up on your competition and affect your bottom line, take a renewed look at your supply chain strategy. With some added focus, creativity, and planning, you can turn your sourcing and supply chain management into one of your biggest business advantages.