Category Scan: Organic Preservatives -- Procurement Best Practices

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By: Beroe Inc

calender07 Sep 2019

category-scan-organic-preservatives-procurement-best-practices

Length of fixed-price contracts largely depends on the volume procured. Food & beverage companies engage in long-term contracts, and relatively smaller buyers from personal care and pharmaceutical industries are offered short-term contracts.

Contract Length

Short Term (0–6 months)

Mid Term (6–12 months)

Long Term (>12 months)

Supply Base

Single Supplier

Multiple Suppliers (2–3)

Supplier

Manufacturer

Distributor

Pricing Model

Fixed Price

Index Based

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Contract Length : Beverage makers are the largest buying segment of preservatives. Length of contract largely depends on the volume procured.

Supply Base : Buyers split their procurement volume across 2–3 suppliers to leverage on tight competition and benefit from competitive pricing.

Supplier : To reduce cost, maintain consistency in quality and to measure supplier performance, buyers generally procure from manufacturers.

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