CASE STUDY

Generating $25 Million in Free Cash Flow for a Company in the American Food Industry – A Success Story by SpendEdge

Feb 19, 2020

American Food Industry Overview 

In the face of significant headwinds, profits in the American food industry have fallen significantly. Factors such as increasing competition, especially from private players and discounters and value-conscious purchasing from customers are further putting downward pressure on prices. Companies are finding it hard to keep up with new trends, demand volatility, portfolio complexity, and development costs. Businesses, therefore, are compelled to identify innovative ways to reduce total costs and unlock hidden value in the supply chain.

Business Challenges Faced

The client is a well-known name in flavor, spices, and seasonings with facilities in 10 nations. Until last year, the company’s procurement function was regionally focused, operating separately from other parts of the supply chain. However, the business environment was changing rapidly-creating unrelenting pressure to generate more cash savings that could fund business expansion and offset agricultural commodity price increases. The company wanted to build a globally coordinated and aligned supply chain while focusing on category management and supplier integration. This required insights that could enable the company to create a supply chain framework. The client, therefore collaborated with SpendEdge, to gain deep-dive insights into the American food industry.  

The inability to generate more cash savings can prohibit business expansion for companies in the American food industry. Request a free proposal to access our tailor-made procurement market intelligence solutions.

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Our Research Approach 

The analysts at SpendEdge rallied around the vision provided and conducted an in-depth analysis of the American food industry. They offered actionable insights that helped the client to align vision with strategy and create a roadmap for execution that could capture the immediate value and build momentum. This helped the client to broaden supply chain operations and overcome the bottlenecks of cost savings when dealing with agricultural materials with long growing cycles.

The team invested time in analyzing and identifying the successful strategies adopted by best-in-class companies to build new processes and gain more value out of standard processes. Also, they reviewed essential parts in the distribution network and found out the opportunities for growth. This facilitated the client to have a better idea of what it takes to expand the business and think strategically about revenue, cost, and asset utilization.    

Engagement Outcome 

With comprehensive insights into procurement functions in the American food industry, the client improved supply chain management. The strategies devised by them resulted in 20% procurement cost savings in the first quarter. The company was also able to $25 million in free cash flow, thereby facilitating procurement transformation into a global process.

Gaining accurate supply market insights is crucial for companies in the American food industry to improve the supply chain. Request a free demo to access our web-based procurement platform and gain reports across 800+ categories. 

Procurement Strategies for Companies in the American Food Industry  

  • Improve forecasting abilities by analyzing the links between prices and external factors. 
  • Increase product value and sales through value-added processes and ingredients. 
  • Build a better understanding of the role of different players across the whole value chain.

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