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Buying power: why it pays to work with the right procurement provider

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Who are Entegra and what do you do?

We are a team of 150 specialists operating predominantly in the UK and across Europe who work in partnership with 800+ businesses and 200 suppliers in the UK alone. We negotiate on behalf of our clients to find them the best possible proposals and solutions available to them and within their own objectives. Our team is made up of ex operators, chefs, analysts and buyers.

What can you bring to a restaurant group’s procurement operations that they can’t achieve alone?

To be successful at achieving procurement results, three things are needed. The first is a large amount of spend with which to negotiate - we currently manage £710m of spend in the UK and Entegra Global manages a total of €23.9bn, which also allows us to tap directly into manufacturer deals as well as being able to negotiate the best price files available in the market. The second is market intelligence and foresight - we subscribe to market intelligence as well as having our finger to the pulse with all of our current supply partners and we share this knowledge with our partnered clients in regular market reporting so they can mitigate upcoming pitfalls or specific product volatility. The third is experience – we have operated for 30 years and our buyers are highly qualified in procurement and supply chain matters. We provide our partnered businesses with the most qualified and best placed people. I think of it as having the right people in the rights seats - aces in places.

Do you charge a fee for your services?
We don’t charge a fee, but instead agree a percentage of identified savings as our operating rebate with our clients, so that extra resource comes at no cost.

What are the common hurdles when starting to work with restaurateurs?

For an industry so dedicated to having the right people in the right place, on the right day and time, I can see more and more of the business-forward groups not imposing that level of obligation on their chefs or operations teams. Who has the bandwidth for that level of complexity in their working week? I come from a restaurant background myself, and I was initially surprised at the level of intricacy and detail that goes into strong hospitality procurement: it’s constant forecasting, negotiation, renegotiation and data analysis on fresh commodities executed by qualified people and in specialist category areas. Chefs and restaurateurs are creative minds and running a moving business, why would they want to undertake that task if they don’t need to?

If a business partners with you, do they need to move all of their purchasing to Entegra nominated suppliers?

No, absolutely not. We are very aware that many businesses have their own strategic partnerships in place and for many different reasons. They may also have a specific product they want to keep, which we as ex-operators are very aware of. We also, more than likely, partner with some of the same providers they are currently trading with, in which case a switch to our price file terms may be possible and very simple. During initial conversations, we and the client identify areas of opportunity and we understand their own core business objectives. We are then able to propose a set of solutions to meet their individual needs. However, many businesses move the majority of purchasing under our management to see the best results as one consolidated piece.

So, why might a business not work with you?

Great question. Fear of change or a perception of loss of control. I understand this as I too would want to be in complete control of my business, but I counter this with the assurance that we are a resource for our restaurateurs to use to their own benefit. Their objectives become ours. In some cases, we have helped businesses become more sustainable, sourced direct products from producers and of course protected their bottom line. In the best cases they delegate and outsource to us as an extension of their own team so that they are in the driving seat. I think of it in the same way as a business outsourcing a PR agency to fulfil its objectives from a place of expertise. Imagine if you had to pay the labour costs for your full PR team, it wouldn’t make sense. There are also very few occasions where we stumble across a brown envelope passing between a key stakeholder and supplier, I always thought this was an urban restaurant myth.

What if you option a supplier the restaurant doesn’t like?

We often propose several options and make a point of understanding if there’s a supplier that wouldn’t work so we can avoid doing that work. We also sign off on full buying lists and samples before mobilisation as well as negotiate on logistics and service level agreements. Both large national suppliers as well as local provincial suppliers often use the same producers and wholesalers, which makes sense. If I were a cheese producer, why would I only engage with one distributer? There is a perception that large nationals don’t provide the same quality as local provincials, which isn’t true.

We have had a tumultuous few years, how do you maintain competitive pricing in the face of uncertainty?

When we first start working with any business, we carry out an analysis on their current purchasing performance prior to a commitment to us working together. This result forms the initial basis of our partnership. Thereafter, we continue to negotiate, maintain and monitor their spend on their behalf and our operations consultants continue to identify efficiencies and year on year results. We will always demonstrate our current position against the open market - it’s currently sitting at 12.34% better. We also have a function called ‘best price purchasing’ that demonstrates opportunities for product switches to make further savings at the clients’ discretion. This is available on our procurement software platform to all of our partnered accounts at no cost.

What do you mean by ‘open market pricing’?

We mean all current pricing data available to us at that time. This includes ranges from large Nationals, contracted pricing and the often less fortunate independents combined.

How do you find savings? What is the process?

We analyse the total basket spend and factor in volumes to produce a final result on like for like products. We know that, within individual lines, there will be variances, but the focus is on the bottom line. The alternative would be working on line by line negotiations, but this process is not cost or time effective and doesn’t focus on the end results we want for our clients.

How have you coped with the current supply chain crisis?

We are fortunate to have been able to alert and advise our clients on volatile commodities ahead of time. For example, during the recent avian flu, which effected 2,400,000 birds, we were able to advise our clients. We have found the best solutions for poultry, at present, coming out of France. We know that next on the horizon is lamb with extra checks at our ports due to Brexit as well as difficulty getting lamb out of New Zealand having an impact on world-wide demand. Where possible, we have advised to avoid this product on upcoming menu changes. Cooking oil is also high on our watch-out list. Vegetable oil pricing is currently at a 10-year high and supplies of rapeseed, soya, sunflower and palm oils are all reduced as demand for exports to China are up 40% year on year. We were able to negotiate a six-month price hold on this commodity for our clients. The other way we have dealt with this challenge is through working with our supply partners and clients to find solutions to best ease the pressure. This has been through an agreed reduction of delivery days, advance ordering and wherever possible, stockholding.

How can a business engage you in an initial analysis?

Contact me at Wnpyla.Rinaf@ragrtencf.hx​ or for more information go to our website www.entegraps.uk