Purchasing Direction and Oversight Board Purchasing Direction and
Purchasing Direction and Oversight Board
Purchasing Direction and Oversight Board Progress and Plans
2013 -14 Progress • • Purchasing Trends Programmes Ethical Supply Chain Constructive Engagement
Purchasing Trends • • • Total Purchasing value = £ 55. 9 m down 4. 2% In addition external trade fell by £ 3. 2 m Retail = £ 30 m or 53. 7% of total purchases Licensed = £ 20 m or 35. 9% of total purchases Catering = £ 5. 8 m or 10. 5% of total purchases Top 20 volume unions = 53% of total purchasing value
Programme Performance Retail Plus and Meal Deal – • Slight increase in marketing revenues • Payments to members = £ 798 k an increase of £ 39 k • Sandwich and snack products values up by over 11% Licensed Trade Plus – • Marketing revenues down by 45% • Payments to members down by 33% to £ 170 k
Ethical Supply Chain • 8 step process to evaluate supplier E&E credentials • Sound Sourcing Guide – all suppliers commit to meet these standards • Ethical Screening • Ethical and Environmental Accreditation • E&E Commitments in Supply Contracts • Supplier Audits • Ethical Plus Retail Programme
Constructive Engagement • Constructive engagement with contracted suppliers and NUS Extra partners • Recent examples are Starbucks, Pepsico and Amazon
2014 -15 Progress Purchasing Contracts Effective 1 st July 2015
Draught and Packaged Beers and Ciders Beer levy change from £ 3 per barrel to 2% of invoice value – aligns with all other licensed contracts Draught 4 year term starting July 2015 Packaged 2 year term starting July 2015 Carlsberg – no price increases. RPI excluding duty price increase from July 2016 Heineken – some price reductions and some prices held at existing levels. Tender prices held until July 2017 Coors – 2% price increase. £ 4. 67 per barrel annual increase from July 2016
Draught and Packaged Beers and Ciders Inbev – 3. 5% price increase. Annual price increase of 4% duty exclusive from July 2016 Kopparberg between 1&3% price increase. Price increase in July 2016 of 3% duty exclusive Diageo – no price increase Gaymers draught – no price increases Tennents – 3% increase Rekorderlig – 2% increase Brothers Cider – withdrew their tender submission Budvar – declined to tender Gaymers packaged – no tender submission
Draught and Packaged Beers and Ciders Overall price increase based on current volumes 0. 2% All products may stock apart from Carlsberg draught lager – must stock in all unions but not in all bars
Draught and Packaged Beers and Ciders Carling replaced by Fosters v Carling Fosters price July 2015 £ 63. 20 Carling price July 2015 £ 64. 93 Fosters price July 2016 £ 63. 20 Carling price July 2016 £ 66. 36
Soft Drinks Pricing Summary • Water prices remain level. • Natural stills has some increases of less than 3%, Oasis increase of 6% • Carbonates overall 3% increase • Energy prices have some increases but overall prices have decreased, some by as much as 10%.
Soft Drinks New Brands Carbonates Pepsi • Added to Licensed Trade in addition to Coca-cola • Available from Carlsberg • Benefits outlets wishing to consolidate deliveries and unable to meet the minimum drop quantity required by CCE.
Soft Drinks New Brands Energy Drinks Monster • Added to Carlsberg range for Licensed Trade in addition to CCE • Assists outlets wishing to consolidate deliveries and unable to meet the min drop quantity required by CCE. Boost • Lower priced alternative in retail
Soft Drinks New Brands Water Harrogate Spring Water • Alternative UK water in Licensed Trade to Strathmore Highland Spring Water • Alternative UK water in Retail to Brecon who have longstanding supply issues Abbeywell • Water addition to range available via CCE delivery, will assist in meeting CCE minimum drops
Soft Drinks New Brands Natural stills Bottlegreen • More interest in premium soft drinks Innocent • Alternative to naked smoothies
Stationery Contracts Stationery 3 year contract starting 1 st July Accepted suppliers • Mitsubishi – 2% price increase • Nuco – no price increases • Pilot Pens – 2% price increase • Pukka Pads – no price increases • Sinclairs – 2. 5% price increase • Staedtler – 2. 8% price increase • Tiger Stationery – no price increases • UKOS – 2. 8% price increase from • Hamelin Brands - new
Stationery Discontinued suppliers Exaclair – unacceptable price increases Helix Trading Ltd – unacceptable price increases Snopake – declining sales and expensive products Stabilo – unacceptable price increases and poor sales
Stationery Summary Additional Information • 1. 5% average price increase across all existing stationery suppliers • Providing a good, better and best product offering across all suppliers • Number of suppliers reduced whilst still ensuring product alternatives in all categories
2015 -16 Plans • • • Being easy to do business with Engaging with strategic partners Improving member relationships Ethical development Purchasing contracts effective 1 st July 2016
Being easy to do business with • • • Retail threat from symbol groups Strong support package Integrated EPOS sytem Dedicated online ordering system Central warehouse Promotional allocations
Being Easy to do Business With • Cloaked pricing creates confusion over Union buying prices • Manual EPOS file changes needed at Union level • Inadequate ordering processes • We need to change to make it easy for Unions to do business with us
Ordering Processes Currently orders are placed via: • • Supplier online ordering processes Supplier telesales facilities Control rests with suppliers Systems are inefficient
National Online Ordering System • We will offer unions a national online ordering system supported by Itrade Network • Catering suppliers live during March 2015 • Licensed suppliers following by July 2015 • Retail suppliers phased later in the year
Range and price file maintenance • Currently manual input at union level • We will move towards offering automatic integration of file changes into union epos files • We intend to have some trial sites in place before the end of 2015 working with Fidelity
Engaging with strategic partners • Retail category trends highlight decline in traditional areas such as stationery and greeting cards • Growth has come from Grab & Go and Convenience • Co-operative supply contributed to convenience growth but not to Grab & Go • Opportunity to develop an improved Grab & Go concept with the Co-operative
Engaging with strategic partners • Additional opportunity exists to develop ordering systems and joint branding • NUS Extra relationship already exists • We are looking to identify further areas where we can develop our strategic partnership with the Co-operative
Improving Member Relationships • We need to consider ways to increase Licensed Trade purchasing • Interlink licensed trade and catering • Insight development into catering and menu development • Develop a national customer marketing strategy for licensed trade • Collaboration with union commercial staff via webinars • Network session with suppliers • Catering focus group
Ethical Development Ethical Clothing • Working with Epona to deliver a living wage product Ethical Supplier Event • March 2015 event at House of Commons • Explore how suppliers work with young people regarding employment Ethical and Environmental Accreditation • Developing a new feedback tool to help suppliers understand areas where improvement is needed
Purchasing Contracts effective 1 st July 2016 • • • Spirits and premium packaged spirits Wines Sandwiches Catering Ambient Catering Frozen Catering Chilled Catering Light Consumables Cellar Gases International Foods Crisps and Snacks Sweeter Snacking Greeting Cards
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