Beverages

In the beverage sector, many functions are asking what disruption means for them and how do they prepare for it. Some of the way drinks manufacturers such as Bavaria, PepsiCo, and Britvic are responding to disruption is by looking to improve the cost control, efficiency and risk management processes. The global alcoholic beverages market was valued at $1,439 billion in 2017 and is expected to reach $1,684 billion by 2025*. This rise in consumption is partly due to a rise in disposable income and changing consumer preference. However, despite this increased taxation and higher excise duties on has put pressure on the market. They influence product innovation as well as create pressure for improved cost control. Although, many products such as beer are based on four basic ingredients – malted cereal grains, hops, water, and yeast, there is a growing trend for the addition of flavouring ingredients, such as herbs and fruits. Product innovation is fuelling the demand for these new ingredients. And companies are finding they have a growing need for a wider range of independent market prices that can help manage supplier costs. As well as for other associated costs such as product packaging. These activities are increasing the time spent on already stretched processes. Leaders are increasingly looking to improve efficiency and reduce the time and resources required across areas. To assist with this many are looking to have access to commodity pricing data in order negotiate more effectively with suppliers, understand market conditions and operate more efficiently. When purchasing materials in high volumes, it’s imperative to accurately track market prices. This ensures purchasing spend remains consistent with real market prices and to avoid market volatility year on year. But they are searching for new ways to make it quicker and easier to manage the various product categories, as well as gain leverage over current suppliers. And with increasingly competitive markets they are always looking to demonstrate value and to evidence their price changes to customers.

Expana implemented their raw materials and commodity price tracking services through Mintec Analytics, its proprietary commodity price dashboard and supply analytics platform. This has delivered a combination of data, market insight and analytical tools to large manufacturers like Bacardi, Diageo and Pernod Ricard. This has enabled them to access any of the +14,000 commodity prices, to accurately manage and respond to current challenges.
Mintec Analytics gives them access to:

• Integrated raw material and commodity analysis
• Personalised price dashboards for supplier contract management
• Market insight and extensive price data
• Benchmarking supplier pricing across a range of commodities

Expana data has become an integral part of our customers procurement and product strategies. The breadth of data and access to insight it provides supports their commercial teams. It helps to free-up valuable time and resources, so they can focus on their core roles – sales, supplier negotiations and supply strategy. Access to reliable market prices on relevant materials all in one, easy to access location has reduced the time spent collating data, performing analysis and preparing for planning and supplier negotiations. It also underpins their ability to accurately track price movements and enable procurement to respond to any price volatility. By be being able to use the resources in Mintec Analytics, they are better able to track prices in these markets and benchmark their suppliers. This ensures they are better able to control their costs and remain more competitive. Mintec Analytics was able to consolidate their workload of manual market tracking and allow them to create customised dashboards and cost models for a wide range of products, all of which can be updated regularly and in bulk, using data integration tools including APIs.

Conservatively, a 1% saving on £2.5 billion could result in savings of circa £25 million. An investment that clearly demonstrates a healthy return on investment.