There are lots of decisions to be made when it comes to buying edible oils and fats for your manufacturing company.
How do you go about beginning to tackle these choices, and make the best moves for your business?
It’s helpful to start the decision process with a little feedback-- peer feedback that is. Understanding what's important to your procurement peers when they buy bulk oils can be helpful. What factors did they look at? What influenced their decisions?
Your peers have been in your shoes and they can provide insight that no one else can– they often hold the key to helping you make the best decisions.
Here's a compilation of the most important factors that your peers look at when they bulk bulk edible oils and fats.
Quality / Oil Grade Requirements, As Mandated By R&D
The most common question that purchasers come to us with is: “We are looking for X type of oil. Do you have it?”
How do they know which type of oil they’re looking for? Usually, R&D has sent them on a mission to find something specific.
Chances are that your R&D or product development department have put together a very specific recipe for the product you are sourcing for. The marketing department may also have given you some ideas for types of ingredient features they are interested in (e.g., organic, non-GMO, kosher, expeller pressed).
Now it's your job to go source those ingredients. To do that, you'll need to have a good idea of the quality grades available in the market to make sure that you're getting the right thing to satisfy both departments.
Want to review the different types of oils available? Read about how each oil is made and what products it’s good for, by clicking on each type on this page.
Alternative Oil Grades Available
Next, most of your purchasing peers want to look at some ingredient alternatives. These are the “secondary options” they can offer their R&D team as a back up, in case some features of the first oil doesn’t fit right (pricing, flavor, availability, etc).
For example, if the price of R&Ds preferred oil is too high, you’ll need to present some alternative options. R&D will want to understand what some of the cheaper grades are or even if there is a different type of oil that will work okay.
To find the best alternative oil, ask you supplier the question, “If this doesn’t work for X reason, what’s the next product that you would recommend?”
Your purchasing peers also want to learn about other non-GMO or organic varieties of oils that may be available. Most manufacturers are working on building out these product lines right now, so your peers are always thinking ahead to try to source raw ingredient suppliers for non-GMO and organic lines.
Supplier Location
Your peers also think that it’s helpful to know about a suppliers location. This information can impact how you order, your total delivered price, and how long it will take to get the ingredients.
But, they also don’t restrict their search to local vendors only. For most ingredient industries, bulk edible oils included, they is a very limited number of the largest suppliers in the US.
You'll usually have to buy from a supplier that is located at least a few states away if you want to work with one of the larger suppliers. And there are advantages to working with these suppliers – larger inventory, lower prices, and a more professional order processing system.
If you just need a small amount of your ingredient (a few cases), a local distributor will do just fine.
Packaging, as compared to what their production team is using now
Your peers want to understand the packaging that the bulk oil comes in. The most common process they use is to start the search backwards, looking initially for packaging that their production team is using already. Do they use drums? Are the used to handling totes?
From there, they will evaluate other options to see what their facility could handle, how easy it would be to for them to use a new size and how much a different packaging style would save.
Delivered Price
Just like you, your peers always want to understand their total delivered price. This price is the most helpful piece of information to be able to compare supplier quotes apples to apples. This is because it includes all of the packaging, shipping, or additional charges you may pay.
Here's the catch – it typically takes a few days for your suppliers to work up a delivered price, because they will have to send out for a shipping quote. That process normally takes a few days, so you’ll have to be patient.
If you are an experienced purchaser, or your sales rep can make an accurate estimate, you can usually work together to estimate what the delivered price would be, so that you don’t have to wait.
Now we want to hear from you… What other factors do you care most about? Tell us in the comments below.
