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Electronic Auctions Reduce the Burden of Rising Commodity Prices

eAuctions are reducing the burden of rising commodity prices for key organisations in the food services industry by up to 27%.

In January cocoa prices rose 15 per cent to £2,005 a tonne, the highest since April 1985, mainly due to the weak sterling, but also because of worries about crop scarcity and speculative buying. Prices have risen 75 per cent in the past year.

The rise in the price threatens to affect premium brands such as Wax Digital’s customer’s Thorntons, by forcing consumers to buy cheaper brands – those with less cocoa content.

	Thorntons has been able to manage the impact of rising cocoa prices on its business by controlling other areas of spend via electronic sourcing events Thorntons

“We have adopted a sourcing strategy to drive down the cost of core ingredients, whilst also reducing costs on indirect products which ultimately affect the bottom line.”  said David Proctor, Head of Purchasing and Supply, Thorntons.

Thorntons has just signed a three year contract to continue to drive down the cost of suppliers’ products and services in order to make savings during tougher economic times in all areas of spend; large and small.

“Many of our clients have been surprised by the savings they’ve made in spend categories where they believed they were already getting a good price,” said Daniel Ball.

"Most of them don’t believe they can drive costs down further, but they should consider all areas of spend, even if they have been purchasing the goods for a considerable length of time and have a good relationship with trusted suppliers.