SAOS presentation [Compatibility Mode] - Scotland Food and Drink

Public Sector Procurement OpportunitiesA Practical Guide to Supplying Food & Drink to the Public Sector in ScotlandGeorge Noble – Supply Chain Development Manager - SAOS

A Changing LandscapeNational Food & Drink Policy has sustainablepublic procurement of food & drink as a distinctworkstream.Six Simple Steps - Guidance for public sectorbuyers to ensure fair access to contracts for SMEsEstablishment of Public Contracts Scotland webportal – list contract opportunitiesMore contracts being awarded on a MEAT basis,where price is only one factor

Introduction•Practical guide for SMEslooking to supply the publicsector in Scotland•Guide launched by CabinetSecretary Richard Lochhead inApril 2010•Available to download atscotlandfoodanddrink.org andctwo.org.ukGeorge Noble - SAOS

The Market£130m market in Scotland with the mainpublic sector buyers being:•Local Authorities•Universities and Colleges•Prisons•National Health Service

Potential Demand forFinancially improved unaffected PredictableFavourable produce secure bypayment income £130m downturns utilisation customer Market stream terms

•Developing the capabilitiesrequired to service public sectorcontracts often requires addedinvestment and effort•Distribution can be costlyand complex•Responding to tenders canbe daunting for many SMEs•Food safety and qualitystandards are high and mustbe met. SALSA & BRC arecommon requirements

Is This For Me?

Strategic Fit•Does supplying the public sector fit with thestrategic goals for your business?•Does it help or detract from growth/profitaspirations•Will it enhance my competencies that will leadto other opportunities?

Capacity & Resources•Can I supply the required range of products?•Do I have the capacity & skills for extra production?•Can I meet food safety and quality assurance criteria?•Can I fulfil anticipated product volumes in full, ontime at the right price?•Do I have sufficient storage and distribution capacity?•Am I aware of the risks in failing to meetcontractual obligations?

Suitable Products•Are the type of products I sell in demand fromthe public sector?•Best opportunities for SMEs lie in perishableproducts such as milk, bread & bakery, fruit &veg, fresh meat, poultry and fish.•Am I able to sell seasonal products on a yearroundbasis?

Distribution•Can be a substantial challenge for SMEs•Potentially wide geographic spread•Small delivery windows•Many small drops are costly•Ensure delivery costs are fully and accuratelycosted whether using 3 rd party or in-house logistics•Develop new ‘en-route’ business to spreadcost.

Routes to Market

Supplying DirectlyPros•Maintain controlProducer•Maximise margin potentialPublic BodyCons•Contractual liability•Logistics can be an issue•MEAT evaluation criteria,Sustainable Procurementand splitting of contractsinto lots mean moreopportunities for individualSMEs•Costs of complianceand due diligence•Burden of tendercompletionProducer contracts directly with the publicsector organisation

Supplying IndirectlyProsProducer•No need to complete a tenderWholesaler/Foodservice/Caterer•Distribution likely to be less costly•No contractual liabilitywith final buyer•Access to other marketsCons•Lower marginPublic Body•Greater sales effortrequired•Easier for buyer tode-list your productProducer supplies into first tier supplier tothe public body•Support for product fromintermediary

Collaborate to Supply•Supply directly or indirectly•Loose affiliation to co-op•Efficiencies in processing, grading andmarketing of productsProducers•Offer a competitive mix of products andvolumes•Provide a single administrativeorganisation for buyers to deal with•Establish a delivery hub where productsare consolidated – reduce delivery costsand miles travelled

Collaborate to SupplyArgyll Hill Lamb Producers & ForteithFoodservice . Collaborative producer pilotto supply Argyll schools with local lamb.AHLPGForteithFoodserviceArgyll & ButeCouncil

Collaborate to Supply•Lamb producer group formed to look at increasingprofitability of Argyll hill lamb.•Market finished lambs as premium branded productthrough Forteith Foodservice in Oban•Successfully sold to existing Forteith customers andsecured pilot supply of diced shoulder to Argyll schools•Pilot proved successful and profitable and helpedachieve carcass balance for lambs – higher value cutsto hotels and restaurants etc

Collaborate to Supply•Also selling Argyll Lamb burger into Cal Mac•250 lambs 08/09 pilot, now looking to scale up to 1000lambs.•Return achieved of £13 per lamb as opposed to£5 per lamb received pre-pilot.

Public Sector RequirementsEssential and DesirableEvidence of Financial ViabilityInsurancesHealth & Safety PolicyEvidence of Membership of AssuranceSchemesEnvironmental, social and ethical policiesTrade References

Finding Opportunitieswww.publiccontractsscotland.gov.ukScotland ExcelOJEULocal Authority WebsitesContact Existing SuppliersUniversity/College Websites Meet the Buyer EventsNHS Trust WebsitesLocal, Regional and Trade PressPersonal ContactsTrade Organisations

Responding to Tenderswww.publiccontractsscotland.gov.ukScotland ExcelOJEULocal Authority WebsitesContact Existing SuppliersUniversity/College Websites Meet the Buyer EventsNHS Trust WebsitesLocal, Regional and Trade PressPersonal ContactsTrade Organisations

Key Advice for SMEsDon’t rule out supplying the public sector – many ofthe misconceptions aren’t trueRegister on Public Contracts Scotland portalGive yourself plenty time to respond to tenders –do not leave it to the 11 th hour!!Be conscious of price, but more importantly taketime and effort to ensure you clearly articulateyour strengths in non-price factorsTake care to get your pricing correct

SupportScotland Food & Drink Information Service –helpline@scotlandfoodanddrink.orgor 0845 601 3752Collaboration Support – www.ctwo.org.ukGeorge Noble – Supply Chain DevelopmentManager – SAOS – george.noble@saos.co.uk

Thank You