Case study · Food & Beverage
Organic produce grower saves $2M by cutting corrugated packaging spend 22%
A growing organic produce grower and packager faced higher volumes and a $100-a-ton rise in pulp and paper costs. USC opened its corrugated packaging bid to more suppliers and wrote a fairer supply agreement.
Results
$2M
in corrugated packaging savings
22%
reduction in corrugated spend against baseline
The grower also avoided cost from later pulp and paper index increases.
The situation
Rising volumes and a $100-per-ton jump in pulp and paper costs pushed the grower's corrugated spend up.
What the assessment found
- Bids limited to two large incumbent suppliers
- Little bargaining power as a small customer of big suppliers
- Contracts with evergreen clauses that favored the suppliers
How the work was done
Bids: widen the field
Built internal user groups to define supplier requirements and every packaging specification, then ran a broader bid with detailed requests for information and quotation, and supplier visits.
Agreement: rewrite the terms
Drafted a comprehensive supply agreement with clear commercial terms, material escalation and de-escalation clauses, lead times and forecast sharing.
22%
reduction in corrugated spend
Lasting impact
Smaller suppliers competed for the business, and the new agreement left nothing unclear, giving the grower lower costs and a cooperative supply relationship.
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