Evaluating Food Commodity Procurement Strategies

We use a case study approach to determine the primary factors affecting food manufacturers' commodity procurement decisions, as well as to examine the strategic nature of commodity procurement departments. The research fills a gap in both the commodity and procurement literature. A large literature exists on commodity marketing; however, very little exists on the topic of commodity procurement. Existing procurement literature tends to focus on non-commodity products rather than commodity products. The results suggest a model for the strategic role of commodity procurement departments within food manufacturers. The initial procurement strategy must be supply maintenance, which once accomplished, allows the commodity procurement department to progress to a profit-focused strategy, which is generally cost-based. Finally, the role of the commodity procurement department can expand by offering additional services to customers, such as designing promotional programs.

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Working or Discussion Paper
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Dept. of Agricultural Economics Staff Paper Series #2004-26

 Record created 2017-04-01, last modified 2018-01-22

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