Frank O'Kelly Written by Frank O'Kelly

Exploring the importance of partners in food and beverages

Today’s food and beverage manufacturers are under increased pressure to establish partnerships with their suppliers. With a focus on the sugar industry, we explain why this is, what partners do differently from suppliers, and how this benefits food and beverage manufacturers.

Ragus directors in a meeting with food and beverage partners while sitting around a table
Ragus as a partner: discussing a mutually-beneficial strategy. 

Uncertain market creates demand for partners

The demand to find partners in the food and beverage industry is being driven by market pressures, with both the sugar market and wider food and beverage market currently experiencing uncertainty. In laymen’s terms, this increases the likelihood of disruption, pressure, stress and financial risk building.

In the sugar industry specifically, sugar prices have increased by 4c/lb since last October and supply into the market is tight. As such, food and beverage manufacturers that rely on sugar for their end products need partners, not just suppliers, who have broad sugar market experience and can guide them through the uncertainty while working towards long-term business objectives.

Indeed, as detailed in recent blogs, sugar prices have been significantly impacted by both transport challenges and packaging inflation. And these market forces have not only been felt in the sugar industry but also the wider food and beverage industry. The consequence of which is further market instability.

However, this is where the wider food and beverage market outlook becomes somewhat paradoxical. The easing of lockdown conditions last month created lots of high-order opportunities in food services for food and beverage manufacturers to benefit from, mainly because there is now much greater demand.

But while the easing of lockdown has brought with it these additional opportunities, not everyone can be a winner. So, to increase the likelihood of capitalising on these opportunities, food and beverage manufacturers are advised to engage with trusted partners that are reliable and have a proven track record.

Ragus Quality Manager shaking hands with partner in the food and beverage industry

Partners are trusted, reliable and highly sought-after in the current market. 

So, what does a partner do differently from a supplier?

Well, quite a lot extra actually. Let’s look at the definitions below.

A supplier is a business that provides products or services to another business in standardised transaction patterns for an agreed period, as per the terms and conditions of a contract.

A partner, on the other hand, is a supplier that works with its contracting business to achieve a shared objective. In most cases this objective is growth, which has a symbiotic impact on both parties. Typical features of a partner therefore include:

• Strong relationship with contracting business, developed by frequent and transparent lines of communication
• Deep levels of expertise in the relevant domain
• High levels of trust with the contracting business
• Transparent, open and independent relationship with the contracting business, often offering guidance, advice and consultancy services

Effectively, a partner is a level above a supplier. Partners are typically more strategic in their approach than suppliers and, as such, they aim to work with their customers in the short and long term so that they can both experience benefits from mutual growth.

It is however important to note that partners are not the silver bullet for all supply challenges. The world isn’t perfect, and neither are partners – so sometimes they will get it wrong. But mistakes often highlight the true value of a partner, who should be open and transparent in response and work with their customer to find the appropriate solution.

The benefits of partners – in sugar terms

Partners are less common than suppliers because they deliver more value and enable the contracting business to gain competitive advantage in various ways. Below we detail three key benefits of Ragus’ partnership approach.

Experience faster turnarounds
When working with a partner, food and beverage producers know they receive priority treatment and therefore expect the highest levels of service in every interaction they have.

Ragus customer services team work in partnership with customers

Pictured above: the Ragus customer services team.

To meet these expectations, our customer services team at Ragus is agile and flexible, and this enables us to work to customer-specific schedules and provide timely solutions to delivery turnaround challenges. Especially in the current market when there may be unforeseen disruptions to production schedules, this flexibility and ability to provide faster delivery and communications turnarounds is a major competitive advantage.

For example, we were recently involved in a quite urgent conversation with an ice cream manufacturer about switching their cane sugar supply from Asia to South America due to current shipping challenges in Asia. To avoid elevated prices, we quickly handled the transfer and turned the agreement around before the manufacturer could experience any disruption.

Develop superior end products
A key difference between suppliers and partners in food and beverages is that the former presents a shopping list of standardised products, whereas the latter offers standardised products that can be expertly modified and formulated to customer specifications.

Through consulting customers on the right formulation for their unique application and production process, partners can enhance product development.

Gain more peace of mind
For many decision-makers and industry stakeholders, peace of mind is the all-important partner benefit. Due to their trust in the partner’s capabilities, they can avoid the worries or stress that they might otherwise experience. This may not appear to deliver competitive advantage at first glance but consider the fact that removing stress frees decision-makers up to spend more time on their own added value tasks.

Let’s look at this with a sugar lens – one of the key industry stresses is whether the supply chains are ethical from source to end product. At Ragus our customers don’t have to worry about that stress because our sugar supply chains are fully accredited, and we go a step further by regularly visiting beet and cane growers in person to audit their processes and working conditions, presenting customers with an added layer of protection.

Ragus is a bulk pure sugar ingredients manufacturer and trusted partner to commercial food and beverage manufacturers in the UK and abroad. To find out more about our high-quality product portfolio and added value services, or to benefit from our pure sugar expertise, contact a member of our customer services team on +44 (0)1753 215424 or enquiries@ragus.co.uk. For more sugar news and Ragus updates, follow Ragus on LinkedIn.