Barter of America Works With ... Restaurateurs/The Food & Beverage Industry
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The Restaurateurs/The Food & Beverage Industry trades in some of the most perishable inventories in any industry In today’s marketplace, You can never make up the revenue of a lost dinner reservation. However, you can use barter to expand your cash budget by using available inventory as currency in exchange for media services or merchandise that you would buy for cash if you have the budget. What’s more, other Barter of America clients can utilize those services as part of their transactions. up to four out of five new product introductions in the food and beverage industry do not succeed as planned. This can lead to a quandary for industry marketers and financial professionals. Many times, companies opt for one of two solutions — slow down the flow of new product.
introductions or dispose of the excess inventory at significant losses. Barter affords the opportunity NOT to discount your inventory, or lose a sale, while increasing revenue. The transaction allows your company to achieve higher occupancy and average rates with the prospect of repeat business. Barter also results in increased profit from cash flow savings, incremental revenue and reduced marketing expenses. However, by trading inventory in exchange for trade credits, which are used to acquire the media, goods, and services they would normally acquire for cash, restaurateurs/manufacturers can realize profits where significant losses seemed likely.
Corporate trading provides solutions to some of the food and beverage industry’s most difficult problems. Food and beverage restaurateurs/manufacturers need to test a variety of new products in a marketplace that has the desire to embrace only a small percentage of them. In response, company executives can count on a corporate trading transaction to cover the wholesale value of their products or services. This allows them to become more creative in their marketing of those products.
At some point, most major food and beverage companies have found new labeling requirements have made some of their inventory unmarketable in the U.S. Corporate trading can also be a problem solver when overly optimistic forecasting creates a warehouse full of stock. Products geared to warm or cold seasons can be remarketed in those parts of the world where the weather is the opposite of that in North America. Excess inventory can also be effectively distributed in those markets, virtually anywhere in the world, where the manufacturer has no channels of distribution in place.
One of the more interesting aspects of one of the world’s largest and most prestigious food manufacturer’s business model is also one of the more potentially troublesome aspects. The manufacturer is a member of a grower’s co-op, owned by the growers. This means that in addition to owning the rights to the entire harvest in any given year, they are also bound by agreement to purchase all of the same harvest. Usually, there is sufficient capacity to handle the harvest volume, but occasionally, the supply exceeds the demand, and the client often owns more fruit than it needs.
We Provide Solutions
Since bananas are particularly perishable, time is of the essence in such a transaction. Barter of America agreed to purchase 4 million pounds of the bananas for its full selling price in exchange for trade credits.
By contacting Barter of America, the timeliness of the transaction was preserved. The manufacturer is relieved of the necessity to dispose of the product inventory themselves while, at the same time, avoids the cost of liquidation. The barter credits received in the transaction were used to purchase pre-planned media/advertising to promote orange juice.
Restaurateur/Food & Beverage Trading Strategies
Barter of America works with clients in the food and beverage industry in a variety of ways. In addition to moving products that have not fulfilled sales targets, Barter of America’s clients have traded real estate, Land, manufacturing machinery, and other no longer needed or under performing assets.
Corporate trading has provided effective solutions for food manufacturers. It has remedied inventory situations in raw materials in which the manufacturer was able to write them off with no charge while, at the same time, acquiring advertising, printing materials, legal advise, employee incentives…and more with the trade credits they’ve received as part of the transaction.
One food-manufacturing client has an advertising budget of $2 million. In some years, this ongoing Barter of America client has had as much as $8 million of that buy acquired through corporate trading.
BoA Serving Restaurateur/Food & Beverage Industry.
- Use available inventory as currency
- Support the sales effort with a targeted media campaign
- Bring new business that does not conflict with your cash customer base
- Impact low season and gap periods with tactical advertising campaigns and barter customers
- Increase rate and awareness with a consumer campaign to drive business
- Finance capital improvement and other FFE costs
- Handle an unexpected dip in occupancy