Renegotiate a major Soft Drinks Contract for a Large Middle Eastern Restaurant Ch

Client overview: Middle Eastern client with a large quick service restaurant chain that sells carbonated drinks.

Background: The chain was approaching the end of their contract agreement with their current soft drinks supplier and the company had grown sufficiently since the agreement started that a whole new deal needed to be struck

Objective: To ensure that the chain was still able to provide quality, recognised, carbonated beverages to its customers but also securing a more attractive deal to the purchasing company, resulting in improved profit margins.  

Work Done: The existing supplier was advised that as the contract agreement was coming to an end and demand had increased, the contract would not be automatically renewed with the current terms, allowing them an opportunity to prepare a new offer to retain their client.

We utilised the previous contract agreement, as well as our consultant’s expert knowledge, to draw up a list of demands; signing on bonus, new outlet support, branding, equipment maintenance and a number of other criteria.

We extended an opportunity to tender to our current supplier and their closest competitors, who made up the two leading brands in the soft drinks market.

Once proposals were in we could then begin to compare prices, rebates, value adds, financial, marketing and equipment support as well as the quality and assured supply of the product.

Negotiations commenced once both offers were returned and scrutinised, with each supplier initially offering different value adds in order to improve upon their offer. Once second and third tenders were placed, the decision to switch to a new supplier was made.

Result: During contract negotiations, the new supplier reneged on many offers and placed conditions and caveats to many of the incentives that had won them the contract so we could then return to the existing supplier to give them further opportunity to consider some of the previous points. The existing supplier then won the business, still saving the client some $XXUSD