FOOD procurement 80/20

For the individual food producer, going through a procurement process is a major investment. Requirements and outcomes are major uncertainties in relation to potential profit. The purpose of the FOOD Procurement 80/20 project was to solve that challenge.

The goals of the project were to further develop and spread the 80/20 procurement model and create collaborations between local small food producers and smaller wholesalers. The model is based on 80 % of the food being supplied by larger companies that take on responsibility as full-service suppliers. The remaining 20 % of the food is supplied by smaller and locally producing suppliers who do not have to take on responsibility for volume but deliver until their products are sold out and then the larger suppliers secure the volume. When the procurement model is implemented, it will solve the challenge that municipalities have in gaining access to locally produced raw materials to the greatest extent possible. In this way, they can both satisfy consumer demands and stimulate local food companies.

The project was implemented by Krinova Incubator and Science Park in collaboration with the municipalities in northeastern Skåne, local wholesalers, food producers and LRF. A project manager coordinated the process, which consisted of planning with partners, inventory of potential product groups, identification of obstacles/challenges in existing procurement, investigation of what is required for companies to submit tenders, and a pilot test with follow-up and support.

The project has provided experience and understanding of how the food chain needs to work together so that local food processing companies and raw material producers can participate in a food procurement. There are no shortcuts, but commitment is required at all levels in the municipalities and in the other parts of the food chain. Politicians, purchasers, food and unit managers in the municipalities need to have a common view all the way from political decisions down to an order line linked to the menu program at an individual cooking unit.

The 80/20 food procurement model will be a tool at Krinova and the other innovation arenas in Sweden where local food processing companies and raw material producers are invited. These innovation arenas will be able to offer a ”community”/network with a development process for meal solutions and services linked to public food.

The project has seen the need for solutions for the food processing and raw material producing companies (20 % companies) in terms of administration, computer literacy requirements (electronic ordering), packaging size, call-offs and logistics.

The project points to the need for an adaptation and development process for products from 20% companies, meeting the wishes of municipalities and regions.

The project sees the project results as a good foundation for the future development of meal solutions and services linked to public food.

Krinova and the other innovation arenas in Sweden will offer a "Community"/network function for the 20 % companies in the work with the Food Procurement Model 80/20. This work is based on finding different product concepts and solutions per product category through collaboration between the municipality/region, producers, processing, packaging, logistics and administration functions, etc. The innovation arenas can also, together with the 20 % companies, develop meal solutions and services linked to public food.

The project has also identified that not only traditional wholesalers can solve wholesale work tasks. First, we have locally and regionally anchored wholesalers who know the local market and have logistics that match those of the 20 % companies. The project has also identified another type of company that we call ”companies with a wholesale-like function”. These companies can be ”agents” with logistics and arrange a good administrative solution in food procurement where the 20 % companies themselves can handle call-offs and invoicing. This can apply, for example, to food companies that already deliver within food procurement also driving the 20 % companies’ products on their trucks. These companies can also to some extent handle the administration that it means to be a supplier in a food procurement.

The project has conducted a review of food procurement in 2017 at municipalities in Skåne Nordost and the product groups included. The project has also looked at nodes with from 20 % companies that individually or together could deliver products to these product groups. In parallel, the project has looked at nodes with from 20 % companies that individually or together could deliver products. We see enormous potential for many companies, most of which have not previously participated in any food procurement.

The project has a positive intention to create increased competitiveness for local producers through collaboration, cooperation and a developed model. The project contributes to sustainable development ecologically, economically and socially by giving local food production a stronger position in public procurement. The result can lead to new products and new processing of products, which can mean increased employment and strengthen local food production. With Krinova's large network of small-scale food producers and the fact that LRF is involved in the project, the project is seen to be anchored with the actors. The project can also contribute to the transition towards a reduction in environmental risks and resource and energy use, as the result will benefit local production.