How To Lose When You Negotiate Soft Drink Contracts
Here is a partial recipe for losing. There are many more ways to lose, but we see this particular cocktail most often.
1) Don’t engage competition. Nothing good happens in the soft drink contracting process unless it includes a competitive review. You WILL end up with a contract that puts you at a competitive disadvantage unless your process includes fostering competition.
2) Don’t challenge the “standard terms and conditions” presented by your soft drink supplier. There is nothing standard about the standard terms and conditions in the soft drink contract. Read the fine print. Challenge what does not make sense. Otherwise, you will be saddled by terms that limit your flexibility for a very long time.
3) Allow the marketing discussion to rule the negotiations. Soft money wins if marketing executions are the focus. Focus on cash instead. Avoid the soft money trap.
4) Allow unlimited price increases. Don’t let your supplier increase prices at will. Do you let other suppliers do that?
5) Agree to language that forces you to buy packaged products without negotiating a packaged product deal. Maintain your freedom to buy what you want, or negotiate the terms in the contract. But don’t let them get away with dictating the terms as a result of not having negotiated a program in advance.
If you want to win, get expert help.