There are 3 top reasons you need expert insider help when you are negotiating your next soft drink contract. There are plenty more, but these are the most valuable reasons that can affect the cost and length of your contract in many ways.
1. There are no benchmarks readily available
Our clients are often shocked when we tell them how much money we can save them. Usually, the number is larger than the amount of savings they can get with any other procurement-related project. The reason is, there is no benchmarking data available to the public.
If you are buying chicken or beef or just about anything else, you can go to the internet and get a reasonable idea of what the market price for those items is. You can fairly easily benchmark just about anything you buy. Unfortunately, you cannot do that for soft drink pricing. The invoice price paid by everyone for fountain syrup is published, so everyone pays the same invoice price. What separates a good deal from a bad deal is how much you get back in marketing funds and rebates from your soft drink provider, and how many landmines there are in the contract.
You simply cannot get accurate benchmarking data for soft drink deals without consulting an expert.
2. Complicated, landmine-filled contracts
We spot between 12 and 35 “landmines” in every contract we review. A landmine is an onerous term in the contract that is unnecessarily weighted in favor of the soft drink company. These land mines are so bad that often some of them survive the natural expiration of the contract, keeping you beholden to the soft drink company even after your contract has ended. Most land mines are unnecessary, but if you don’t know what to look for, you won’t have reason to question them. Most of these unnecessary complicated terms can be negotiated or partially mitigated with the help of a beverage expert that knows specifically what to look for.
Your lawyer may not spot the landmines because often they are soft drink company specific terms, hidden in places lawyers don’t usually focus on.
3. Soft drink negotiations are predictable, if you know the script
If you don’t know the script, your highly-trained soft drink representative will be able to manipulate the negotiation terms in his or her favor based on 70 years of accumulated knowledge of doing these negotiations. But if you know the script, you can use that fore-knowledge to make sure you are conducting the negotiation from a position of knowledge and strength, giving you the power to negotiate effectively. The best way to know the script is to consult an industry expert who was one of those highly-trained soft drink representatives. Better yet, find an expert who trained the reps that can train you how to win!
BevTrust is the most experienced and proven soft drink consultancy in the industry when it comes to contract negotiation. Our team at BevTrust has long-term experience negotiating contracts since 1984, from both sides of the table.
To connect with our team and learn more about how we can help you negotiate your next beverage contract, send our Chief Negotiation Officer Ben Kitay an email at Ben@bevtrust.com to connect!