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2 Suppliers and a Lot of Juice

A large European retailer was in need of substantial volumes of orange- and apple juice for Q4 of 2015. Only two potential sources were qualified and the initial bids from suppliers were far apart. Also, the buyer needed to factor in different logistics costs and payment methods to the bids.

2 Suppliers is Enough to Create Competition

  • The buyer utilized a Cherry Picking Auction in order to have a clear line-by-line competition
  • A green/yellow/red traffic light system was used to encourage bidding

8.94% Savings with the Incumbent Supplier

  • Significant bidding activity with 114 total bids placed
  • 20 extensions
  • Savings of 8.94% relative to target price
  • Despite having the payment and logistics advantage, it turned out that the potential supplier was still unable to beat the price of the incumbent supplier