Foodstuffs North Island has introduced a package of practical measures to support small and medium-sized New Zealand suppliers as cost pressures continue to build.
The changes aim to make it easier to do business with the co-operative, including faster payments for smaller suppliers, quicker decisions on fuel-related cost requests, and more support to help suppliers grow through workshops and programmes such as New World Emerge.
Chief Executive Chris Quin said the focus was on supporting suppliers through a challenging period while managing impacts on customers, as suppliers are a critical part of keeping food on shelves across New Zealand.
Many are local businesses dealing with rising costs, particularly for fuel, packaging and production. These steps are about easing some of that pressure and making it simpler to work with us.
Faster payments for smaller suppliers
Foodstuffs North Island will pay its smaller suppliers ten days earlier, moving payments to the 20th of the month. In many cases, this will enable suppliers to pay their own suppliers earlier, helping ease cashflow pressure.
Quin said that for smaller suppliers, cash flow is critical, and paying them sooner gives them more room to operate and invest in their businesses.
Faster response to fuel pressures
Rising fuel prices have continued to push costs through the food system, from farms and factories through to trucks, warehouses and supermarkets.
Foodstuffs said it has been working closely with suppliers to respond in a way that keeps groceries as affordable as possible, supports suppliers facing fuel-driven cost increases, and avoids locking in short-term inflation.
Where a supplier requests a fuel-driven cost increase, these will be prioritised, with reviews expected in around four to six weeks, instead of up to 12.
“We’re working through each request with suppliers based on their individual situation,” said Quin.
“At the same time, we need to be careful not to lock in temporary inflation. Where changes are agreed, they’re intended to be temporary, with the expectation that suppliers will remove the adjustments once fuel prices ease by an agreed amount.”
Quin added that Foodstuffs is also managing the same pressures.
“We use a lot of diesel to keep food moving, and those costs are adding up quickly. Our job is to balance keeping prices as low as possible for customers while supporting suppliers so they can keep producing.”
Supplier workshops to build capability
New workshops will help small- and medium-sized suppliers understand how to work with the co-op, build long-term partnerships, and take advantage of opportunities to grow their businesses.
Quin said it’s the largest group of suppliers by number, and that many are New Zealand businesses, so backing them is important. These suppliers are a big part of what keeps the shelves local and full of innovative products that our customers love.
“Working with the co-ops can be complex for newcomers or small suppliers, but the opportunities are enormous. This is about leaning into that and giving suppliers the best shot at success.”
The sessions will cover the basics, from pricing and promotions to supply chain and store execution, and were shaped by feedback from suppliers.
“If we can make it easier for suppliers to grow, that’s good for them, good for our locally owned stores, and good for our customers,” he said.
Foodstuffs will also continue to support emerging suppliers through New World Emerge. Now in its fifth year, the program supports winners who are backed by industry leaders and Foodstuffs mentors, and who get to have their product range in New World stores across the country.
Explore the local suppliers featured in the latest issue of Supermarket News here
