How to Achieve Sustainability Objectives as a Franchise Business
Jun 19, 2018
By: Barbara Mayrand, Vice President of Supply Chain
One of the biggest factors in keeping your franchise thriving is your supply chain. The supply chain delivers what you need in order for you to deliver what consumers want. If guests do not get what they want, they will go somewhere else for it. However, today’s consumers are not content to just receive their product on time or without it running out. They want to know where products come from and whether they are ethically sourced. Ultimately, every product must meet the guests’ specific purpose.
To achieve sustainability through your supply chain, you must pick suppliers your customers would approve of. This requires finding reputable sources for your products and making sure they meet your standards, as well as those of your customers.
Having an extensive network of connections in a variety of industries is important for finding your suppliers. For me, the two biggest referral sources come from my network and trade shows.
For example, I might reach out to a supplier who is in good standing and who also buys a lot of ingredients. I’ll ask them if they know of a reliable supplier who can serve my purpose.
Attending trade shows is an effective way to expand your network and find suppliers, too. But, you must walk through the major trade shows and talk to people about a wide range of subjects to establish contacts that you can turn into relationships. Once you’ve done that, you can ask them for referrals.
Ten percent of the suppliers I use come from trade shows and the vast majority come through relationship building, or networking. Only about 2 percent of suppliers I’ve found were through Internet searches.
The selection process does not end there, though. They still have to go through a stringent vetting process.
It’s during the vetting process you will be able to determine if potential suppliers can fulfill your purpose. While our products are made with ethically sourced ingredients, we still have to make sure our suppliers are healthy, too.
We vet every potential supplier that wants to work with Smoothie King. They are scrutinized on three different points:
- Quality of product – Our research and development department reviews ingredients, nutritional values and more.
- Financial strength – The supplier has to be financially fit. We should not have to worry whether they will be out of business six months down the road when I’ve contracted volume with them.
- Plant visits – Everything that comes from a supplier’s fields and manufacturing plant must meet our standards, as well as federal regulations. This is important for Smoothie King because we use a lot of fruits, vegetables and juices, which will soon all be non-GMO by the end of the year. We visit plants and fields to watch processing procedures and meet with the supplier’s quality control staff. We also review pesticide reports on all agricultural products.
Establishing Ethical and Dual Sourcing
Smoothie King conducts other assessments, too, including the supplier’s country of origin. If the supplier is located in a country with labor issues, Smoothie King asks them to provide a social responsibility audit and an audit by a third party that looks at labor practices. We want to see fair labor practices by all our suppliers.
We tend to avoid countries where we can’t inspect fields or plants or where auditing is difficult. When it comes to ethical sourcing, it is important to visit where the product is actually being harvested and assessing the conditions.
In order to keep the flow of goods for your franchise company constant, it’s important to have dual sources for the products you use. If, for whatever reason, your primary supplier can’t deliver, you should be able to turn to a secondary, or backup, supplier to get the products to your franchisees without missing a beat.
For example, Smoothie King is one of the largest buyers of sliced strawberries in the United States. Therefore, we have to maintain an uninterrupted flow of strawberries. But the challenge is dealing with growing seasons in different regions. In order to ensure I maintain my supply chain, I contract with four or more fruit packers in different growing regions in North and South America. If there’s ever an issue in any of them, I will always have availability from somewhere.
However, since we want to impact the environment as little as possible, we strive to bring in the majority of our strawberries from California. When you think about sustainability, you have to keep in mind the shorter the distance products have to travel to get to our stores, the less impact there is on the environment.
Achieving Our Objectives and Our Guests’ Purpose
Since our guests want cleaner ingredients – not just nutritionally, but clean of conflict, too – these steps are crucial for developing a sustainable supply chain while continuing our Cleaner Blending initiative. By adding cleaner, more sensible ingredients to their menu, franchisees are meeting the evolving demand for better-for-you foods with fewer additives. Cleaner Blending is all about making smarter, more transparent choices about every ingredient added or eliminated at Smoothie King.
The ingredients have to meet the purpose of the consumer – the very end of the supply chain, but the party that drives the demand that drives sustainability.
People are more mindful than ever about what they’re putting in their bodies. Millennials, the largest consumer group alive right now, are looking at their aging parents and grandparents, who grew up on a lot of processed food, and deciding they want to be healthier than them. That involves cutting out processed foods and eating better. At the same time, millennials and the younger generation, Generation Z (ages 15-20), are concerned about transparency and environmental impact, too.
As long as we – and any franchise business – keep these consumer ideals in mind when developing their supply chain, they will survive.