Commodity Risk Management
Best-in-class strategies monitor risk and protect member costs
From ingredient changes in a batter mix or sauce, to the resins used in paper goods or food containers, commodities form the backbone of strategic purchasing. Volatility in world markets, a challenging economy, energy legislation and other economic issues have made commodity markets complex. As a result, today’s buyers must not only build strong relationships with suppliers and work within market principles, but strategically execute solutions based on all supply and market factors. Commodity risk management assists buyers in this strategic role and serves as a vital link of information between the concept co-op boards and the buyer's that manage our purchasing activities.
Commodity Risk Management has four specific functions:
- Create and execute strategic planning and positions on key commodity items
- Assess and monitor market risk in margin management for store operators
- Use risk management tools to smooth price volatility
- Centralize key purchasing and commodity information for teams in Fort Lauderdale, Fla., Irvine, Calif., Louisville, Ky. and Plano, Texas
By proactively monitoring raw-material costs from the farm to the store, the commodity risk management team acts as a resource to assist buyers in evaluating market conditions. With the commodities team acting as a central point of contact, purchasing teams may share relevant strategies and information across many product categories.
Commodities Managed by Restaurant Supply Chain Solutions
||Wheat and Grains
RSCS’s commodity risk management team publishes updated commodity information on the secure, concept-co-op websites located at www.rscs.com.
The dairy purchasing team, located in Plano, Texas, produces The Cheese Wire, a publication covering the dairy market. Members may log in with their username and password to view monthly updated to the commodity web pages. Both publications provide relevant information on key commodity areas.
As markets remain volatile, RSCS is focused on using risk management tools to help smooth or eliminate volatility. With the commodity risk management team in place, RSCS can help to ensure favorable pricing for concept co-op members.