One irony that historians note is that turkey was most likely not eaten on the first Thanksgiving. But tradition is what it is, and turkey is on the menu today. With that being said, there is a lot of turkey to be had this year.
Let’s start with some numbers: According to the NTF (for the non-turkey experts, this is the National Turkey Federation), 228 million turkeys will be raised in the U.S. in 2015. As everyone probably knows, the #1 state in this domain is Minnesota with 40 million, closely followed by North Carolina with 29 million. And out of all those turkeys, we Americans will eat up to 46 million of the dear birds. With an average of 15 lbs per animal, this is about 2.15 lbs per American!!
Now, let’s Imagine you are the meat and poultry buyer at your local retail grocery chain. You would have a very big responsibility because your job is to make sure that:
- There’re enough turkeys for all your customers on Thanksgiving.
- You offer your customers the best price and quality.
- You have the best margin for your company.
But sourcing and negotiating turkeys is far from being easy.
- First, you’ll have to look at your net demand (sales forecast versus current global inventory and incoming orders).
- As you source, you’ll want to study the green curve on the chart below. This is the forecasted price of a pound of turkey. Yes, that’s right. The turkey market is a very speculative market that you must consider when negotiating for the frozen animals earlier in the year.
- Of course, you need to calculate the cost of storage and transportation (in your own warehouse and/or external freezer locations).
- Another detail: you need to calculate your cash flow and cost of cash immobilized.
- To find the best deal, it just might take longer than the actual cooking time of a turkey, unless you have SaaS on your side. Then it’s a piece a cake (or pumpkin pie).
With the right tools and automated workflow, making tough decisions are easy when you have insights that inform. Let’s face it, Thanksgiving leftovers are great the following week, but you don’t want too much ending up on the sale’s rack.
Cheers and have a happy and safe Thanksgiving!!!