Child Nutrition Program – South Texas Coop 

REGION ONE ESC

Business Review

February 11, 2014

Agenda• Labatt History• Value Added Services

Business Review Available upon RequestData Reports Available to MembersAnnual , Semiannual or Quarterly ReportsIntegrationsCost Analysis

• What is Cost-of-Goods• New Item Requests • Cost Containment Analysis• How Is Fill Rate Calculated• Pros and Cons of Rollover Vs New Bid

From The Beginning

Labatt Food Service Sales Growth

• One Inventory Management System

• One Computer

• One Set of Buyers

• One Accounting Office

• Inventory Transfers

One Company: Multiple Distribution Centers

Distribution Map

Labatt Distribution Centers

Constructed 1971 380,000 ft²

ASI & Silliker Certificates

SCHOOLS31%

NATIONAL ACCOUNTS

23%

QUICK SERVICE17%

MEAT MARKETS10%

INDEP OPERATOR9%

MILITARY7%

HEALTH CARE2%

LABATT ONLINE1%

85% Prime Vendor Customers

Percentage of Sales by Category

Value Added Services

• Order Accelerator

• Nutritional/CN Label Retrieval

• Corporate Reports

• Material Safety Data Sheets

• Labatt Invoice Inquiry

• Accounts Receivable Statements

• Change Password

• Logoff

Customer Web Applications

Order Accelerator

Order Accelerator

Pack/SizeDescription

Last Purchase Price

This Week’s Price

Item #Order Qty

Order History Order Summary

Critical ItemsWednesday September 5, 2012

System Backup

Web Corporate ReportsWeb Corporate Reports

Web Corporate Reports CONFIDENTIAL

Sortable Columns Can Transfer Web Reports into Excel

Drill down into a table of Items with Usage for

a Particular Vendor

Sales Usage Report CONFIDENTIAL

CONFIDENTIALDistributor Usage Reports

Location 1Location 2Location 3Location 4Location 5Location 6Location 7Location 8Location 9Location 10

Distributor Usage Report

Location 1Location 2Location 3Location 4Location 5Location 6Location 7

Location 8Location 9Location 10Location 11Location 12

CONFIDENTIAL

CONFIDENTIALDistributor Usage Reports

Location 4

Integrations

Labatt Retrieves Order for processing

Labatt Connection-Streamline business (Current View)

Point of Sales Systems

EDI System Interfaces

Inventory Systems

• Chef Tech• Systems Design• Horizon• Foodtrack• Posi Touch• B2B• Prizm• SureQuest• Radiant• Visual Boss• Agilysys

• SIMS• ECS• AFMI• SPVI

• Radiant• FoodTrak• SPOT• Bistro• SureQuest

Accounting Interfaces

• QuickBooks• MAS200• Solomon• Great Plains• MiChoice• Pentamation• Lawson• Peachtree• PeopleSoft• Radiant

*not all systems listed; customization available

Computer Systems: Interface Availability

OutsAccounting & Web Tools

Online Invoicing

Online Invoicing

Online Invoicing-Table Detail

Web Accounts Receivable Statements

Online Invoicing-Scanned Copy

OutsOperational Fill Rate 

Voice Technology

Operational Efficiency

Warehouse Technology Video

• Mini-Load/Warehouse Automation• Stretch warehouse capacity• Reduce errors• More room for additional SKU’s that have higher velocity

Warehouse

OBC

1. Increased Efficiency in Routing

2. Driver Job Satisfaction

3. Safety

4. Temperature Integrity

5. Reduced Operational Errors (Shorts)

OutsScope Of School Business

Scope of Labatt School Business

School Districts Serviced by Labatt

Labatt Distribution Center

Region 1 Delivery Sites 306

Single Source Coops serviced by Labatt

School Districts: 730 districts

Campus Locations: 3,350 locations

Avg Weekly Deliveries: 4,000 deliveries

Total Students: 2,570,000

Annual Purchases: $390,000,000

Region 1 ESC West Texas Coop

Region 3 ESC Tejas Coop (Sodexo)

Region 7 ESC NM School Nutrition Coop

Texas 20 Coop Multi-Region Coop

Scope of Labatt’s School Business

Customer Cost Of Goods

Manufacturer %,80%

Distributor %, 12%Freight %,

8%

Vendor %

Distributor %

Freight %

OutsCNP-STC Report

Region 1 Historical Growth With Labatt

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Sales $

*2014 sales are projected

Region 1 Historical Growth With Labatt

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Cases

*2014 cases are projected

Purchases

Year Purchase $ Cases11-12 $70,619,892 2,638,857

12-13 $76,521,525 2,754,967

13-14* $81,661,086 2,840,126

*2014 cases are projected

Year CasesOrdered

Cases Shipped

Fill Rate

11-12 2,666,382 2,628,523 98.6%12-13 2,809,506 2,746,976 97.8%13-14 1,818,117 1,788,127 98.4%

Fill Rate

How Is Fill Rate Calculated

Calculating Fill Rate

• Cases Ordered Minus Cases Shipped Divided By Cases Ordered

• Product shortage is removed from an order if there is a manufacturer shortage, ie; OB Mac

• Product Is Removed From an Order due to short lead time

• Delays due to weather conditions

Operational Service Level

Year UnitsSold

Shorts Damages Mispulls OPSL

11-12 2,638,857 587 1,033 578 99.92%

12-13 2,754,967 532 1,400 270 99.92%

13-14 1,050,847 242 935 56 99.88%

*Company average is 5 errors per 10,000 cases

Scope of Commodity Business

Cases Sold 1.4 Million

Discount Given $17.4 Million

Districts Participate 571

Commodity Vendors 46

Commodity Items 905

*2012-2013 School Year

NOI Commodity Purchases

Year Purchase $ Cases DiscountReceived

11-12 $12,762,026 266,300 $3,316,213

12-13 $14,042,897 288,098 $3,740,017

13-14 $15,588,905 308,473 $4,128,159

Pros and Cons of a RollPros and Cons of a Rollover

Pros of a Rollover

• Leverage – Most manufacturers will not take the full market

increase – They want to reward the customer for extending the

contract• Guaranteed that a rollover is going produce an increase

less than that of a new bid• Anticipate similar increase

– Market research– Preliminary discussions from manufacturers

Cons of a New Bid

• Manufacturers reset– Make up for changes in the market that were

absorbed during the rollover year• Cost Increase

– Distributor reevaluation of overhead/operating expense

– New bid year will never be between 1-2%, like it can on a rollover

Price Increase Percentages

School Year

Type Price Change %

13-14 Rollover 1.06%12-13 Rollover 3.60%11-12 New 3.10%10-11 Rollover 0.05%09-10 Rollover 2.07%08-09 New 6.36%

Cost ContainmentCost Containment

Cost ContainmentSY 2013 vs. 2014

2014 TOTAL: $45,497,580 2013 TOTAL: $45,014,169 DIFFERENCE: $483,411 % DIFFERENCE: 1.06% 

Cost Containment Detail – Chain 969

2014 TOTAL: $1,605,9962013 TOTAL: $1,597,629 DIFFERENCE: $8,367% DIFFERENCE: 0.52% 

Cost Containment – Chain # 969

Pros and Cons of a RollThank You.