Further evidence of the way the slumping economy is shaping business policy was demonstrated recently when two of the world’s largest companies reached an agreement in the US to jointly purchase goods, such as office supplies, and services.
US giants PepsiCo and Anheuser-Busch InBev said that their new deal will allow them to purchase goods and services more efficiently at competitive prices, enabling them to better manage costs and reinvesting them back into growth.
A team of procurement experts from Anheuser-Busch InBev and PepsiCo that will now concentrate on common spending areas and negotiating joint purchases.
These sorts of agreements are not new. However, joint purchasing agreements involving large companies on the scale of Anheuser-Busch InBev and PepsiCo are rare. Could this deal between PepsiCo and Anheuser-Busch InBev mark a step change in the way large companies source their office supplies? If two big companies that are not necessarily competing and are looking for the similar types of goods, it makes a fantastic way to leverage their buying power.
It certainly tips the power towards them in terms of getting the terms they would like from supplies contracts. Office supplies companies that serve these two firms will be under even greater pressure now and will have to ensure they are at the top of their game when dealing with this mega-customer.
Only the best deal, best distribution and precise pricing will do. After all a team of procurement experts will be going over the details with a fine tooth comb. Some suppliers may find themselves losing out.
Rufus Jay, News Editor
Wulff exits two companies
Leading Nordic office supplies group Wulff has offloaded its stakes in two companies as it looks to focus on its core business model.
The company has sold its 70 percent stakes in Everyman and Officeman to minority shareholders for h280,000 ($411,000) in cash.
The two companies sell office supplies and certain consumer products to retailers and also use the direct sales concept. They comprised 4 percent of Wulff’s net sales and balance sheet total and posted sales of h1.4 million in the first six months of 2009, although they made a loss of h100,000. Wulff said the offload follows its Direct Sales Division’s strategy of focusing on product sales, with the division sourcing nearly all of its products directly from manufacturers and selling them to end-users.
"Our goal is to provide customers with solutions that are specific to this sector," said Heikki Vienola, CEO of Wulff-Group. "This calls for good management, as well as a focus on core business and its development. The operations of Everyman and Officeman no longer supported our core operations and the divestment complies with our strategy."
Computer cleaning boost for Durable
Durable says that its recent Computer Cleaning Week helped customers achieve sales increases of its cleaning products by up to 90 percent.
With the UK gripped by swine flu fears and the number of cases of the virus expected to increase, the timing of Computer Cleaning Week could hardly have been better for Durable.
The company said that the trade once again fully embraced the campaign, running blitz days, national and bespoke promotions, e-shots and point of sale and web programmes.
"We would like to thank all of our customers for their continued support in making Computer Cleaning Week such an important and memorable campaign with consumers," said Durable’s VP of Marketing Stewart Anderson.
"We are delighted with the results especially given that it has been such a tough year for the industry."
P1 and Bid Perfect team up
Heanor and Bierley, UK
P1 and Bid Perfect have unveiled a new partnership between their operations under which P1 will market and sell Bid Perfect’s training and consultancy programme to the office supplies and technology sectors.
The industry training and performance management company has obtained exclusive rights to market and sell Bid Perfect’s services. Commercial bid specialist Marcus Eden-Ellis founded the company to help organisations to achieve success in winning contracts through the formal bid process.
"I love the Bid Perfect offering. It cannot fail but to improve a company’s bids and tender success," said P1’s Managing Director, Gary Naphtali. "These guys really know their stuff and anyone wanting to give themselves the best possible chance of winning more bids and tenders should talk to us or Marcus at Bid Perfect about our new programme."
"We have developed a successful bids and tenders training and support programme that is highly effective across all industries," said Marcus Eden-Ellis, Founder and Managing Director of Bid Perfect.
Depot retreats from consumer electronics
Boca Raton (FL), USA
Office Depot’s Executive VP and CFO, Michael Newman, has said that the company is reducing its commitment to consumer electronics in a bid to bolster margins and profitability.
Depot’s consumer electronics offering represents around 25 percent of its sales mix and is mostly notebook computers, which are traditionally low-margin. Pulling back from that business has already cost Depot sales, Newman commented. However, he added that the Boca Raton-based company was willing to let these sales go in order to benefit its bottom line.
Newman told the Goldman Sachs retail conference that the company had mixed away from consumer electronics to better its profitability and margin.
"We want to remain relevant in consumer electronics, but don’t want to overly rely on it," said Newman.
But the result of this move has been that Depot’s sales have dropped behind those of channel rivals Staples and OfficeMax, according to Newman. Depot’s decision to not be "overly promotional" in consumer electronics contributed to the category’s underperformance during the Back-To-School season.
Under the umbrella of driving its margins, Depot will now concentrate on services, including its Tech Depot IT support programme. Depot has also increased its assortment of private label and direct import products, and is testing a new smaller store format. Newman said the smaller format could help the company reduce the $500 million dollars it spends annually in rent.
Businesses must step up ID fraud battle
One third of UK SMBs have been hit by fraud and this has caused a crisis in confidence among British consumers about the organisations that handle their personal data.
According to two sets of new independent research commissioned by Fellowes and the National Fraud Authority exclusively for National Identity Fraud Prevention Week (NIDFPW), only 3 percent of UK consumers feel completely confident about the responsibility of organisations that handle personal data. The research for NIDFPW also uncovered a series of worrying trends related to the understanding of the risks identity fraudsters pose to businesses and the non-existence of relevant and resourceful information for businesses in this area.
Only 64 percent of businesses have put in place a clear policy on how to handle sensitive documents. This would go some way to explaining why nearly 32 percent of employees are willing to throw sensitive documents in the bin.
The 97 percent of employees would be justified in thinking that their company does not completely protect customers’ identities. A large majority, 71 percent, of UK employees believe their companies should do more to ensure confidential documents are handled responsibly.
Despite the evidence of a lack of procedure in terms of disposing of sensitive documents, 62 percent of businesses fear consequential financial loss from the impact of fraud and 43 percent worry about the effect identity fraud could have on their reputation.
Office Depot expands Officeworks alliance
Perth (WA), Australia
Office Depot has expanded its strategic alliance with Australian player Officeworks.
As a result of this agreement, Officeworks will carry on providing products and services to Office Depot’s global corporate customers in the country. Officeworks Managing Director, Mark Ward, said the joint decision to continue the alliance was a credit to Officeworks’ growing business in Australia.
"Officeworks and Office Depot are very similar," he said. "Through this collaborative arrangement we will be able to deliver mutually beneficial outcomes to new and existing Officeworks and Office Depot customers across the world."
Teddy Chung, SVP and MD of Office Depot Asia, said the collaboration has allowed Depot to expand its offering to comprise a number of specialised and localised solutions within Australia.
"Australia is a very important market for us and we are very pleased to have the continued support of Officeworks in this region," Chung said.
This cooperation stretches back to 2002 when Officeworks acquired Depot’s Australian Viking business.
Tech Data forges new collaborations
Tech Data has announced distribution agreements with Absolute Software, Elgato Systems, Infonic and Quattro BPO Solutions, and expanded partnerships with Novell and Samsung.
The agreements enable the company to expand its solutions offeringto include new mobile computing, security, video production, document management, virtualisation and professional IT services solutions.
"One way Tech Data responds to our customers’ requests to help them take advantage of new revenue opportunities is through the continued diversification of our solutions offering," said Tech Data SVP of US Marketing Joe Quaglia.
SP Richards targets Hispanic market
Atlanta (GA), USA
SP Richards has announced it has rolled out a Spanish language version of the online product information website, iteminfo.com. The company is looking to cater for the expanding Hispanic population in the US.
"It’s estimated that 12.3 percent of the total US internet population is Hispanic and the growth of this demographic’s use of the internet is outpacing all other segments of the population," said Paul Gatens, SP Richards Director of Marketing Information. "We believe there are a large number of current users who will prefer to use the Spanish version in addition to a large group for whom this enhancement opens up a new opportunity to utilise the site. We’re making the information that populates iteminfo Español available to system providers and dealers with proprietary systems, enabling bilingual capabilities on their websites as well."
The Spanish language version of iteminfo.com can be accessed from the home page or by going to: www.espanol.iteminfo.com.
OP vendors support CoH campaign
Los Angeles (CA), USA
Three OP vendors in the US are offering pink ribbon products in support of City of Hope’s National Breast Cancer Awareness Month.
3M’s Post-it Super Sticky Notes will donate 50 cents from every specially marked pink ribbon three-pack and 20 cents from every specially marked single-pack. Sanford will donate between 10-50 cents on a range of specially marked products. Collectively, Sanford aims to donate at least $720,000 for the 2009-2010 promotion. Mead will make donations on sales of specially marked pink ribbon Mead At-a-Glance and Cambridge products.
"We’re grateful for the tremendous support from our corporate partners to help speed research into discoveries for new, more effective breast cancer treatments," said Steve Martin, Associate VP Marketing, City of Hope.
"These programmes have a widespread appeal because it engages consumers to become directly involved and actively participate in breast cancer awareness and support, a cause that affects the medical community, survivors and their families and friends."
Mergers and acquisitions
After recently sealing a 345 million ($72 million) deal for consumables distributor Adimpo, Spanish OP player Unipapel looks set to snap up one of the country’s leading distributors. Unipapel has confirmed to the Spanish stock market that it is in negotiations to acquire certain assets of Nova Line Plus Iberica. Madrid-based Nova Line is the exclusive distributor in Spain for three local manufacturers – UMEC, Papier and Marino – and also distributes many OP brands in Spain. Its total sales are around 312 million. Unipapel is understood to be interested in acquiring the goodwill of Nova Line, which it estimates at between 31-1.5 million.
Stamp manufacturer COLOP has acquired UK manufacturer and supplier William Jones Clifton (WJC). WJC has been a COLOP partner in the UK for the last 25 years. "The relationship to COLOP has been always excellent, so for us the synergy that we will enjoy as part of the COLOP Group makes perfect sense as we move forward into the future," commented WJC Director Stan Pratley. The business will continue to trade a WJC and will also continue to offer its existing range of products, even those that compete with COLOP.
Faber-Castell has acquired the European rights to the Eberhard Faber trade name from Staedtler. Staedtler bought the trade name in 1978, but is now marketing former Eberhard Faber products – most notably Fimo branded craft and hobby products – under the Staedtler umbrella. From 1 January 2010, the Eberhard Faber brand name will once again belong to the Faber-Castell group. The company will present the marketing concept and the product range of the Eberhard Faber brand at the Paperworld show in Frankfurt next January. The agreement does not involve the US trademark for Eberhard Faber, which is owned by Newell Rubbermaid.