Ottimate
August 30, 2021

Why Purchase Size Matters, And Not In The Way You Think

by The Ottimate Editorial Team

Did you know that there’s actually an inflection point where buying larger purchase size doesn’t necessarily mean you’re saving more?

Here’s what our data team found after sifting through some of the data available though Ottimate Insights.

(Ottimate Insights is a feature of the Ottimate Platform that analyzes your invoices and alerts you to price changes, and lets you set up actionable triggers like contract price violations.)

Summary:

The Ottimate data team found some key insights in four categories of commonly ordered foodservice supplies:

  1. Granulated Sugar: While 50 lb packages offer the most value, these can be too big for smaller restaurants. Instead opt for 10/4 lb pack sizes – these offer better value than 25 lb packages
  2. Brown Sugar: 25 lb packages are cheaper than 12/2 lb and 24/1 lb… (it’s just 1 lb more than the 24/1 lb pack!)
  3. Ketchup: 25/20 oz and 30/20 oz cases are similar in price per oz to bulk sizes (#10 cans/pouches/jugs). (Both (20 oz large cases and #10s) are cheaper per ounce than the 16/14 oz cases. Make the switch!)
  4. Vinyl Gloves: Those of you buying 4/100 ea cases need to stop. You’re paying ~200% more than the average! Make space for the 10/100 ea or even just buy breakers. Avg price per ea is $0.07.

Data credit: John Cho, Ottimate

Sugar, Sugar

The Ottimate Data team analyzed sugar prices from over 60 nationwide distributors over a three-month period (totalling close to 4000 datapoints!) to uncover some interesting insights:

Brown sugar average PPU line graph from the Ottimate Data team's analysis, date range from 5-17-2021 to 8-9-2021.
Granulated sugar average PPU line graph from the Ottimate Data team's analysis, date range from 5-17-2021 to 8-9-2021.

In general, supply chain disruptions have not had a major effect on sugar prices; what is truly remarkable is that 10/4 lbs pack sizes of granulated sugar is consistently cheaper than 25 lb pack sizes. It’s totally counterintuitive, but this price difference has been holding firm for more than three months.

Meanwhile in the brown sugar segment, if you’re trying to decide between 25 lb pack sizes vs 24/1 lb pack sizes, go for the 25 lb size! Its way cheaper per unit and it’s only a pound extra.  

Price per unit versus pack size comparison bar graph between brown sugar and granualted sugar, with varying weights.

Purchase Size Impact on Ketchup Shortage

You may have seen the news about the nation-wide ketchup shortage back in April, where we provided some data on rising ketchup prices to the Wall Street Journal.

Well, three months later, we now have a clearer picture on how you, as the restaurant operator, can strategize your ketchup purchase size for the best costs:

Ketchup average PPU line graph from the Ottimate Data team's analysis, date range from 5-17-2021 to 8-9-2021.

After analyzing over 3300 individual price data points across a three-month period from close to 40 distributors, we found that the 16/14 oz ketchup tend to have the greatest price fluctuation; while the other package sizes tend to be more stable price-wise.

You’re going to be way ahead cost-wise by switching to 25/20 oz and 30/20 oz ketchup cases — and in fact, the costs of these are very similar to bulk purchase size ketchup!

Make the switch and get prices similar to bulk! 

Hand in Glove…

For vinyl gloves, we’ll keep it simple. We analyzed close to 20,000 individual price points over a three month period from over 77 distributors to discover that 4/100 packs are a terrible waste of money and is the one pack size that wildly fluctuates in price;

Vinyl gloves average PPU line graph from the Ottimate Data team's analysis, date range from 5-17-2021 to 8-9-2021.

If you’re still buying 4/100 packs you should probably stop that asap. Instead, consider switching to the 10/100 or 1000 packs. These may be a lot, so you might want to consider buying breakers as well. We promise that it’s a better use of your money than paying way over the norm for gloves!

Bar graph of vinyl glove average price per unit vs pack size

And if you’re still not convinced, check out how much annual savings you’d get by switching! 

Bar graph displaying annual savings if you switch from 4/100 each to 10/100 each of vinyl gloves

One of the biggest benefits of using Ottimate is that you will be able to finally access the data that is hidden in your invoices. Because we digitize everything down to the line item we’re able to extract, visualize and highlight actionable insights for you. Some examples of how you can leverage Ottimate:

  1. Set up hot lists for price alerts on your commonly ordered goods
  2. Set up contract price enforcement so your distributor doesn’t overcharge
  3. Compare costs across locations to ensure you’re being charged fairly
  4. Request a demo today!

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