For years, procurement in food manufacturing was often judged by one simple metric: who negotiated the lowest price?

While cost remains important, today’s procurement teams face a far more complex challenge.

Rising energy prices, labour shortages, supply chain disruption, inflation and increasing customer expectations mean that reducing costs is no longer about squeezing suppliers. Instead, it’s about creating commercial resilience while maintaining quality, service and continuity of supply.

The most successful food manufacturers are changing how they think about procurement, and seeing better results because of it.

Cost reduction is about more than price. Negotiating a lower unit cost is only one part of effective procurement.

In reality, businesses lose money through:

Contracts that automatically renew without review
Suppliers whose pricing has drifted over time
Duplicate suppliers across multiple sites
Poor visibility of indirect spend
Hidden charges and service costs
Procurement teams lacking the time to revisit long-standing categories

Many of these costs remain unnoticed because they don’t create an immediate operational problem. Instead, they quietly erode profitability year after year.

The hidden cost of indirect spend

When manufacturers focus on reducing costs, attention naturally turns to raw materials.

However, indirect spend can represent millions of pounds across areas such as:

Mobile phones
Laboratory testing
Waste management
PPE
Workwear
Utilities
Cleaning services
Packaging support
Office supplies
Fleet management

These categories often receive less scrutiny because procurement teams are rightly focused on strategic suppliers and production-critical materials.

The result?

Contracts quietly renew.
Prices gradually increase.
Supplier performance isn’t measured.
Opportunities are missed.

This is what we often refer to as “silent inflation”.

Procurement is becoming a strategic function

Leading food manufacturers are moving away from transactional buying and towards structured commercial management.

Instead of asking “Did we get the lowest price?” They’re asking:

Are we using the right suppliers?
Are contracts still fit for purpose?
Do we understand where we’re spending money?
Are suppliers delivering value?
Where are our commercial risks?
Which categories haven’t been reviewed for several years?

These questions lead to sustainable cost reduction rather than one-off savings.

Five priorities for modern procurement teams

The businesses performing best are focusing on:

1. Supply chain resilience

Reliable suppliers reduce operational risk and protect production.

2. Visibility across spend

You can’t improve what you can’t see.

Accurate spend analysis allows procurement teams to identify opportunities and prioritise effort.

3. Supplier performance

Cost matters, but so do service levels, responsiveness, innovation and reliability.

4. Contract management

Regular reviews prevent contracts from drifting and ensure pricing remains competitive.

5. Continuous improvement

Cost reduction shouldn’t happen once every five years.

The strongest procurement functions continually review categories and look for opportunities to improve.

How Pare helps food manufacturers reduce costs

At Pare, we work alongside procurement and finance teams to uncover opportunities across indirect spend.

Rather than adding work to already busy teams, we manage the review process from start to finish.

Our clients typically achieve cost reductions of 15–20% across the categories we review.

More importantly, we help create greater visibility, stronger supplier governance and ongoing commercial control—ensuring savings are maintained long after implementation.

Final thoughts

The role of procurement has changed. The question is no longer:

“Are we paying the right price?”

It’s:

“Do we really understand where our costs, risks and opportunities sit?”

Food manufacturers that can confidently answer that question will be better positioned to improve margins, strengthen supplier relationships and build more resilient businesses.

Looking to reduce indirect spend without increasing your team’s workload?

Get in touch with Pare to discover how we help food manufacturers achieve sustainable cost reductions while improving visibility and supplier control.