Discover how your organization can save with a beverage consultant
Are you overspending on the beverages offered within your facilities? Turns out, most health systems are.
“While they may be getting a decent deal on the product itself,” says John Claytor, AVP, Food and Nutrition Services at HealthTrust, “the real question is, do they have the business intelligence to know, for example, whether they have received the best value from the local bottlers that would service their accounts?”
HealthTrust’s partnership with Enliven, a beverage consultant, can help HealthTrust members understand just that.
The team at Ovation Healthcare thought they were lacking this level of insight and turned to Enliven for an analysis. “After looking at our overall usage with dual vendors in this space, we worked with Enliven to take this category out to RFP,” says Kim Milliken, Ovation’s Director of Strategic Sourcing.
The outcome? Enliven negotiated an agreement with just one supplier, resulting in better service and significant financial savings.
“We work with hospital executives to identify what they are spending today and what the savings opportunity could be if they partner with a major soft drink supplier,” explains Tim Harms, CEO of Enliven. “We also negotiate price controls so that pricing is capped for several years.”
Price savings & program support
Enliven is HealthTrust’s only approved beverage consultant, and it focuses solely on negotiating and managing pouring rights programs.
Enliven has represented more than 1,000 hospitals, negotiating at least $1 billion in total beverage contract savings within various industries.
Its beverage database provides the Enliven team access to industry-specific deal terms and financial benchmarks, allowing them to identify the best pricing possible. Its analysis includes accounting for health system initiatives such as sustainability, rebates, vending commissions, marketing dollars, new equipment, price protection and monthly reporting.
Another benefit of partnering with a beverage consultant is program management. “They size up the opportunity on the front end, run the negotiations and then manage the whole partnership on the back end,” adds Milliken. Enliven takes the workload off of the hospital’s supply chain team by handling all invoices and any product or service issues with the selected beverage supplier. Its monthly reporting to Milliken’s team also includes new and often previously unknown data and insights into this category.
Product selection & insights
Health systems are often surprised to hear that beverage negotiations are less about trading volume for price than they are with other suppliers. “Beverage companies view themselves as marketing firms—they create and market brands. What they are ‘after’ is not your beverage volume; it’s the 24/7 access to your patients and staff who consume their products,” Harms adds.
Despite concerns over not having a big enough selection with just one supplier, “people are generally happy about the variety of products available,” Milliken shares. “Outside of grocery or convenience stores, most restaurants, movie theaters, theme parks, hotels or stadium-type venues don’t offer both [Coke and Pepsi] beverage brands, so there’s typically no expectation of choice between sugary soda brands.”
Recent trends also show that most beverages consumed at healthcare facilities are not sodas, but waters, sparkling waters, teas, juices and energy drinks. The industry’s three primary beverage companies—Coca-Cola, PepsiCo and Keurig Dr. Pepper—have extensive product portfolios with hundreds of beverage options. “Of our top 10 products selling at retail, only two are sodas; and two of the top five are waters,” Milliken says. “This trend has only accelerated in recent years, so it makes us less dependent upon preferences toward a single brand of soda.”
Milliken encourages health systems to explore the beverage partnership. “Enliven has been a great partner, and they will do all the heavy lifting for you,” she adds. With meaningful savings and a well-run experience, Ovation re-signed with Enliven when their first agreement ran to term.
There are no program costs, either. “Enliven only earns a percentage of the verified savings we can negotiate. If we don’t save you money, we don’t earn a dime,” Harms says.
For more information, contact your HealthTrust Account Manager or visit legacymembers.healthtrustpg.com/portfolio/food-nutrition.
Share Email Facilities Management, On-contract service, Operations, Q1 2024
