problem inventory rescue case study

How 4 Food Companies Won Big on Problem Inventory [Part 1 of 4]

A problem inventory story that ends with a positive outcome.

3-minute read

As anyone in the food industry knows, problem inventory creates challenges. That includes losing money on the investment, shelling out more cash to dump the ingredients or paying to store the unusable product.

However, problem ingredient stories can have a happy ending! In this four-part series, read how each food industry business found a way to rescue their profits on what seemed like impossible ingredients.

Part 1: How a Bakery’s Load Break-in Ended with a Quick Win

The thieves that broke into the parked semi-trailer were probably after goods they could move easily and turn for a quick profit — small electronics, pharmaceuticals, even nuts

However, when they broke into the truck just outside Chicago, they discovered goods that they possibly thought unprofitable or too tricky to maneuver.

The truckload belonged to a large bakery. Upon breaking in, the thieves opened only one box — a 50-pound case of palm-oil shortening. They did not tamper with the remaining 40,000-pound shortening load. 

Unfortunately, by breaking the seal on the rear of the trailer, the thieves broke the chain-of-custody. Neither the bakery nor any food manufacturer could use the shortening. Not only did the bakery now have a load they couldn’t use, but they also needed to move the product quickly to free up their equipment.

Mission: Swift turnaround 

The bakery contacted Ingredient Exchange around 3 pm on a Tuesday. Our team reached out to our network of non-food, non-animal-feed buyers. The goal was to generate quick interest in the shortening. 

We told prospective buyers the story of what happened to the shortening and were able to get a bid in less than an hour. 

Understandably, the buyer required a copy of the original manufacturer’s specification sheet, which the bakery had on hand. With immediate access to the inventory verification documents, we were able to make an offer. 

In essence, the process took about an hour and fifteen minutes from when the bakery first contacted us.

(Note: This was a fast transaction — even for us.)

The bakery accepted our offer Wednesday morning. We made arrangements to move the load and get it to the buyer later that day. However, there was a minor delay, as the bakery had to finalize some details with their insurance company. 

Even with the short wait, the bakery’s product made it to the buyer first thing Friday morning. 

The whole deal took just over two full working days.

Problem inventory rescued

Even though thieves turned the bakery’s pristine food product into a compromised 40,000-pound load, the inventory owner was able to recover about 15% of their investment. (This is a healthy return for a product that cannot re-enter the food supply chain.) 

Also, to ensure that the bakery was 100% comfortable with the transaction, the Ingredient Exchange team required the buyer to certify that the final product would not re-enter the food supply chain.

Finally, as well as getting a good return on their problem inventory, the bakery was able to free up the semi-trailer and get it back into production.

At Ingredient Exchange, we help food-industry clients rescue profits from their unusable inventory. Do you have obsolete or downgraded ingredients you’d like salvage? The sooner you get started, the better the return you can get for your problem product. Give us a call today: 314-872-8850

Sign up (above) for our once-a-month newsletter and get the next ingredient rescue story delivered to your inbox.

2 Responses

  1. Jeanine Barber

    What great Team work and quick response for a fellow baker!! If all the world acted this way now and always we would have a Wonderful place to live!!

  2. Pingback : How This Bakery Recovered Cash From Its Excess Inventory [Part 2] - Ingredient Exchange

Leave a Reply