If you’re in food processing and you stop making a product, you might end up with excess inventory.
As expiration dates shrink, and you explore what to do with the unwanted ingredients, inventory logistics can create issues — some foods are easy to offload; others, not so much.
In the third story of our four-part series about food industry businesses rescuing cash on their problem inventory, discover how a large-scale bakery recovered money on an expiring, hard-to-move product.
Finding a new home for a soon-to-expire ingredient
A large-scale bakery was producing bagels for a customer. When the customer closed up shop, the bakery had to stop making the rolls.
Due to the abrupt halt in production, the bakery was left with 70,000 lbs of high fructose corn syrup (HFCS).
Additionally, the product had less than thirty days until expiration. This limited the options for repurposing the sweetener.
Tackling the immovable food
Finding a buyer for the expiring HFCS was one thing. Removing the product from the facility was quite another.
The bakery stored the HFCS on-site in tanks. Getting the syrup out of the storage units and to a buyer would involve three critical factors:
- Locating a local tanker truck company with the capability, experience, and appropriate fittings to pump the product from the storage tanks into the tanker (and deliver it to the customer).
- Warming the crystalized syrup to make it pumpable.
- Minimizing the expense of empty-truck miles out to the bakery’s remote location.
(Also, at the time, the truck-driver shortage was at its peak, making accessing a truck and driver more difficult.)
Options for managing problem inventory
Like many food businesses that end up with problem ingredients, the bakery had several options for managing the expiring syrup.
|1. Repurpose the product internally: While this works in some situations, reformulating an inventory item can be difficult, from assigning the task to someone (and getting R&D involved) to shifting the food to another area of the plant. |
2. Dump the ingredient: This is an expensive option because the inventory owner has to pay someone to haul and dispose of the product, as well as clean the tanks, fittings, and pipes (around $2000 per load).
3. Let the syrup sit in the storage tanks: At some point, they have to address the problem food. The longer the HFCS sits, the longer it takes up storage space — not to mention further crystallizing and becoming more difficult to move.
4. Contact an ingredient specialist: An ingredient management company can help product owners recoup some of their investment. Moreover, they take care of the entire selling process (from finding a buyer to hauling the food away).
Marketing, managing and moving a tricky product
We explained to the bakery what we needed to market the product — a certificate of analysis (COA), specs sheets, and images.
The bakery had all their verification documents in place, including images of the tanks and the existing fittings.
We located a buyer that could use the product as a specialized feed application (a bonus, as this type of application generally yields a higher return).
However, the greatest challenge was finding a local trucking company that could handle the HFCS, including having the right fittings to get the product in and out of the truck.
The Ingredient Exchange team reached out to our network and located a company that could do the job at a fair price.
In addition, with access to pictures, we were able to show the trucking company the current fittings, ensuring they had the correct equipment.
Enjoying a sweet return
We managed the process of selling the product and removed it from the bakery without a hitch.
The bakery was able to:
• Recoup some of their original investment.
• Free up the storage tanks and put them back into use.
• Enjoy peace of mind as Ingredient Exchange managed the details of selling, transporting and offloading the problem food.
Final thoughts on this inventory logistics challenge
Some problem ingredients require extra planning and problem-solving to sell the product and get a good return. In the bakery’s case, offloading the corn syrup involved finding specific, cost-effective transportation.
In addition, by getting the sweetener into a specialized feed application, they diverted the syrup from the landfill (and dodged the expense of dumping it) and rescued cash from a logistically challenging, expiring ingredient.
At Ingredient Exchange, we solve complex ingredient problems for food businesses. Do you have expired inventory that you need to dispose of with minimal effort and get a return? Please reach out to our team at 314-872-8850.
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