What is the Premier Foodservice Purchasing Program?
The Premier Foodservice Purchasing Program is a proven, 20‐year foodservice purchasing program. It includes an aggressive national distribution program, discounted manufacturer agreements, technology solutions, cost management solutions, participant’s satisfaction surveys and ongoing communication from its participants to continually improve upon the existing offering.
What is the relationship between Premier and US Foods?
US Foods is the primary distributor for the foodservice programs and offerings that Premier negotiates on the behalf of its participants. One hundred percent of all products purchased from US Foods are priced based on the overall distribution agreement Premier has negotiated on behalf of its participants.
What are CMAs?
Contracted Manufacturer Agreements (CMAs) are contracts that Premier has negotiated directly with manufacturers for a three (3) year period. The products are typically purchased through US Foods, but the deviated pricing and/or rebates are negotiated by Premier for Premier participants. Contracts are negotiated to determine the cost into distribution and have various controls built in to protect against extreme market fluctuations. There are in excess of 350 CMA contracts in place that provide discounts on over 100,000 actual products. Some of Premier’s CMA’s include a rebate as part of the savings for agencies - Participants receive 100% of these rebates with no processing fees. Use of Premier’s CMA products is completely optional, understanding that the greatest value is on products that Premier has negotiated terms and conditions as it relates to cost.
What food purchasing categories are included in the program?
Dry, Refrigerated and Frozen Grocery, Dairy, Milk, Center of the Plate, Medical Nutritional Products, Produce, Disposables, Janitorial Chemicals, Beverages – Coffee, Tea and Small Wares, Kitchen Equipment, Foodservice Software, Specialty Distribution and any future foodservice related contracts.
How would this program be different from what a participating member might be using today?
This program is more of a single source supplier vs. multiple distributors awarded by line item bids. A prime vendor type relationship reduces ordering time, invoice processing and number of deliveries to the facilities which helps to increase overall productivity within the department. US Foods and Premier are committed to helping agencies reduce cost and drive efficiency when they obtain this primary vendor relationship with an agency.
How is the distribution mark‐up structured?
The mark-up structure for the program is determined by the average drop size of a public agency. Agencies that receive an average delivery of $3,000 per drop with an average payment term of less than 45 days earn program A margins. If the agency is less than $3,000 per drop they earn B margins, an increase of 1.3% over program A. If an agency achieves program A and has an annualized combined volume of $2.0 million within a 5 mile radius they achieve program Z margins, 1.0% less than program A.
How does the participating agency access their discounts?
For the distribution program with US Foods, Premier has negotiated the category margins that will be applied to the cost of goods on each product at time of invoicing. CMA products have three types of discounts:
- Deviations: the majority of Premier CMA contracts have discounts applied at the time of invoicing. The cost into US Foods is negotiated by Premier; divisions use this as the cost basis for the distribution mark‐up.
- Allowances: Premier has negotiated an allowance with the manufacturer to be applied to the division cost (that has been defined by Premier) at time of invoicing.
- Rebates: discounts returned to the participating agency after the end of the quarter from Premier. Some vendors utilize one of these discount options and others might utilize multiple options depending on their contract with Premier.
Are there additional incentives for the participating member to achieve?
Yes. The program has the following incentives:
- Average Drop Size: the larger the drop the larger the incentive
- Accounts Payable: the faster the payment the larger the incentive
- New Business Incentive: If they purchase less than 20% of their annual volume from US Foods, they would be eligible for this incentive
- Program Maximization (Direct Parent Incentive): If an agency has multiple locations, uses US Foods for greater than 85% of its purchases and maximizes use of Premier’s CMA contracts they will be eligible for this incentive.
What is Foodservice Operational Strategies (FOS)?
Public agencies have access to our Foodservice Operational Strategies team of consultants that will assist the individual facilities who are (or are considering) working with, contract management companies. These consultants provide evaluations of existing contracts in place, contract request for proposal creation, evaluation and negotiations on behalf of the participants.
Are there reporting tools available?
Yes, Premier has numerous reporting tools on their contracting site and on the US Foods online ordering system. Participants will be able to look at purchases by specific location or they can roll purchases into one master account if they have multiple locations. This information can be in total, by manufacturer or by products. Additional reporting tools include:
- Analytics on purchases on and off contract (use of Premier’s CMA’s)
- Category spend data
- Central order guide support to determine how multiple locations compare and contrast in usage, purchasing patterns and contract utilization
- Service level reports
- Order guide change report
What additional resources are available to the public agencies, in addition to food purchasing?
OMNIA Partners participants have access to Premier menu programs, health and wellness programs, culinary training and regional meetings that will highlight new programs and contracts. Participants will also have access to tools, resources and programs from US Foods to help train, educate and become more efficient throughout your foodservice departments. Both Premier and US Foods will provide participants access to publications that assist operators in learning and trend awareness as well.
