Here at CCPA, we specialize in giving our members access to GPO pricing while adding value to the customer service experience. We are our members’ one point of contact for all service-related issues, working directly with the food distributors we partner with to quickly and efficiently resolve problems, and improve processes.
But what exactly does that mean? What is “GPO pricing” and how does it all work to ensure members are taking advantage of cost savings and improving service processes along the way?
This article will break it all down by explaining the concept of group purchasing and collective buying power, how a group purchasing organization works, and how Culinary Consultants Purchasing Alliance brings the pieces of the puzzle together.
What is Group Purchasing?
The group purchasing method of sourcing combines the purchasing power of a group of entities (people, businesses, etc.) to secure discounted pricing on goods and services.
A group purchasing organization, or GPO, is a platform that leverages the collective buying power of its members to obtain bulk discounts from suppliers and retailers. Any type of business, regardless of size, can join a GPO and take advantage of a “strength in numbers” concept when purchasing the goods and services it needs to function.
The GPO negotiates with suppliers to secure discounted pricing based on the volume of purchases being made by its members. In turn, the GPO offers those pre-negotiated contract terms to its member base.
History of GPOs
The first group purchasing organization was established in the healthcare industry in the early 1900s as a way for hospitals and clinics to save money on supplies and medications. There are now approximately 600 GPOs serving healthcare providers throughout the United States.
After growing in popularity in the healthcare industry, the GPO model caught on in other segments as well. Horizontal GPOs serve organizations spanning all markets and industries. This type of GPO works with businesses of all shapes and sizes, offering assistance on a broad spectrum of goods and services, mostly related to indirect spend.
Vertical GPOs serve a niche segment of a specific industry and are usually created as a way for management or association groups to benefit their member companies. This type of GPO is commonly found in the healthcare and hospitality industries and the dental and veterinarian segments.
How does the concept work as it pertains to food and food distribution?
Brian Heider, President & Owner of CCPA, identified the need within the food industry to combat certain pricing models distributors often used to take advantage of smaller organizations. He made it his mission to develop relationships directly with food distributors in order to help make a difference in niche food industries that simply needed the best pricing possible.
CCPA focuses our efforts on leveraging combined food purchasing to secure savings on food orders using a three-step approach.
When a new organization joins CCPA, we combine its food spend with the total food spend of our existing members to create more “buying power.
CCPA uses the aggregated buying power of our members to negotiate exclusively discounted contracts directly with the nation’s top food distributors.
In turn, we share the newly negotiated contract pricing with all of our members, thereby helping all of our members save money.
CCPA currently includes serving over 80 college campus communities in 48 states, helping with student housing, greek chapters, and more. CCPA also serves several large spring and summer camps, outdoor communities, food management companies, and property management groups.
A practical example to see how it all works
Let’s say you’re responsible for managing a local sorority and need to place a food order from US Foods. Because you are a single chapter house and your purchase volume is small, you are charged full price.
Now, let’s say you hear about Culinary Consultants from your friend who is managing the fraternity next door. CCPA has already combined the purchasing needs of all of its members and uses this larger purchasing volume as leverage to negotiate lower prices with the food supply vendors.
Once you join, and because CCPA has already secured these discounted rates, all you have to do to receive the cost savings is use your member ID when placing an order with a food distributor. You’ll receive immediate savings on your invoice. You never need to purchase a certain amount to qualify and can continue ordering anything in the catalog.
Additional value for members
We take enormous pride in the relationships we’ve developed over the years and the value of the partnerships we’ve formed means that our members are treated as a national account in the eyes of the food distributor. Members have exclusive access to the Reference Room, an app dedicated to giving chefs and supervisors a way to manage their kitchens in the most efficient way possible.
The services CCPA provides are completely complimentary – it’s free to join and our program is free to use. Our contracts are set up so vendors pay our fees, which means our services remain free to our partners.