During volatile and uncertain market conditions, these solutions help customers gain confidence through improved price and supply certainty.
Eric Morrison, head of Risk & Commercial Solutions at NZMP says the refreshed solutions are designed to remove complexity and reduce supply risk for NZMP’s dairy ingredients which are sold in more than 130 countries.
NZMP’s four new pricing categories are:
NZMP PriceLock: Market volatility can affect margins, budget, plans and competitiveness. NZMP PriceLock protects customers from dairy ingredient price fluctuations by giving price certainty and supply security for up to 18 months for ingredient purchases across powders, dairy fats, cheese, proteins, specialty and organics.
PriceCollar: Provides flexibility for pricing to move within an acceptable range so customers can benefit from a potential downward market movement.
PriceBreak: Gives customers the benefit of a lower fixed price when a break point is agreed, along with security of supply for the duration of the agreement
Double-Cap Collar: Provides the certainty of fixing supply and the flexibility of a more customisable collar range in return for adding a second trigger cap. If the trigger cap is exceeded the customer receives a discounted market price
Morrison said, “External and often difficult to predict factors such as weather events, supply chain disruptions, and geopolitical events can impact supply, demand and pricing. We wanted to provide our broad customer base with options to reduce complexity and take back some control. Over a number of years, and with plenty of customer feedback, we have developed a range of market-leading solutions. Each is intended to reduce the distraction and noise which volatile markets can bring, and that’s what we’re hearing. Our solutions are supporting many of our customers achieve their priorities and focus on what they do best.”
NZMP recently showcased its four hero Risk and Commercial solutions at Gulfood in Dubai and Food Ingredients China (FIC) in Shanghai.
Morrison said NZMP’s local sales teams work closely with customers to understand their objectives and how NZMP’s solutions can best support them.
“We also have a specialized Risk and Commercial Solutions team who are based out of Singapore, the Netherlands and New Zealand and who are available to discuss options with customers.
“A good example is a customer’s leading consumer brand in the repack milk powder segment, operating in the Middle East and Africa market. The repack market in general is price sensitive and significant increases in commodity prices can put pressure on margins and market share. They’ve also experienced challenging supply conditions on occasion due to adverse weather events in supply regions. Our NZMP PriceLock solution for a 12-month period allowed them to lock in their supply and eliminate volatility from their milk powder pricing.”
He added, “Another customer is a well-established nutrition company in the South and East Asia region. They were seeking to secure supply for the next nine months while also protecting their margins in the event ingredient prices increased significantly. They chose our NZMP PriceCollar solution which allowed them to secure their ingredient supply with the pricing linked to a market index but constrained to an agreed range, providing the customer comfort that their ingredient pricing could only increase to a certain pre-agreed limit.”