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Applesauce Maker Fortifies Supply Chain With Procurement Tech

Pouched applesauce producer Materne adds two carton suppliers to its network and cuts $1 million in annual costs by adopting procurement software.

Materne used procurement software on its latest carton RFP to bolster its supplier network and save $1 million per year.
Materne used procurement software on its latest carton RFP to bolster its supplier network and save $1 million per year.
Materne

Applesauce-in-a-pouch leader Materne has modernized its request for proposal (RFP) process with Arkestro procurement software, strengthening its supplier network and finding major savings along the way.

Materne has over 140 years of history as an applesauce producer in France, initially packaging its product in cups until it became the first to offer pouched applesauce in 1998. The company expanded into the U.S. under the name GoGo squeeZ in 2008, operating from a New York City office and starting with a co-manufacturer.

“Long story short, now we have two manufacturing facilities, one in Michigan and one in Idaho,” says Mathieu Pappalardo, vice president of Materne Procurement. “We do roughly $600 million in sales and manufacture over 120,000 tons of product.”

GoGo squeeZ is available in a range of multipack sizes, from retail four-packs to 48-count cartons for foodservice, totaling around 50 million cartons and a baseline spend of about $20 million per year. In all, the company owns 70% of the market share for pouched applesauce.

Materne may be dominating the market now, but it still has ambitions for growth. “The goal for us is not so much to gain more market share, it’s to grow the category as a whole, to grow household consumption. We want to keep 70% market share, but on a bigger pie,” Pappalardo says.

Finding solutions for growth with procurement software

To support this growth, Materne realized it needed to grow its supplier network, adding layers of continuity to support new products and protect against supply chain disruptions.

Materne had previously focused on the bottom line when strategizing its supplier network, but the COVID-19 pandemic and subsequent supply chain disruptions prompted a reprioritization. As a result, Materne’s focus shifted toward business continuity to withstand unexpected changes.

That said, Pappalardo knew supply chain resiliency often comes at a price. Knowing that the addition of extra suppliers can bring a negative cost impact, he says that Materne was hoping to “maintain costs at the very least, or potentially realize some savings.”

Pappalardo was also looking for a way to automate the company’s procurement. Short-staffed on some categories and struggling with overly manual processes, he was looking for a solution that could save time. “Not just automating, but having a consistent way of doing RFPs, using the same tools over again, reusing the data from previous bids,” he explains.

Materne turned to Arkestro’s Predictive Procurement Orchestration (PPO) software as a potential solution, and initial results were exceptionally promising; starting with a small project, the software brought 40% savings.

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