Givaudan Case Study

Case Study Title: Givaudan Flavors Case Study – Customer Value Driver Discovery

1. Major Facts / Major Problems:

* Givaudan had been providing flavors to Tastyco.

* Geoff Morales had been the Givaudan’s account manager for Tastyco for three years.

* In those three years that Geoff was the account manager he rarely had to compete with other flavor suppliers and was able to get premium prices for basic and custom flavor products.

* Tastyco was one of Givaudan’s largest customers who is known for their carbonated beverages.

* Tastyco began to introduce some very successful non-carbonated, nutritious beverages to the market as a result Tastyco flavor purchases from Givaudan had increased steadily. Most of Givaudan’s sales volume for carbonated beverages.

* Givaudan flavorists worked closely with Tastyco’s R&D Group on some new products.

* Tastyco’s Purchasing Manager, Susan Challis, informed Givaudan that they had decided to implement new purchasing policies to include negotiating “Strategic Supplier Agreements” with several flavor suppliers.

* Susan mentioned that “…achieving SSA status will allow Givaudan to have first shot at our new flavors projects, but it also means you will probably have to sharpen the pencil on some of the existing flavors.”

* Several of Tastyco’s beverages that Givaudan supplied flavors for have moved into their “productivity program” leading Tastyco to look at cutting their supplier’s costs.

* There is a known working history between the companies which is supported by Tastyco’s Team Lead. Givaudan’s R&D group has worked with Tastyco’s Beverage R&D group that included “Flavors 101” Training for Tastyco’s R&D team and managers. Talk of making it an annual event.

* The new pricing policy allows Tastyco seek cost saving opportunities by seeking competitive bids from other flavor suppliers. They will also implement a matching program to give different...