Jeff Koeze's Blog Good Food, Good Business, and the Good Food Business

9Feb/090

When Spartan Tossed Us Out

We made private label peanut butter for Spartan Stores for around 40 years.  In fact, when my Grandfather died in 1968, Spartan played a key role in keeping our business afloat by agreeing to pre-pay for peanut butter for a time to ease a cash flow crunch.

Fast forward to the late 80's or early 90's.  The Spartan peanut butter buyer was visiting my father at our plant.  After a tour and some conversation, my Dad and the buyer went out in the parking lot to get into my Dad's car to go to lunch.  At the time, my Dad had a Mercedes Benz 190 -- their version of an economy sedan.

The buyer pointed at the car and said, "Is this your car?"  My Dad said, "Yeah."  The buyer said, "You shouldn't be driving a car this nice; that's my money in that car."

It is at that moment that my father knew that nothing mattered to Spartan except price.  Shortly thereafter, Spartan went to another supplier.

I'm for competition and free markets as much the next person (well, almost as much), but Spartan tossed a long-time, high-quality, and local supplier (on whom they could easily check) for a penny or two a jar.  Perhaps that was the correct decision for them and I trust their new suppliers have performed well over the years.  But that decision, repeated by buyers across the grocery supply chain for a couple of decades now, put price far above every other consideration in buying decisions across the food industry.  And steadily increased the temptation among manufacturers to get ahead by cutting corners.

The logical response by government would have been to step up surveillance of the food business.  But we know what happened instead.

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