INDUSTRY BRIEF: FOOD DISTRIBUTION

MARKETCompanies throughout the distribution industry face similar challenges: intense competition, volatile commodity costs, low profi t margins, and constant shifts in consumer demand and preferences. If a food and beverage distributor is to secure and maintain healthy profi tability and a strong market position, however, it must also: • Manage supplier costs. • Maximize revenue from vendor programs. • Maintain the right mix of street vs. contract customers. • Negotiate profi table national contracts. • Correctly calculate fl oor and target prices. • Implement effective private-label penetration initiatives.

To effectively meet these challenges and increase margins, food and beverage distributors must adopt the appropriate tools and processes to manage their costs and prices.

CHALLENGESFor food and beverage distributors, a fundamental challenge to managing prices and costs is the sheer volume of customer, supplier, and product data they must gather and analyze. Moreover, this data comes from multiple systems and manual processes and is typically too fragmented and out-of-date to support effective decision-making. Without centralized data and the right analytical tools, a food and beverage distributor will struggle to answer questions like these:

• Where are our profi t leaks and what is causing them? • Which are our most profi table products and customers, and why? • How do our distribution centers’ performance compare? • What destructive trends are causing price erosion? • How do actual supplier costs vary from reported costs? • How are vendor prices changing? • How does our mix of contract vs. street customers affect our margins?

If a company cannot answer these and other relevant questions quickly and accurately, setting the right prices and negotiating profi table contracts is nearly impossible.

PROFIT MANAGEMENT AND OPTIMIZATION FOR FOOD DISTRIBUTIONPROFIT MANAGEMENT AND OPTIMIZATION FOR FOOD DISTRIBUTION

SOFTWARE SOLUTIONPROS offers analytical tools to integrate all the information that food and beverage distributors need to make both strategic and tactical pricing decisions. For example, analysis of market price trends and product performance supports the creation of profi table vendor programs. In the case of private-label products, which are typically more profi table thancorresponding brand-name items, distributors can use scientifi c analysis of historical transaction data to optimally offset private-label prices from brandname to drive market penetration. With PROS, sales representatives, who are under constant pressure to close deals, have at their fi ngertips data on market trends, competition, peer buying behaviors, and customer profi tability to negotiate national contracts with confi dence and identify upsell opportunities with ease. Additionally, representatives receive guidance on fl oor, target,

and stretch prices geared to specifi c customers and segments. Finally, PROS delivers information on substitute and complementary products that sales representatives can suggest in real time to boost the profi tability of individual deals.

PROFIT-CENTERED PRICING GUIDANCE

PROFIT MANAGEMENT AND OPTIMIZATION FOR FOOD DISTRIBUTIONPROFIT MANAGEMENT AND OPTIMIZATION FOR FOOD DISTRIBUTION

By utilizing PROS pricing analysis software, customers gain insight into pricing strategies, identify detrimental pricing practices, optimize pricing decisions, and improve business processes as well as fi nancial performance.

Scientific Analytics Deal Optimizer

Price Optimizer Rebate Optimizer

BUSINESS RESULTSFor many distributors, erratic pricing can affect their ability to effectively position their private-label products in the market. With PROS, however, one company was able to bring its pricing under control to improve private-label penetration by more than 20 percent. When another foodservice distribution

company implemented PROS, it could analyze customer, supplier, and product profi tability with unprecedented accuracy, detail and speed. Furthermore, the company realized a one percent revenue lift simply by making use of previously unknown substitute product combinations generated by PROS.

PROFIT-CENTERED PRICING GUIDANCE

BIG DATA:TransactionMarketCostProductCustomerCompetitor

PROSBIG DATASCIENCE& ANALYTICS- Price Effectiveness- Sales Effectiveness- Rebate Management- Revenue Management

OutSellOutMarketOutPerform

PROS Corporate Headquarters3100 Main Street, Suite 900, Houston, TX 77002

Phone: +1 713-335-5151 | Sales: +1 855-846-0641 | Fax: +1 713-335-8144

ABOUT PROS

PROS Holdings, Inc. (NYSE: PRO) is a big data software company that helps customers outperform in their markets by using big data to sell more effectively. We apply 27 years of data science experience to unlock buying patterns and preferences within transaction data to reveal which opportunities are most likely to close, which offers are most likely to sell and which prices are most likely to win. PROS offers big data solutions to optimize sales, pricing, quoting, rebates and revenue management across more than 30 industries. PROS has implemented more than 500 solutions in more than 55 countries. The PROS team comprises more than 650 professionals around the world.

To learn more, visit www.pros.com.