Posting more passenger cruise days, Norwegian Cruise Line Holdings (NCLH) has held the line on its food spend. Much of the credit goes to Carl Robie as senior vice president of supply chain.
Robie said in an exclusive interview with Cruise Industry News that he and his team of 70 supply chain professionals have been working over the past 18 months to consolidate the company’s spend and reduce the number of distributors and suppliers for better efficiency and to leverage its stand to drive savings.
“We have looked at our supplier base and identified those vendors that are performing well and also those that were not performing very well, made some changes, and also introduced new vendors.
“We are making sure vendors have clarity on what we are working to accomplish. It is not just a matter of us submitting a bid and having them send a price back to us. It is about having a dialogue and making sure they are clear about what our goals and objectives are.
“And while we are working to drive cost out of the supply base, we have a standard, and that is equal or better quality (than before).”
Working for the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands, Robie and his group are directly and indirectly responsible for more than $3.5 billion in annual spend. $1 billion is for food and beverage, marine and technical spares, hotel consumables and durables, and some services.
“Our approach is hybrid,” Robie explained. “We may go as far up the supply chain as possible directly to the supplier or manufacturer, or, for certain items that we may not have the volume for, or even when we do have the volume, we can leverage with a distributor, a Sherwood or a Performance Foodservice, where it makes sense.
“We will look for what is the best fit for us. Leveraging with distributors can be beneficial when they are buying quantities that are 10 to 20 times more than what we are buying. In the end, we will make the buy that is best for our business.”
NCLH’s food and beverage sourcing is approximately 70 percent from the United States and 30 percent from around the world, according to Robie. He said that most of the product specifications are U.S.-based also to meet the expectations of the guests, most of whom are also from the United States.
Describing Regent as an ultra-luxury product, Oceania as premium-plus and Norwegian as contemporary, Robie said that food specifications line up accordingly. Thus, Regent and Oceania offer prime and choice beef, for instance, whereas Norwegian offers choice and upper select.
“So there are some variations on the specifications, but mainly on the center of the plate,” Robie said. “When you get to basic commodities like sugar, flour, cooking oil, those will be the same or very similar, and that is where we would partner with Apollo to leverage the spend to benefit all three brands from a cost basis.”
“The culinary team is very much the driver,” Robie continued, “and we are basically a support organization. They do awesome work on menu planning, and it is our responsibility to support their goals and objectives, what their mission is, and what sets our brands apart from the competition.”
Robie’s key metrics for success are straightforward: “Safety and security are paramount,” he said.
“For food, we have to make sure we are working with manufacturers and processors that have very high sanitation standards and go through third-party audits.
“Number two is quality. We can buy things all day long, but we have to make sure we are getting the quality we are expecting. Vendors have to be able to fulfill against our contracts and requirements.
“And finally, there is the cost and price.”
Excerpt from Cruise Industry News Quarterly Magazine: Winter 2017/2018
