Plan Ahead With Commodity Forecasting

How Operators Prepare for Volatility

No matter how good you are at budgeting, markets will always change, leading to higher or lower prices than anticipated. However, if you can accurately predict what might happen in your highest spend categories, you can create better strategies for success. The key is in keeping track of key products and categories and using that data to make smarter, more strategic purchasing decisions.

Identify the Categories That Impact Your Business

Ideally, you’d get the best available price across your purchasing portfolio. However, if you’re looking to gain the biggest savings quickly, you’ll want to start by identifying your top-spend categories.

Start by reviewing your spend data over the past 12 to 18 months. Focus on categories that represent a large percentage of your total purchasing volume. That might include proteins, dairy, and even some produce items. Tracking these commodities puts you in a position to spot disruptions that will throw off operations.

It can also be helpful to consider which markets have the most volatility. You may have some items that are lower spend but higher volatility. If these items are irreplaceable parts of your menu, you’ll need to stay looped in on market changes for them, as well.

Understand Market Drivers and Volatility Indicators

Once you’ve identified your key categories, take time to understand what drives their price changes. Commodity costs are influenced by everything from weather patterns and transportation costs to global trade policies and consumer demand.

For example, droughts in Brazil can affect coffee availability while diseases like avian influenza can impact egg prices. Staying informed about these market indicators allows you to anticipate changes rather than react to them.

By monitoring both historical trends and current market drivers, operators can forecast short-term shifts and long-term cost patterns, enabling better contract planning and budgeting.

Leverage Technology Resources

Monitoring commodities can be a challenge when you have limited information or a time-crunched procurement team. It’s important to find technology resources that will lessen the burden and keep you informed. Luckily, Foodbuy Foodservice offers platforms built for the modern operator.

MPower provides a centralized portal that gives you visibility into your procurement financial performance, your contracted programs, and critical market updates. Among other features, the MPower portal gives you access to:

• Program search and promotional announcements – making sure you’re optimized across suppliers and categories.
• Market updates and inflation reports – helping you stay ahead of drivers that affect commodity pricing.
• Standardized reporting and individual dashboards – allowing your team to uncover opportunities quickly and act on them.
• Rapid crisis communication – enabling swift action when supply disruptions, weather or recalls threaten operations

iTrade Insights, available to some Foodbuy Foodservice Members, takes your data a step further by aggregating invoices, tracking promotional and contract compliance, and delivering deeper visibility into supply chain activity. With its intuitive interface and real-time analytics, you can:

• Measure performance across your vendor network and categories.
• Spot inefficiencies or opportunities for savings before they erode margins.
• Securely manage contract information and ensure alignment with your strategic objectives.

By integrating both MPower and iTrade Insights into your procurement workflow, you’re equipping your team with tools to prepare for market volatility. Ask your account manager to find out which systems are available to you.

Engage the Right Procurement Partner

There’s no crystal ball that can tell you which commodities will rise in price when, but there are strategies that procurement companies like Foodbuy Foodservice use to predict shifts in the market.

By partnering with Foodbuy Foodservice, you gain access to a team that monitors trends daily, aggregates supplier data, and leverages scale to help mitigate risk. With forecasting tools, expert guidance, and strategic sourcing, Foodbuy helps operators turn market uncertainty into an opportunity for smarter planning and stronger financial outcomes.

Get to know the Foodbuy Foodservice team now by filling out our Become a Member form.