Bickford’s strongly advocates vertical integration, something that Angelo described as “innovation in process and supply chain”. Vertical integration involves relying less upon external suppliers by internalising as much of the production process as possible. Mr George Kotses, Operations Manager, Bickford's, described the benefits this generates for Bickford’s:
“Vertical integration for us is extremely important. It enables us to control the supply chain, it enables us to be very efficient and very responsive, reducing downtime and ultimately allowing greater control over the process of producing the products when they are needed”.
Mr Angelo Kotses highlighted two clear examples of vertical integration and the benefits they created for Bickford’s. First, the company no longer buy its bottles externally; instead it blows (mould), fills, caps and labels its own on the production line. This allows Bickford’s to operate a just-in-time approach, minimising warehouse storage requirements, avoiding bottlenecks in production and operating more efficiently.
Second, Angelo claimed that as yields from fruit farming can be unpredictable Bickford’s cannot over rely on suppliers, particularly when they are international and Bickford’s has little control over them. As such, Bickford’s made the strategic decision to ‘move backwards up the supply chain’ and bought the largest pomegranate farm in Australia. Whereas before Bickford’s was the largest importer of pomegranates into Australia, it is now less reliant on that supply chain, it has greater certainty and control over supply, it employs locally within South Australia, it can ensure the quality of the product and market the final product as Australian, clean and green. Furthermore, as only 20 per cent of a pomegranate is used in the production of a juice, Bickford’s now also owns the remaining 80 per cent which can be used to make syrups giving Bickford’s an additional income stream with little extra cost.