Procurement has always been rooted in the fundamentals: balancing cost, quality, and supply. But today, the hospitality industry faces rapid change that is redefining procurement’s role. Inflation, labor shortages, and new regulations are converging with digital transformation, AI adoption, and rising expectations for sustainability. The result: procurement leaders are no longer back-office operators but rather strategic drivers of agility, innovation, and competitive advantage.
At BirchStreet’s European Conference, we hosted a panel discussion, Top European Themes Influencing Procurement, to hear how procurement leaders are navigating disruption, driving innovation, and balancing the expectations of an exceptional guest experience. The central theme was clear: Procurement must remain agile. Disruptions are inevitable, but they can also be opportunities for cooperation, innovation, and growth.
The New Realities of Disruption
Disruption today takes many forms: inflation at levels not seen in decades, evolving labor challenges, supply chain volatility, and new environmental regulations such as EU deforestation acts.
But disruption does not have to be negative. As one panelist noted:
“I don’t want to call it disruption—it’s an opportunity for everybody to cooperate.”
The pandemic underscored the critical role of procurement in keeping operations running. Those lessons are now being applied to today’s challenges, highlighting the need for stronger supplier partnerships, cleaner data, and a mindset that prioritizes agility over rigidity.
Changing Client Expectations
Hospitality procurement teams are being asked to deliver on a new set of expectations:
- Digitization – The move away from spreadsheets and manual processes is no longer optional. Digital platforms are essential for eliminating inefficiencies and managing sourcing, purchasing, and payments with greater speed and accuracy.
- Sustainability – Once a differentiator, sustainability is now a must-have. Guests, owners, and regulators expect proof of ESG progress, and procurement plays a central role in enabling and reporting it.
- Agility – Resilience in procurement is measured by agility, whether that means responding to inflation, finding new suppliers, or adapting to geopolitical shifts.
New Themes Taking Center Stage
Several issues that were once peripheral have now become top of mind:
- Inflation – Long muted in Europe, inflation has become one of the hottest topics shaping purchasing strategies.
- Labor Challenges – Staff shortages, wage pressures, and government mandates are reshaping contracts and cost structures.
- Cross-Functional Collaboration – Supply chain is no longer just a procurement issue; it’s now on the agenda of management teams across business functions. Other departments increasingly recognize the trade-offs procurement navigates, bringing both more visibility and more responsibility.
The Evolving Role of GPOs
GPOs are central to this environment. Their role has expanded beyond securing contracts to balancing global and local supply strategies, fostering supplier innovation, and acting as a collective force to move the industry forward.
Global agreements deliver resilience and economies of scale, but local suppliers provide identity and guest experience. The art of procurement lies in striking the right balance: leveraging global reach while supporting local networks.
Suppliers, meanwhile, have more choices than ever. Strong partnerships and fair opportunities now define the future of supplier relationships.
Technology, Data, and the AI Question
Meeting these new challenges requires digital enablement. Investments in data warehouses and analytics are helping procurement leaders provide cleaner, more actionable insights. The key, however, is to balance delivering meaningful information without overwhelming stakeholders with too much data.
AI is entering the picture, though with measured optimism. Its value lies in enabling faster transactions, sharper analysis, and innovation support, not in replacing people. As panelists emphasized, AI will only succeed when paired with human skills in communication, strategy, and relationship management.
Ultimately, AI can help serve the organization more impactfully, but it must be used thoughtfully.
Procurement at the Center of Strategy
Procurement has reached a tipping point. While traditional fundamentals remain, new expectations dominate: digitization, sustainability, and agility now define competitive advantage.
Disruption is a constant, but it is also an opportunity. Every procurement decision shapes the organization’s message to guests, employees, and investors. Today, procurement anchors efficiency, margin, sustainability, and brand reputation. By working hand-in-hand with GPOs, suppliers, and technology partners, procurement can drive industry-wide resilience, innovation, and growth.