Releasing the Brakes

05 August 2002 by
Releasing the Brakes

The UK's largest supplier of frozen, fresh and ambient foods to caterers, Brakes, is about to enter a new phase, after it was sold last month to a US private equity firm. Amanda Marcus went to meet chief executive officer Ian Player to find out more.

Ian Player, chief executive officer of food service supplier Brakes, has a busy year ahead of him. Last month the 40-year-old family-run business was sold to US venture capitalists. Driving through the changes will be Player, who has already doubled the size of the company since he arrived in 1997 and consolidated its position as one of the leading food service suppliers in the UK and France. Under the guidance of his new employer, Clayton, Dubilier & Rice (CD&R), Player is charged with driving the company forwards, to further strengthen its position in the UK and expand in Europe.

While the company may be entering a new phase, however, Player insists it is business as usual. CD&R has appointed one of its own, Roberto Quarta, to replace Frank Brake as chairman, but no other management changes have been announced.

"Brakes already has a good track record, a strong management team and leading market positions," he says. "We expect CD&R to become involved in developing the business but not in its day-to-day running. We are looking forward to working with them. They have experience in the food service market and can help us develop the business both in the UK and in Continental Europe. There are no redundancies or major changes on the horizon."

That will be good news both for Brakes's 9,000 employees and for Player himself. He has worked hard to realise Brakes's philosophy of reinvesting in the company to promote growth, both organically and through acquisition. Over the past few years, the company has acquired the UK's second- and third-largest suppliers of ambient foods, Watson & Philip (W&P) and Cearns and Brown (C&B), plus seafood specialist M&J Seafoods. Consolidated annual sales are now about £5.1b.

Expansion across the Channel has been just as avidly sought, with Brake France's annual turnover up from £80m to £300m. Brake France probably represents one of the biggest opportunities for the group, according to Player, with Brakes now ranked number two in its product category. Over the past 12 years Brakes has invested more than £90m in France, and Player says he's confident of growing market share and profit.

In the UK, Brakes has embarked on restructuring and rebranding to consolidate its recent acquisitions and bring the new companies under the Brakes banner. Brake Bros is the UK's market leader for frozen food to caterers, and 80% of all Brakes's frozen range is branded under its own label. Its chilled food division, formerly Larderfresh, has been rebranded Brakefresh and W&P and C&B have become Brake Grocery.

Country Choice and M&J Seafood, however, have kept their own names. Player says: "Customers like the idea of specialists and there was a danger that, under Brakes, they would have looked too generalist."

Brakes has also invested heavily in its infrastructure, and recently spent more than £20m, enabling it to offer chilled products on a national basis. Player says: "Chilled foods are a major growth area for us and, with a shorter shelf life than frozen, they need to be delivered quickly. A growing number of Brakes's customers now want chilled or fresh ingredients to complement their frozen and ambient supplies. Offering chilled and frozen foods on one delivery makes life easier for all our customers."

In contrast, organic and British-only produce will remain niche markets, in Player's opinion. "If it costs more to buy British than an imported equivalent, most people won't buy it," he says. "British farmers in general are very efficient, and farming is going through tough times all over Europe at the moment - it's not just here. We shouldn't be too pessimistic. It's a bad cycle. Things will come right, but only for those who get and keep their house in order."

Information technology is the company's second major area of investment. Brakes is installing an SAP software system across the group - expensive, but the best, according to Player - which will let customers place all their orders for different parts of the business via just one call. He estimates the whole company will be integrated into this system within two years.

Brakes already has a live online ordering system so, although Player believes the relationship between customer and telesales is vital, customers do have the choice to order via the Internet. "We've seen the growth from national accounts," Player comments, "especially where buying is centralised and the staff are given a list of Brakes's products. In the long run, of course, automated buying and paying will bring costs down for both parties. But we need to work smarter so that both we and our customers can cut costs."

Whatever the options, with a total of 9,000 employees and 300,000 customer outlets, service is a recurring word. "A business our size needs top-quality people," says Player. "We place a tremendous emphasis on focusing on the customer, internal or external, because many more of our employees' customers are internal. If a storeman loads a vehicle incorrectly, for example, his customer, the driver, will face the wrath of the company's customer if a product is not on the vehicle. The driver may be another Brakes's employee but he's still a customer for the storeman."

Player may have doubled the size of business in three years but doesn't seem to be thinking of quitting there. "Our ambition is to be number one in everything we do," he reflects. "There are other opportunities in non-food grocery products and I'd like to see us stronger in fresh produce. Fresh meat is a particular area we want to grow."

The plan doesn't stop at the UK and France. "With CD&R's support there will be further moves into Europe," says Player. "Spain, Germany and northern Italy are all thought to be attractive opportunities in the coming years. The leaders have to lead."

Meet the parents

Brakes is CD&R's seventh European acquisition and brings its total equity invested in Europe to $1b (£639m).

Its main experience of food service comes from the acquisition of Kraft Foodservice from the Philip Morris Corporation for $690m (£441m) in 1995. CD&R renamed the company Alliant Exchange then expanded its distribution network, infrastructure and technology systems and grew revenues by more than 60% to $6.6b (£4.2b). In December 2001 it sold Alliant to Royal Ahold in a deal worth $2.2b (£1.4b). US Foodservice (Alliant's new name) is one of the largest food service distributors in the USA.

Brakes

Enterprise House, Eureka Business Park, Ashford, Kent TN25 4AG
Tel: 01233 206000
Web site: www.brake.co.uk

Chairman: Roberto Quarta
Chief executive officer: Ian Player
Founded: 1958 (floated, 1986)
Mission: to be the leading food service supplier to the catering industry
Areas of operation: UK, France
Products: more than 15,000 frozen, fresh and grocery lines
Customer outlets: about 300,000 in the UK, 100,000 in France
Brands/divisions: Brake Bros, Brake Grocery, Brakefresh, M&J Seafood, Twin Chef Foods, Country Choice, Brake Contract Distribution, Brake France
Turnover, 2001: £1.38b
Pre-tax profits, 2001: £40m
Earnings per share, 2001: 55.9p

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