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BaxterStorey – saving our bacon

26 October 2009 by
BaxterStorey – saving our bacon

BaxterStorey has become the first British contract caterer to source all of its meat from the UK. But reorganising the supply chain to become more eco-friendly has not been easy. Rosalind Mullen reports.

Last month, BaxterStorey finally clinched a deal to source British Red Tractor Farm Assured bacon from the UK, marking the last hurdle in the contract caterer's mission to buy all its meat from British farmers.

"So what?" you might say - but think again, because the environmental implications are huge. Not only does the deal represent a breakthrough in balancing sustainability with good business sense, it also raises the game for hospitality businesses that claim to want to support the British farming industry.

BaxterStorey's struggle to source British bacon has been ongoing since the company made the switch to sourcing all fresh meat from UK farmers three years ago. Ian Platt, supply chain general manager and the man closest to the struggle, explains why there was such a delay. "The block on bacon was price," he explains. "With a 20-40% premium on British pork, EU bacon is significantly cheaper than in the UK."

This price-differentiation is driven by the fact UK farmers adhere more rigidly to the high animal welfare standards that, for instance, ban inhumane practices such as pig stalls and tail-docking. EU legislation to reform pig farming was passed in 2001, but it won't be enforced until 2013. The UK, however, has used it with almost immediate effect.

In such a competitive climate, the resulting higher production costs have meant lower sales for UK farmers, with many hospitality businesses buying from abroad.

The facts are out there. A cross-party report by MPs earlier this year found that better welfare had imposed a "heavy financial burden" on the UK industry. According to the British Pig Executive, most English pig farmers lose £7 on the sale of each animal, compared with the costs of rearing it. Meanwhile, cheaper imports have increased to the point where half of the pork eaten in the UK comes from overseas (see opposite).

An added twist to the story - which consumers are not always aware of - is that British bacon isn't necessarily produced from British pork. UK labelling merely refers to where the meat was processed, so BaxterStorey had to get right back to the start of the supply chain.

Needless to say, the caterer's attempts to source British bacon from British pork became a vicious circle - the farmers couldn't negotiate on price unless they were guaranteed the volumes; the distributor needed demand from the caterer; and the caterer needed support from the client. In the end, BaxterStorey simply called all the members of the supply chain together, including its own main supplier and distributor Brakes (see page 24), to thrash out a deal and break the pattern.

"We wanted to help the farming community and work backwards in supporting the UK and developing a long-term sustainable food source," says deputy chief executive William Baxter.

Certainly, the deal would have been more difficult to organise if BaxterStorey had been forced to create a new logistical solution. Fortunately, though, once it had given a commitment to volume, its distributor and processor fell into step. The UK farming groups reviewed their costs and margin base, and these savings trickled down the supply chain. It's still more expensive than EU bacon, but the price-difference is now down from 20-40% to single digits, which, Platt hints, is "above 5% and below 10%".

"It's a wonderful partnership," he adds. "We came along and re-engineered the supply chain by committing to the volume. We all changed our position, even though we recognised that the bacon would still cost more than from the EU. Everyone wanted to do it, but no one had taken the initiative."

However, with bacon and fresh meat now 100% sourced from the UK, BaxterStorey still has to overcome the logistical problems of running a sustainable supply chain. To keep food miles to a minimum, the meat is sourced through regional butchers and farms. That means it is never transported more than 80 miles from farm to unit in London, or a maximum of 150 miles in the rest of the country.

HIGH VOLUME?

In some areas, however, it has proved difficult to find regional butchers and farm shops who can supply the amount of meat required at high-volume catering contracts. One black spot is Eastbourne, as Platt explains. "We have some butchers who service Brighton via the M23 and others that use the A26 to Tunbridge and Hastings, but it's a drag to Eastbourne. So we now have a local butcher doing that tiny area."

Using smaller butchers also incurs difficult issues such as due diligence. Independent suppliers need a BRC (British Retail Consortium) accreditation or EFSIS accreditation, which can be expensive for them. However, BaxterStorey has found a cheaper certification, the SALSA (safe and legal supplier) accreditation, which it is encouraging its suppliers to use.

Despite the added legwork, there are benefits. "Local suppliers give us a greater breadth of produce than national suppliers and distributors because they offer more choice. National distributors tend to offer only a volume of products to suit general tastes," explains Platt.

The knock-on effect is that the caterer attracts high-quality chefs, who are excited about using new products and can create more innovative, seasonal menus. Similarly, because the food travels less and isn't frozen, it's fresher and tastes better. And despite the higher cost of the produce, Platt says there is an element of transport-cost reduction.

Last, and most importantly, the ecological benefits of sourcing British meat are obvious in that it supports local farmers and the countryside. But is that the real reason why BaxterStorey is going to so much trouble to source from the UK?

It seems it is. No matter how you pose the question to the BaxterStorey team, the message coming back loud and clear is that they are doing it because they believe they should support British farmers. "We think it's good to do, it comes from board level and it isn't PR driven. We are reluctant to discuss it because we don't want people to be cynical," Baxter says.

"Part of what we do as a company is to try to minimise the effect on the environment. We're not trying to be clever. We just think it is the right thing to do. We have been on this road for a long time. We don't get it right all the time, but we're getting better at it."

LOCAL ANGLE

But surely the company gets something tangible out of it? Baxter concedes that from a business perspective, it's an added attraction for eco-conscious clients. And the local supplier angle is a draw, too. "We believe in what we're doing. But I guess we have gained more contracts because we can offer more choice using smaller suppliers. It means our chefs have more freedom and can use more flair," says Baxter.

It certainly hasn't done the company any harm. Baxter adds that they will be announcing their best sales this year. "We'll break all previous records. It will be in excess of £40m," he says.

The sustainable supply chain is just one of the many eco-friendly practices followed by BaxterStorey. To that end, the caterer has picked up several awards and accreditations for its green stance, including winning Caterer‘s Sustainable Business Catey this year (see panel) and its head office being awarded carbon neutral status by the Carbon Trust.

Looking to the future, however, the company won't be resting on its laurels. With regard to sustainable sourcing, work is ongoing to reduce food miles further. More research is going into fish sustainability, too. For more than two years the company has boycotted fish listed on the International Union for Conservation of Nature and instead sourced it in accordance with Marine Conservation Society guidelines.

Similarly, the quest will continue to buy British. However, while all produce that can be grown in the UK, such as potatoes or carrots, is sourced here, there are some ingredients that have to be sourced abroad, such as Japanese seaweeds, miso soup and bananas.

That said, in sourcing food from developing countries, BaxterStorey looks to make sure growers are fairly rewarded. For instance, tea and coffee are sold under BaxterStorey's Down to Earth brand, which is both Fairtrade and organic.

"In all categories you can look to improve your environmental impact, putting the people who work for you - for instance, the growers - at the top of the chain," says Platt.

And long-term, Baxter and the team hope the initiatives will generate a culture whereby customers will increasingly demand to know the provenance of ingredients. Some units now do cooking classes and suppliers are encouraged to go along with fresh produce so customers can see it and taste it.

In addition, he hopes that the rest of the food service industry will lend their weight to supporting British farmers. Certainly, this is the hope of Mike Hanson, director of environmental and sustainable practice, who is keeping the company ahead of the eco-friendly pack. "We want to make sure the message gets across to the industry by virtue of the fact that we do it, which will make people have an agenda of their own."

Hanson's role reinforces the contract caterer's commitment to the environment. He was, for example, heavily involved in BaxterStorey becoming the first contract caterer to gain the environmental management BS EN ISO 14001 accreditation. He maintains the company's carbon neutral status, assesses sites, helps clients to make their businesses greener and trains staff in the basics of climate change, pollution and new legislation. He also sits on several government steering bodies and think-tanks to examine issues such as the environmental impact of the food service industry and the drive to make labelling of British-grown products, such as bacon, less misleading

.

More importantly, he has the muscle to make recommendations to the board on environmental policy, so long as he can show the benefits. But he is pushing at an open door as the initiatives evidently appeal to BaxterStorey's core business and industry clients, who take their corporate social responsibility image seriously.

"We're not doing it as a marketing tool, but the bigger picture is that it is a USP for clients - as well as doing the right thing," Hanson says.

Baxter has the last word, reiterating his hope that the food service industry will see the benefits of supporting the British farming industry through sustainable sourcing.

"Why aren't other caterers doing it?" he asks.


WHY YOU SHOULD BUY BRITISH PORK

A report by MPs on the Environment Food and Rural Affairs Committee earlier this year found that the high welfare standards of British pork farmers has left them vulnerable to competition from European producers. That means that up to 66% of imported pig meat could have been reared using less humane methods of farming, but most Brits don't understand why they should pay a little more for British pork.

By 2013, the EU will implement a similar ban on the use of stalls and tethers as that imposed in the UK a decade ago. Unlike their British rivals, however, farmers in countries such as Denmark and the Netherlands will receive state support to make the changes. The plight of British farmers was picked up by Jamie Oliver earlier this year. His Channel 4 series, Jamie Saves Our Bacon, aimed to encourage people to buy British pork because of the stricter welfare laws.

THE DISTRIBUTOR'S TAKE

BaxterStorey approached Prime Meats, the specialist fresh meat division of supplier the Brakes Group, to help it identify the supply chain for British Red Tractor Farm Assured bacon.

It knew Brakes would support the move, being among the first food wholesalers to have products accredited by the RSPCA Freedom Food initiative and Quality Meats Scotland, and having a sourcing philosophy of belief in integrity, traceability, quality and consistency.

"We were delighted to be approached by BaxterStorey," says Rob McFarlane, director of meat and poultry at Prime Meats. "Since we set up Prime Meats in 2004, Red Tractor assurance and British products have been cornerstones of our business. We have grown our business from £7m to £75m with consistent year-on-year growth, through customers such as Orchid and John Lewis Partnership who believe in what we do and back British farming."

Brakes, together with Cornwall-based bacon and gammon processor Tulip, secured a commitment to deliver sales of more than 200 tonnes of British bacon a year - equivalent to six million slices. The product is exclusive to BaxterStorey and gives them a USP in the contract catering market.

McFarlane says: "We've been encouraging customers to switch to British bacon and other British meats for years but take-up was slow, with costs being incomparable to those offered by Europe. Happily, through our relationship with Tulip and their suppliers, we've found a viable solution for BaxterStorey."

But for pig farmers, there is still a long way to go. According to figures from Prime Meats, British bacon sales account for less than 1% of bacon sold in the food service market. Unsurprisingly then, Barney Kay, general manager of the National Pig Association, hopes the move will inspire other hospitality businesses to buy British as well. "This partnership between BaxterStorey and Brakes is evidence that UK supply of fresh produce is a reality for the food service industry. British pig farmers have taken a big hit over the past decade with production halved under difficult market conditions."


NESTLE PROFESSIONAL

"As sponsors of this year's Sustainable Business Award and one of only two food companies worldwide to have been awarded SAM Gold Class Membership (in the food category of the Dow Jones Sustainability Index), Nestlé Professional, congratulates BaxterStorey on its award win and highly commends its hard work and exceptional results," explains David Field, managing director of Nestlé Professional.

"We know only too well the challenges of demonstrating and maintaining a comprehensive corporate responsibility (CR) programme in such a demanding climate, which is why it has been encouraging to see first hand how dedicated the entire food service sector is to keeping CR on the business agenda.

"Among other accomplishments last year, BaxterStorey recycled more than 300 tonnes of food waste and reduced carbon emissions by 18.9%, proving itself a worthy winner in helping to keep the CR torch burning. By addressing a range of environmental issues, the company has embraced sustainability throughout its business, propelling its CR offering to best in class.

"The key to operating a sustainable business is looking at the end-to-end process and identifying achievable objectives and solutions. Here at Nestlé Professional, our own strategy focuses on short- and long-term priorities across areas including water, energy and emissions, transport and distribution, waste and packaging, sourcing, nutrition, health and wellness, as well as marketing and consumer information. CR is intrinsic to how we operate as a business and is more than just a programme we pay lip service to - it's an ongoing journey not a destination.

"I am pleased to say that this year the Sustainable Business Award category not only had the highest number of entries but it boasted an exceptional standard, further highlighting BaxterStorey's significant achievement. It should be justly proud to have stood out in such a competitive category."

CRATE EXPECTATIONS AT APETITO

BaxterStorey isn't the only company making strides towards sustainability in the supply chain. It comes in all shapes and forms. Mark Lovett, safety and sustainability manager at food service company Apetito, talks through a new initiative to reduce the packaging used in their supply chain.

Can you explain your new system?

We have introduced a crate system to reduce the packaging used in the transportation of products to more than 150 local authorities and 75 NHS trusts. The returnable crates have a five-year life span, so as well as removing the need to purchase a million cardboard boxes a year, they also eliminate the production of about 100 tonnes of carbon.

When was the crate system introduced?

We piloted it in May and rolled it out over the summer. The initiative forms one strand of Apetito's three-pillar sustainability programme. The project involved an initial outlay to cover the crates and trolleys and there has also been an investment in the time spent training drivers and briefing customers.

What other benefits are there?

It improves the delivery and storage system for catering managers. The system allows them to order crates of food by meal by day, which reduces their need for handling and sorting dishes. In addition, there are no cardboard boxes for them to dispose of and the crates are returned at the next delivery for added convenience. Customers are also provided with a trolley to help them move stock around their storage facilities.

What do customers think about it?

Customer feedback has been positive, with most finding the new system more convenient - it means less lifting and allows them to monitor stock more easily, which ensures it is all used. Another bonus is the reduced need to recycle cardboard, as in some regions recycling facilities for businesses are limited.

What other ideas are in the pipeline?

Our sustainability vision includes a number of targets around reducing waste and minimising CO2 emissions. These include:

  • Diverting all waste from landfill and sending all factory food waste for anaerobic digestion, generating grid electricity and compost-like material.
  • In 2008-09, we committed to replacing our truck fleet with Euro 5-compliant vehicles that produce fewer pollutants and this will be completed in 2010. Environmental performance has been further enhanced using a tank additive that helps to reduce the amount of harmful nitrous oxides in exhaust emissions.
  • Our trays are made from 99% recycled material and the company is working with a couple of hospitals to see how they can work together to recycle aluminium trays.
  • We now use double-decker trailers to reduce journeys and have introduced route-planning software to ensure the most energy-efficient delivery route to avoid racking up unnecessary food miles and carbon emissions.
  • We employ a driver-trainer whose role involves helping drivers to operate trucks more economically. For instance, changes to certain manoeuvres, such as braking and average speed, which all impact on fuel consumption and the environment.
  • We estimate that our transport initiatives will reduce carbon dioxide emissions in the region of 900 tonnes per year.
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