John Porter looks at the future of the wholesaler
From street-corner cafés to Michelin-starred restaurants, the one thing every catering operation has in common is supplies. The food, drink and other essentials need to be there when they're needed, and at a price that means the business will make a profit.
As the eating-out market has diversified and grown - valued by analyst Horizons at around £45b annually - so has the wholesale infrastructure that supports it. Just two examples are the acquisition of wholesaler Caterfoods by Bidvest Foodservice, and Brakes' move into bottled beer and cider, which the delivered wholesale specialist said removed a reason for its customers to "visit the cash and carry."
The other side of that same coin is the focus in recent years by both Booker and Bestway on growing the delivery side of their operations alongside their cash and carry trade.
"A modern wholesaler should be less of a supplier and more of a business partner, and be able to offer advice on a range of business issues," says Raj Tugnait, managing director at Brakes Independent. "Moving boxes is one thing, but knowing what the customer wants in terms of logistics and what's inside the box in terms of quality, suitability and, of course, price, is where the real magic lies, and that is what sets some wholesalers apart from others.
"We have category teams who specialise in specific products, and buyers with responsibility for those categories who are experts in their field, and are able to advise on issues such as ranging, pack size, quality and pricing."
KFF, based in Kent, specialises in supplying local food
He adds: "Sector intelligence is another key tool for the modern wholesaler and enables us to demonstrate our knowledge of which products are right for any given operator, right from the moment we engage with them. Just because a particular product is spot-on for a hotel doesn't mean it's necessarily the right one for a care home, for example."
The big delivered wholesale and cash and carry players compete on the basis of extensive product ranges as well as quality, availability and price. For smaller players, competition becomes a question of finding a niche that can be filled better than by bigger companies.
For Kent-based wholesaler KFF, that niche is its range of local food, sourced from the Garden of England. Top brands in its 'Produced in Kent' range include the Cheesemakers of Canterbury, Owlet juices, Kent Crisps, Stokes Sauces and Kentish Mayde pies. By promoting these as its point of difference, KFF is also able to offer its wider range to caterers.
Chris Beckley, managing director of KFF, says: "Bulk-buying is a huge advantage for caterers - especially for multiple sites as it will drastically reduce costs that can be passed on to the customer. Price is important but almost secondary to service and the relationship a chef will have with a wholesaler. It's all very well purchasing the cheapest chip, but if it is constantly out of stock or not delivered on time it causes caterers to panic-buy at higher prices, it's not sustainable in the long run.
"Not all products will work for every type of establishment, and a good wholesaler will educate and inform the chef on what items will and won't work for the business, rather than pushing everything they have available. Understanding the operator's brand is fundamental to supplying the right offerings."
For a regional brand, working with wholesalers offers the route to a wider range of outlets, such as New Forest Ice Cream, which uses a network of delivery specialists. Director Christina Veal says: "Not only does this allow us to logistically supply ice-cream to customers nationally, it also provides customers with the reassurance of quality and specialist knowledge related to the ice-cream."
Also targeting a specialist market is organic wholesale business Wholegood, which was set up to service London's deli, restaurant and independent grocery sectors. Among its customers is Planet Organic, which buys Wholegood fruit and vegetables for sandwiches, salads, chowders and smoothies sold through its in-house cafés. The company also distributes its fruit and veg through online supermarket Ocado.
Al Overton, head of buying at Planet Organic, says: "Wholegood is an industry disrupter, which is what I like about it. It has built an end-to-end, chilled, ambient and frozen storage and distribution system that offers me a service that no one else can match."
JJ Food Service, which has eight branches and plans to open three more this year, is focusing on technology. Caterers can shop using the JJ app, which over time can predict what they are going to order, and this has seen online shopping grow to account for 63% of the company's sales compared to 50% a year ago. The company also works with Foodit, a software developer which builds websites for caterers and develops their presence on search engines.
JJ Food Service also aims to add value in other ways, as Terry Larkin, group general manager, explains: "For contract customers like schools and hospitals, putting together nutritionally balanced menus is vital but can be very time-consuming. We've responded by training up one of our own employees, Nina Grosicka, to become the official JJ Food Service in-house nutritionist."
With Horizons having recently reduced its growth forecast for the UK foodservice market to 1.8% compared with last year's 2%, the bigger players can be expected to complete hard for trade. Brakes is currently awaiting the go-ahead from the competition authorities for its £2.2b acquisition by Sysco, giving the world's largest catering supplier a foothold in Europe.
Meanwhile, Bidvest Foodservice's South Africa-based parent company has restructured, in a move which analysts believe could see the business given a listing on the London Stock Exchange.
Alongside having the financial clout to compete, Tevin Tobun, chief executive of food logistics and distribution specialist GV Group, believes the wholesale players will have to get even more responsive to their customers' needs in the face of ever-higher expectations. "Consumer shopping is driving behavioural change, and the gap between personal shopping and ordering for a business is closing. In the same way consumers can add last-minute items to their online baskets and select a delivery slot, the current industry focus on technology should allow caterers to do the same.
"We will get to a point where a chef, regardless of the size of his or her operation, will receive goods on the same day. This shift in culture will mean more efficient stock control, reduced over-ordering and food waste, resulting in a more profitable and sustainably run operation."
Case Study: RP Adam and Brakes
RP Adam, a family-run cleaning products manufacturer from Selkirk, has supplied Brakes for 10 years and has been named its best Non-Food Supplier of the Year three times out of the last five.
The company has successfully managed to maintain and grow the range of products it provides to Brakes, helping the wholesaler expand its non-food sales. In the past year it provided over one million litres of cleaning and disinfection products to Brakes.
Mark Larcombe, dedicated Brakes senior account manager for RP Adam, says: "We now have an extensive knowledge of what Brakes requires and expects from us as a key supplier, from technical to supply chain, and from purchasing to sales perspective.
"We can assist Brakes in forging new relationships with its existing customer base. We provide a full-service, own-label offering to exploit a huge business development opportunity within its existing customer base, most of whom don't buy cleaning chemicals from Brakes."
Case study: Azaro Dhaba
Contemporary Indian restaurant Azaro Dhaba is located in Brighton and has made its presence felt since it opened two years ago. The menu features 'feel good' dishes from several regions of India with a focus on fresh, authentic food inspired by India's roadside kiosks or dhabas.
Co-owner Az Raja describes Azaro's food as: "Proper Indian dhaba food with a Brit twist. It isn't all about garam masala - we use ingredients such as cardamom, cinnamon, saffron and star anise, so it's about flavour, not just heat."
A key supplier is Bestway Wholesale, and the Azaro team uses the Brighton depot for produce including meat, rice and dairy products. Raja says a key reason the Azaro team use the supplier is because of the personal service.
He says: "We deal with real people - we aren't dealing with central distribution. We have built up a great rapport with the local Bestway team. They get involved and understand what we are trying to achieve and support us."
Raja adds: "They have sourced specific product lines for us and think outside the box. They don't just go the extra mile, they go the extra 100 miles if they need to."
JJ Food Service
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