The following foodservice companies have kindly funded the research and publication of this guide. IGD would also like to thank them for their time in interviews and steering group meetings.

IGD would like to thank the following organisations for their valuable help and advice with the research and publication of this guide:

SOURCING

IGD would also like to thank the following organisations for their help in the production of this guide: UNDERSTANDING FOODSERVICE Bernard Matthews • British Hospitality Association • British Potato Council Cherry Valley • English Lakes Hotels • Ensors • Fairfax Meadow OPPORTUNITIES FOR FARMERS HC3S • Hampshire County Council • Hippo Campo • Horizons • Ilchester Cheese Company PDM Produce • NHS Purchasing and Supply Agency • Pure Organics • Udale • Travis Foods AND SMALL FOOD PRODUCERS

IGD, Grange Lane, Letchmore Heath, Watford, WD25 8GD.

SOURCING A programme supported by Business in the Community and IGD

contents The guide is structured to provide information which helps answer a series of questions. This information will help inform the decision of whether to target the foodservice sector and if so, which sector(s) to target.

How is the foodservice Market size and structure 07 market structured? Types of companies operating in foodservice 08

Routes to market 11

introduction Factors affecting choice of routes 12 In 2004 the foodservice market in the UK was worth £33.2 billion in terms of food and drink sales to consumers. What is required to supply Baseline requirements 15 This clearly represents a big opportunity the market? Factors to consider 16 for domestic suppliers and yet in our experience few farmers or small What determines sources of supply 17 producers specifically target this sector. Perhaps the biggest barrier is the complexity of the foodservice market Category specific information for Beef 19 and a lack of information on how Are there any category specific requirements? different sections of it operate. Category specific information for Poultry 20

The guide aims to fill this important Category specific information for 21 gap. It lays out the structure of the Potatoes/chips foodservice market, discusses what is required to be a successful supplier and explains how this differs from retail. It is designed to help suppliers Which sectors should you target 24 pinpoint the best opportunities within foodservice and gives several Which sectors should I target? examples of potential role models. Who should you approach 25

Uniquely, this guide has been initiated and funded by a group of seven leading foodservice companies. They have also given IGD full access to their buying teams ensuring that we address the real commercial issues. It Are there any case studies ARAMARK and Fairfax Meadow 27 demonstrates that British foodservice companies are keen to encourage to show how other domestic Brakes and Ilchester Cheese Company 28 British suppliers provided that those suppliers are prepared to gear suppliers have got on? themselves to the needs of this sector. I call this ‘meeting halfway’. Compass and Travis Foods 29

We would like to thank His Royal Highness the Prince of Wales and 3663 First for Foodservice and Ensors 30 Business in the Community who, through the rural action programme, have been long term supporters of ‘local sourcing’. Thanks also to English Mitchells & Butlers and Bernard Matthews 31 Farming and Food Partnerships, Food from Britain, Meat and Livestock Sodexho and PDM Produce 32 Commission and National Farmers Union for their important contribution to the development and dissemination of the guide. Whitbread and Cherry Valley 33

Joanne Denney-Finch English Lakes Hotels and Udale 34 OBE, Chief Executive I hope you find the information here useful in developing your business IGD in foodservice. Hampshire County Council and 35 Pure Organics

Where can I find more Where to find useful information 36 useful information?

What do the different Glossary – what’s what 37 terms mean?

Disclaimer This guide provides generic information about the foodservice sector. It is not intended to be a definitive or comprehensive guide to apply in every situation. 7 VICE MARKET

VICE MARKET How is the foodservice market structured? HOW IS THE FOODSER STRUCTURED? HOW IS THE FOODSER STRUCTURED?

1.1 MARKET SIZE AND STRUCTURE From the graph, in 2004 outlets operating in the ‘profit’ sector accounted for 87% of food and drink sales revenue to the final consumer, 66% of total outlets and 58% of the total number of meals served (Source: Horizons). In contrast, most outlets operating in the ‘cost’ Definition sector ‘sell’ a relatively high number of meals compared to the ‘sales’ generated. This is due ‘Foodservice’ is the term commonly used to describe the provision of meals out of the to the requirement for many cost sector operators to deliver a set number of meals to an home; it is also known as the ‘catering’ sector. agreed budget, with price per meal being the key focus. Market structure The foodservice market is much more complex than the grocery retail market. To make 1.2 TYPES OF COMPANIES OPERATING IN FOODSERVICE understanding easier the foodservice market tends to be divided into two broad categories: The names ‘ARAMARK’, ‘Brakes’, ‘Compass’, ‘3663 First for Foodservice’, ‘Mitchells and Butlers’, ‘Sodexho’ and ‘Whitbread’ may not be familiar. These companies are Profit sector Cost sector however some of the largest in the UK foodservice sector and, in some cases, the world.

It is important to understand that companies operating in the ‘foodservice’ sector do not all do the same thing. Manufacturing apart, at the simplest level the large majority of Staff catering companies in foodservice can be categorised into either: Restaurants Education Quick service restaurants Health care Operators... …of foodservice outlets Pubs Custodial (eg prisons) Hotels Ministry of Defence Leisure Welfare (e.g. old people’s homes and meals on wheels) Distributors... …to foodservice outlets

Meals within the ‘profit’ sector are provided in response to consumer demand. Meals Wholesalers... …of food to distributors and/or within the cost sector are generally provided out of necessity. The distinctions are not foodservice outlets always clear however.

Market size A foodservice company may perform one, or more than one of the above functions. In 2004 the UK foodservice market was estimated to be worth £11.1 billion in terms of Operators food and drink purchases by caterers. When valued in terms of sales to the consumer Operating a foodservice outlet includes all of the functions associated with both ‘front’ the sector is estimated to be worth £33.2 billion (Source: Horizons). and ‘back’ of house, including kitchen operation and meal preparation.

For reasons that will become clear, the profit and cost sectors do not contribute equally All of the operating functions can be undertaken by the owner; alternatively however the to the overall value of £33.2 billion sales to consumers, nor to the number of outlets owner may decide to contract some functions out to third parties. In this guide the operated, or number of meals served. The chart below shows the approximate focus is on who runs the ‘back’ of house ‘catering’ function. percentage contribution of profit and cost sectors in terms of these three measures. As a general rule, operators can be categorised into those operating their own catering Percentage of food and drink sales / outlets / meals served in profit and cost sectors function (defined here as ‘in-house operators’), and those running the catering function on behalf of others (contract caterers).

100%

90% Operator...

80%

70%

60%

50% In-house operators Contract caterers

40% Undertake their own Undertake the catering Cost catering function function on behalf of a client 30% Profit 20%

10%

0% Food & drink sales Outlets Meals served Single Units Multiple Units

Source: Horizons (2004) (independents) (Chains/Groups)

8 9 VICE MARKET VICE MARKET HOW IS THE FOODSER STRUCTURED? HOW IS THE FOODSER STRUCTURED?

An in-house operator can vary from being very small, running a single ‘independent’ Five important points for suppliers to note about the nature of contract catering are: unit, to a national or multi-national company running large ‘estates’ of branded outlets. There is often an extra link in the chain compared to in-house operators: the Likewise, contract caterers, depending on their size may run single units or large contract caterer’s direct client is often a business or public institution, rather than chains on behalf of the owners. In-house operators and contract caterers can be the consumer. found operating in both the profit and cost sectors: more information is given in the following section. The nature of the contract agreed may limit the contract caterer in terms of supply choices. For example, a fixed cost contract may put great pressure on achieving The decision of whether to operate your own catering function or contract it to a the lowest cost price for goods. specialist catering company to do it on your behalf is determined by a large number of factors including type of outlet; sectors in which they operate, number of outlets, Within a particular type of contract the client may insist on particular services looking to outsource, number of meals served, core competencies, specifications. In the public sector EU procurement rules do not allow efficiencies, cost comparisons and so on. country of origin to be specified, however specifications relating to freshness, seasonality, assurance etc. may be used. (See also Contract caterers www.defra.gov.uk/farm/sustain/procurement). Many types of organisation outsource their catering functions, along with other services, to contract caterers who increasingly provide facilities management services additional Contracts can be for relatively short durations (ie rolling for 12 months) at the end to catering (cleaning, laundry, porterage and security). The most important sectors of which the contract can switch to another contract caterer or revert to (and the relative sizes) for contract caterers in terms of numbers of meals served are in-house operation. shown in the following chart. They may have internal divisions or subsidiary companies to focus on particular Percentage share by business segment customer segments.

The UK contract catering market is highly polarised between a small number of large 17 8.1 players and a group of smaller organisations.

2.2 Business & industry Compass Group, Sodexho and ARAMARK are the three largest contract caterers operating in the UK. 14 Off-shore 9.7 Healthcare In-house operators In-house operators cover a diverse range of foodservice outlets, from small, single unit 1 State education caterers in a school, through to national or international branded chains of restaurants. Independent schools 11.1 Whitbread and Mitchells & Butlers are two of the largest in-house operators in the Local authorities restaurant, pub and hotel sectors. Whitbread is also one of the largest foodservice operators to distribute products using its own distribution. Ministry of Defence McDonalds and Burger King are operators/franchisors of the two largest quick service 36.9 Catering for members of restaurant chains in the UK. the public

Source: British Hospitality Association, 2004 Wholesalers and distributors 1. Delivered wholesalers It can be seen that contract catering covers both ‘profit’ and ‘cost’ sectors, servicing Delivered wholesalers have traditionally purchased products from suppliers and both private businesses and public institutions. Business and industry continues to be distributed them to operators (either ‘in-house operators’ or ‘contract caterers’). the largest segment and health and welfare sectors offer strong growth potential. Contract catering has been helped by a trend towards privatisation in all parts of the Traditionally delivered wholesale business has been generated through the publication and public sector, including the armed forces. dissemination of ‘product lists’. These are updated periodically and carry a large selection of products needed by operators, from specific cuts of beef to cleaning products. There are a variety of contractual types which can be entered into by the caterer and client: Management Fee More recently some of the larger delivered wholesalers have moved into a host of other All costs associated with providing the service are paid by the contract caterer activities including: and recharged to the client with an agreed management fee on top. Client purchasing (see section 1.4)

Fixed Cost Contract distribution (see below) The contract fee is fixed in advance, based on forecasts and estimates. Food processing and manufacture Profit & Loss New product development and own brands The foodservice provider is responsible for the offer and pricing with little or no subsidy from the client; the service is paid for in full by the consumer. Menu development

Concession Category management The contract caterer pays for the right to trade on the premises. This type of Product advice arrangement is widely used in the travel and leisure markets. Kitchen design

10 11 VICE MARKET VICE MARKET HOW IS THE FOODSER STRUCTURED? HOW IS THE FOODSER STRUCTURED?

3663 First for Foodservice and Brakes are the two largest delivered wholesalers in the UK. Food purchases by major routes to market There are also a large number of smaller regional delivered wholesalers specialising in foodservice. Your regional food group should be able to provide names and contacts for them. 18.1 2. Cash and carry ‘Cash and carries’ provide a wholesale function, but without delivery. Foodservice focused cash and carries differ from those in retail in a number of ways, for example in Delivery Wholesaler terms of numbers of lines carried and product size. Cash & Carry The UK market leader is Booker. Other operators include Bestway, Batleys and Makro 16.2 52.8 Contract Distribution

3. Contract distributor Others (inc. retail) Contract distributors do not normally take title to goods, instead offering a delivery service function. They may deliver on behalf of the manufacturer or foodservice customer. Operators choosing to contract a distributor for all or part of their estate 12.9 include McDonalds, Burger King, Prêt a Manger and Compass.

3663 and Brakes provide a contract distribution service in addition to delivered wholesale. Source: Horizons, 2004 Other specialist distributors include Wincanton, Hays, Gist and Christian Salvesen The pie chart shows that over half of all food sold to foodservice operators is currently 4. Retail delivered wholesale. Large operators (both in-house operators and contract caterers) Foodservice operators may procure food from a number of other sources, including often select a preferred national wholesaler. Smaller operators, such as independent retailers. This may be for reasons of cost or convenience but is normally limited to small restaurants and hotels may also buy products from a national or regional delivered operators. It is not generally a targeted market chosen by manufacturers. wholesaler, but given their small size and flexibility are also more likely to be in a position to source direct from regional producers. 5. Direct from manufacturer Products may be delivered direct from manufacturer to an operator’s outlet (or outlets) or into their regional distribution centres. Direct delivery is mainly associated with high 1.4 FACTORS AFFECTING CHOICE OF ROUTES volume products. This is often the simplest option, but is not as common as in retail (where typically products go direct to a retailer’s regional distribution centre or direct to Food producers have the potential to use the same five, basic routes as the operator in store). However, distress orders in foodservice may be required to go direct to outlets. getting their products to market. It is not necessarily as simple as choosing the route that best suits you however. Suppliers must consider several questions which will help identify the necessary route to take: 1.3 ROUTES TO MARKET Q. Who is your customer? – a processor/packer perspective Operators can choose from one or more major supply methods outlined in the last In the foodservice sector it is not always easy to identify who your customer needs to section. The five main methods are shown in the simplified diagram below. be. Referring again to the five major routes to market: if you are a manufacturer/processor/packer the operator is your customer if you Manufacturer/Small Food Producer deliver direct to them, or your products are nominated lines and are distributed to them by a contract distributor.

in all other cases, you will be trading with an intermediary, such as delivered Contract wholesaler, ‘cash and carry’ company or retailer. These intermediaries will in turn Distributor make it their business to understand the demands of their customers, the operators. Delivered In practice large operators will use a combination of the five routes to market – Wholesaler Cash & Carry which one they use for your product portfolio will depend on a host of factors.

Retail The operator may use a delivered wholesaler’s list for a selection of purchases, but ‘nominate’ specific suppliers for particular lines or categories. In these cases, the delivered wholesaler may provide a contract distribution service for the nominated products, or the operator may hire a separate distributor to deliver these. Foodservice Operator

Source: IGD Research/ACNielsen

Which routes are the most popular? The pie chart below shows the breakdown of food purchase into operators through the different channels, excluding direct from manufacturer.

12 13 VICE MARKET VICE MARKET HOW IS THE FOODSER STRUCTURED? HOW IS THE FOODSER STRUCTURED?

Q. Who is your customer? – a primary producer’s perspective Single unit (independent) operators in the profit sector As a primary producer you are further up the supply chain. By it’s very nature, your Independent operators tend to have more flexibility in sourcing. Whilst they may use a product may need to be further processed or packed before it is suitable to enter any wholesaler for some products, the owner/chef has more control over menu design and part of the foodservice sector. This will either require you: purchasing decisions. At the top end they will be more likely to run ‘chalkboard’ menus, making experimentation with new products easier and less risky. to trade with the manufacturer/processor/packer, rather than with the foodservice wholesalers or operators directly. Single unit (independent) operators in the cost sector Cost sector independent operators tend to be regional rather than national, for example to invest in the processing sector, either through direct investment in processing operating a school kitchen. Many single unit operators in the cost sector work within the equipment, or through membership of a farmer controlled business. public sector and so must work within public sector constraints when it comes to product sourcing. There is another good reason for collaborating/joining a farmer controlled business: larger foodservice companies are rationalising their supplier base for reasons of Q. How do delivered wholesalers procure food? efficiency, logistics and food safety control and find it easier to deal with larger consortia than with large numbers of individual small suppliers. By working collaboratively Delivered wholesalers offer a versatile route to market as they can take on the role of producers can consolidate supplies which may help meet volume and distribution sales, marketing and distribution for manufacturers. For smaller manufacturers this may requirements of foodservice customers. in fact be the best way of gaining a much wider potential customer base. How the wholesaler procures food will depend on the function it is performing. As with any Q. How do foodservice operators procure food? wholesaler however, it is important to find out the minimum volumes they can handle into depot (the minimum may be a pallet for certain products). Operators, whether in-house operators or contract caterers, differ widely in how they procure food. Essentially they have the option of operating their own purchasing arm or Wholesale lists contracting out some or all of the procurement operation to a third party. The lists must deliver what customers require and so must offer a balanced product portfolio. In addition to selling branded products, larger delivered wholesalers have Own purchasing developed their own labels. They will therefore take particular care in ensuring the The way in which operators deal with their in-house purchasing depends on a host of quality of food supplied for their own label products. It may be difficult to get a factors including: internal structure, size, number of sectors and brands, type of product wholesaler to list a product unless you are able to identify a distinct need. and so on. As such it is important for the supplier to be clear which parts of the Furthermore, a small manufacturer may have to be willing to subsidise some of the business the operator is purchasing for. By way of example a company may structure costs to gain entry, as their products may be viewed as risky by the wholesaler. its purchasing team:

to buy products on behalf of the entire business – and will search out suppliers Third party ‘client’ purchasing who can deliver large volumes to a single specification, which may for example A delivered wholesaler may be required to purchase products specified by the end up in school meals or hotel restaurants. This may not be confined to the UK operator (referred to as ‘sourced lines’) or be given complete responsibility for all but could also extend to a foodservice operator’s activities in Europe or beyond. food purchasing.

to buy products separately for specific sectors or brands (e.g. business and Third party ‘client’ distribution industry; hotels; or institutional) – and would be likely to have different product Foodservice operators will have a number of products for which they have specification requirements for different parts of the business. negotiated specification and prices directly with the manufacturers. These are referred to as ‘nominated lines’ and delivered wholesalers may be required to Both models have their advantages, but clearly the model in use may affect the ability to supply provide a ‘wheels only’ service for these products. in terms of volumes demanded or the ability to meet a number of different specifications. It is also relevant to distinguish between national and regional delivered wholesalers in Third party ‘client’ purchasing terms of choice of route. Most regional/independent wholesalers are linked to An operator may contract out the purchasing function to a third party. This may wholesaler groups (eg Fairway Foodservice and Caterforce), which improves their be picked up by a delivered wholesaler or contract caterer. purchasing power. A potential supplier should therefore target both the wholesaler and the group to which it belongs, as if the product is listed by the group it may also be listed Q. How big is the operator? by other regional wholesalers within the group. The decision on how to procure food can be determined by the size of the operator: Operators of multiple units Operators of multiple units, for example national chains, have a relatively large number of outlets to handle. In many cases the outlets are branded, spread across the country but offering the same menus; making consistency both crucial and challenging.

A common way of assuring consistent supply nationally is to work with manufacturers large enough to meet the volumes nationally; often making supply by smaller, regional players unfeasible. Chefs in the outlets will be tasked with placing orders from lists provided by the head office purchasing division. But generally speaking they will not have the flexibility to purchase supplies for their outlet independently of the head office purchasing team.

14 15

What is required to supply the Y THE MARKET? Y THE MARKET? T IS REQUIRED TO T IS REQUIRED TO market? SUPPL WHA SUPPL WHA

2.1 BASELINE REQUIREMENTS Size of supplier Some of the larger foodservice companies specify that a supplier’s business to them Companies operating and distributing to different foodservice sectors will of course require must be less than a particular percentage of the supplier’s overall turnover. This tends different things of their suppliers. However, a number of baseline requirements appear to be to occur where foodservice companies purchase on contract for a fixed period of needed to trade with foodservice companies, particularly larger foodservice companies. This time (and usually a fixed price). After the fixed period there may be a change to other section notes some of these requirements and also highlights some key differences in suppliers. The turnover limit helps assure the supplier will be in a position to supply baseline requirements between retail and foodservice sectors. at some later date.

Supplier approval questionnaires Summary A growing number of foodservice customers require potential suppliers to complete In summary, while there continue to be some obvious differences between the approval questionnaires to assess quality and hygiene. In some cases this function baseline requirements of retail and foodservice companies the gap is closing as is undertaken on their behalf by a recognised third party. A smaller number also foodservice becomes more sophisticated. It should be noted that small suppliers require completion of other surveys, for example regarding the ‘environment’ or may not be required to meet every requirement and certification if the customer is ‘corporate social responsibility’. happy with the existing procedures. Likewise, smaller, independent, foodservice operators may well require few, or none, of the approvals and certifications from their Administration suppliers, instead holding face-to-face meetings or inspections. Due to quicker Electronic data interchange (EDI), a normal requirement for supplying into larger menu turnaround or through the use of specials boards they are also better retailers, is becoming more widely used in foodservice to replace fax and phone equipped to market dishes with particular provenance (such as ‘red tractor’, orders, particularly for products moving through distributors. Whether it is ‘organic’, ‘local’ or specific breed). demanded of suppliers is still very much dependent on the customer.

Farm assurance 2.2 FACTORS TO CONSIDER The requirement for supplies to be farm assured depends on the type and size of customer and sector they operate in. Larger foodservice companies are more Product quality and consistency likely to require certification to farm assurance standards than smaller, budget end, Most of us expect a specific dish in a particular outlet to look and taste very similar independent operators. There is a growing interest in this area, with for example, each time we have it. Likewise, if it says an 8oz sirloin steak on the menu, we are Brakes (delivered wholesaler) listing some own-label red meat lines with the ‘British entitled to expect an 8oz steak every time we order one. Foodservice buyers, Farm Standard’ logo (Red Tractor). Global production standards are also important whether operators or wholesalers, must therefore set strict specifications which with, for example, nearly all large foodservice companies requiring fruit and deliver this consistency time and again be they weight, thickness, shape, size, colour vegetable supplies to be certified to the ‘EUREP-GAP’ assurance standard. or taste specifications. Foodservice outlets, and their customers, know there is no excuse for a poor eating experience (unlike retail where inappropriate home cooking Hygiene certification may spoil the meal!). BRC certification is the key requirement for many companies, covering food safety, product traceability and due diligence. Price Cost prices and selling prices are important to any business. The relative importance Distribution of cost price against other factors will depend on the particular foodservice sector In contrast to supplying retailers, bar-codes are generally not required in foodservice (see section 2.3). as products are rarely scanned through the chain. However several large companies believe this will change in the future as monitoring product flow through Volumes the chain becomes more important. Foodservice operators also require deliveries at Foodservice can offer manufacturers a relatively consistent demand, helping with pre-determined delivery times, generally in a morning for lunch-time or evening cash flow and planning. This occurs because foodservice is generally not as service that day. ‘promotion’ driven as retail, and because in certain sectors the choices are much more limited than can be found in retailers (e.g. menus on trains or aircraft, school or Packaging hospital menus). Unlike retail, packing in foodservice is purely functional and is not needed for sales and marketing purposes. However, it is important that inner and outer packaging is For farmers and other small food producers, the volumes necessary to meet larger provided to allow cases to be split for use at unit level. (national) supply requirements are likely to be achieved only through collaboration.

Marketing support Availability Foodservice is in general not as ‘promotion’ driven as retail, although delivered The menu is key to the sourcing requirements of many foodservice outlets. For larger wholesalers in particular will offer promotions from their lists on a regular basis. operators in particular, the menu may be in place for several weeks or months at a However, other types of support will often be required, for example providing time. It is essential therefore to find suppliers who can guarantee to supply what the ‘distress’ supplies direct to individual outlets at short notice or running a programme menu specifies. Having a menu item ‘unavailable’, or bringing out a dish which is of product innovation. different to the one advertised and ordered is a non-starter: operators are keenly aware of the other 260,000 foodservice outlets available to their customers!

Relationships Whilst in many ways foodservice is becoming more like retail, as a general rule, buyers stay in place for longer in foodservice companies than retailers. It is therefore possible to build longer relationships with individual buyers.

16 17 Y THE MARKET? Y THE MARKET? T IS REQUIRED TO T IS REQUIRED TO SUPPL WHA SUPPL WHA

2.3 WHAT DETERMINES SOURCES OF SUPPLY In contrast, a ‘top-end’ restaurant, with menu prices to match, is likely to be more flexible in terms of cost price, may value other attributes highly and be prepared It is a fact that both foodservice and retail sectors import a proportion of their food and drink to pay more for them. Some of these attributes may be best delivered by requirements. As the UK’s self sufficiency in all food was 62% in 2003* and for indigenously domestic suppliers (e.g. specific origin). produced food was 75% in the same year this is not surprising (*Source: ‘Agriculture in the UK 2003’). Who can provide the necessary specifications? Given the complexity of the foodservice sector no accurate figures exist on the level of Continuing the theme of delivering the required ‘attributes’ for the specific foodservice imports in general, or by category, making it more challenging to understand the challenges sector, they may be concerned with production or processing specifications. As made and opportunities in specific categories. clear elsewhere in this guide specifications are laid down for specific reasons to ensure the product is exactly what is required consistently. Several of the key determinants have been considered above and ‘price’, ‘consistency’ and ‘availability’ are often sited as reasons for imports. These determinants are at the core of supply Foodservice buyers may not find the specified cut, fat level, size etc (which are essential decisions and it is important to have a deeper understanding of what this means in practice. to the sector) in a particular country. This may be to do with the breeds or varieties grown, the way in which they are grown, or the way in which they are processed. General factors The category specific section and case studies give more detailed examples and in Some determinants of where and how foodservice companies purchase are category some cases show where domestic producers are able to deliver what foreign specific, however there are a number of determinants which are important irrespective competitors cannot. of category. Foodservice companies, particularly larger delivered wholesalers, have bought processing Competition with retail facilities in particular categories to ensure consistency of specification and service. The UK foodservice sector is in direct competition with the UK retail sector for a large proportion of its supply, but the buying power of even the largest foodservice Increased automation in kitchens companies is relatively weak compared with the large retailers. This is mainly due to With declining skill levels, higher salary demands and fewer working hours in many the smaller volumes required by foodservice companies. kitchens, automation has increased. This makes it all the more important for the products handled within the outlets to be easy to prepare and hard to spoil. This places Focus of UK manufacturers greater emphasis on the buyers to source product varieties and types which can still Many UK manufacturers see the foodservice sector as of secondary importance to deliver ‘on the plate’. This in turn pushes them towards suppliers who are innovative retail. This is due in part to the buying power/volume issue highlighted above. There and able to supply more prepared foods. are other factors driving this perception however: product specifications required by foodservice companies may not be the specifications normally delivered to existing customers; and may require processing in ways which the manufacturer is not familiar with, or which may create additional waste or cost.

known as ‘carcase balance’ with meat, the issue of finding markets for all parts of a processed product is key to profitability. Foodservice companies are likely to be particularly selective in the cut, colour, size (etc) of the product, which may require the manufacturer to find additional markets for other parts of the carcase.

Which sector is the product purchased for? As noted earlier, foodservice covers everything from hospital catering to a Michelin starred restaurant. Operators within each sector will have requirements specific to that sector, some of which may be more or less compatible with domestic supply. Considering an obvious example:

Cost price As indicated on page 9 the type of contract set for contract caterers in the public sector may be ‘fixed price’; i.e. the caterer must work to a tight budget. This will require a greater focus on cost price, probably to the detriment of other potentially desirable attributes, such as origin, lower food miles and so on. This will not only affect public sectors where contract caterers are used, but will also have the same impact on buyers within public institutions, for example NHS Purchasing and Supply Agency (PASA) or local authorities.

18 19

Are there any category specific Y SPECIFIC Y SPECIFIC

requirements? TEGOR TEGOR ARE THERE ANY CA REQUIREMENTS? ARE THERE ANY CA REQUIREMENTS?

Having considered the sourcing determinants relevant across most categories, it is worth Some major beef exporting countries have focused on breeds which meet the high focusing down to category level. value cut market in the UK but as a result produce ribs too small to meet the specifications of the UK carvery restaurant sector. This section aims to highlight, for a selection of specific categories, some key procurement Competition with the UK retail sector is not as great for this cut; in addition foreign drivers and an assessment of where domestic supplies are strong, and weak. The case studies availability is lower due to other lucrative markets for major beef exporting countries. in this guide also provide category specific information – taken from identified companies.

The categories here are beef, poultry and potatoes/chips. They have been selected Where are domestic suppliers/supplies challenged? because foodservice takes supplies from both foreign as well as domestic sources. More Heterogeneity of the UK herd in terms of size, breed, feed and finishing regimes has category specific information is available on the IGD web-site (www.igd.com). been identified as being a key factor in the difficulty domestic beef supplies have in attaining and maintaining foodservice specifications. It is important to note that the category information comes from foodservice companies involved in this project and is based on their experiences. As such the information is not UK suppliers often prefer supplying retail as there is less of a carcase balance issue meant to be comprehensive, nor apply in every case. It does however provide some (due to high demand for mince), and overall volumes tend to be greater. pointers towards key learning areas and opportunities for domestic suppliers. Foodservice operators using menus often set them for several months. To ensure availability they also need to agree a set price with suppliers for this period of time. Domestic processors are often not able to guarantee a cost price for several months. BEEF Given some of these problems some delivered wholesalers, including Brakes and 3663, have invested in their own wholesale meat businesses. Many of the observations relevant to beef are also relevant to lamb and pork. For logistical reasons, some types of customer may require meat supplies to be Category observations frozen. This often makes it easier for foreign suppliers to enter the market. Frozen meat is easier to handle when it comes to portioning for foodservice as Both the end market and cut of beef required will determine the specification and automated machinery can be used which cuts through bones to produce for origin of beef into foodservice. example 4, 5 and 6oz pork chops. It is both easier and more cost effective than In terms of end market, premium sectors are more able to carry the higher cost portioning by hand using frozen product. of buying domestic beef; but at the value end prime cuts of beef may have to be imported. Where are the opportunities for domestic suppliers/supplies? Imports of high value cuts (e.g. sirloin steak) are sometimes required due to high domestic demand with fierce competition amongst foodservice companies and Improve consistency and availability of raw material, e.g: retailers. specific ‘foodservice’ breeds. High value cuts can stand greater distribution costs so imports are more viable. similar rearing and finishing regimes across larger numbers of stock. The profit sector takes the majority of high value cuts so suppliers of these cuts dedicated supply chains for foodservice. into the profit sector are more likely to have to import. See foodservice as the primary, not a secondary, market. Cost sector customers are more likely to require lower value beef. In fact around Guarantee supply at set forward prices. 85% of red meat purchased in the cost sector is in the form of diced or mince (Source: MLC). Sufficient volumes are more widely available from the UK and, additionally, cannot so easily ‘carry’ the higher distribution costs associated with foreign supplies. POULTRY

As the UK is not self-sufficient in beef, foodservice companies have found that if Category observations supplies are tight, UK supplies will often flow to retail, not foodservice, as retail buying power is greater and retail specifications may be easier to deliver. Poultry is a relatively cheap, core protein and dishes containing poultry meat (particularly chicken) are very popular in the UK. Carcase balance tends to be a greater issue for beef suppliers into foodservice as there is not necessarily a balancing demand for all parts of the carcase. A key requirement in foodservice is forecasting demand, particularly for sectors where demand fluctuates significantly over a year (for example schools). Beef (and other meats) is the ‘key’ ingredient on a plate, around which other items will be selected. As such the area of the plate the beef covers will determine the To deal with large foodservice companies, processors may be required to provide amount of other ingredients required. A specific size and shape of the beef cut will poultry at different price points (which may require imports to satisfy lower cost be required to ensure a particular plate coverage. prices and ensure availability). This is essential for operators with both high-end and value-end outlets. The requirement for farm assurance depends on the sector and companies involved. It is sometimes, but not always, specified. There are opportunities for small UK suppliers, but larger processing companies find it easier to ensure product volumes and consistency, particularly for national Where do domestic suppliers/supplies have advantages over supply agreements. imports?

UK suppliers can often benefit from the specifications foodservice customers set. Taking rib of beef as an example: UK restaurants operating carveries often require larger size beef ribs as they look better on the carvery and must be the right size to fit into catering ovens.

20 21 Y SPECIFIC Y SPECIFIC TEGOR TEGOR ARE THERE ANY CA REQUIREMENTS? ARE THERE ANY CA REQUIREMENTS?

Sufficient shelf life is critical to take account of potentially long distribution chains. Potatoes are versatile, relatively cheap and filling, so feature in many dishes. The demand for poultry in the UK is to a large extent dictated by retailers through The core component of the dish (often a protein) will determine whether potatoes or in-store price offers. This in turn affects availability of domestically produced product. other carbohydrates are used; and how potatoes are presented (roasted/mashed etc). Demand for breast meat in some large poultry exporting countries is lower With increased automation in kitchens, buyers need more convenient products. than for ‘thigh’, meaning breast can be sold to the UK for lower prices. This includes: The quality of product boned out by hand is considered superior to that boned by seeking varieties that are easy to cook on site and ‘hold together’ well on the machines, there is also less waste if done by hand. Foodservice requires poultry plate (absorb less water), or can be prepared elsewhere and simply finished in meat that looks good on the plate, without ragged edges produced by machine. the outlet. Low labour costs in Eastern Europe, Thailand and Brazil make it possible to provide requiring products which have been processed to some extent (e.g. jacket a hand boning service. In addition, poultry from these countries is significantly potatoes individually packed and part or fully cooked). cheaper than from the UK. Given the above, potato variety is a strong influencer of country of origin. Product Imports of poultry are mainly in commodity frozen lines such as butterfly chicken breasts. provenance becomes more important in the more premium markets.

Where do domestic suppliers/supplies have advantages over Where do domestic suppliers/supplies have advantages over imports? imports? The UK grows a large number of varieties, which can appeal to a number of UK suppliers are able to offer foodservice a fresh product (whole birds are difficult to different markets. vacuum pack so fresh products from more distant foreign countries tend to have a shorter shelf-life). This advantage may start to diminish if new EU countries (in Where are domestic suppliers/supplies challenged? Eastern Europe) start to focus on fresh product. Some foodservice companies consider the UK to be ahead of foreign competitors in Whilst there is a relatively large number of potato varieties grown in the UK in terms of processing knowledge and added value techniques (e.g. shapes, coatings, comparison to close foreign competitors (e.g. Holland), foreign competitors are more finishes etc) for some products. likely to be able to meet large volume contracts of a set specification. Trading with UK processors is generally easier, in terms of dealing in the same Few UK processors offer a wide range of further processed potato products. currencies and so on. Where are the opportunities for domestic suppliers/supplies? Where do domestic suppliers/supplies struggle? Research undertaken for the British Potato Council has identified several possibilities: For large domestic processors volumes into foodservice tend to be small compared Growers and packers should identify new varieties which are more appropriate to to retail, so few large UK processors are able or willing to supply this market. foodservice needs. While domestic processors may be able to supply at a particular price point, they There is the potential to improve innovation in an number of areas – not least finding may not be in a position to provide the overall portfolio of product specifications and new products, ways of preparing and cooking products, and packaging. price points to cover a range of foodservice markets. The growing consumer focus on health could be linked more strongly with convenience and indulgence. Where are the opportunities for domestic suppliers/supplies?

Processing facilities/processors dedicated to foodservice provide confidence for foodservice companies that they are not seen as secondary markets to retailers. CHIPS Foodservice customers often require different specifications to retailers. Large Category observations foreign suppliers may not think it worthwhile to change processing specifications, particularly for small volumes. In many foodservice markets chips are considered to be a commodity item, bought Whilst fresh product may be imported, there may be an opportunity for more value in bulk with a necessary focus on cost price. adding (marinating etc) to be undertaken in the UK. Foodservice requires large volumes of chips of the same quality (potato variety and The Bernard Matthews/Mitchells and Butlers case study provides an example processing technique) of how a domestic processor has worked successfully in the profit sector. It is estimated that approximately two thirds of chips into foodservice are imported, into both profit and cost sectors. Large foreign suppliers may offer wide ranges of other potato products in addition to POTATOES (FRESH) chips allowing foodservice companies to trade with fewer suppliers. These large suppliers are also more willing to enter into Europe/worldwide long term Category observations supply agreements, often through a tender process. The British Potato Council estimate that 50% of potato tonnage moves into the Chips need to be the right colour, length, firmness and ‘bite’ when on the plate. foodservice sector: this includes processed potato products (e.g. chips). The cooked chip colour varies by variety and therefore country of origin. Some UK foodservice is in competition with potato processors as well as retailers. foodservice companies say their consumers prefer the cooked flesh colour of a chip Growers for processing potatoes such as crisps are often on contract and retailers to be yellow. This colour is most readily found in chips purchased from Belgium and require relatively large volumes meaning in times of short supply availability may be a the Netherlands (chips sourced from UK tend to be white). problem for foodservice.

22 23 ARGET? Y SPECIFIC

TEGOR Which sectors should I target? WHICH SECTORS SHOULD I T ARE THERE ANY CA REQUIREMENTS?

Where do domestic suppliers/supplies have advantages over imports? As a small food producer interested in entering the foodservice market you are faced with a bewildering number of routes to market and types of operator you could, in theory, service. The varieties of potatoes used for chips in the UK often allow longer chips to be cut. Longer chips tend to look better on the plate. However, for many reasons covered elsewhere in this guide, some areas of the foodservice market are more likely to offer realistic opportunities to large (domestic or foreign) suppliers. Where are domestic suppliers/supplies challenged?

The large volumes involved require large processors. However there is only one 4.1 WHICH SECTORS SHOULD YOU TARGET? large processor in the UK (McCains) compared to several on the continent. To source UK grown/produced chips would mean working with a number of smaller Many factors will affect the ability of a foodservice customer to purchase food from smaller UK suppliers, where quality may vary by supplier through season, where price may domestic food producers. Many of them can be summarised into two key factors: the be less competitive and where volume requirements may not be guaranteed. customers’ focus on cost price and level of flexibility the customer has: European processors are more innovative developing products such as par fried chilled chips. Cost price Cost price is important to all companies and institutions. The importance given to Where are the opportunities for domestic suppliers/supplies? it relative to other attributes will in most cases reflect the foodservice sector in which the customer operates. For many of the reasons described above, the chip sector is a difficult one for relatively small UK processors to access. However some UK varieties are clearly Flexibility favoured for the longer length of chip they can produce. ‘Flexibility’ covers a number of different elements, for example menu selection and duration; the ability of individual units to procure food on their own behalf, the volumes required, and so on.

Greater focus on cost price National public Local public sector wholesale supply sector wholesale and catering contracts supply contracts (e.g. MOD, NHS, (e.g. individual health Prison service) trusts; schools)

Lesser Greater flexibility flexibility

Independent, National branded in-house operated pub, restaurant and ‘chalkboard’ hotel chains pubs/restaurants/hotels Lesser focus on cost price

Areas for smaller suppliers to target The diagram does not attempt to capture every type of foodservice outlet which exists, so no doubt there will be exceptions to prove the rule! That said, ‘traffic light’ colours are used to indicate the likely level of success for farmers and small food producers – Green indicates the most realistic supply opportunities – Red indicates the biggest challenges!

The most obvious routes to market are into independent, in-house operated, ‘premium-end’ pubs, restaurants and hotels. They may be individual businesses or part of smaller regional chains, but due to their customer base will often balance paying a bit more with the benefits of buying from smaller suppliers who can offer something special (for example, food with ‘provenance’). The key determinant of success will be how their food is procured. If they deal directly with producers/ processors there is less of an issue; but if they use a regional or national delivered wholesaler for your category, you may have to persuade the customer to nominate your product, and persuade the wholesaler to carry it.

24 25

Are there any case studies to show

ARGET? how other domestic suppliers have got on? WHICH SECTORS SHOULD I T

Supplying into the public sector has often been extremely difficult for smaller food The following pages highlight examples of successful domestic supplies into the suppliers, given the often large volumes required and focus on cost price. However UK foodservice sector. there are a growing number of examples (one as a case study in this guide) where smaller producers have dealt successfully with local authorities, hospital trusts and individual schools. The ‘Public Sector Food Procurement Initiative’ led by Defra is The case studies have been selected likely to help expand these opportunities over time. to showcase:

Large chains of pubs, restaurants and hotels may not be focused on cost price to various food categories (of importance in UK agriculture). the detriment of other attributes, but are likely to be locked into a food supply structure which a small supplier will find very difficult to access. This may be for a foodservice sectors (profit and cost). host of reasons covered elsewhere in the guide, such as volume requirements being too large, where and how often products have to be delivered and so on. They are supplier size (local to national). likely to work with large delivered wholesalers who will have secure supply routes and who may not be able or willing to handle your product. However, if the chain types of customer (in-house operators, contract caterers purchases directly they may be better able to work with smaller suppliers. and delivered wholesalers).

National contracts to supply into public sector institutions are the hardest of all sectors The case studies are also intended to highlight some of the for smaller producers to enter. Due to the way in which these contracts are often major challenges and opportunities for domestic suppliers in awarded (by tender) not only will suppliers be required to focus heavily on cost prices, working in various sectors and with various types of but the volumes required will often be much larger than smaller suppliers can deliver. foodservice customer. The economies of scale in dealing with fewer larger suppliers makes it very difficult for groups of small suppliers to effectively deliver the volumes by working together. Also, the contract may require delivery of non-food services as well as food supplies, something even a consortium of food producers may struggle to deliver.

4.2 WHO SHOULD YOU APPROACH?

The only sure way to know how flexible a particular distributor or operator can be is to do some research. This may be as simple as visiting the premises and looking at a printed menu or specials board – are products from the region being used in dishes? Speaking with the owner, chef or manager (the contact may be all three in smaller establishments) will also give insight.

For large chains of pubs/restaurants, or catering facilities in the cost sector (businesses, schools, hospitals and so on) a direct contact is likely to be deflected to the operator’s head office buying function (which could be a contract caterer), or to a delivered wholesale supplier. In all cases the buyers will have an existing source of supply for your category and will require sound business reasons to consider changing them: a vague approach will not be fruitful.

Contacts

The web-sites of some national foodservice distributors and operators are given on page 36. Your regional food group will be able to provide contacts for regional wholesalers and operators: their web-sites are also given on page 36.

Some things to consider in supplying independent outlets

Having identified independent outlets as offering the best chances of supply for smaller domestic producers, it is worth highlighting a few other things to consider. These outlets often:

lack food storage space so require smaller, but more frequent deliveries. have no central distribution system – everything is delivered from suppliers to the back door. lack economies of scale. case studies focus on specific cuisine. will want to sell foods that customers cannot buy in supermarkets.

26 27 ARAMARK and Fairfax Brakes and The Ilchester Meadow Cheese Company

MUTTON INTO WORKPLACE CATERING BLENDED CHEESES INTO THE PROFIT SECTOR case studies

background usual machine dice, and finished product needed background For the cheeseboard Brakes wanted a product ARAMARK is the third largest contract caterer to be 85% visual lean in comparison to the normal Brakes is a market leader of delivered wholesale that could be delivered to outlets in a ready to and facilities management company in the UK, 75%. Both factors are important when dealing with in the UK supplying frozen, chilled and grocery serve form so that pub/restaurants could simply managing clients’ dining requirements and offering a product that needs slow cooking to bring out the products to sectors across the foodservice remove the wrapping and present to customers. tailor made food service solutions. This includes texture and flavour of the mutton dish. industry. This provided a number of challenges for Ilchester, directors dining, hospitality and employee not least finding the right mix of packaging The Ilchester Cheese Company was founded in restaurants, throughout the UK. ARAMARK current supply relationship formats & cheese types to tie in with their core 1962 with the creation of the first British speciality is present in most industry sectors including competencies and achieve an acceptable cost Fairfax Meadow currently sources the mutton used cheese – ‘The Original Beer Cheese’. The first Business and Industry, Corporate Dining, price. This product is delivered into Brakes’ in the ARAMARK promotion from T.H. Sutcliffe, a British company to blend cheeses with other Education, Healthcare, Custodial, the MoD regional distribution centres for forward supply Welsh producer with whom they have been dealing ingredients, Ilchester Cheese has grown to be the and Offshore. onto their customers. for more than 20 years. Sutcliffe operates its own brand leader in the British blended cheese market Fairfax Meadow is the largest meat supplier abattoir and holds contracts with local Welsh with production of nearly 4,000 tonnes per year current supply relationship dedicated to foodservice in the UK, supplying farmers for the supply of all its lamb and mutton. and a turnover in 2004 of around £22 million. The relationship has been extremely successful, 17,000 tonnes of chilled and frozen meat products Fairfax Meadow delivers meat to around 400 with like-for-like sales (Jan 2005 vs Jan 2004) up per year, including 10 million portion controlled individual ARAMARK locations three times a week. development of supply relationship products, all produced in line with agreed 116 per cent. Ilchester continue to work with At the start of the ARAMARK agreement, each unit In early 2003 Ilchester made the strategic decision customer specifications. Established in 1980, its Brakes to identify new opportunities. was visited by a Fairfax Meadow representative to to target the foodservice sector with a number of annual turnover is around £65 million. agree locally suitable service levels. innovative products geared to foodservice. advice FROM ILCHESTER Ilchester targeted Brakes partly because the main development of the supply relationship contact at Ilchester had been an Account Manager Rodger Seaman, Account Controller at Ilchester, In April 2002, Fairfax Meadow started supplying advice FROM FAIRFAX MEADOW at Brakes so was fully conversant with Brakes’s considers a key reason for their success with ARAMARK on a regional basis in the South West business and was able to identify opportunities Brakes is that the relationship is built on mutual Rob Shears, Fairfax Meadow’s National Account of England and South Wales, before securing within the cheese category. trust and respect, as well as a desire to optimise Manager for ARAMARK, explained that in order national supplier status for all chilled meats at the trading opportunity. to satisfy the due diligence requirements of its Extensive discussions with Brakes led first to a the end of 2003. Fairfax Meadow successfully foodservice customers (some of which supply into contract to supply 3kg mature cheddar blocks for For domestic processors wishing to enter the won the tender as it was able to provide schools and hospitals), Fairfax Meadow holds long slicing to Welcome Break – distributed through foodservice market, Rodger has the following collaborative procurement, taking title and control term trading relationships with approved key quality Brake logistics. Brakes largest markets for high advice: of the product, and supplier assurance, such as producers in compliance with their own higher level quality cheese products are independent pubs and offering full product traceability to ARAMARK and ■ you need to be efficient and flexible in BRC accreditation. sandwich bars, so Brakes worked with Ilchester to their clients. production to serve this market, particularly find products that appealed to this audience. when launching new products which often take In response to an initiative inspired by HRH Prince Orders for Brakes wholesale lists followed including time to become established. of Wales, Patron of The Academy of Culinary Arts, mild and creamy cheese portions and ‘Applewood’ advice FROM ARAMARK to define and reinstate mutton onto local menus, smoke flavoured cheese. ■ One size does not fit all in foodservice. Different ARAMARK identified the opportunity to start channels may require different products and According to Greg Woodland, Buying Director From October 2004, Ilchester has supplied featuring more mutton based dishes. ARAMARK pricing structures, essential to consider when at ARAMARK, suppliers need to be focused on baguette slices (unique to Brakes) and a 150 gram elicited the support of restaurateur and celebrity developing new products. foodservice and understand how they can make a flavoured cheeseboard selection, launched by chef Brian Turner to develop bespoke recipes to tie difference to foodservice operators. Portion control Brakes and consisting of blended cheeses, ■ If you can remain flexible and open-minded in with two seasonal promotions, featuring British and plate coverage is paramount in foodservice such as ‘Wensleydale and cranberry’, and ‘Stilton when approaching the foodservice sector the mutton sourced through Fairfax Meadow. The first and suppliers must be flexible regarding size of and apricot’. rewards are significant. promotion took place in October 2004 and the production runs, different pack sizes, the trim or second in January 2005. Such was the success of finish they can provide and a willingness to deliver the first promotion that sales of British lamb & mixed pallet drops. some issues mutton into ARAMARK increased by 11%. Some Brakes noted that its pub customers were selling advice FROM BRAKES examples of the promotional dishes included slow more baguettes than sandwiches, but that the roasted leg of British mutton with a creamy leek cheese slices required for baguettes are different Chris Cannon, Brakes, thinks that flexibility is key sauce and hotpot of British mutton with cumin (baguettes need a single, elongated slice, rather and this is where Ilchester scores highly, for tomatoes. than the square slices produced for sandwiches). example Ilchester are able and willing to make It was therefore necessary to quickly develop smaller production runs of products for trial – some issues slices specifically for baguettes to meet growing something larger companies may be unable or customer demand. Brakes approached Ilchester unwilling to do. In addition, Ilchester has proven Sourcing legs of mutton for the first promotion given their proven track record for product itself as innovative and will come to Brakes with with a weight tolerance of between 2-2.5 kg development and their ability to move quickly new ideas, such as more convenient, labour proved a challenge, particularly for what can to develop and deliver products. Development of saving cheese products (such as the cheese sometimes be an inconsistent product in terms the new slice required the commissioning of new board concept). of size. The weight is dictated by operational and moulds to form the necessary shape of block usage issues, with smaller joints requiring shorter cheese and the development of special cutting cooking times and resulting in less wastage. techniques to minimise breakage. For the second promotion, diced mutton leg meat was used. However, the specification differed from the ARAMARK normal specification, as the dice was a larger 25mm hand dice in comparison to the 28 29 Compass and Travis Foods 3663 First for Foodservice WHOLE HEAD VEGETABLES INTO COMPASS and Ensors

MEAT INTO THE INTERCONTINENTAL HOTEL GROUP case studies

background current supply relationship background benefits of the relationship Travis Foods is a family owned business that goes Travis Foods supplies Compass with a range of 3663 First for Foodservice is a market leader in For Ensors the foodservice contract is an important back several generations. Fresh produce has different whole head products, including carrots, delivered wholesaling covering the business and part of Ensors business portfolio. Ensors are also always been its focus and currently it has 1,450 swede, cabbage, beetroot, onions, leeks and industry, travel and leisure, pubs, healthcare and able to build longer term relationships with acres (590 hectares) under cultivation in four cress and more recently Chinese leaves, speciality education sectors. foodservice customers through, for example, counties: Lancashire, Cheshire, Suffolk and cabbages including black kale. It is also looking offering advice and information to hotel and Ensors is a medium sized abattoir and boning Norfolk. Travis Foods specialises in whole head at the future development of ethnic products and development chefs, and running ‘meat awareness operation based in Cinderford, Gloucestershire. and prepared vegetable lines. In 2004,Travis Foods speciality lines to suit the requirements of the days’ at Ensors to improve chef knowledge of how Ensors have a varied customer base including local business was valued in excess of £3 million. diverse sectors within the Compass businesses. to handle and prepare meat in the hotel kitchen. wholesalers, further processors and a growing Compass is the world’s leading foodservice Contract duration tends to be 1-2 years with foodservice business. Paul Willington, 3663, says of the relationship with organisation with annual revenues of nearly prices fixed for the duration. This means that Travis Ensors: “for 3663 a major benefit of working with The Intercontinental Hotels Group (ICHG) is a £12 billion, employing 400,000 people in over Foods takes responsibility for fluctuations in supply Ensors is their obvious commitment to foodservice leading global hospitality group and in the UK 90 countries. In the UK and Ireland, Compass allowing Compass to more accurately cost its and not seeing foodservice as of secondary operates a number of well-known hotel chains, provides high quality catering and support services menus across its business. When products are importance to retail. Ensors also operate their own including Intercontinental and Crowne Plaza at nearly 9,000 locations and serves nearly three no longer in season Travis Foods is responsible for abattoir and processing facilities and so are able to Hotels; the Holiday Inn and Holiday Inn million meals a day. sourcing imported product to maintain continuity ensure good consistency and provenance“. Express chains. in supply. At present there is reduced supply of development of supply relationship in Savoy cabbages in the UK due to the wet summer foodservice last year and consequently smaller cabbage sizes. development of supply relationship in advice FROM ENSORS Travis Foods must therefore source more imported foodservice Travis Foods first started supplying Compass with products to ensure the correct weight is supplied Ensors set up a catering arm in 1999 having Nigel advises treating the foodservice sector very a selection of whole head fresh produce in 2000. at all times. identified foodservice as an opportunity not seriously: “Foodservice is the No.1 focus at Ensors. Since then the Travis Foods foodservice business being taken seriously by many large red meat You must deliver precisely what each customer has grown from strength to strength. Given this advice FROM TRAVIS FOODS processors in the UK. One of their first contracts requires in terms of specification and service success, Travis Foods has taken the strategic was to supply pork, lamb and beef into the every time!!”. decision that from April 2005 the company will For Travis Foods its contract with Compass has Intercontinental Hotels Group, a purchasing focus entirely on the foodservice and food provided consistent volumes, which have helped operation now outsourced to 3663. processing sectors, and stop trading with the with company stability and continuity. David Travis, retail sector. MD of Travis Foods observes that “the relationship advice FROM 3663 FIRST FOR helps us plan ahead not least in terms of capital some issues FOODSERVICE expenditure and labour requirements. Having the Providing the right quantities and quality of meat some issues As a supplier you must satisfy the delivered contract also means we can put crops in the ground week in/week out is fundamental for both Ensors Before supplying Compass Travis Foods had very wholesaler, their customer, and the final consumer. with confidence of a market for them”. This is in and 3663. All the pork and the majority of lamb little experience of supplying the foodservice This is a key difference to dealing with contrast to retail where wide fluctuations in demand and beef for this contract is produced and sector. This meant the business had to undergo supermarkets. can occur, depending on the season. Travis Foods processed in the UK. There are many instances a very steep learning curve very quickly. Firstly, also finds that it is able to build a more personal where required specifications can only be achieved foodservice specifications for some whole head relationship with its foodservice customers as they by using and processing domestic stock. For products are substantially different to retail and value Travis Foods’ expert produce knowledge. example, the 3663 specification for the ‘short loin there is a large void between what is acceptable of pork’ carving joint requires chump and rind on, in retail compared with foodservice. For example: advice FROM COMPASS as diners prefer ‘crackling’ with roast pork. Nigel ■ Savoy cabbage needs to weigh at least 800gm Buxton, Commercial Director at Ensors, notes that for the Compass contract but only 600gm for For Compass the main benefit of working with foreign loins tend to be rindless so automatically fall retail customers; and white cabbage needs Travis Foods is the full traceability back to the out of spec. Likewise, Ensors take beef ‘carvery to be considerably heavier for foodservice, grower. Compass values Travis Foods’s knowledge cut foreribs’ from the UK as they are the right size requiring weights of between 1.6 – 2 kilos, and recognises the progressive and forward and foreign processors tend to turn foreribs into whilst retail accepts 800gm – 1 kilo weights. thinking approach of the company in terms of ‘ribeyes’, which are not appropriate. To produce these larger cabbages Travis Foods agronomy. Compass would like to further develop has had to change its production techniques, their business with other UK growers, and build current supply relationship and reduce its sowing densities. strong supplier-purchaser relationships. Ensors supply all the pork, beef and lamb for the Robert Hughes, the buyer for fresh produce at ■ For carrots Compass requires a crown diameter 3663/ICHG contract. 3663 take orders directly Compass, emphasises the importance of working of around 35mm and between 200 – 250mm from ICHG units (individual hotels) in the morning directly with growers in support of Compass’s ‘seed in length. There are therefore fewer carrots in and feed through the consolidated order to Ensors to plate’ strategy (ie improved traceability). It should a 12.5 kilo bag which reduces the amount of at 2pm each day. Ensors process the meat and never be underestimated the work that has been preparation time needed in the foodservice deliver the order into the 3663 depot in Banbury undertaken by growers with the assistance of kitchens. by the early hours of next morning, for onward Compass to achieve recognised fresh produce delivery into unit by 3663. This ordering process Secondly, Travis Foods was not in possession of standards, always taking into account end user runs 6 days per week. “BRC certification” when it took over the contract. confidence and safety. In terms of Travis Foods, Robert This is a requirement and had to be secured. Prior explained that “ this represents a grower which to the award of this certification Travis Foods was understands the Compass business and is able to regularly audited by the technical team at provide volume commitment at fixed prices, something Compass. that is critical within the contract catering business”. 30 31 Mitchells and Butlers and Sodexho and PDM Produce Bernard Matthews ICEBERG LETTUCE INTO SODEXHO

TURKEY “TOPS” INTO TOBY CARVERIES case studies

background current supply relationship background current supply relationship Bernard Matthews is the largest turkey producer in Bernard Matthews currently supplies all turkey tops Established in 1990, PDM Produce is a grower PDM Produce consolidates the lettuce order for Europe. A fully integrated company from hatchery for Toby Carveries. From an initial 156 tonnes in of iceberg and other speciality lettuce (e.g. Lollo Sodexho into pallet loads and delivers into five to processing, Bernard Matthews launched its 1996 the supply has grown to 2,325 tonnes per Rosso, Little Gem and Curly Endive). It has around regional depots 6 days per week. Sodexho’s foodservice division in 1984. year for 2004 and maintains growth of 17% year- 1,600 acres (650 hectares) under lettuce cultivation tender for lettuce is issued on a 12 month basis on-year. This volume makes M & B one of the in the UK and a partnership arrangement with a and each year it is advertised and retendered. Mitchells and Butlers (M & B) is a market leader largest purchasers of turkey breast meat in the UK, grower in Spain. PDM Produce is working with Sodexho on a range in the managed pub and restaurant sector with comparable to some of the larger supermarket of speciality lettuces with the view to developing 2000 outlets in the UK. Within the restaurant Sodexho is a major contract caterer in the UK and chains. Bernard Matthews are also able to put the these products and moving more volumes to sector brands include Toby Carvery, Vintage Inns, Ireland, providing catering and a range of support other portions of the carcase to good use by virtue premium products. Harvester, All Bar One and Browns. services to clients at over 2 300 sites in the of its value added business. business and industry, education, healthcare, To help support the contract, PDM Produce holds development of supply relationship in Contract duration tends to be 1-2 years with leisure and defence sectors. open days throughout the year for chefs to see foodservice agreed price parameters for the duration; this gives the farms at first hand and better understand the M & B the ability to set menu prices for long way in which Iceberg is grown and cut. It is an There are over 80 Toby Carvery outlets nationwide development of supply relationship periods, which is fundamental to its business. opportunity to explain the ecological approach that offering a selection of beef, gammon and turkey PDM Produce starting supplying all Sodexho’s PDM Produce adopts towards its lettuce carvery meals with an extensive range of Bernard Matthews deliver into Brakes Logistics lettuce business nationally in December 2004, cultivation. vegetables. The turkey required for the carvery is depots 6 days per week and from here Brakes when it secured the lettuce tender. Six growers similar to a ‘crown’ – a butterfly turkey breast left deliver to individual outlets three times per week. were invited to tender for the contract: five British on the bone, known as a turkey “top”. and one Dutch, but only two submitted tenders. Most English growers declined to bid as Sodexho advice FROM PDM PRODUCE Prior to 1996 turkey for Toby Carveries was volumes did not compare favourably with retail. sourced on a regional basis, through regional PDM Produce values its relationship with Sodexho butchers; however this created considerable advice FROM BERNARD MATTHEWS as it has helped to raise its profile in foodservice, some issues which in turn may lead to new opportunities. difficulties in maintaining consistency and Jamie Hutcheson, Bernard Matthews National A fixed price supply agreement runs for a 12 month PDM Produce prefers to deal direct with contract availability across the country. To improve Accounts Controller for the M & B contract period during which time PDM Produce is caterers, rather than through wholesalers as it standardisation, and as part of a re-branding considers that a domestic supplier has a key responsible for continuity of supply and is required believes that direct communication with the end project, M & B invited turkey processors in the advantage over foreign competitors in being able to to manage the change in growing season. At times user is essential. UK and overseas to tender for a national contract offer the necessary service to M & B. No where is this can be difficult as weather conditions can alter to supply fresh turkey tops. this better demonstrated than when individual Toby the changeover periods. The season for English outlets have under-estimated demand and require lettuce is generally between May and October with some issues Bernard Matthews to deliver direct to outlet at short advice FROM SODEXHO Iceberg lettuce sourced mainly from Spain outside Bernard Matthews was awarded the contract in notice. As Jamie observes “We fully understand the UK growing season. However, in 2004 severe The main benefit for Sodexho is in dealing direct 1996 but faced several challenges in meeting the that availability in restaurants is fundamental and weather conditions in Spain meant PDM Produce with the grower. For a major volume line like Iceberg specifications required by M & B: Firstly, visual we are geared to ensure Toby Carveries always had to source some Iceberg lettuces from as far as lettuce the grower is able to offer full product appearance of the meat on the carvery counters have the right amount of turkey to satisfy demand”. North America. This is clearly a more expensive traceability to its customers. Sodexho also values is key so the ‘top’ must sit upright, which requires He goes on “a key requirement of being successful supply route the additional costs of which must be the fact that the agreement is on a 12 month fixed it to be a specific shape. This is guaranteed in this sector is appreciating the real meaning of absorbed by PDM Produce. price supply basis, thereby placing the through cutting and processing specifications foodservice, i.e. ‘food’ and ‘service’. Know how the responsibility of balancing the lower cost of English particular to this contract. Skin appearance of the customer operates, what they need and satisfy this Specification for Iceberg lettuce is similar to that lettuce with the higher imported product on PDM cooked top is also important and requires the requirement time after time, targeting your for retail – between 450 -500grams in weight. Produce. highest quality processing. proposition accordingly”. However, the pack sizes are different, ranging between 6, 10 and 12 individual Iceberg lettuces to Secondly, size and weight of the “tops” are crucial a pack. Different Sodexho sites can opt for one of and require tight tolerances. ‘Autosham’ ovens in these pack sizes. As the 6 pack size did not exist in the outlets have been designed to cook multiple advice FROM MITCHELLS & BUTLERS Spain PDM Produce had to set this up with its turkey, gammon and beef joints simultaneously. Keith Edwards, Purchasing Controller at M & B Spanish grower. Out of specification joints mean the ovens cannot offers the following advice: “It is vital that we be filled optimally and cooking does not take place provide our customers with high quality foods at evenly. If for example turkey tops are too large a reasonable price. With the experience and other joints can overcook, shrinkage will occur and strength of the Bernard Matthews organisation useable meat yields will be lower. With the large supporting us we have shown that we can deliver number of birds it processes, Bernard Matthews is this on a consistent basis throughout all of our able to select birds that meet M & B weight outlets. Their overall ‘value for money’ offer is very specifications. strong and we must continually seek ways of improving our turkey offer to customers and Bernard Matthews are crucial partners in this…”.

32 33 Whitbread and Cherry Valley English Lakes Hotels ESTABLISHING DUCK AS A MENU ITEM IN SOME OF and Udale WHITBREAD’S BRANDED RESTAURANT CONCEPTS SUPPLIER OF MEAT TO THE ENGLISH LAKES HOTELS case studies

background current supply relationship background current supply relationship Cherry Valley was founded by the late Sir Joseph Supply of half roasted ducks to Whitbread has Udale is a family owned regional meat supplier Udale supplies all red meat, poultry and game to Nickerson. Recognising a gap in the market he increased by over 122% in the last few years. which has been supplying meat to hotels, pubs the English Lakes Hotels Group, all of which is decided to specialise in the rearing, breeding and More recently, following a particularly buoyant and restaurants in the North West of England for sourced from within the region. This includes marketing of ducks under the Cherry Valley brand, Christmas in 2004 year on year growth has been three generations. In 1996 Udale made the decision sourcing specific regional breeds and brands of starting in 1960. around 18% as customers have opted for duck in to focus entirely on the foodservice market. meat (for example Herdwick and Swaledale for preference to turkey. lamb and Fellbred for beef) which feature on the Today Cherry Valley remains a fully integrated English Lakes Hotels is a privately owned family restaurant menus,. supplier of ducks, with eggs coming from its own Following on from Cherry Valley’s success in run hotel group with five hotels in and around the hatchery and the ducklings raised on its own farms Beefeater, the same product now features on Lake District region of the North West of England. The Group is also planning to include breed in South Lincolnshire and East Riding. The duck menus in Brewer’s Fayre outlets. The anticipated The client base across English Lakes Hotels varies information on its menus for pork dishes and Udale variety that Cherry Valley breeds is Peking, this merger of the Brewer’s Fayre and Brewsters with each hotel operating fairly autonomously. is looking at sourcing possibilities, although is holds less fat compared to other duck varieties, brands in March 2005 will see Cherry Valley’s duck Three of the hotels are of ‘4 star’ standard, of encountering difficulties in finding a local supply making it easier to produce a crispy finish to appearing on menus in approximately 500 of which two, the Storrs Hall and Lancaster House source large enough to deliver required volumes. products. Processing takes place at Cherry Valley’s Whitbread’s branded pub restaurants (compared hold AA rosettes in recognition of their high own factory in Lincolnshire. Cherry Valley has with just under 400 currently). standard of cuisine. In the case of Storrs Hall this grown into a £40 million business, active in both means that menus often change daily! advice FROM retail and foodservice. ENGLISH LAKES HOTEL GROUP advice FROM CHERRY VALLEY Whitbread PLC is a leading hospitality company in development of supply relationship in foodservice Douglas Dale, Operations Director at the English the UK, managing brands including Premier Travel David Belton, the National Account Manager at Lakes Hotels likes to have personal contact with his Udale’s relationship with English Lakes Hotels Inn, Marriott (UK), Brewers Fayre, Beefeater, Costa, Cherry Valley highlights the following pieces of suppliers and prefers where possible to use local started in the 1960s, as a supplier to one of its T.G.I. Friday’s and David Lloyd Leisure, with a advice for suppliers into foodservice: ones that operate along similar lines to the Group. strategic investment in Pizza Hut (UK). With 1,400 hotels. The decision to consolidate meat supply In particular, he values the fact that Udale is ■ You must formulate a strategy of which different outlets, Whitbread generated sales of away from regional suppliers was taken by the sufficiently interested in its contract with the Group foodservice sectors to target, identify the main more than £1.8 billion for year end March 2004. hotel group in 2000. They chose Udale as it was to spend time visiting the hotels and engaging players and the foodservice brands that your able to meet the volume and service requirements directly with the Head Chefs. development of supply relationship in product best suits. Understand the volume for both the hotels’ corporate and restaurant foodservice potential that can come from large and small businesses and, crucially, could provide a 6-month brands. Do your home work on the business fixed pricing agreement. Cherry Valley started supplying Whitbread with you are targeting, understand their distribution advice FROM UDALE duck in May 1997. At that time it was a raw duck channels, menu prices, profit aspirations, breast fillet which already featured on the menu in some issues Neil Udale, the proprietor, believes that in addition customer profiles and so on. Whitbread’s Beefeater outlets. However, because To service the Group Udale had to expand to the head office contact a supplier also needs of difficulties of cooking in terms of time and ■ Take into consideration the handling distribution, as deliveries needed to arrive at the regular personal contact with the Head Chefs of equipment used, it was requested that Cherry requirements of your product back of house hotels before 10.30am daily Monday to Saturday. the hotels, as they are the ones using the product. Valley develop a half cooked duck product. It took and bear in mind the skill and labour level Udale uses 3 delivery vehicles for this. Orders are Neil also stresses the need to make sure you are around 6 months to agree on the final product and available to ensure that each time your product taken the night of day 1 for day 2 delivery, which set up to provide the appropriate service levels, in pricing, leading to the launch in September 1997 is served it is consistent in appearance and requires Udale to start processing orders at terms of delivery times and order fulfilment, as if of a half roasted Lincolnshire duck on the quality on the customer’s plate. 3.00am the following morning, to ensure delivery this fails it can have a major impact on the rest of Beefeater menu. vehicles are ready to leave the depot to achieve your business. ■ Be aware of the cooking equipment and the morning delivery slots. cooking times needed to cook/regenerate your some issues product. Given the mixed hotel client base Udale treats The initial challenge for Cherry Valley was to each hotel in the chain as an individual customer. ■ Finally, bear in mind the time scales foodservice persuade Whitbread to list a duck dish on its Product specification sheets are held for each work to for menu launches, for example the Beefeater menu as in the 1980s duck was still hotel to ensure that Udale fulfils orders correctly Christmas menu is often “put to bed” by June if considered to be a niche product. in terms of the way the meat is cut and trimmed. not earlier. For example, for hotels heavily involved in The product used today has also evolved: it is corporate events, Udale supplies large volumes larger in size, with an improved cooked weight and of ready to use steaks; whilst for others Udale better plate coverage. There is less bone in the advice FROM WHITBREAD supplies whole fillets of beef, allowing the hotel product which enhances the eating experience to do its own butchery. making it more consumer friendly. For the duck category to continue growing, production innovation is required to increase the range; products also need to be price competitive with substitutes (chicken in particular) to encourage customers to switch.

34 35 Hampshire County Council and Pure Organics TION? ORGANIC BEEF BURGER ON PRIMARY SCHOOL MENU Where to find useful information WHERE CAN I FIND MORE USEFUL INFORMA case studies

background weekly, which it metal checks, freezes and stores, IGD www.igd.com Pure Organics was set up by Pauline and Gary until sufficiently large volumes are available for a Stiles in 1996 in response to the great difficulty in production run (around 4 tonnes). Pure Organics Food Chain Centre www.foodchaincentre.com finding food free from additives and colourings for has worked hard to ensure that Rother Valley a child with food intolerances. Pure Organics has meets all the strict hygiene standards required for Foodservice companies grown into a £5 million business supplying a supply into schools, seeing as there is no third number of channels with own label organic and party accreditation system. This has involved Pure ARAMARK www.aramark.co.uk additive free products. All organic meat is sourced Organics carrying out regular comprehensive Brakes www.brake.co.uk from the UK. audits and taking responsibility for microbe checks. Compass Group www.compass-group.com 3663 First for Foodservice www.3663.co.uk Hampshire County Supplies is the supply arm of Pure Organics are, themselves, regularly audited Hampshire County Council. Approximately 60% by a food consultant working on behalf of Mitchells & Butlers www.mbplc.com of its food spend is for HC3S, an internal operating Hampshire County Supplies and Hampshire Sodexho www.sodexho.co.uk company responsible for providing catering to Scientific Services (the Public Analysts). Whitbread www.whitbread.co.uk over 550 primary schools in Hampshire and West Berkshire, representing 50,000 meals per day. current supply relationship National Government Organic beef burgers have featured on primary development of supply relationship in school menus in Hampshire and West Berkshire Defra (public procurement) www.defra.gov.uk/farm/sustain/procurement foodservice since April 2004. Currently organic beef burgers NHS Purchasing and Supply Agency www.pasa.nhs.uk For some time Hampshire County Council had feature once a fortnight and nearly 1000 cases of DARD www.dardni.gov.uk been contemplating how to re-introduce beef on product are supplied monthly to HC3S. A key WDA www.wda.co.uk to primary school menus following BSE. It wanted partner in this is 3663 First For Foodservice who as Scottish food and drink www.scottishfoodanddrink.com a beef product that would reassure parents of the existing major foodservice distributor into the schools had to agree to distribute the burgers on its safety and purity, so initially started looking at Regional food additive free products. behalf of the supplier. Food from Britain www.foodfrombritain.co.uk HC3S first became aware of Pure Organics at East Midlands Fine Foods www.foodanddrinkforum.co.uk a LACA (Local Authority Catering Association) advice FROM PURE ORGANICS conference and were very impressed by the Heart of England Fine Foods www.heff.co.uk samples of additive free and organic beef burgers Pauline Stiles, joint Managing Director at Pure North West Fine Foods www.nw-fine-foods.co.uk in terms of their cooking and holding qualities, Organics explained that the reason they were able Northumbria Larder www.northumbria-larder.co.uk leading to less shrinkage and improved plate to supply schools in the first place with products South East Food Group Partnership www.buylocalfood.co.uk coverage. However, they were concerned with that fell broadly within a school’s budget, was Taste of the West www.tasteofthewest.co.uk price as it represented a large proportion of because of the economies of scale they could Tastes of Anglia www.tasteofanglia.com the overall daily school meal spend. Following generate from their retail business. She then went The regional food group for www.foodyorkshire.com/rfg negotiations between Hampshire County Supplies on to say: and Pure Organics, HC3S agreed to take the Yorkshire and the Humber ■ In addition to the relationship with the local organic beef burger. Local Food Works www.localfoodworks.org authority customer, you must develop Listing with Hampshire has reinforced Pure a relationship with the schools’ existing Organics’ position as a supplier to schools and foodservice wholesaler(s), without which you Primary producers enabled it to secure a number of other contracts will not get your product into schools. English Farming and Food Partnerships www.effp.com with other local authorities leading to more listings ■ A ‘Unique Selling Proposition’ is essential and National Farmers Union www.nfuonline.com with distributors. When Pure Organics first tried to helps differentiate from larger suppliers who enter foodservice it suffered several years of false because of size may not be able to produce starts due to the focus on price rather than value Levy bodies organic, gluten free, dairy free, nut free, additive for money. However, increasing concerns over the free food. This means that products are also British Potato Council www.potato.org.uk use of additives and levels of fat and salt found in suitable for children on special diets. Meat and Livestock Commission www.mlc.org.uk food helped overcome this barrier. Milk Development Council www.mdc.org.uk some issues advice FROM HAMPSHIRE COUNTY Business support organisations Initially, Pure Organics sourced its organic beef SUPPLIES from its organic supplier in Wales, a company that Business in the Community www.bitc.org.uk it has grown up with, but as part of a new local ■ Understand the nature of your customer. Business Links www.businesslink.org food procurement initiative Pure Organics was ■ Countryside Agency http://ppfood.net.countryside.gov.uk encouraged to look at sourcing from within Listen to what your customer wants and Hampshire. Hampshire Fare, part of the South East respond accordingly. Horizons www.horizonsforsuccess.com Food Group Partnership helped Pure Organics find ■ Be prepared for a number of setbacks. a Hants based supplier, Rother Valley. A supply agreement was started in December 2004, worth ■ Ensure that you have a route to market and can £100,000 a year to the local rural economy. As meet the appropriate insurance requirements. Rother Valley has little storage, Pure Organics collects fresh vacuum packed organic mince 36 WHAT DO THE DIFFERENT

TERMS MEAN? 37 Electronic datainterchange Central DistributionCentre Category Cash andcarry Buffet boxes Direct delivery Depot Cross docking Contract distribution Composite Delivery Centre Composite Distribution Distress order Cost price Contract caterer Description Alsoknownas BRC globalstandards Bespoke Ambient Name Glossary –what’s what Delivered wholesaler Cost sector C D,CCAgenerictermoftenusedtomeanaregional orcentral DC, RDC,CDC Logisticsonlyservice.Asopposedforexampletodelivered CD D Theexchangeofdocumentsinastructured formbetween EDI Priceat whichthesuppliersellsaproduct toan Product cost Separatestandards forfood,packagingandconsumer Agroup ofstandards focusingonsafetyandlegality. Consortium BRC =BritishRetail ntcs intermediatecustomer. Unit cost store orders forimmediatedespatch,asopposedtobeing Where deliveriesreceived intodepotsare processed into Order required atshortnotice;notplannedfor. stored indepot. the customer. wholesale where thewholesaler takestitleandsellsonto purchasing anddistribution–orders, confirmations,shipping computers viatelephonelines.Usedmost commonlyfor certification bodytooneormore ofthestandards asrequired. goods. Suppliersareby anapproved auditedandcertified manufacturing points and servingvariouscustomer points manufacturing central (ornational)distributioncentres, stockedbyvarious system itserves.Largermanufacturers commonlyhave A warehouse thatisthesole stockingpointforthedistribution are perceived byconsumerstobeinter-related. A distinct,separateandmanageablegroup ofproducts that take awayproducts atwholesaleprices. Wholesale outletwhere businessescome,purchase and applies tofresh produce. specific outletsanddispatchedinmixedcases–generally Method oforder placementwhere orders are pickedfor http://www.brcglobalstandards.com temperature’ (asopposedtochilledorfrozen). papers andinvoices. outlets, ratherthantodepot. Manufacturers ordistributorsdeliverdirect toindividual distribution centre. from thewholesaler). also ‘profit sector’). chambers usedtodeliverfrozen/chilled products. A multi-temperature vehicle withdifferent temperature operating ataspecifictemperature. products takesplaceina variety ofon-sitechambers,each chilled/frozen products. Receipt,storageandhandlingof A multi-temperature distribution centre, typicallymanaging distribution warehouses. Undertakes thecateringfunctiononbehalfofaclient. Unique toacustomer–notavailable‘off theshelf’. Product whichcanbetransportedandstored at‘room opposed to‘cashandcarry’where thecustomerpicksup Wholesalers whodelivertothecustomers’premises (as with thepublicsector, butalsoexistinprivatesector(see more Meals provided outofnecessity. Tend tobeassociated Pallet Over thebank Outlet Outer case Out ofstocks Order processing Order leadtimes New product development Multi-temperature Local sourcing Foodservice Key performanceindicator Description Independent Alsoknownas Estate Name Off-the-shelf Local food Primary distribution Operator NHS PASA List In-house uople foreaseofuseandtransferability inthesupplychain. transportmerchandise. Pallet dimensionsare standardised Aportablebasethatisusedto stack,sort,assembleand Referstoproducts ordered dayone fordaytwodelivery. Anindividualestablishment.Maybe partofalarger‘estate’ Euro pallet Chep pallet GKN blue Thepackagingunitinwhichproducts are delivered from OTB Term usedwhenaproduct is unavailableatagivenpointin Unit Case Stock outs Alltheactivitiesassociatedwithdevelopingnewproducts Coveringmore thanonetemperature category(ambient, NPD Aprocess ofmatchingconsumerneedsonalocal/regional Multi-temp Regional ranging Term commonlyusedfortheprovision ofmealsouthome; Catering P e Measures deemedessentialinmonitoringbusiness KPI –Key White pallet coveringallsupplysectors,includingfoodanddrink. ormenus. Theprocurement agencyoftheNational HealthService, and supplyagency PASA =purchasing Innovation performance(e.g.servicelevels,sales,profit etc). Theprovision ofactivitiesandservicesbythefoodservice performance measure itisalsoknownasthe‘catering’sector. Own account Out ofhome caterer). wholesalers. (in-house operator),oronbehalfofsomeoneelse(contract Company runningafoodserviceoutlet–eithertheirown Refers tothelistsofproducts availablefrom delivered Products are cross-docked ratherthanheldindistribution location toanRDC. centres. Typical forfresh produce distribution. or ‘independent’. supplier tocustomer. the supplychain(e.g.inoutlets,orRDC). delivered atthedestination. andconfirmed to themanagementofanorder from itscreation until itis The administrativeactivities,normallycomputerised,relating It mayrefer todeliveriesinto depot,ordeliveriesdirect tooutlet. This canbemeasured atdifferent pointsinthesupply chain. packaging) toaparticularcustomer. chilled, frozen). basis withselectedproducts. within afewmilesoftheoutlet. company’s ownbusiness. business orunderaspecificbrand. Not formingpartofalargergroup or‘estate’. A collectivetermtocoveranumberofoutletswithincertain Available foranycustomer –notunique(intermsofspec.or the UK’.Forindependentrestaurants itismore likelytomean it. To largemulti-nationalcontractcaterers itmaymean‘from using How itisdefineddependsonthefoodservicecompany Distribution from amanufacturingpointorstockholding 38

WHAT DO THE DIFFERENT TERMS MEAN? WHAT DO THE DIFFERENT

TERMS MEAN? 39 aeAs nw sDescription Alsoknownas Name Specification Regional foodgroup Regional distributioncentre Quick servicerestaurants Public sectorprocurement Public sector Profit sector Unit Shelf life Secondary distribution Product leadtime pc Mainlyrefers tothedetailedproduct specificationsetby Spec. Represent quality, smallandmediumsizedfooddrink distributiontocustomers.Nationaldelivered wholesalers Warehouses designedtoholdstockready foronward Abusinessmodelof‘fastin/fastout’. RFG Depot RDC Buyingfunctionsofpublicsectororganisations(e.g.NHS QSR Public procurement ultSee‘outlet’. Outlet development. customers. Howeveritmayalsobeusedtodescribe producers intheirregion. Theiraimistoassistbusiness have networksofRDCsandmayrequire product to be specific methodsoffoodproduction orprocessing required. specify minimumlife‘intodepot’. delivered toRDCratherthan direct tooutlet. Fast foodoutlets ‘purchasing andsupplyagency’). level. government armed forces etc).Control maybeatnationalorlocal Publicly fundedinstitutions(schools,hospitals,prisons consumer demand(seealso‘costsector’). Meals withinthe‘profit’ sectorare provided inresponse to also beconsidered. specified willdependonthecustomer. Wholesalerswill periodduringwhichproduct canbeused.Theminima Time Distribution from RDCtooutlet. lead-time, asaspectsofthemanufacturingprocess must delivery toacustomer. Thiscanbeverydifferent totheorder The timebetweencommencingproduction ofanitemand Notes: