BETTER COMMUNICATION BETTER SALES BETTER PROFITS EXCLUSIVE CATEGORY GUIDANCE

NOVEMBER 2012 betterwholesaling.com

INFORMATION IS EVERYTHING HOW TO HELP YOUR CATERERS WIN CONTRACTS

The JJ way P12 IT: where should you invest P38

Why case size matters P24 Batleys exclusive P28

p1_cover NovCS5.indd 1 25/10/2012 15:22 WELCOME NOVEMBER/2012

Contents Leader

One-stop shop: our Analysis 14/ 28/29 CHILLING FACTS Q&A EXCLUSIVE new site covers it all A more sustainable Better Wholesaling approach to talks pets, profits Last month marked the one-year anniversary of Better 06/ refrigeration could and foodservice Wholesaling, so Happy Birthday us! After spending a year IDENTITY be easier than with Batleys’ making sure the print edition meets your needs, we’re de- FRAUD you think Martin Race lighted to announce our new website, better­wholesaling.com, How to protect which is designed to deliver the best bits of the magazine in a your business 16/ Category guide smartphone-friendly, easy-to-navigate ­format. from criminals FIT FOR The site will keep you up to date with industry news, as PURPOSE well as deliver the usual action-oriented advice to promote 10/ Unilever is 30/32 best practice and grow sales. A PERFECT innovating in the TOBACCO You will also be able to watch the launch of our depot-level DROP wholesale channel Is your tobacco room video project, ‘Working Together’, in which key suppliers Palmer and with pack sizes reflecting the trend tailored for retailers partner with wholesalers to grow category sales. Could they Harvey’s new depot towards RYO? be doing the same for you? caters for smaller, We’ve designed the site to make it easy to share informa- multi-temperature 36/37 deliveries Cover story tion, so you can email pages to your colleagues. We have FIZZY HEIGHTS Twitter, LinkedIn and Google+ tabs, so make sure you 11/ 18/21 Grow your category give us a tweet. sales with advice If you have something you’d like us to put on the site, RISE OF PMP FOOD FACTS from leading soft whether it’s the announcement of a new depot, staff appoint- Wholesalers are Wholesalers must drinks suppliers ramping up their support the trend ment or other company development, please get in touch. price-marking towards nutritional 38/42 Thank you for your fantastic support this strategies to transparency and year and I look forward to working with secure sales provenance if TECHNOLOGY you in the next. l they want their FOCUS Spotlight caterers to win Four key IT suppliers contracts go under the Better Wholesaling 12/13 Features spotlight A FIRST FOR JJ A soon-to-launch price-comparison 24/26 43/ site is among CASE SIZES BACK PAGE editor various new How suppliers are 15 minutes with developments at catering for limited Fáilte Food’s JJ Food Service space and budgets Steven Kyle GET IN TOUCH [email protected]

OUR CONTRIBUTORS

FIONNUALA TAN PARSONS WALRAVENS MARTIN RACE writes about what writes a column this is operations wholesalers and issue on the benefits director at Batleys. suppliers must of more sustainable He joined Joshua do to protect refrigeration systems. Wilson straight themselves from She is a campaigner from university as business identity for the Environmental a graduate trainee fraud. As news Investigation Agency’s working in auditing editor for Newtrade global environmental campaign, and led and marketing, before Publishing’s Retail Express, he is an expert the development and advocacy work for the embarking on depot management. He joined on the convenience retail sector, with agency’s ‘Chilling Facts’ campaign, engaging Batleys in 1988, managing its Cleveland particular interest in the alcohol category. with supermarket retailers to improve their depot until 1998, when he became a regional He blogs at betterretailing.com and refrigeration policies. controller. He was promoted to operations regularly visits retailers all over the UK. director in January 2000.

Betterwholesaling.com NOVEMBER 2012 05

p3_contentsCS5.indd 3 25/10/2012 15:20 NEWS ANALYSIS

CRIME

NOT IN MY NAME Beware the growth of corporate identity fraud in the UK’s wholesale market, writes TAN PARSONS

e all know about conned, and there may yet be independent checks and ensure the threat of iden- more of which the company in advance that companies tity fraud, but less is unaware. Take action they are supplying have in- Wwell known is corporate Normally, there is no danger deed engaged brokers.” Five steps to identity fraud, in which to the wholesaler, because protect your Leading catering sup- criminals pretending to without a purchase order and business plier Brakes is also taking be legitimate wholesalers a proof of receipt, there is no precautions to warn its trick suppliers into sending case to answer. But that is not l PROCEDURE: regular suppliers, fol- products. The contact usu- always true. Always make orders lowing some disturbing ally comes by mobile phone At the beginning of 2012, through established revelations. Brakes market- or email and, in some cases, JJ Food Service was contacted channels and issue a ing director James Armitage purchase order. goods are diverted en route by legal representatives for said: “We were contacted a l COMMUNICATION: Make to a false delivery address. four suppliers in France, which it clear to suppliers that they couple of months ago by a small “Sometimes, there’s no bill – has a legal process different to should only accept orders placed number of people who had you just get a phone call from the UK’s. These companies lost through the proper channels. received a rather poorly worded a supplier checking an order, goods worth between €28,000 l DON’T RE-ROUTE: Do not letter that did not seem cred- in which case you’re in time to (£23,000) and €144,000 change the delivery destination ible. We quickly put appropriate stop it going out. But at other (£117,000), after being conned once the goods are in transit. warnings on our website. No times, they will ring to tell you by someone pretending to be l REPORT INCIDENTS: Report one has contacted us to suggest any unexpected deliveries to the the order has been sent and, by JJ Food Service. supplier, including details of ve- they have been a victim of then, it’s too late.” So far, the firm is looking hicles and delivery documents. this fraud.” This is how Terry Larkin, at a legal bill of €30,000 l TELL THE POLICE: One delivered wholesaler general manager at JJ Food (£24,000) and is desperately Report any­ unexpected deliver- that did not want to be identi- Service, describes the moment fighting to have the case ies or invoices to Action Fraud fied told Better Wholesaling when you realise your company heard on British soil. on 0300 123 2040 or at there had been up to 15 errone- name has been used to obtain www.actionfraud.police.uk. ous deliveries that had cost goods fraudulently. The Ireland-based nearly 10 small suppliers hun- In the last 18 months, there Musgrave Group – the company dreds of thousands of euros. have been 34 incidents in which behind UK symbol groups it is advising suppliers that it For information about how fraudsters have placed orders Budgens and Londis – first does not use the brokers Dante to protect your business and pretending to be from JJ Food encountered this type of fraud International plc or AA Global suppliers against this type of Service. Suppliers in France, five months ago. Foods. Musgrave communica- crime, visit the Federation of Germany, Belgium, Spain Although the group is reluc- tions director Edel Clancy said: Wholesale Distributors website, and now the UK have all been tant to disclose specific details, “Suppliers should do their own www.fwd.co.uk. l

06 NOVEMBER 2012 Betterwholesaling.com

p4 newsaCS5.indd 4 25/10/2012 11:43 NEWS ANALYSIS

PALMER AND HARVEY SMALL DROP, BIG WINS

Smaller, multi-temperature deliveries give Palmer and Harvey an edge, writes NICK SHANAGHER

onvenience retailers investment is based on an as- located behind a need a mix of frozen, sessment of what shoppers are 14,000sq ft chiller fresh, chilled and am- likely to do rather than which space, which bientC products on the depot shops they will use. helps to optimise shelf, not in the back room, energy use. and Palmer and Harvey’s The trend towards top- “If you new site meets this need. up shopping means more look at the Early on Monday morning, shoppers want to buy fresh south-east in Palmer and Harvey’s mixed- and chilled products in local particular, it’s temperature depot at Hemel c‑stores. The most effective been a big focus Hempstead in Hertfordshire way to serve these stores is of growth in the The depot is like a guardsman on with frequent multi-tempera- convenience sector, saves costs parade, all polished and ture deliveries. The most effec- not least from the with flicker- free lighting with a hint of steel. tive way to support such deliv- multiples, which have Julian Streeter, managing eries is to have all the products been putting more footprint director of operations for the available in one depot. into London. That’s put pres- chilled and frozen products in UK’s largest delivered whole- “It is a calculated invest- sure on my sites that serve the multi-temperature vehicles. saler, and his local manage- ment,” says Mr Streeter of the [region], including Coventry, The investment is a vote in ment team have chosen this new depot. which serves the north-west confidence in the future of time for a tour, mainly because The depot’s advantage over parts of London”. local shopping, with smaller this is the depot’s down time. Palmer and Harvey’s Medway The company identified shops taking more volume Designed to support 5,200 operation is that all tem- the Hemel Hempstead site in from superstores. customers with a mix of fresh, perature regimes are under one 2010 and acquired it in 2011. “In the convenience sector, chilled, frozen and ambient roof. In Kent, the Snodland It then took nearly a year to fit more frequent chilled and products, the depot is busiest and Aylesford depots are ambi- out, and get up and running. fresh deliveries are absolutely before the weekend rush. ent and chilled, and staff have It is Palmer and Harvey’s most key,” says Mr Streeter. “We are The company’s £6.5m invest- to bring goods together to pack technologically advanced and able to make relatively small ment is targeted at two things: for delivery; in Fareham, the environmentally friendly quantities economically viable the rise in top-up shopping two warehouses are close but depot, with flicker-free light- so retailers can buy the quanti- and the fast pace of growth in separate. ing, saving 25% of costs, ties they need.” the south-east, where two out The Hemel Hempstead depot movement sensors, recycling, His competitors have fairly

of every three new multiples features a further innovation, composting, and CO2 thermo- onerous minimum order quan- and c-stores are being sited. with a 26,000sq ft freezer containers for transporting tities that have to be met – Palmer and Harvey has a Palmer and Harvey’s competi- broad customer base, from tive advantage is that it can major packaged goods compa- In the convenience sector, more frequent deliver these smaller volumes. nies through multiples down chilled and fresh deliveries are key For an online tour, visit to independent local shops. Its www.betterwholesaling.com l

10 NOVEMBER 2012 Betterwholesaling.com

p10 newsaCS5.indd 4 25/10/2012 11:45 NEWS ANALYSIS

PRICEMARKING THE PRICE IS RIGHT Wholesalers are ramping up price-marking to secure customer loyalty, writes NIGEL HUDDLESTON

he consumer appeal sub-branding under the built around big-name brands of price-marked slogan ‘Great British Value’. FAST FACTS in confectionery, snacks, packs (PMPs) is Bestway says its Essentials biscuits, soft drinks, pet food evidentT across the branded line uses quality sources and and toiletries that its Key supplier base, but PMPs is intended to give a profit on Store retailers can sell for £1. are also playing a crucial return (PoR) of up to 30% for Sales director Ian McDonald role in wholesalers’ own- retailers. It includes biscuits, of76% consumers think says: “People are looking for label strategies. Research oil, soft drinks, dog food and value for money and they’re by Him! shows that 76% household products. PMPs improve very familiar with the £1 of consumers think PMPs Nick Brown, manager the price image shop in the high street. The improve the price image for the Best-In brand at of a c‑store £1 Zone enables customers to of a c-store, while 98% are Bestway, says: “It is designed take that idea and put it into more likely to buy a PMP to increase footfall for the their own stores. over an unmarked product. retailer. In the longer-term, “Initially, the thought The case for the PMP route we hope it will improve sales process was around is therefore compelling. of our own-label which, confectionery, because there Today’s has just launched from the early signs, is 98% are a lot of £1 PMP deals are more likely to an own-label range, the first being achieved.” on blocks of chocolate, but since its split from Nisa. buy a PMP over a when we looked at it more The range is divided into Scottish wholesaler non-PMP product closely, there was scope for a Select and Essentials lines, JW Filshill has taken bigger range.” the former focused on food, inspiration from the high The range is intended to the latter exclusively on street with its recently give retailers around 35% household goods, including announced £1 Zone, a range PoR on products within the bleach, washing-up liquid and of everyday grocery essentials 35% £1 Zone. “It’s not so much kitchen foil. Filshill’s £1 Zone aims about driving loyalty as Anita Oakhill, Today’s brand to give retailers 35% providing customers with marketing manager, said: “In POR on products another tool to compete in the convenience sector, the marketplace and sell more consumers don’t really products,” he says. want two-for-ones or The long-term issue Price-marking BOGOFs. They’re gives some for wholesalers could be just looking wholesalers an managing price-points and for a straight advantage margins, when PMPs are price deal so prevalent in the branded and knowing arena and global raw material what they’re prices are volatile. getting.” Anita Oakhill says of For Today’s, Today’s Select: “There are one the appeal or two lines that aren’t price- is in locking marked, like oils and orange customers juice, where the fluctuations into the group. in price on the market make it “It closes the very difficult to do so.” loop for our But Ian McDonald at symbol group and JW Filshill is confident the retail club members, company can make its £1 who until now had to Zone work long-term. “I don’t shop around and buy into think it will be an issue,” competitor wholesalers’ own- he says. “Manufacturers labels,” she says. have always found a way The spate of own-label It’s not so much about driving loyalty as to manipulate price-points price-marking includes the re- when costs rise, whether by launch by Bestway of its Best- providing customers with another tool to changing the pack size or In economy range as Best-In compete in the marketplace some other mechanism, so it Essentials, with price-marked is a sustainable model.” l

Betterwholesaling.com NOVEMBER 2012 11

p09 newsanal CS5.indd 1 25/10/2012 11:57 WHOLESALER SPOTLIGHT

JJ FOOD SERVICE

JJ LEADS THE WAY JJ Food Service is about to unveil the channel’s first price-comparison tool, writes ELIT ROWLAND

arlier this year, changed from pure distribu- order online and collect their the end of the year. This will JJ Food Service tion, with customers now able purchases from the depot. also feature a price-compar- posted record sales to collect their orders, and JJ JJ offers customers other in- ison tool, which JJ believes ofE £180m – the greatest in publishes three corresponding centives to collect orders. “Not is the first of its kind from a the group’s history – with prices for goods: the top band only do they get the best deals, grocery wholesaler. internet sales increasing is for those who don’t order if they tell us when they’re The new site coincides with by a staggering 63%. Bet- online; the middle band is for coming, their order gets picked JJ’s involvement in improve­ ter Wholesaling visited the those who order online but out in advance. This means thatprice.com, the UK’s first group’s Enfield depot to who want their orders deliv- they can be in and out in price-comparison site for the find out how ‘the JJ way’ is ered; while the lowest prices five minutes,”­ says Larkin. food and drink market. “We securing a flow of new cus- are available to those who As a result, more than were approached by them to tomers and a 30% increase a third of customers now supply food and drink prices in turnover. collect their orders and half because we have such an hon- “Our open pricing policy is of the group’s sales are from est pricing policy,” says Larkin.­ the main thing that differenti- online orders. These numbers The best thing, he adds, is ates us from our competitors,” will be boosted further by that JJ is coming out on top says Terry Larkin, general Percentage50% a voucher scheme that will of many searches. “They’ve manager of the business. JJ’s of purchases appear on the group’s new done us a big favour – we’re business model has recently made online website, which will go live by hitting a much bigger audi-

12 NOVEMBER 2012 Betterwholesaling.com

p10-11 wholesalerCS5.indd 12 25/10/2012 11:48 ence compared with using our “The business is going website alone.” FAST FACTS well, particularly now that Price-comparison is ex- we’re getting a wider range pected to become increasingly of specific ­products.” important to wholesalers’ But new markets are also customers as caterers become critical, and JJ is dipping “more discerning over price”, 30,000 its toe into the hotels and adds Larkin. Customers bed and breakfast market. “We don’t have any hotel Earlier this year, JJ customers – it’s a new announced ‘more investment avenue we are looking to in IT than ever before’ and explore,” says ­Larkin. it’s certainly living up to its Landmark So technology, customer promise. At the time of going Buying group Depots service and keeping up with to press, staff at the Enfield 8 consumer trends are all key branch were finalising re- factors in JJ’s success. But vamped customer collection 3,000 sometimes, even simple zones, where customers have Live changes to business strategy access to self-service, touch- £180m can contribute significant screen tablets and optional Turnover (ending March 2011) SKUs sales, explains Larkin. chill-out areas. “We recognised three “We are at the forefront of years ago that things were technology and have the will Sector: going to get tough and de- and ability to implement new cided to reduce our margins systems,” says Larkin. JJ will foodservice to support our customers. have expanded its IT work- 100% That resulted in a sales force by 15 – an increase of leap last financial year of 50% – by the end of the year says Larkin. Although organic JJ’s general manager Terry £42m.” to support its IT plan. options were more fashion- Larkin emphasises the Much of the time, Technology is used able a few years ago, local company’s green the group’s suc- throughout all layers of the sourcing is more important credentials cess comes down business to speed up proc- now because it supports local the instincts of esses and improve custom- businesses and the difference chief executive er service. in distance equates to good Mustafa Kiamil, “A good example of this cost savings. who founded the is our handheld device for Despite having an company in 1988. drivers,” says Larkin, which excellent relation- “Mustafa follows enables customers to be ship with the his instincts – he invoiced after the delivery has cost-sector, almost always gets been made. “This means they JJ’s biggest it right. It’s like he are only charged for the goods customer is the has a crystal ball,” they want. It completely independent says Larkin. “He eradicates the need for credit high street keeps his finger notes, which customers tell restaurant. on the pulse of us are one of their greatest Eighteen what’s going on causes of annoyance.” months ago, around the world With such a wide range of the group and the implica- customers, JJ has to make expanded its tions to the group.” sure that it can cater for all. product ranges to He also likes to For its cost-sector customers, cater for Asian keep things close to this means supporting social cuisine and has home and JJ’s in-house responsibility commitments. increased its approach helps to foster “We have a fleet of Euro V import activ- the best employees. Volvos – the most emissions- ity to support “We do everything in-house, compliant vehicle that Volvo diverse customer from IT and design can offer,” says Larkin. “But requests. to having our own vehicle for our more prestigious wash,” explains Larkin. “It customers, like government helps to ensure that our buildings in Westminster, we employees truly understand roll out the electric vehicle. It the business.” always looks very ­impressive.” We recognised three years ago that And the developments don’t The group also works close- things were going to get tough and stop there. JJ’s focus remains ly with independent providers decided to reduce our margins to on ensuring profitability while of school meals to deliver lo- encouraging continuous im- cally sourced ­produce. “With support our customers. That resulted in provements. “Plans are under schools, we’ve noticed a big a sales leap last financial year of £42m way for two new branches move towards provenance,” within the M25.” l

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p10-11 wholesalerCS5.indd 13 25/10/2012 11:55 HAVE YOUR SAY [email protected] Opinion

Smaller wholesalers and retailers could benefit from stand-alone, sustainable refrigeration systems, says Fionnuala Walravens

s carbon consciousness freezer systems, and there’s no reason grows, many companies why other retailers shouldn’t join are looking for ways them. Similarly, HFC-free options toA do business more sus- in the industrial refrigeration tainably, by reducing the systems used in warehouses are amount of greenhouse gas very advanced, with ammonia emissions for which they being the most popular alterna- are responsible. One tive to HFCs. These systems are comparatively unheard of also often more energy-efficient yet remarkably effective than their predecessors, helping way of doing this is the savings add up, so although to change the gases used climate-friendly systems can in refrigeration and air- sometimes cost more up front, conditioning systems. the energy savings they bring Hydrofluorocarbons (HFCs) result in lower lifetime costs. are used as refrigerants but are Transport refrigeration, however, extremely potent greenhouses gas- seems to be the area where the devel- es – they are often many thousands opment of climate-friendly solutions is of times more damaging to the climate lagging. Despite claiming to be trialling than the most common greenhouse gas, alternatives, supermarkets have made

carbon dioxide (CO2). They leak out of little progress. But that’s no excuse – if equipment into the atmosphere where the users of transport refrigeration they exacerbate climate change. These 14 stores running on alternatives in demand sustainable HFC-free options, emissions can account for about 20% 2008, 344 stores have now converted, they will eventually get them. of a retailer’s carbon footprint, often proving how quickly change can happen Apart from being the ‘green’ option,

equating to the same amount of CO2 as if companies are sufficiently committed. going HFC-free is also a way of getting that created generating the electricity to In fact, some retailers are so confident your business ahead of the game. Right power the refrigeration ­systems. about the merits of going HFC-free, now, Europe is reviewing how it regu- By 2020, global HFC emissions will they have already pledged to phase out lates HFCs and we expect to see a big reach the equivalent of between two and their use: Waitrose has committed to shake-up that, as well as limiting the

2.6bn tonnes of CO2 – that’s three to phasing HFCs out of its entire estate amount of HFCs available on the market four times more than the UK’s total an- by 2020, Sainsbury’s has committed in the future, will drive up their price. nual greenhouse gas emissions today. to going HFC-free in all new stores, as The EIA is also campaigning for the EU Since 2008, the Environmental has the Co-operative, while Marks and to ban the use of HFCs in various sec- Investigation Agency (EIA) has been Spencer has pledged to stop using all tors, including commercial and indus- carrying out an annual survey looking HFCs by 2030. trial refrigeration. into the use of HFC-free alternatives in So when you next think about the supermarket sector. We cover the But while some large supermarkets changing or upgrading your refrigera- use of HFCs in stores and in transport are bounding ahead in using climate- tion and air-conditioning, make the refrigeration, as well as in warehouses friendly refrigeration, it doesn’t mean right choice for both your business and and depots. the rest of the supply chain should sit the ­environment. l During the past four years, we have on its laurels. There are various options seen enormous progress in the develop- available to wholesalers and smaller re- Fionnuala Walravens is a ment of HFC-free technologies. Our tailers. Discount chains such as Lidl and campaigner with the Environmental most recent survey found that from just Aldi are using HFC-free, stand-alone Investigation Agency

During the past four years, we have seen the use of HFC-free technologies increase from 14 stores in 2008 to 344 stores in 2012

14 NOVEMBER 2012 Betterwholesaling.com

p12_columnCS5.indd 10 25/10/2012 12:01 INDUSTRY PROFILE

IAN TOFT CHANNEL CONTROLLER, UNILEVER FAST UNILEVER FACTS

Turnover€2.4bn Flora 15% Best-selling Percentage of product business that (by value) goes through wholesale

BRAND LEVERAGE ELIT ROWLAND talks to Ian Toft about the value of good displays, retail clubs and price-marking

BW: How are you working What have been your main What major challenges have manufacturers and wholesalers with wholesalers to achievements in the past you faced? A key area we are seeing the benefits of grow sales? 12 months? We recently are working to improve is working more closely with CB: Unilever provides bespoke acquired the Alberto Culver getting packs fit for purpose. them and they give suppliers tailored offers, promotions, hair care product range, which Essentially, this comes down like us confidence that incentives and added value has given us an opportunity to removing brown boxes that promotions will be passed activities across food, home, to evaluate and improve obliterate our branding. We are down to the customer. and personal care brands to how we approach hair care working with our wholesaler drive sales. in wholesale. Value and and packing supplier DCS What advice would you give One of our main ways to price-marking are key, so to engineer smaller case to wholesalers? You need to share category expertise within three months of the sizes to meet the common understand your customers. is our Partners for Growth acquisition, we tested and £10 price-point for retailers, Build everything in your depot programme for retailers and launched a price-marked £1 and to increase the visibility around what retailers and their wholesalers. Every year, we range, which contributed 4.5% of certain products so that shoppers really want. It’s such produce a handbook giving to the Alberto brand value. We retailers can see what they are a competitive marketplace, impartial range and merchan- were really pleased with the buying. We are planning to it only takes a few missed dising advice, along with tips result – it showed that large review our portfolio and make purchases for an unhappy on how to maximise sales. organisations can be quick sure that all our new product customer to go elsewhere. An initiative over the past to market. development meets this few years has been to invite criterion. Any last minute Christmas key wholesalers to share their How important is hair care advice for wholesalers? views on what they believe in wholesale? It’s growing What opportunities are there For us, Christmas is about are the main challenges and significantly – non-food is for wholesalers? Retail clubs condiments. Mayonnaise, in opportunities in specific cat- growing quicker than the food are growing in importance – particular, sees its biggest egories. We’re also partnering portion of our business. Now spike in sales during this time with wholesalers to tailor the that we have a breadth of because of the demand for advice to their customer bases. brands, we can meet different it in cold buffets and meat We are working with Bestway, pricing levels. Unilever’s strong We’ve shown that sandwiches. We recommend JW Filshill, East End Foods, relationship with wholesalers that wholesalers invest in United Wholesale, Landmark gives us a great chance to raise large organisations branded condiments as Wholesale and the Today’s the profile of some recently can be quick consumers tend to trade Group to promote the guide acquired brands that may have to market up and pay more over the and encourage best practice. been under-represented. Christmas period. l

16 NOVEMBER 2012 Betterwholesaling.com

p14 profileCS5.indd 4 25/10/2012 15:12 COVER STORY

WHAT’S ON THE MENU? ost wholesalers already have strategies Wholesalers must in place to reduce their impact on the environment and make their businesses develop an appetite for more sustainable, from waste reduction to Mlowering carbon emissions. But according to a YouGov labelling and provenance, food provenance report earlier this year, during the recession an issue that is under more scrutiny when it as foodservice customers comes to sustainability is the opportunity to support demand nutritional local and national economies. Consumer desire to buy British is increasing and coupled with growing demand transparency, writes for nutritional information, there has been a shift in focus for wholesalers and their foodservice customers LINDSAY SHARMAN from global to local.

foodservice outlets – and a big comes to food traceability,” says managing challenge.” director Tracey Rogers. “We are opening the A recent report by GS1 UK identi- dialogue to try to engage people, especially fied the provision of accurate informa- smaller suppliers – to educate the industry tion as the key area for improvement for that they should need and want to make the sector. changes.” The provision of information is less “Information is disparate because of prevalent in the foodservice sector the way the industry works,” says Andrew The issue of providing customers with the than it is in retail. Grocery retailers have Stinchcombe-Gillies, head of industrial information and the products they want is been wise to the demand for information development – foodservice at GS1 UK. one that affects foodservice outlets in both for some time and consumers have come to “We need to get a better understanding of the cost and profit sectors in a number expect a certain amount on the packaging how much information people have and of ways. of the products they buy. how to capture and share it.” Amy Teichman is the quality and “Retail has led the way when it comes to Unilever Food Solutions, a member of nutrition manager for education caterer transparency on nutritional information,” GS1 UK and the Food Service Directors’ Alliance in Partnership. She oversees says Helen Hyde-Schuwer, channel market- Group, believes that addressing the way menus for 26 schools in the Royal Bor- ing manager for potato supplier Aviko. information is shared is an essential issue ough of Kensington & Chelsea and the “Consumers expect to get information for the sector to address. specification is high. Recipes have to be and this is a big change for independent “There is a need for transparency when it health-compliant and supportive of local

18 NOVEMBER 2012 Betterwholesaling.com

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WHAT’S ON THE MENU?

suppliers, and nutritional information on nuts, but because they have been bottled “Prevalence of gluten allergy has dou- allergies such as nut- and wheat-intoler- or packaged in the same place as a product bled in the three years I’ve worked in the ance must be taken into consideration. that does.” education sector – the industry, especially “One of the biggest issues we’re dealing Locating products that meet these re- the bread manufacturers, is going to have with in schools is not the quirements takes some effort, and in some to adapt. We are already at the forefront provision of nutritional cases, it’s a choice between using a product on this issue, but in two or three years, it information like that isn’t quite right – or not using it at all. will be more apparent in the wider popula- calorie content, “Nowhere does nut-free, organic cream, tion, so we need to be.” but information for example,” says Teichman. “So then Alliance in Partnership uses a bread on allergies, I have to decide whether we go with a supplier, Aston’s Bakery, that has a The prison particu- non-organic substitute or we don’t have it specific approach to bread-making. All grows 75% of larly nut and on the menu.” the bread is organic and the fermentation wheat,” she Wheat and gluten intolerances are also process takes a minimum of 24 hours, its salad and says. “There allergies that caterers and foodservice sometimes longer. The longer fermenta- vegetables are thousands outlets increasingly need to consider. tion process combined with the use of a of products Teichman has seen a tremendous growth particular type of heritage grain means we can’t use in in the number of children with gluten-free the sugar and starch break down enough our menus, not dietary requirements and she believes this to make the bread tolerable for those because they contain is the next big area for caterers to address. with ­allergies.

Betterwholesaling.com NOVEMBER 2012 19

p18-21 coverstory CS5.indd 13 25/10/2012 17:37 COVER STORY

Sourcing ingre- Kraft, for example, I often find that I Profits in dients from local has had a variety am then able to provenance suppliers that of sustainability educate wholesal- Let customers can guarantee initiatives. It has ers about what know your food the provenance reduced its water is available and sources of their products usage by 30% what can be is important since 2005 done.” in profit sec- and reduced The two-way tor catering, too. packaging relation- And restaurants are not only looking at significantly, ship between how to offer customers locally-sourced cutting 100,000 wholesalers products but also how to make their own metric tons from and suppliers businesses more sustainable. its supply chain is paramount The Clink Restaurant, a fine-dining out- between 2005 when it comes to let at HMP High Down in Sutton, has a and 2010. provenance. Having unique approach to sustainability. Using Dealing with prod- a good understand- a concept similar to Jamie’s Oliver’s Fif- ucts on a vast scale means ing of what suppliers are teen, the restaurant is staffed by prison- suppliers are also looking at doing with the products will ers who do everything from the cooking manufacturing methods as a way to make for more effective communi- to the waiting. make their products more sustainable. cation with wholesale customers. Chief executive of The Clink Chris Aviko is one of the four largest potato- So what can wholesalers actually do Moore believes the restaurant’s contri- processing companies in the world, sup- to better support their customers when bution to the catering industry has the plying fresh and frozen potato products it comes to sustainability? The mes- potential to be significant. “We train to the catering industry. sage from suppliers and caterers is that 28 men at a time and with a skills short- “One of the key things from a supplier education is the key role they can fulfil. age in catering, it’s contributing to the perspective is sustainable production If wholesalers become knowledgeable sustainability of the industry itself,” methods,” says Helen Hyde-Schuwer. about the products they are selling, then he says. “We are looking to use 100% sustainable their foodservice customers can buy The prison grows 75% of its salad palm oil for all our products by 2015.” with ­confidence. and vegetables on site and uses local, Aviko is also looking at other ways of “Wholesalers are doing a great job sustainable and British produce for the making the business more sustainable, in some areas. For example, 3663 has restaurant menu. It also composts all including lorries that have carbon introduced MSC [Marine Stewardship

food waste for use in the prison gardens dioxide (CO2) cooling systems, Council]-certified fish,” says Teich- and keeps 12 beehives just outside the which purify and store CO2 to man. “My ideal would be to see prison wall. reduce carbon output, and 30% wholesalers using less pack- Kraft’s Plans are now in place to open 10 simi- smaller product packaging, reduction in aging overall and to be more lar restaurants at prisons across the which in turn means more water usage educated about what is in the country over the next five years, includ- boxes in cases and more cases since 2005 products.” ing a women’s prison. on ­lorries. Aviko’s Helen Hyde-Schuwer The Clink works with 3663 and Chris Hyde-Schuwer says Aviko has a similar point of view: Moore emphasises the importance of is not alone in its endeavours: “There needs to be a flow of infor- working with a wholesaler with business “Branded suppliers tend to be more mation from supplier to wholesaler and practices in line with his own. focused on sustainability than those with then wholesaler to the customer about “We try to use the least amount of lower-priced products, but in general, it is everything from nutrition to provenance. packaging possible and 3663 is leading on people’s agendas and I think it should “Wholesalers really need to know their the way on this. It has one lorry with be.” products. It’s much easier to sell some- several different compartments and con- thing when you’ve tried it yourself.” tainers to be more economical,” he says. But it’s not only And being able to provide the right “We partner with suppliers and Supplier the larger suppli- information to your customers can be a wholesalers that have support ers that are re- satisfying part of the business. similar values to us, or Help them and sponding to sus- “We advise customers all the time – it’s we simply won’t use they’ll help you tainability trends part of our job and we love it,” says Mike them.” and requirements. Berthet, fish and seafood director at M&J Using Some, if not In fact, smaller, Seafood. “We try to give them the bits information all, of the lead- local suppliers can to fit their jigsaw and make the picture on sourcing ing branded be better placed to complete. We don’t see ourselves as just suppliers have respond quickly to changing consumer having fish for sale. We are dedicated to can help create been on point tastes and are well-placed to advise cater- end-to-end marketing of the product and a story around with sustain- ers and even wholesalers. it brings the whole sale to life for every- a product ability for some Sid Aston of Aston’s has extensive one, especially the foodservice customers. time. Companies knowledge of the bread-making process “At the end of the day, using informa- like Coca-Cola En- and the health benefits of eating organi- tion on sourcing can really help to create a terprises, Kraft, and cally, making him an ideal partner for the story around a product and a menu. Imagine Unilever, to name but a catering trade. a specials board that says ‘line-caught sea few, all have long-standing Alliance in Partnership’s Amy Teich- bass from skipper Ian Taylor on his boat the commitments to make their man says: “I have learned so much from Skin Deeper’. It sounds much better than a businesses more sustainable. dealing with local suppliers like Sid, and chicken Kiev, anyway.”l

20 NOVEMBER 2012 Betterwholesaling.com

p18-21 coverstory CS5.indd 14 25/10/2012 17:39 M&J IS Consumers want to know more about what’s in their food A SUSTAINABILITY HERO

M&J Seafood, part of the Brakes group of distribu- tors, is passionate about the issue of sustainability in rela- tion to British-caught fish. It recently won an award for its ‘Sustainable Hero’ campaign, which achieved record sales of under-used, sustainable fish species, including dab. “Every month, we have a fish as a sustainable hero for chefs to build into their menus and, over time, build up a repertoire of sustainable choices,” says Mike Berthet, fish and seafood director at M&J Seafood. Mike says an increasing amount of interest from consumers in the provenance of food in general has had a noticeable impact on the fish market, with businesses ranging from Brasserie Blanc to independently-run gastro-pubs actively seeking out British species over exotic fish for their menus. “Four years ago, people wanted red snapper or barracuda, but growth of those has pretty much stopped now and there’s a huge uptake of British fish like Cornish crab or Scottish monkfish.”

Betterwholesaling.com NOVEMBER 2012 21

p18-21 coverstory CS5.indd 15 25/10/2012 17:41 Working Together with

Ferrero’s depot-level displays are dazzling retailers and driving spectacular sales ustomer engagement is a key way to break retailers’ regular purchasing habits and Ferrero is working with cash & carries around the UK to deliver Ceye-catching promotions, impactful PoS and strategic £27m category advice to deliver a truly spectacular solution. of Ferrero’s “We are doing something that’s never been done in this business goes country before”, says Levi Boorer, customer development director through the at Ferrero, which has launched the UK’s first shimmering gold standard praline display, which also coincides with Rocher’s wholesale 30th anniversary in the UK. channel The sheer size of the display makes it quite a commitment for Ferrero’s wholesale partners, but Mumtaz Ali, Bestway’s confec- tionery buyer at the Park Royal depot says it’s going down well with Retailers customers and other suppliers. “Two suppliers came in recently to are following take pictures of the display to report back to their head office. They the gold said it was a perfect example of how PoS should be executed.” And the added excitement on the depot floor has inevitably led to extra sales. “We’ve definitely seen an uplift”, says Ali, who is confident that the uplift will continue until the end of the year. “The Ferrero is currently making a huge invest- first thing our customers see when they come in is the display; it Display ment into the wholesale market, with £27 stays in their minds for the whole season.” Category million of its business going through the But a successful partnership is not just about knowledge channel. “With so many points of distribu- short-term projects, says Boorer. “Ulti- is critical tion, wholesale gives us a unique opportu- mately, our relationship is about how to nity to reach out to millions of consumers,” sustain growth in the long-term.” And says Boorer. sometimes, this means taking a leap With some areas of confectionery in of faith. “We want to work with decline, confectionery is a category where you can’t afford to make wholesalers who trust us - Bestway mistakes. “The whole confectionery category has been static or in believed in what we were trying to decline over the last three years”, says Ali “But working with Ferrero achieve. We hope other wholesalers has enabled us to enjoy category growth.” In smaller stores it’s even will have the same faith.” more important because spacing is so limited, agrees Levi, “Without The risk is certainly paying off for this support, it’s hard for wholesalers and retailers to make sure that Ali, who says that his confectionery their confectionery is driving profit.” Bestway’s category enjoyed growth last year, Ferrero is supporting its promotional activity with strong in-depot Mumtaz Ali with Ferrero’s support. “Things are also displays, which helps to educate retailers. “We believe that wholesal- looking positive for this year, too. We hope ers play a crucial part in this learning process, particularly in giving that other suppliers follow Ferrero’s lead.” retailers clarity on what they should be buying and why,” says Boorer. To support its wholesale and retail partners, Ferrero’s website offers downloadable planograms, category advice and best-seller information.

22 NOVEMBER 2012 Betterwholesaling.com

p20-21 Working together.indd 1 25/10/2012 12:50 Working Together with

LEVI’S TOP TIPS With confectionery the most impulsive category in the independent channel, effective category management is crucial both in-depot and in-store.

CORE RANGING: Smaller retailers are seduced by NPD – but it’s very important for retailers to know that over 85% of their confec- tionery sales come from a core range. Focus on the products that sell the best in the market place – we list all the best-sellers on our website: www.ferrero-trade.co.uk

CAPITALISE ON SPECIAL SHARING: Although the giving opportunity is key, we have also noticed growth in special sharing occa- sions. People are starting to take our products to less formal events, like get-togethers with friends and family.

PRICE-MARKING: Consumers are very price-oriented around certain price points, particularly 20p and £1. Retailers are starting to realise that this is a key way to communicate value to consumers over other factors like more facings.

CONSUMER PROMOTIONS: Relevant on-pack promotions are a great way to add value to the brand and drive consumer engagement. Our latest one is with tic tac and MTV, giving consumers the chance to win tickets to the European music award finals in Frankfurt. No.1 Ferrero is the PROVIDE SOLUTIONS: Impulse purchases are key in No.1 classic retail and we’ve taken our tic tac promotion one boxed brand step further to incorporate a free counter top at Christmas display that’s pre-filled and pre-merchandised, making life a bit easier for retailers.

DON’T FORGET THE RETAILER: To give retailers an added reason to purchase on-pack offers, it’s impor- tant to overlay on-pack offers with promotions for retailers. We’re giving retailers 24 packs of tic tac free when they buy a counter display unit.

FOCUS ON BEST-SELLERS: Wholesalers and retailers should focus on brands with significant marketing campaigns. We are investing £6 million into ours over the Christmas period, which is set to give the Ferrero brand No.1 share of voice in food during the Christmas period for a second consecutive year. Retailers are starting to realise that this is a key Over way to communicate value of85% retailers’ to consumers over other confectionery sales factors like more facings come from a core range

Betterwholesaling.com NOVEMBER 2012 23

p20-21 Working together.indd 2 25/10/2012 12:59 CASE SIZES FEATURE

SIZE IS EVERYTHING Smaller cases are helping to drive sales with space- and budget-conscious retailers, writes NIKKI ALLEN

hen it comes to independent cash outlay and improve retailers’ stockrooms, size stock control. The matters. With small stores smaller cases will see Wlimited in space and often cash outlay They allow independents Roysters, Nik Naks as well, there has been a marked trend to offer more choice to the and Frisps reduced among suppliers in recent months consumer by stocking new to 28 packs per towards smaller cases, which allow case, while Discos, products to be shifted quicker and are and different products Skips and Wheat less of a cost risk to retailers. Crunchies are now “Smaller cases free up storage space available in cases and allow retailers to convert more safety is also improved as smaller of 24. of their shops into selling space to cases are lighter and easier to carry.” “We understand the maximise sales,” says Guy Gissing, A host of major suppliers have challenges retailers face AG Barr’s national impulse control- been investing in smaller cases daily as a result of the current ler. “They also allow independ- in recent months. In October, economic climate,” says George Johnston, ents to offer more choice to KP Snacks launched a new range marketing director of bagged snacks at the consumer by stocking of smaller cases across six of its KP Snacks. “We hope that the launch of new and different products brands in a move to help in- our new smaller cases will go some way at less risk, and health and dependent retailers manage to helping improve independent retailers’

24 NOVEMBER 2012 Betterwholesaling.com

p22-24caseCS5.indd 20 25/10/2012 12:42 CASE SIZES

cash flows and management of supply and space levels, especially with many retailers moving towards smaller and more frequent deliveries.” KP Snacks VIEWPOINTS is supporting the launch with a ‘three for £20’ multi-buy deal for cash & carry Retailer MARK CALLAWAY retail clubs. Bargain Booze Select In July, Walkers launched a new range Convenience, Salisbury, called Deep Ridged. “Not only have we Wiltshire backed the launch of the crisps with our biggest ever multi-million pound media “I don’t buy a lot in large spend for a new product, but we have cases because you’ve got to supported independent retailers by in- ensure cash flow. I was recently offered price-flashed troducing the three Walkers Deep Ridged a large pallet of Stella Artois at a very outer cases, which flavours in half cases of 24 packs,” says good price. I’d definitely have saved clearly identify value Kieran South, wholesale sales director money in the long-term, but I didn’t and profit opportunities at Walkers. want to tie up the cash and I don’t to the retailer and help the Meanwhile, AG Barr says it is con- have a lot of storage space.” wholesaler drive volume sales,” stantly working to ensure that case sizes he adds. suit the needs of independent retailers. Supplier “Our price-marked packs and cases “All our 500ml PET packs are in 12s, PAUL BENDIT are also popular with retailers as they whereas many other suppliers supply founder and MD, offer an excellent way to generate profit these packs in 24s,” says Gissing. “All our Metro Drinks and sell through quickly to maximise 2l packs are in sixes, and we also changed “We recently gave our cash flow.” our Rockstar 500ml cans from a 24-pack popular Latitude Iced Tea to a 12-pack, and our Simply Fruity packs range a full brand makeover, the start of August, Coca-Cola were reduced from 24s to 12s, to tailor And at and at the same time, we decided to offer Enterprises also got on board with the them to retailers’ needs.” the product in smaller packs of 12 in- trend, introducing a smaller 12-pack case The soft-drinks supplier has also re- stead of 24 and in a 330ml rather than for its Oasis juice drink for cash & carries, cently launched a range of printed trays the previous 375ml bottle. This was to in a move it says was aimed at meeting for Rockstar, Rubicon and KA, to help help our foodservice customers with stor- retailers easily identify their drinks. age and stock management, which we “Our current range is working well know is an important issue in the sector.” with wholesalers – in particular, our Supplier Price-flashed outer cases LEVI BOORER identify value and profit customer development opportunities and help the director, Ferrero wholesaler drive sales “In September, we launched the first ever on- pack promotion for Kinder Sur- prise, offering consumers a trip to Italy. retailers’ demands for more flexible stock The promotional eggs are available in options. limited edition half-cases of 36 designed The new smaller Oasis case is designed specifically for independent retailers, as to help retailers manage space in their we know these are what they are looking stockroom more effectively and offer for at the moment, as well as standard retailers greater choice, says Darren cases of 72.” Goldney, sales and customer develop- ment director at CCE. “Offering a 12-pack case for Oasis allows us to offer retailers Wholesaler greater control over their stock. The cases STEVE PARFETT are aimed at retailers looking to buy and chairman, Parfetts Cash & Carry sell the brand, and wanting to stock the range, but who are conscious of the initial “Smaller case sizes are investment in stock.” needed by our customers. To attract retailers to the smaller cases Cases of 24 or 48 are practical in-depot, they should be merchandised for a superstore, but not for smaller lengthways to help customers easily iden- stores that are managing their stock on tify the different brands and flavours, a daily basis. For instance, most small says AG Barr’s Guy Gissing. “The cases stores only have two or three lines of work as on-shelf point-of-sale material if 12-packs soups because they come in cases of merchandised in this way and special case Give retailers 24 cans. If they were supplied in sixes, prices should be strongly communicated greater control small stores could have greater ranges.” on-shelf to allow retailers to identify over their stock packs that offer the best value.” l

26 NOVEMBER 2012 Betterwholesaling.com

p22-24caseCS5.indd 22 25/10/2012 12:43 Q&A

£10m Investment in Bestpets over the next three years

PETS, PROFITS AND FOODSERVICE ELIT ROWLAND speaks to Martin Race of Batleys about the expansion BW: Earlier this year, you work with our Xtra Local Retail of Bestpets and the group’s unique extended your director- Club members that will ship to the Bestway start soon. approach to foodservice business. How’s this going? Are you working BW: What have been on anything exciting? your greatest achieve- MR: The group has many ments in the business? exciting plans, with extra MR: I have been with investment in our dedicated Batleys since 1988, with my pet-care wholesale business, greatest achievement being Bestpets, where we are adding the successful integration of the new delivery hubs and increasing sales business within the Bestway Group, personnel; and the extension from Scot- along with the ultra-successful launch of land to England and Wales of our Drinks Bestpets. More recently, I’ve also seen Express on-trade delivered drinks busi- through the acquisitions in Scotland of ness – we are opening in Brighton and Martex and Bellevue and integrated them Newcastle, with more to follow. We also into Batleys Scotland, which has been have some exciting plans for category another success for the group. I enjoy

28 NOVEMBER 2012 Betterwholesaling.com

p26-27 BatleyCS4.indd 20 25/10/2012 14:44 FEATURE

BW: Batleys Foodservices is the ‘new BW: What advice would you give to kid on the block’ but you’ve managed suppliers for the year ahead? What to secure some impressive contracts do your customers want and what – how is the Batleys approach to key trends should they be innovat- foodservice different? ing for? MR: When we started this side of the MR: Improve and maintain their avail- business, we were able to conduct a ability – concentrate on the core product complete SWOT [strengths, weak- range for disciplined retailers and give nesses/limitations, opportunities and us the deals that they give to the pound threats] analysis of the competition, in a shops and the like to enable our retailers positive way, as we had a blank sheet of to feature them in their shops: let us all paper. One of our points of difference is compete more fairly in the marketplace. ‘lower food miles’, which because of our number of depots and strong geographi- BW: What will be your focus in 2013? cal coverage, are pretty low. MR: Sales will always be the focus across We pride ourselves on our real-time all our business categories, but we IT systems, which have been designed particularly want to ensure that our new to deal with numerous difficult pro- chilled distribution centre increases our curement demands and give us a very competitive edge. ­efficient telesales and sales-order processing model. BW: I’ve heard that you’re We have retained and won quite a sought-after business on a consistent speaker at industry basis for the last two events. What makes years and strongly you so popular in believe we can our industry? grow further in And how has this sector. this contrib- uted to your BW: You’re in- success at vesting £10m Batleys? in Bestpets MR: I would over the next hope that it is wholesale in its entirety, but being in the three years. because I am a depots with the management, staff and Does it still straight-talker, customers is my first love. account for 30% honest and down of all delivered to earth, allied to BW: Batleys has maintained its brand orders? What’s the the fact I can take identity since joining Bestway seven update on the new it as well as give it years ago, but are there differences hubs for Glasgow and out – people know exactly between the Batleys and Bestway Bristol? where they are with me. l customer? Do both businesses offer MR: Bestpets continues to grow apace different strengths? – work has been started on the MR: Yes – even within cities where we hub in Glasgow, while we are still BIOGRAPHY have both Batleys and Bestway depots, researching sites for Bristol. We have Martin Race is operations director at there is little cross-fertilisation of cus- developed something very special for Batleys. He was educated at Seaham Gram- tomers. Batleys has helped to drive the the pet trade and our customers really mar and the University of Leeds, graduat- whole pet care industry and has a unique seem to appreciate our offering. ing with a degree in economics and history. image for that and the Batleys brand has He joined Joshua Wilson straight from also grown the foodservice side of the BW: How important is technology university as a graduate trainee, working whole Bestway Group. to your business? Is it really worth in every department including audit and the investment? What impact has it marketing before embarking on depot man- made to your business in terms of agement. He ran depots in the north-east Batleys has helped drive operations, cost savings and custom- and when Joshua Wilson was taken over by er service? Linfood, he progressed to regional direc- the pet care industry and MR: Technology is vital – tor, Scotland. has a unique image for our new online ordering He left in 1988 to join Bat- that and the Batleys website goes live for the leys, managing its Cleve- core business at the land depot from opening brand has also grown the end of October, while until 1998, when he foodservice side of the the Best­pets website £100m became a regional whole Bestway Group is being upgraded Bestway Group’s controller. He was shortly to be real- subsequently promoted time, in line with our 2011 profits to operations director core systems. in ­January 2000.

Betterwholesaling.com NOVEMBER 2012 29

p26-27 BatleyCS4.indd 21 25/10/2012 14:45 TOBACCO CATEGORY GUIDE

£15.4bn Sales value of the UK tobacco market

READY TO ROLL? Make sure the trend towards value is reflected in your range, says NIKKI ALLEN

orth £15.4bn in the UK, In line with this trend, says Patrick tobacco is the biggest FMCG Toms, head of the distributive channel category by sales value and a SIX WAYS TO GROW SALES at Imperial Tobacco, is the growth of Wmajor source of income for wholesal- price-marked packs (PMPs): “PMPs have l CURRENT IS KEY: Stay up to date ers, with over half the average depot’s with local and regional market trends, and a vital role to play in achieving a positive turnover generated from purchases ensure your range reflects them. Pricing price perception and communicating to made in the tobacco room. For you to information must also be kept up to date to shoppers that everything in a retailer’s store is great value for money,” he says. make the most of the category, it’s build customer trust. vital you ensure you understand “Shoppers believe they are getting a good l KEEP STOCKED UP: The average consumer trends, work with suppliers deal, which leads to customer loyalty and to grow sales, and get your merchan- spend lost due to products being repeat ­business.” dising and display right for your unavailable in-depot is a significant £119.33 Philip Morris marketing manager Zoe customers. per visit across all product categories, Smith agrees that as many as 84% of adult Key to helping your retail according to a recent survey. smokers are switching to lower priced customers grow sales is under- l TAKE TIME TO TALK: Speak to your products. “24% of shoppers choose a standing the trends affecting local tobacco representatives for advice particular store because it sells PMPs. We adult smokers in the UK, on merchandising, market trends, have responded with the launch of Ches- suppliers say. First and fore- new developments and best- terfield, RRP £5.75 for 20, and Marlboro most of these, says Jeremy sellers in the local area, to help Gold Touch, PMP £6.35 for 19.” Blackburn, JTI’s head of maximise sales. Another area of growth is additive-free communications, is value: l MAKE RECOMMENDATIONS: products, which are increasing in popu- “The price of cigarettes Retailers are more likely to larity, says Alan Graham, head of mar- has increased significantly, purchase a product if it is on keting at Scandinavian Tobacco Group which has primarily been promotion and suggested by UK. “There is definitely a trend among driven by the government’s tax depot staff. consumers for additive-free products, es- increases,” he says. “In recent years, this, l TIDY ENVIRONMENT: A neat and tidy pecially in the case of our Natural Ameri- together with the economic climate, has tobacco room with clear signage makes it can Spirit brand. The range of cigarettes led many adult smokers to down-trade easier to navigate. is available in two variants – Blue and to products that offer greater value for l DELIVER KNOWLEDGE: Retailers can Yellow – both at a manufacturer’s RRP of money – a trend that has manifested £7.49 for 20.” build expertise through their wholesale itself in the considerable growth of suppliers. By offering a high level of the value cigarettes and RYO [roll your A vital trend in the tobacco market is own] segments. service, you can maintain customer loyalty. the introduction of plain packaging, as

30 NOVEMBER 2012 Betterwholesaling.com

p28-30tobaccoCS5.indd 38 25/10/2012 12:05 TOBACCO

NEW PRODUCTS, LIMITED EDITIONS AND REDESIGNS

24% Shoppers who go to shops that sell PMPs

JTI is introducing three BAT has moved its Pall Amber Leaf Blonde uses This summer saw the limited-edition pack Mall RYO 12.5g variant a paler-coloured blend for a introduction of the first designs for Silk Cut. The packs into a new 11g pouch and smoother taste. It is available in ever PMP for Salsa. Each Salsa will be rolled out across Silk Cut reduced the price to a RRP 12.5g packs, RRP £3.87, and multipack contains five 12.5g Purple, Blue and Silver 20s from of £2.99. 25g pouches, RRP £7.57. PMPs packs, each RRP £3.35. November 1 for four weeks. are priced at £3.74 and £7.31.

Premium brand Davidoff Golden Virginia JTI has unveiled three Marlboro Gold is being has introduced iD, Original (Green) and limited edition tin designs sold in price-marked packs available in Orange and Blue, Smooth (Yellow) 50g packs, for Hamlet 5s, Hamlet for the first time, initially in RRP £7.75. RRP £16.18 and £15.02 Miniature 5s and Hamlet Greater London. Marlboro respectively, will now include Miniature 10s, ahead of the Gold 20s are price-marked quality cut-corner papers. fast approaching festive season. £7.75, Gold 10s £3.94.

it’s likely to dramatically affect your retail keep up to date with any changes in legis- Rothmans Gold and Silver launch,” says customers, suppliers say. Ian Robertson, lation,” says JTI’s Jeremy Blackburn. Mr Robertson. “With a rapidly changing BAT’s head of corporate and regulatory “Helping our wholesaler customers is landscape of regulatory challenges, it is affairs, says: “For the wholesale commu- more important to us than ever before,” essential that wholesalers keep up to date, nity, a trade exemption is proposed in the says Imperial’s Patrick Toms. “We run and we support them with information, consultation document, with branding regular trade days, as maintaining good such as our guide to the display ban, which allowed on the outer packing case. But this business relationships with suppliers and we produced earlier this year.” can’t possibly work,” he says. traders helps distributors provide the Suppliers say they are also committed to “Retailers would have to take the right ranges for their customers and get helping wholesalers get their tobacco mer- product out of the outer in the back room the best deals from suppliers.” chandising right. “Although wholesalers and carry it into the shop to put it on the BAT offers promotions such can’t sell directly to adult smokers, gantry, as consumers would not be allowed as money-off deals and effective merchandising is still im- to see the outer. It is simply impractical.” offers on new products, portant,” adds Mr Robertson. Suppliers say they are urging wholesal- to support its whole- “Maintaining a diverse range ers to make sure their voice is heard by sale customers. “One of brands, and highlighting the government by contacting MPs and recent example was the new products and any special are communicating with their wholesale popular money-off deal offers to the trade, while en- customers about how best to approach run in support of the suring shelves are full at all this. They are also investing heavily in times will help retailers find their brands and people, and working the products they need.” closely with the wholesale channel to help And communicating these grow sales. promotions is key, adds Philip “The distributive trade is an incredibly Morris’s Zoe Smith. “40% of adult important part of JTI’s business, and our Smokers84% switching smokers are likely to purchase a product dedicated team works closely with tobacco to lower-priced if it is on promotion and suggested room staff in order to provide guidance on products by retail staff.” And the same rule the tobacco category, as well as help them applies to the depot. l

32 NOVEMBER 2012 Betterwholesaling.com

p28-30tobaccoCS5.indd 39 25/10/2012 15:32 SOFT DRINKS

£7bn Total take-home value of soft drinks sales

TOP OF THE POPS Price-marking, energy drinks and bundle deals are driving soft-drinks sales, says LINDSAY SHARMAN

oft drinks is a lucrative cat- of the positive side effect that PMPs can egory worth £7bn in total have on sales,” says national impulse take-home and it is growing BRITVIC’S TIPS FOR CUSTOMERS controller Guy Gissing. byS 7% in value year on year. Growth “The use of long-term PMPs has l SERVE IT COLD: 86% of consumers has continued despite the recession say they want their soft drinks chilled. delivered year-on-year sales increases of and soft drinks suppliers agree that 53% would pay more if they were chilled. 37% for Rubicon, 51% for KA, and 26% when times are tough, consumers l MAKE IT VISIBLE: 49% of people don’t for ­Rockstar.” Rubicon is also reflective of another look for ways to treat themselves at see soft drinks when they are in a c-store. an affordable price. l trend in the category – this time for An area of growth within the category STOCK UP: 38% of lost sales are exotic drinks. In the retail channel is energy drinks. According to Coca-Cola due to poor availability. in particular, products geared Enterprises (CCE), over the past year, l LINKED PURCHASES: towards particular ethnic energy drinks have accounted for 34% 67% of snacks and soft drinks groups are proving to be of total soft-drinks growth, the biggest are consumed together, but successful. “The fast-growing value increase of any soft-drink sector. only 13% are sold together – ethnic market is of increasing Functional drinks like Red Bull and snacks should be positioned importance to retailers and CCE’s Relentless and Monster are driving near the chiller. consumers are very brand- much of the growth but an increasing l COLA AND ENERGY DRINKS: loyal, seeking out brands with number of own-label and mid-range These account for over 43% of impulse authentic tastes,” says Gissing. brands are muscling in. Red Bull’s cat- soft-drinks sales and are a must-stock. egory marketing manager for wholesale Although impulse is a growing mar- Claire Ladds emphasises the need to But Simon Gray, managing director of ket for the soft-drinks category, it’s also prioritise premium brands. Boost, says there is room in the cat- crucial to remember foodservice custom- “Over the past 12-18 months, we have egory for a mid-range product. “We give ers and the small differences in customer seen an increasing number of value brands consumers a value product while still requirements that need to be catered for. enter the market and this is resulting in offering good margins,” he says. Boost’s Simon Gray says: “Retail is a slowdown in value growth, particularly Price-marked packs (PMPs) are an- essentially divided into big and small in independents,” she says. “Private-label other key trend in the soft drinks sector. stores, but foodservice is a more diverse and value brands have a role to play, but According to AG Barr, 70% of soft- animal. The requirements of a foodser- should not be prioritised over premium drinks growth has been driven by PMPs. vice outlet are vastly different from those brands that deliver high cash profit.” “KA and Rubicon are excellent examples of an independent retailer,” he says.

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VIEWPOINTS NEW PRODUCTS, LIMITED EDITIONS AND REDESIGNS

Retailer CHRISTINE HOPE Hopes of Longtown, Hereford, Herefordshire

“We stock a range of soft drinks, from best-sellers like Coca-Cola to smaller, organic brands like Fentimans. We also stock Booker’s Euro Shopper energy drink and Lucozade Sport, although only the one with the sports cap sells in our Red Bull has launched three new AG Barr is introducing Christmas store, which I know is not the national flavours with the same functional packs of Irn-Bru featuring iconic trend. I think it’s important for suppliers benefits of Red Bull: The Red Edition snowman imagery. and wholesalers to understand the needs (Cranberry), The Silver Edition (Lime) and of individual stores and the fact they The Blue Edition (Blueberry). might be different from what is a trend in grocery. I am a member of Booker’s re- tail club, Shop Locally, and I find it is an excellent way to try out new products.”

Foodservice ROB ROUSE Britannia Inn, Wells, Somerset “I use L&F Jones, which is a family whole- saler, and they deliver. They Boost Sport Orange, Mixed Berry CCE has launched Grapetiser White have a good range of soft drinks, includ- and Tropical Berry, 500ml, have been and Grapetiser Red available in 1.25l ing Britvic and Schweppes. Occasionally re-designed to create greater standout on PET packs and 275ml glass bottles. we come across promotions from sup- shelf and are available in 65p price-marked Grapetiser Red is also available in pliers, particularly at Christmas – for bottles as well as unmarked variants. 330ml cans. example, there might be an offer to buy six or eight cases and get one free. It’s definitely something I’d like to see more of. One of our best-sellers is Britvic’s J2O. They continually bring out new flavours and customers love them.”

It’s important for suppliers and wholesalers Ribena Plus is available in four Lucozade Sport Tropical has been to understand the needs flavours – Blackcurrant, Apple & relaunched as Lucozade Sport of individual stores Peach, Mixed Berries and Apple & Caribbean Burst. A Pink Lemonade ­Raspberry. flavour has also been added to the range.

“We recommend using non-price- Red Bull is big on working 70% Nigel Paine, Britvic’s commer- Growth of marked packs for caterers and foodser- directly with wholesalers in- soft-drinks sales cial director, impulse, agrees vice outlets. The 55p price-marked cans depot to get the execution of category because that understanding custom- already offer excellent margins for the energy drinks right, says Claire of PMPs ers is key. “It’s important to retail sector, but caterers have an oppor- Ladds. “We work at all levels regularly engage with the people tunity to increase these even further by within wholesale, including head coming into a store to find out what stocking non-price-marked cans.” office, regional and depot staff, to drive brands they want and in what format.” Energy drinks are also popular mixers the distribution of core lines.” But an opportunity that could be capital- in bars and restaurants, says Gray, so AG Barr’s Guy Gissing also emphasises ised on, he adds, is linked purchases. “67% there is a good opportunity to capitalise the importance to the company’s ap- of snacks and soft drinks are consumed on linked deals by cross-promoting them proach of working with the channel. “One together, but only 13% are sold together.” with ­spirits. size does not fit all,” he says. “We tailor Wholesalers should advise their retail Ultimately, communication with cus- ranges to include brands that appeal to lo- customers to position snacks close to chill- tomers and their varying requirements is cal shoppers and implement point-of-sale ers or use display solutions that bring the key, as is working together with suppliers. material in-depot to drive sales.” categories together. l

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p34-36softCS5.indd 39 25/10/2012 12:20 TECHNOLOGY THE IT OPPORTUNITY ELIT ROWLAND asks four key suppliers what results IT has brought to the channel

here’s no doubt that technology is helping businesses of all sizes to expand fast, but with hefty price tags and results that can be difficult to measure, is IT a strategic investment or a risky business? Four key providers explain how IT has helped their wholesaler customers to improve operations and grow sales. And, with budgets continuing toT tighten, how they are making solutions more financially accessible.

SANDERSON MARTIN BEATTY Development director for wholesale distribution solutions, Sanderson

What differentiates your business from Your customers other software providers? We’ve been include major providing software to the wholesale buying groups channel for nearly 30 years and, with the – what makes support of our technology, have your approach seen a number of small operators so popular with grow into large and successful companies. them? We have One of our biggest customers in Ireland developed is The Barry Group, which has grown functionalities tenfold since working with Sanderson. for buying- In the UK, we have JW Filshill, which group members has grown sevenfold with our solutions. and made these We care a great deal about our wholesale changes available customers and won’t let go of a project to all members of until it’s successful. the group. This has helped 12 How long would it typically take to see the groups to months a return on investment? We are seeing move forward return on a strong correlation between companies with central some web that invest in IT and those that perform projects. technologies well. Where we can measure return, we are seeing good results. For our voice How are you operations in a warehouse, we’re seeing helping smaller particularly fast returns – within wholesalers? Many Voice around 13 or 14 months and, in some smaller businesses are stuck technology cases, just 15 months for a 100% because they can’t afford to is providing return. We have also seen as little improve their IT. To address this, good results in warehouse as 12-month returns on our web we offer cloud-based solutions operations technologies. for a monthly rental fee, giving such as smaller customers flexibility and Today’s What trends are you seeing in the access to technology. wholesale channel? There’s a big move towards mobile and web technology, and also towards voice technology, which is There’s a big move towards mobile and web technology, proving to be very cost-effective – even the smaller wholesalers are picking up and also towards voice technology, which is proving on this. Three or four years ago, the to be very cost-effective – even the smaller technology was very expensive, but now wholesalers are picking up on this it’s affordable and delivering a faster return on investment.

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Untitled-3 1 24/10/2012 15:50 FEATURE

FAST SANDERSON FACTS

£13mTurnover

1983Founded

Coventry Months: Fastest 12return on investment Headquarters Buying group customers: Today’s, Landmark, Sterling, Sugro, Country Range

Independent wholesaler Savage & Case study Whitten has used Swords, the special- Savage & ist delivered wholesale and cash & carry Whitten system, for many years. Recently, it succeeds invested further to support an expansion with Swords of the company that included the launch of online ordering.­ “From a standing start 18 months ago, the web now accounts for 16% of our revenue – around £7.5m,” says managing director Mark Windebank. “We have budgeted for 20% by the end of 2012 and I’ve no doubt this can be exceeded.” He adds: “We run our entire business on Swords, from order placement to final accounts. It’s is a great system for this industry and enables us to stay ahead of the game.” The wholesaler had already improved warehouse productivity and efficiency through radio frequency technology, but upgraded to . l voice order picking. “Our picking rate went up by 35% last year – and we believe it can improve further this year,” says Windebank. The installation of voice technology went hand in hand with an upgrade of the Swords stock and warehouse management module, which Windebank believes has driven more gains by making pro- cesses more streamlined. “The warehouse management software has helped improve the overall running of our facility,” he states. “It has helped us to boost the in-full delivery rate, improving service levels by 2%. This is not just because the picking activity is more efficient, but also because our control of stock is so much better.” S&W now uses Swords to manage every item of stock, giving them greater accuracy and full visibility. Windebank adds, “By using Swords to its full potential throughout our business, we’ve been able to drive a three- fold expansion.”­

PICKING RATE INCREASED 35% LAST YEAR ONLINE ORDERING ACCOUNTED FOR 16% OF REVENUE AFTER 18 MONTHS IMPROVED SERVICE LEVELS BY 2%

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CELTECH

DARRAGH FANNING CEO, Celtech

What trends are you How important are integrated seeing in the wholesale solutions? For a long time channel? The move retailers and wholesalers have towards tighter supply chains tried to cope with increasing is a key trend. Visibility is vital – it’s complexity by bolting on a important for retailers to be able to software module here and see everything, from historical orders, there. But if the independent actual deliveries, upcoming promotions channel really wants to and prices to credit terms and limits. compete with the multiples, Businesses need to be prepared to be it needs to consider transparent up and down the supply integrating these solutions. chain if they want to compete with For smaller wholesalers who the multiples. may not be ready to take the ‘big bang’ approach, we offer How is Celtech responding to this a transitional process that will trend? We offer a real-time solution allow them to work towards this that gives wholesalers’ customers the over time. choice to do business online, in-store or by email or fax, with up-to-the-second information on stock. Retailers even receive warnings on stock that’s running low and suggested alternatives based on FAST CELTECH FACTS what they have purchased before or what other retailers have bought. Relying on pickers isn’t always successful because they can’t guess what the customer will want. A mistake will mean a disappointed customer but also time and resources Batleys wasted on getting it replaced. Our real-time system actually ‘learns’ the Biggest wholesale customers’ preferred substitutes, which 1992 customer helps to manage their expectations. Businesses need to be Founded prepared to be transparent up and down the supply chain if they Dublin, Competitive offering: want to compete with wholesale operations the multiples Ireland and retail collaboration Headquarters in real-time

Case study Batleys Cash & Carry, part of Bestway, the UK’s second largest wholesale and Batleys uses distribution business, integrated five depot acquisitions into its business using Celtech’s ab-initio software. The integration of three Martex and two Bellevue ab‑initio to units into the business has enabled Batleys to drive its expansion in Scotland. improve real-time Martin Race, Batleys operations director, says: “Ab-initio’s ‘one version of visibility across the truth’ means that everyone throughout the business is using one system. the business We can see everything, from stock levels to point-of-sale data, from any- where and in real‑time.” “WE CAN SEE EVERYTHING FROM ANYWHERE AND IN REAL‑TIME”

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p38-41 infoCS5.indd 40 25/10/2012 16:20 STL TECHNOLOGY SOLUTIONS IVAN DURKIN Managing director, STL

Maini Wholesale Cash & Carry, a leading wholesaler of Case study wines, beers and spirits has benefited from a more detailed Maini Wholesale What differentiates your business from picture of all its commercial activities, and improved the is seeing clearly cost of operations and customer service with the use of the other software providers out there? with MMS We were founded by wholesalers for STL’s Merchandise Management System (STL MMS), four wholesalers, which means that not only STL Wholesale non-pay point-of-sale tills and two secure do we have IT expertise, but we really central cash systems. understand the dynamics and pressures Kamaljit Sandhu, a partner at Maini, says: “The tills are of the wholesale sector. We also provide easy to operate and mean we can process customers’ pur- support seven days a week and our chases more quickly and more accurately, and keep queues to a minimum.” solutions are developed using the latest By capturing all sales and stock information, STL MMS also helps track Microsoft development tools, making what’s selling. “This information helps us run a tight ship, keep our them the most modern and easy-to-use operation costs down and offer our customers the best possible prices. systems available. They are also ‘open’, This level of control is helping us to make more confident decisions as which means you can integrate them with we plan future expansion.”

other existing systems, and expand or “THIS INFORMATION HELPS US RUN A TIGHT SHIP” upscale them as your business needs.

What is your advice to wholesalers capabilities for up to five users and looking to develop their IT solutions? 10,000 products. Based on the latest Firstly, you need to plan properly – Microsoft development platform, it easily identify your processes, bottlenecks integrates with small business accounting FAST STL FACTS and objectives. Then you need to bring systems such as Sage 50. in professional help – experts will save wholesalers money in the long run by Can you quantify the savings that your helping them prepare properly. Finally, wholesale customers can make? Bestway make sure you invest in proper staff There is no simple answer – every case training, so users know how to make the is different – but all our customers have Biggest wholesale customer most of their IT systems’ capabilities and reported savings. Some of the key ways help you drive more benefits from it. we do this is by enabling them to order on time and correctly, and by helping them How are you making your technology track fluctuating prices and costs carefully. 2002 accessible to smaller wholesalers? We also help wholesalers systematically Founded We have established a programme to capture all sales and reconcile with stock support independent resellers and that intake to enable them to pick up any News: celebrating 10th targets smaller businesses. We have also anomalies (such as theft or excessive developed a new solution especially for discounting) really quickly, nipping any anniversary these smaller businesses: STL Foundation, issues in the bud. These are just a few of which is designed to offer sophisticated the key ways we are helping our customers Darwen, Lancashire yet easy-to-use merchandise management to improve operations. Headquarters

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BCP

CHRIS PASS Distribution sales executive, BCP

What differentiates to their changing needs your business from the and evolve Accord in line other software providers with changing market out there? We’ve worked conditions. in wholesale for 33 years, which gives us a unique focus and commitment Technology is to the channel. At the same time, we expensive – is it are heavily committed to R&D and are really worth the continually reviewing and introducing investment? Yes, new technologies that we believe will provided it’s the benefit our clients. Voice technology is right technology, a typical example of this and we led the able to add value way in the UK with its introduction in where the margin the warehouse – not just for picking, but gets created – across all warehouse operations. that is, in the core Our customers tell us that Accord operations of buying, offers both depth and breadth in terms handling, selling and of functionality, which differentiates it delivering food products, from other systems on the market. and offering a high-quality service We also have long-term partnerships to customers. It’s a very competitive with clients, which means we can marketplace out there and technology incorporate new technologies that adapt can provide that competitive edge.

What is your advice to wholesalers more flexibility in what you can choose. Accord voice technology looking to develop their IT solutions? A single IT platform ensures you have Ensure the solution you choose offers all transparency across the whole operation delivered productivity the functionality you need not just now, and don’t have integration issues to improvements of 10% but looking forward, and that a regular consider. And don’t go for the cheapest upgrade path is available. It should option – it can turn out to be the most have the flexibility to scale up easily as expensive in the long run. you grow. A modular approach offers How are you making your modules accessible to smaller wholesalers? FAST BCP FACTS The modular nature of Accord means it is appropriate for a wide range Biggest wholesale customer: Musgrave of operations, from smaller single outlets to large multi-site operations. Wholesalers need only buy those Headquarters modules that are appropriate to their £6m 1979 Stockport, Greater business and size. In addition, we offer Manchester different funding options such as help Turnover Founded with financing the entire system.l

Scotland’s Spar wholesaler CJ Lang implemented BCP’s Accord Case study voice technology across all its warehouse operations, from goods CJ Lang receiving and put-away to picking and replenishment. BCP believes achieved it represents the first wall-to-wall voice implementation in the accuracy levels UK’s food and drink wholesale sector. of 99.99% CJ Lang’s IT director Graham Murdoch says the system “exceeded ex- pectations in all areas”, delivering productivity improvements of around 10% and a reduction of 25 staff days of effort per week in warehouse administration, as well as delivering accuracy levels of 99.99%. It was so successful that the wholesaler extended voice to its frozen and chilled operations. Murdoch says: “Voice is the best thing we’ve ever done.”

“WE SAW A REDUCTION OF 25 STAFF DAYS OF EFFORT PER WEEK”

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