CEO Update

CEO update

All the latest news and views from Richard Harrow

Sugar

Public Health England (PHE) published its update in September on progress on the sugar reduction programme across 10 food categories. While there were some notable successes with yogurts, breakfast cereals and sweet spreads and sauces - all showing decreasing sugar content - overall on a sales weighted average across 10 categories there was only a reduction of 2.9% against a first-year target of 5% and a longer-term target of a 20% reduction.

I was involved in some of the early work on sugar with PHE and it was clear one of the issues was a lack of understanding about what drove the 20% reduction target. It did not appear to be based upon scientific data or engagement with retailers or manufacturers.

In the same report, PHE highlighted soft drinks have seen a reduction in sugar of nearly 29% between 2015 and 2018. There must now be concern politicians will see the only way to drive industry is through taxation. This ignores the fact that even before the Soft Drinks Industry Levy (SDIL) was discussed the market for soft drinks was already seeing a significant move by consumers into lower sugar drinks.

Aldi

Federation member Aldi was in the news in September. Giles Hurley, the CEO of Aldi UK, was widely reported in the press discussing plans to open more stores, announcing intentions to increase the number of stores in London. With 45 stores currently in London, Aldi have plans to open 250 stores, with up to 50 being the new Aldi Local format. Their current market share in London is reported as 3.4% vs 8.1% nationally. Nationally they will open 100 stores in the next two years and will invest £1bn in new stores and distribution centres.

Road map

WRAP and IGD have issued a progress update on their road map to help manufacturers reduce wastage. With a target to reduce food waste by half from 2018 to 2030, the focus has been to encourage companies to ‘Target, Measure, Act’. Some 156 companies have signed up to the plan, with 121 companies already having shared data with WRAP and IGD.

Food wastage and how companies deal with it is becoming an increasingly important topic, so while we currently have 25 members involved in this initiative, I would encourage all members to consider following suit.

On a recent store visit to Aldi, a senior member of staff was challenged by a customer about what they are doing on food waste. The customer said topics like this were driving his store choice. As with consumer waste I firmly believe the frozen industry has a strong message on this topic, so it is important we communicate this clearly to consumers, government and NGOs.

Food waste

The Food Conversation week, which was due to run in the first week in November, has now been moved to mid-January. Messaging to consumers will highlight the environmental damage caused by wasting food. With 70% of food waste occurring in the home it is important consumers change habits to address the fact we throw away so much food. However, it is a real concern that there seems little focus on the role frozen food can play in helping consumers. Instead, there seems to be lots of guidance about freezing chilled and fresh food. The federation will push WRAP, Defra and Ben Elliot to make more of an effort to highlight the role frozen can play in tackling this issue. I would also ask members who have contact with these bodies make the same case.

Retail

The first week in October brought some significant news around the retail market. First, we heard Dave Lewis will leave Tesco. I have met him a couple of times and was always impressed by his open and straightforward manner. He managed to make some significant changes in Tesco, not least in the better treatment of suppliers. The announcement of his departure was made alongside two other pieces of news I found very interesting. One, that Tesco have now added Best Food Logistics to Booker, a significant move that re-enforces its commitment to the wholesale and OOH markets. The second news story was the launch of 25 automated fulfilment centres in large stores with spare space to order pick for online. This is an interesting move given a recent report, by consultancy Kurt Salmon, estimates the major grocers lose £5 to £7 on every online order.

Another major story was that John Lewis and Waitrose will become one operation, with Waitrose only recently having undergone a major restructure around its buying operation. The UK retail market is changing, both in non-food and food. As consumers seek value and convenience, even the upmarket John Lewis group is not immune to these forces.

London Gateway

In September I attended a meeting of the Global Cold Chain Alliance, in London. I gave a brief presentation on the federation and the UK market for frozen food. I then had the great privilege of joining the group on a visit to the London Gateway; a stateof-the-art container terminal in the Thames Estuary currently handing 1.4m containers per year, with a capacity of 4m. The site is ideally placed to supply products to London and the South East, reducing costs and road miles. With large areas of underutilised land around the site I could envisage it becoming a major centre for distribution given its proximity to such a large part of the UK population.

Using automation in many parts of the process, the movement of multiple containers was very impressive to watch. However, it was dispiriting to hear many of the containers going back out of the UK are empty, something we must surely address for the future prosperity of the country.

Asda

Asda, another BFFF member, announced in the first week of October the launch of a new standalone Warehouse Club model, based on the Sam’s Club concept from the USA. With 599 locations it will compete with Costco in the USA.

The first location in the UK is Patchway in Bristol and it will differ from Costco in the UK in that membership is free. The traditional channels are blurring in every part of the supply chain with retailers moving into cash and carry, wholesale and OOH, restaurants (through branded offerings in supermarkets) and the ever-increasing convenience of consumers ordering meals from Uber Eats or Deliveroo.

BBC Radio Nottingham

I was delighted to appear once again on the Carson Wishart Drive programme on BBC Radio Nottingham on 14th October, when the focus was once again on Brexit. It’s important to seize these opportunities to not only talk about how our members view current political situations, but to highlight that, should fresh vegetables become unavailable for any reason, a plentiful supply can always be found in the frozen aisle.