Cash & Carry Management June 22 by Cash & Carry Management

SPOTLIGHT ON STEVE IRONS OF CJ LANG & SON

THE BUSINESS MAGAZINE FOR CASH & CARRY/DELIVERED WHOLESALERS

Exclusive!

Chris Gallacher: how United Wholesale Scotland leads the way

Moving Q towards £20 million turnover target

Are you tapping into new on-the-go trends?

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Contents

June 2022

This month don’t miss... 06

Sugro appoints Emma Senior, formerly of Mondelez, as its MD.

Castell Howell’s founder is given a lifetime achievement award.

The first in a chain of 30 stores is opened by Stephen Thompson.

ESSENTIALS 05 06

Editor’s Comment Industry News

FEATURES 12

Interview Chris Gallacher, managing director of United Wholesale Scotland, explains how the Glasgow-based operator continues to be a trailblazer in the world of cash & carry.

Spotlight Steve Irons, wholesale sales director of CJ Lang & Son.

18 20

CCM Chefs’ Own-Brand Awards Behind the Scenes Q Catering’s managing director Steve Clarke outlines his plan for the foodservice wholesaler, in which he took a 40% stake in October last year.

The sky’s the limit: Steve Irons has reached the top as sales director of CJ Lang, having started there as a trainee manager 27 years ago.

Sales of gum and mints are on the up again in convenience.

Illicit tobacco continues to be a huge problem in the UK.

CATEGORY INSIGHT 26

Food & Drinks On The Go Wholesalers and their customers can seize on-the-go opportunities by recognising changes that have taken place since the pandemic.

36 40

Mints & Gum Tobacco & Next-Generation Products

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June 2022

LARGEST SELLING FLAVOURED 500ML 74% OF CONSUMERS MERS SEE * * CAN SIZE +28% YOY ENERGY +39% YOY AS NEW & DIFFERENT ERENT ** *IRI Marketplace Data Symbols & Independents 52 weeks sales to 20th February 2022 **Cousins Davis research boost 500ml quantitative e study - 198

[ EDITOR’S COMMENT ]

From trainees to leaders

ong careers in wholesaling have given the senior executives featured in this issue valuable expertise to draw on. Steve Irons (Spotlight: page 16) returned to CJ Lang & Son as sales director 27 years after starting his career there as a trainee manager. During his first stint at CJ Lang, he progressed to general manager and foodservice controller, and he then spent six years at Bestway and another six at Booker. Chris Gallacher, managing director of United Wholesale Scotland, started on the shopfloor as a trainee at Booker. He accrued 17 years of experience there and two years at independent retail business Scotfresh before joining United. Steve Clarke joined Kent Frozen Foods in his twenties and worked there for more than 25 years – including two years as part of Brakes following its acquisition of KFF – before taking a stake in foodservice wholesaler Q Catering and becoming its MD. Not only have all three of these executives been in the industry for decades, but they have also worked within large corporate businesses and smaller independent wholesalers and have therefore seen ‘both sides of the coin’. In Interview (pages 12-15) and Behind the Scenes (pages 20-24) Gallacher and Clarke each highlight some of the benefits of working for an independent business. These include the ability to react more swiftly to market conditions and

THE BUSINESS MAGAZINE FOR CASH & CARRY/DELIVERED WHOLESALERS

Chris Gallacher: how United Wholesale Scotland leads the way

Kirsti Sharratt Managing Editor

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SPOTLIGHT ON STEVE IRONS OF CJ LANG & SON

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customer demands and to offer a more personal service. Clarke is aiming to use these advantages at Q Catering to build the business. Large companies obviously have advantages over independent firms, including economies of scale and specialists in different departments. However, independent firms are often willing to take decisions more quickly about investing in the business, particularly where there is an element of risk. For example, United’s ‘Warehouse of the Future’ digital cash & carry concept, launched in 2019, was ahead of its time but now the digital screens that generate revenue through supplier advertising are being used by other cash & carry operators. And United is leading the way once again by introducing YUU, a home delivery platform for its retail customers without any of the usual ‘last mile’ liabilities. Gallacher admits that YUU is something of a risk and therefore United is going to ‘test and learn’ for three months before rolling it out. Gallacher, Clarke and Irons seem to be relishing their current roles, and their experiences show that wholesaling can offer a fulfilling lifelong career, with benefits for both the individuals and the businesses they work for.

JUNE 2022

Cash & Carry Management is free to cash & carry and delivered wholesale directors, buyers and managers. The magazine is available to other subscribers for just £74 a year or £7 per copy. Overseas yearly subscriptions are priced at £95. Back issues dating back to 2011 are available online.

Moving Q towards £20 million turnover target

Are you tapping into new on-the-go trends?

Email mail.winlove@btconnect.com or call (01342) 712100 for more information.

Address Winlove Publications Ltd PO Box 366 East Grinstead RH19 4ZE Tel (01342) 712100 Email mail.winlove@btconnect.com Publisher Winlove Publications Ltd EDITORIAL Managing Editor Kirsti Sharratt Contributor Siobhan Kielty ADVERTISING AND MARKETING Publishing Director Martin Lovell Media Sales Manager Clare Phillips 4,448 July 2018 – June 2019 Audit Bureau of Circulations Printed by Bishops Printers ISSN 1352-254X All media rates, feature lists and deadlines can be accessed online by visiting: cashandcarrymanagement.co.uk

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June 2022

[ INDUSTRY NEWS ]

Positive steps Savona Foodservice is collaborating with ClimatePartner to measure its carbon footprint across its three locations: Kidlington (Oxfordshire), Ilfracombe and London. “This will begin our journey towards our target of being carbon neutral by 2025 and will allow us to understand where our carbon hotspots are, so that we can set an impactful reduction plan,” said a spokesperson for the wholesaler, which is a member of Country Range Group.

“Climate change is an ever-increasing, urgent issue. Whilst we have already started to make positive change, including the implementation of electric vehicles and eradicating single-use plastics from our range, we are excited to be taking our first steps towards measuring our carbon footprint to further benefit our planet.” In other news, Savona Foodservice has become an accredited Living Wage employer. It has also received the Disability Confident Committed Certificate, which is based on its commitment to: provide inclusive and accessible recruitment; communicate vacancies; offer an interview to disabled people; provide reasonable adjustments; and support existing employees. 06

June 2022

Emma Senior is new Sugro MD Sugro has appointed Emma Senior (pictured) as its new managing director. Formerly senior national account manager at Mondelez, Senior has spent 10 of her 20 years with the supplier looking after wholesaler buying groups and several national wholesalers, including Booker and Bestway. Senior, who will start her new role in mid July, replaces Neil Turton, who left Sugro in April to spend more time on his non-executive roles. Sugro has shown 19% growth in the year to date (January to April 2022 versus the same period in 2021). This is on the back of 12% growth last year. The strong performance was announced at the group’s 2022 trade show exhibition and conference, held recently in Glasgow. With over 200 attendees, the event gave an opportunity

for members and suppliers to build their relationships. It also included Sugro’s awards ceremony for members and suppliers. O’Reilly’s Wholesale was named as the winner in the Retail Member of the Year category. Other winners were: a Environmental & Sustainability Award: Taylor Wholesale a Digital Innovation Award: The Soft Drinks Company a Specialist Wholesale Award: Rayburn Wholesale a Community Champion

Award: Northern Confectioners a Rising Star Award: ENatural There were also three supplier awards: Suntory Beverage and Food GB & I (Alex McMillan) won Supplier of the Year; Nestlé (Fred Marshall) won Product of the Year for Kit Kat Zebra; and PepsiCo (Simon Murray) was named Retail Club Supplier of the Year. Commenting on the event, Yulia Petitt, Sugro’s head of commercial & marketing, said: “The performance of the group has been exceptional over the past few years, and with some substantial multi-million turnover business done on the day of the show, I believe that the group is set for another successful year of double-digit growth. “I would like to thank all members and suppliers for their continuous support and participation.”

Free coaching for women

Women in Wholesale (WiW) has started a Coaching Academy to offer one-to-one coaching to women looking to unlock their full potential at work. Launched as part of its mission to ‘inspire, support and progress’ women, the

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new academy is offering six free coaching sessions from fully accredited trainers. The process will help to assess strengths, as well as areas to develop. The support is open to all women working in the UK wholesale industry.

WiW chairperson Clare Bocking said: “We want to supercharge confidence and skills levels at a time when the pandemic has regressed gender equality (McKinsey). “The potential challenges to our sector are not going away, they are just changing, and we want to help by offering the ultimate form of support in the form of executive coaching.” The support is fully funded but there are limited places available. The deadline for entries is 30 June 2022 and the entry form is available at: https://ih1n4j7a60m.typeform.com/to/QJ4ye7Wb

[ INDUSTRY NEWS ]

Scottish operation expands Small store National fast-food wholesaler T.Quality is expanding its operation in Scotland. It has moved from its 10,000 sq ft unit in Hillington Park, Glasgow – which it inherited with its acquisition in March of Morrison’s Foodservices – into a redeveloped 22,540 sq ft warehouse in the same business park. The move has created 20 new jobs, with further expansion planned in the coming months. The £1.9 million investment has seen the 1950s building turned into a modern logistics unit with new offices and an enlarged service yard. The redevelopment should reduce energy consumption by 79% through enhanced insulation, LED lighting, an air-source heat pump and removal of gas appliances.

format

T.Quality, which was founded in the 1920s in Hull, now operates 12 distribution centres around the UK and supplies a variety of products to fast-food outlets, care homes and the wholesale fishmarket industry. Mike Crees, managing director of T.Quality, said: “We are delighted to be able to move into our own customer logistics facility following our acquisition of Morrison’s Foodservices. “The new site in

Support for trial Bidfood has become a research founding partner of The Natasha Clinical Trial. The study aims to prove that everyday foods containing peanut or milk, taken under medical supervision, can be used as an alternative to expensive pharmaceutical drugs to desensitise patients with allergies. The three-year oral immunotherapy trial is the first major study funded by The Natasha Allergy Research Foundation, the charity set up by the parents of Natasha Ednan-Laperouse who died aged 15 from a severe food allergic reaction. The £2.2 million trial will be led by researchers at the University of Southampton and University Hospital

Southampton NHS Foundation Trust. Bidfood CEO Andrew Selley said: “We are incredibly proud to be a part of such important and potentially life-changing research that will not only help build confidence for those with severe allergies when eating out of home, but more importantly save countless lives.” In addition to Bidfood, the research founding partners include Greggs, Tesco, Just Eat, Co-op, Morrisons, KFC, Sainsbury’s, Costa Coffee, Pret A Manger, and Lidl.

Hillington Park is the largest of all our depots and shows the exciting potential and plans which we will be laying down in Scotland. The site and our acquisition of Morrison’s Foodservices are truly a game changer for how we will operate in Scotland. “We will be able to add further capacity to our operation which will see us deliver to the whole of Scotland, but it will also help enhance our customer service levels with increased delivery dates.”

Booker has announced the opening of the first small format Premier store in Scotland. The shop at Blackhall, Edinburgh, includes a range of products and services including Vaping@Premier and Refresh@Premier, a dedicated food and drink-to-go area that includes Costa Coffee and Tango Ice Blast.

The first small format Premier store opened earlier this year in Wheatley Hill, near Durham. Booker’s aim is to bring ‘the best of Premier’ to stores of under 1,000 sq ft. Retailers do not have to pay any fees but they are required to spend a minimum amount with Booker.

Leach leaves Nisa Nisa has announced that its sales director, Steve Leach (pictured), has decided to leave the business. Since joining Nisa in 2014, Leach has held a number of senior roles. In his most recent position as sales director, he managed a dedicated team focused on supporting Nisa’s 1,400 retailers. Leach also played an important role in devising and implementing Nisa’s new partner recruitment strategy, and was a board member of Making a Difference Locally, Nisa’s charitable arm that supports the communities that Nisa retailers serve.

Commenting on his departure Nisa CEO Michael Fletcher said: “Steve has always provided great support to all Nisa partners and colleagues, and leaves Nisa with our thanks for all his hard work, dedication and expertise.” Leach added: “I am looking forward to taking some time out, ahead of seeking a senior role that will enable me to step up to new leadership challenges.” In other news, Nisa’s Nisa’s Making a Difference Locally charity has won accolades at both the Better Society Awards and the Business Charity Awards for its support of good causes.

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June 2022

[ INDUSTRY NEWS ]

SOS departure Mark Beckett, managing director of Derby-based SOS Wholesale, is leaving the business after 28 years. Founded by Norman Beckett and his two sons Mark and Steven, SOS Wholesale was acquired by RDCP Group in January. Mark and Steven Beckett decided two years ago to create a succession plan in order to facilitate their retirement, and the firm’s acquisition by RDCP meant that Steven was able to retire immediately while Mark worked alongside trading director Vipin Patara for a period. Patara will now take over Beckett’s duties.

Confex boosts membership Confex has three new members – Midlands Food Service, Deckers, and Lion Catering. The recruits take the group’s membership to 227 and bolster its turnover by £75 million. Andy Waller, managing director of Rochdale-based Deckers, said: “We have chosen Confex for their breadth of knowledge and their innovative approach to the wholesale industry – we look forward to working closely with the head office team to create additional opportunities for Deckers.” Graham Dolman, partner at Midlands Food Service, which is based in Burton-onTrent, commented: “Joining

One of three new members.

Confex will allow Midlands Food Service to take advantage of CORE own-label products to service customers of our recently acquired business Strawberry Fields. We look forward to building a strong partnership, not only with Confex head office team, but also with the wider membership

and look forward to some profitable inter-company trading.” Ergun Ozdil, director of Dorset-based Lion Catering, added: “We are delighted to join Confex buying group to accelerate our growth plans by working along with Confex suppliers to expand our product offering to the customers.” Confex managing director Tom Gittins told Cash & Carry Management: “Confex are very pleased to welcome our new members to our growing buying group. We look forward to helping them traverse these difficult trading times and continue their businesses growth during 2022 and beyond.”

Bestway rewards retail development The winners of Bestway Wholesale’s Retail Development Awards 2022 were announced recently at the London Marriott Hotel, Grosvenor Square, London. The event saw a 400strong audience of independent retailers, members of the Bestway Retail symbol group and Xtra Local Retail Club, and key suppliers come together to recognise best practice and growth over the past year. The awards are part of Bestway’s annual Retail Development Programme, which gives independent retailers the opportunity to attend a series of seminars and workshops offering advice on how to drive growth and best meet their customers’ needs. This is supported by a trade show where retailers can meet suppliers and learn about new products and services 08

June 2022

and industry trends. Retailers are evaluated after six months to see how they have implemented the learnings in their store to help boost category sales and grow their business before they have the chance to enter the awards, which have a prize fund worth over £50,000, including £10,000 for the winner of the National Bestway Retailer of the Year. Dawood Pervez, managing director of Bestway Wholesale, said: “I am

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always humbled by the sheer talent, commitment and determination of our retailers and nowhere is this evidenced more strongly than within our Retail Development Awards.” The winners were: a National Bestway Retailer of the Year: Fairways, Wallasey, Merseyside a Southern Winner: Mini Supermarket, Croydon a Northern Winner: D&S Stores, Tamworth a Scottish Winner:

Brownlies, Biggar a Soft Drinks: Four Seasons, Liverpool a Water: Best-one Plus, St Helens a Beer & Cider: M R Foodstores, Leamington Spa a Wines & Spirits: Stanley Wines, Warrington a Tobacco: M1 Metro, Manchester a Confectionery: S&B Supermarket, Northampton a Crisps & Snacks: Costcutter, Kidderminster a General Grocery: Green & Fresh, Hackney a Household, Health & Beauty: Simis Food and Wine, Thornton Heath a Chilled & Diary: Best-one Jacks, Prescot a Pet Food: Best-one Fiveways, Tipton a Baby Food: Manor Park Mini Market, Newham a Community Award: Weeley Post Office and Store, Clacton-On-Sea.

[ INDUSTRY NEWS ]

NBC investment National Buying Consortium (NBC) has announced that sales through its National Distribution Network (NDN) are up 36% in the year to date. Through NDN, the group’s members can gain access to lower minimum orders than direct from suppliers, at net pricing, with additional discounts and rebates also available on specific products. Speaking to members and suppliers at a recent networking event held at The Belfry, NBC managing director David Lunt (pictured) said: “The performance of NDN is encouraging as our members have had significant challenges since 2020 and are now seeing a return to better trading. This is providing confidence to plan and ensure that we invest in our capabilities to support both members and suppliers.” Lunt also announced that

key category sales (soft drinks, snacks and confectionery) through NBC are up by at least 50% year on year. In response, the group is planning to improve the resource at its head office in Chipping Norton to further develop the commercial relationships between the group, members and suppliers. It is also introducing a further benefit of membership of NBC – a web-to-print brochure service – that members will be able to access free of charge. This complements the wider marketing services support available through the group.

Future Stars cup final

The SPAR Scotland Future Stars Cup tournament has taken place for the first time since the Covid pandemic, culminating in finals day at Scotland’s sports performance centre Oriam. The fun and inclusive competition involved more than 250 girls aged 12-16. SPAR Scotland initially

teamed up with the Scottish FA in 2019 to support the Scotland Women’s National Team and boost the girls’ and women’s grassroots scene – which included the introduction of the SPAR Scotland Future Stars Cup. The initial two-year contract has been extended until August 2023.

Lifetime achievement Brian Jones MBE, founder of Llanelli-based wholesaler Castell Howell, has been honoured with a lifetime achievement award at the inaugural Wales Food and Drink Awards. Originally starting out as a farmer, Jones launched Castell Howell Foods in the ’80s when he branched out into selling frozen food direct to Welsh pubs. Today the Caterforce member has an annual turnover of £140 million and its customers include hotels, restaurants, retail shops, hospitals, schools, and private and public caterers. In addition to its Llanelli base, Castell Howell now has five satellite depots in Cross Hands, Merthyr Tydfil, Avonmouth, Chirk and Blaenau Ffestiniog. In 2003 Jones helped to launch the Celtic Pride Premium Beef Scheme, and in 2008 he was given an MBE for

services to the food industry. Jones commented: “It is an honour to have been recognised at the Wales Food and Drink awards. I am grateful for all the support I have received from my wife Helen, daughter Kathryn and son Martyn, who both work in the business. “I am hugely privileged to have so many superb people working at Castell Howell – many have been with us for more than 20 years.”

Special service JJ Foodservice has launched ‘Advance Order’, giving customers access to a wider range of premium fresh meat and fruit & veg. The service is available to home and business users from the Enfield, Dagenham and Sidcup branches. Customers simply add the JJ Advance Order item to their shopping basket to see the earliest date for the item to be available for either collection or delivery. Commenting on the introduction of the service, JJ Foodservice’s chief product officer Sezer Ozkul said: “It’s fantastic news and means we can offer new premium items, including individually-

portioned premium steaks and locally-sourced fruits and vegetables, with no limit on how far we can expand. “It takes time and skill to butcher fresh meat,” Ozkul continued. “With skilled hospitality staff in short supply, we are here to help and we’re adding to the range every month.”

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June 2022

[ INDUSTRY NEWS ]

Eddy’s first store The first Eddy’s Food Station – the newest venture from Stephen Thompson, former CEO and co-founder of Morning, Noon & Night – opened last month in Alloa, creating 14 new jobs.

Thompson (pictured) plans to open a further 30 stores over the next five years, creating 500 roles across central Scotland. Eddy’s Food Station offers daily essentials and groceries along with an wide choice of hot and cold local takeaway foods, from filled rolls to hot pizza slices.

Zero emission truck taskforce The Scottish Wholesale Association (SWA) has been invited to join Scotland’s new Zero Emission Truck Taskforce. The Taskforce comprises industry leaders from the road haulage, logistics, manufacturing, energy and finance sectors who will work in partnership to set out the steps required to enable a transition to new technologies, identifying where further development is required and exploring new business models. It will also tackle any hurdles in relation to technology, charging infrastructure, costs, finance, and operator engagement in the transition to zero-emission trucks. SWA chief executive Colin Smith, who is representing the wholesale industry on the Taskforce, commented: “We’re working at pace to explore opportunities and find solutions as we start planning the transition

In the driver’s seat: Colin Smith at the recent Volvo event.

to zero-emission trucks so we’re honoured to be invited by the Scottish Government to sit on the Zero Emission Truck Taskforce. “The SWA recently partnered with Volvo Trucks to offer our members more detailed insight into the electric vehicle and infrastructure market as part of our ‘Decarbonisation of the Wholesale Sector’ project and this was hugely successful, with 19 wholesalers and

some of our supplier members participating. Members also had the opportunity to road test the UK’s first commercially available fully electric Volvo FL 16-tonne HGV. “There’s a lot to take on board as we grapple with how best to achieve zeroemission trucks and it’s our job to help members cut through the myriad information available and guide them on the right path to decarbonise their businesses.”

James Hall invests in a greener fleet James Hall & Co has added three new Volvo Euro 6 tractor units, equipped with an Ecodrive refrigeration system, to its fleet. The double-decked multitemperature trailers are powered by the electronic generator that is driven by the tractor unit engine, rather than separately by the trailer’s diesel generator. It is anticipated that the purchase of the new tractor units will result in an eighttonne-per-annum reduction of CO2 emissions, and the new Euro 6 tractor units are also more fuel efficient than the Euro 5 models they are replacing. 10

June 2022

The introduction of the Volvo tractor units follows three 18-tonne rigid Volvo trucks with engineless refrigeration systems that James Hall & Co took delivery of in June 2021.

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A further investment in a greener fleet is planned for later in 2022 and into 2023 with the delivery of the company’s first refrigerated fullyelectric articulated trailer as well as further tractor units

and rigid trucks with lower carbon emissions. Ian Farnworth, fleet engineering manager at James Hall, said: “The new Volvo tractor units are valuable additions to our fleet. Given that they are amongst our longest-distance vehicles delivering six days a week across the North of England, their improved efficiency and performance will make a considerable difference to our carbon footprint. “It is an exciting period for the fleet here at James Hall & Co as we accelerate our sustainability plans, of which our fleet of delivery vehicles are a major part.”

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[ INTERVIEW ]

Proven to be a leader United Wholesale Scotland is investing heavily in technology and people to ensure that it continues to deliver what its customers need to be successful, explains MD Chris Gallacher.

rom its bold and often controversial marketing campaigns to its ‘Warehouse of the Future’ digital concept, United Wholesale (Scotland) has always prided itself on being a trailblazer in the world of cash & carry. And now, under the leadership of managing director Chris Gallacher, the Glasgow-based wholesaler has introduced two more industry firsts: YUU, a free home delivery platform for its retail customers without any of the usual ‘last mile’ liabilities, and EchoPay, an open bank payment facility developed by former C&C operator James Ward that

means United can avoid Visa and Mastercard charges. The development of YUU in particular has involved the appointment of several tech-savvy employees, who along with new senior executives within United’s financial and trading teams have significantly bolstered the business’s expertise so that it can continue to exploit market opportunities and attempt to stay ahead of its competitors. In an exclusive interview, Gallacher spoke to Cash & Carry Management’s managing editor Kirsti Sharratt about United’s new initiatives, recent performance and plans for the coming year. How did United perform in 2021 [to the end of December]? We finished at £274 million – a record year. Even compared to 2020, we increased our sales. In 2021 we thought we were going to be benchmarking against 2019 [turnover: £235 million] because no one ever thought that they would beat the first Covid year. But we absolutely did – we beat 2020’s turnover by half a million pounds, which was remarkable. We’re just finalising our 2021 profits but it’s looking like a record year for profits too.

United’s MD Chris Gallacher (left) with head of operations Jason Butler.

June 2022

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What were the key factors that contributed to those results? By helping our existing customers through 2020 when availability was pretty difficult, we held on to them last year. We also held on to a lot of our new business, especially at our M9 depot in Grangemouth which doubled its sales during the pandemic. A lot of previously delivered-only retailers saw their turnover soar during the pandemic, and their symbol operator just couldn’t give them extra deliveries so they had no alternative but to go to a cash & carry. And a lot of those retailers chose to come to our M9 depot because it is so central – we were getting people from Edinburgh and even from as far as Aberdeen. Our team looked after these customers so well that sales have continued to improve.

[ INTERVIEW ] We also managed our stock position very well. We don’t have a distribution centre – everything comes direct from suppliers to all three depots (Queenslie, Maxwell Road and M9) – so when things did get tough in the supply chain, we already had the stock in the buildings. From time to time, we did do interbranch transfers – we could react on a daily basis – and that benefited us because we could ensure we had key lines available in all three depots. How are sales so far this year? Our non-tobacco sales are within the company’s expectations. Tobacco is slightly down but that has been budgeted for, based on the world opening back up. How is your cash & carry business doing compared to your delivered operation? Cash & carry accounts for over 70% of our turnover. Although our delivered sales did grow during the pandemic, most of our increase came from cash & carry because of delivered customers topping up. We had invested in our cash & carries before Covid hit, so we were in a good place. Our Queenslie depot won the Achievers 2022 award of Best C&C. Half of all the retailers in Scotland

shop at United, and we’re very much focusing on giving our customers a better cash & carry experience – making sure that they can get through the depot quicker than they can in our competitors’ depots. All our branches have seen a rise in turnover year on year. Maxwell Road is where it all started for United and its turnover is roughly the same as at Queenslie which is bigger. At Maxwell Road you can see the same customers in there several times a day! What does United offer unaffiliated retailers that’s different from, or better than, your competitors? We carry nearly 11,000 lines – we’ve got the biggest range in Scotland – and we know that we’re competitive on price. We use a company that measures the price on every single product we sell, and it benchmarks us every quarter against our competitors. Our customers know that all three depots have the same prices, and the price they see is the price they pay – we don’t do any trading. On the subject of price, how are you managing the current price increases? We’ve got to increase our prices as suppliers increase theirs. A big challenge at

Lower charges United Wholesale Scotland is encouraging its retailers to use the open bank app EchoPay to pay for their goods. “We incur a small charge but it is a lot less than the 0.3% charges from Visa and Mastercard, and the speed of service is much faster for the customer,” explains United’s MD Chris Gallacher. EchoPay was developed by former C&C operator James Ward. “We worked closely with James on EchoPay and so we got six months’ exclusivity,” Gallacher reports. “Before Covid, retailers used to come in with bags of cash to pay for their goods but they now use debit cards, so we anticipate that EchoPay will become massive in cash & carry.”

wholesale is talking to suppliers about shared margin: we have to make sure that the prices of price-marked packs protect our margin as well as retailers’ margin.

United removes the barriers for home delivery for its retail customers To help its retailers fight back against the dark store operators, United Wholesale Scotland has developed its own home delivery platform, YUU. Day-Today retailers are being given YUU free of charge, to allow them to offer a home delivery service without the ‘headaches’ associated with the last mile. The consumer enters their postcode, and the YUU app comes up with the Day-Today stores in the area. The consumer then chooses a store and places their order from the PLOF for that store. The store has an API (application programming interface) with GoFor – the last mile operator – and delivery is within the hour. “I believe that we’re the only wholesaler offering this type of home delivery platform, not just in Scotland but in the whole of the UK,” said United’s MD Chris Gallacher.

“We launched a marketing campaign in Glasgow in May and we’re going to test and learn for three months with the

55-60 Day-Today stores in the city. We then plan to roll YUU out to the whole Day-Today estate in Scotland.” The prices consumers pay are slightly higher than those in store, and United will use any profits it makes to cover the last mile and for marketing. Explaining why United decided to develop its own home delivery platform, Gallacher said: “We asked some of our retailers why they weren’t getting on the crest of the wave by moving into home delivery. The biggest barriers were having to invest in their own delivery vehicle and get a driver. Our aim was to remove those barriers. “The dark stores are in London and they’re coming north,” he continued. “As a wholesaler, we’ve got to try to protect our symbol customers and make sure that we give them the tools to be able to compete.”

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June 2022

[ INTERVIEW ]

A big impact has been created in depot with the use of large digital screens.

With the rising cost to serve, how can you continue to provide deliveries at cash & carry pricing? The simple answer is that we continuously need to look for efficiencies. Our delivered prices are the same as our cash & carry prices, our minimum order is 35 cases so it’s very small, and we have no delivery charges. I’m not saying that this will be our position for ever – fuel costs are concerning and who knows what’s going to happen in Ukraine – but we don’t plan to change it for the moment. Also, every order is now placed digitally – everything goes through EPoS, app or web. In terms of efficiencies, last year we invested in Maxoptra fleet routing software, and earlier this year, we invested in a compliance system called FleetCheck, which involves the drivers checking their vehicle every morning. That helps our head of operations make sure that we’re fit for purpose, and if VOSA (Vehicle and Operator Services Agency) comes in to see us, we can show we’re compliant. On top of all that, we’ve got Vision software that deals with tachos [tachograph rules], Exeros live onboard cameras in every vehicle, and SeeTrack, which not only tracks our lorries but also produces reports on harsh braking and other driver behaviour. Which of your depots offer a delivered service? Two years ago we decided to take all of our deliveries out of our depots and use a delivery hub instead. We’ve got a distribution warehouse at our head office at Queenslie – it’s attached to the cash & 14

June 2022

carry and has over 300 lines in a fastpick area; anything other than that we go to the main depot to pick. We’re now using a back shift for deliveries – we pick from 6pm to 3am, load from 3am to 6am and then the lorries go out. We’re coming up with strategic ways to be able to do second deliveries with the fleet [12 x 26-tonne lorries] we’ve already got. We want to get the lorries out at 6am, get them back to the depot and out again in the afternoon. It makes sense to sweat the lorries as much as we can. It’s pointless getting another 10 trucks and going to Inverness when there’s enough business to be had in the central belt. What are the most recent developments at United? We’ve added extra resources to our trading department: we’ve brought in Telly Sarai [formerly general manager at SK Food & Drinks] to manage the licensed category as trading director, and we’ve just appointed Chris Hewitt [currently trading manager at Parfetts]

as trading director to look after impulse. We want to focus on certain key growth areas where we feel we can do better. As a result, trading director Ali Afsar has moved across to help develop grocery, freeing up senior trading controller Sherry Khan to concentrate on other categories, mainly fresh and food to go. Anshu Chandra has been promoted to commercial director to head up the entire trading team. We’ve also built a support team around me. We’ve appointed a financial director Chris Boyle to get under the skin of the business and help us develop for the future. Chris, who reports to chief financial officer Osmond Ramsay, previously worked at Botterills Convenience Stores and is a really good fit for our business – he understands the nitty-gritty of wholesale and retail. We’ve also brought in a chief technical officer Florin Mandache and a new ecom manager Sarah Gordon to help develop our technology. And we’ve recruited a new marketing manager, Hollie Fraser, who starts in June. We’ve therefore invested in a whole ecom/marketing team – in wholesale today you need that level of expertise so that you don’t get left behind. Our YUU business-to-consumer platform is on a different level to the United app and website, but there’s no reason why we can’t bring these business-tobusiness platforms up to the same high spec as YUU. Asim [Sarwar, former managing director] is still very much involved in the business. He’s in here every week and we have a monthly board meetings where we give him the numbers. He lets us get on with it, but keeps a keen eye on us to make sure that we’re hitting company expectations!

Eight Day-Today stores in Glasgow have already been upgraded this year.

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[ INTERVIEW ] We also have to try to become more efficient in our own business. We have tied up deals for this year for electricity and gas and we’ve just invested in a new EMS (energy management system) called Pilot. At the same time we’re becoming a more sustainable business. We now buy green energy rather than brown energy, we harvest rainwater to clean our vehicles, and we’ve worked with JTI to educate and establish green champions in our head office and all our depots.

United is helping its customers to manage the cost-of-living crisis.

Apart from introducing YUU and EchoPay, what other developments have there been technology-wise? We’ve just signed a one-year deal with TWC to use the Smartview data system. From June, we’ll be able to share rich data with our suppliers. The joint business plans that we create have got to be meaningful; we will use data to drive our sales together more profitably and that’s going to be a massive change in culture for us at United. Our digital screen business United Digital also offers great opportunity, not only for digitalisation in our cash & carries, but also to find digital solutions for our retailers. We’re also now working with some of our competitors – CocaCola is one of our clients and they’ve asked us to do some work for Parfetts and Dhamecha. What are your priorities for the coming year? The biggest priority now is managing the cost-of-living crisis. We have to focus all our efforts on ensuring that our retailer customers continue to make a profit so that they can have a sustainable business. We’re finalising our new Value booklet, which suggests own-label and value alternatives to the major brands to appeal to cash-strapped consumers. If we don’t help and educate our retailers to compete with the multiples and the discounters then they will lose share.

How are you developing your DayToday and Usave symbol groups? Jason Macleod, who was working in our merchandising team, is now head of symbol. We have a symbol controller and we’ve got four development managers out on the road. We’re working with the customers who want to work with us. That’s our focus more than ever because of the squeeze on the cost of living and the legislation that’s round the corner, whether that HFSS of DRS – these things are going to have a massive impact on the retailer. There are major headwinds coming our way. We’ve already refreshed eight DayToday stores internally and externally this year and we plan to update more. We’ve got a recruitment target this year of 25 stores for Day-Today and 40 for Usave. We do not charge retailers to be part of Day-Today or Usave. Any plans to invest in your own retail stores? Definitely not. There’s enough to be doing in wholesale to help retailers without having our focus taken away by trying to be a retailer ourselves. We do have two stores of our own, which United acquired years ago, but we’re not looking for any more. Are you developing your product range in any way? In addition to food to go, fresh and value products [see previous answers] we’re going to focus heavily on vape this year. The vape category seems to change every day and if you don’t get on top of it and don’t educate retailers, then you are missing a massive opportunity. There’s also big potential for cocktails and premium drinks – people may want to buy own-brand macaroni but they also want to treat themselves.

You worked for Booker for nearly 17 years (and then independent retail business Scotfresh) before joining United four years ago. How is it working for United compared to Booker? The resources are not the same for a family business as a big national, but it’s much easier working for United because we’re very nimble – we can make changes quickly and that’s a big strength. And before I got into the MD’s role at United, I didn’t fully understand all the different components of the business. But with Asim as my mentor in the early days, now I do and that’s been great for me. I was head of retail in Scotland for Booker and now I’m MD of United, so my job now is definitely more stressful and my work-life balance is not where it should be – my wife would agree with that and so would my kids! I’m fortunate that the team I’ve got at United is very good – it’s an absolute pleasure working with them. However, I loved my time at Booker and my foundations were built there: people like Charles Wilson, Steve Fox and Andrew Muldoon taught me a lot from my school days onwards. How would you describe your management style? I treat people the way I would want to be treated. I’m very much someone who gives people space to make decisions while providing strategic guidance and support. I found out very quickly that you’re better bringing people on board that know more than you – that’s how you’re going to get success in the business. One thing’s for sure – I will always be there for my colleagues. My door is CCM always open.

United in numbers £274 million turnover in 2021 (£273.5 million in 2020; £235 million in 2019) 70:30 cash & carry sales versus delivered sales 3 cash & carry depots (Queenslie, Maxwell Road and M9) 252 employees 2,500 unaffiliated C&C customers 248 Day-Today stores 252 Usave stores 1,200 users of United’s app, including 480 users for deliveries 12 delivery vehicles

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June 2022

[ SPOTLIGHT ] Steve Irons, wholesale sales director, CJ Lang & Son How would you describe your personality and what approach do you take in business (and in life)? I’d like to think I’m an open person and someone who will always try to do what they say they will do. I’m loyal and honest and will do what I can to help others. I’m definitely a glass-half-full guy. In business I’ve learned that honesty is always the best policy and try to never over promise and under deliver. What would people be surprised to know about you? I once appeared in a film, Unleashed, with Bob Hoskins and Morgan Freeman.

Helpful and honest What have been your biggest achievements in work and outside work? Outside work I’m very proud of the challenges I’ve undertaken for charity. These have mainly been around endurance walking/hiking. Over the years I’ve achieved five gold medals for the Maggie’s Monster Bike and Hike events, completed the West Highland Way and the Caledonian Challenge, climbed Ben Nevis and walked the Fife Coastal Path. Alongside a few friends, we have raised over £18,000 for charity. In work, I’d like to think I’ve had a few landmark achievements, but the overarching theme has simply been about working hard and hitting targets. I’m proud of the fact that I started in this industry in an entry level role at CJ Lang and I’m now back there 27 years later as sales director. Who has been the biggest inspiration to you? I was once asked this in an interview and my answer then was Kenny Dalglish. Not only was he a great player, but he always played with a smile on his face and it made me think about trying to enjoy everything you do. Since that 16

June 2022

interview my Mum has sadly passed away, but during her illness (she had cancer), I was totally inspired by her courage to deal with what was in front of her. What were your ambitions when you were growing up? I suppose that, like many other little boys, I wanted to be a professional football player or golfer, but I learned in my mid-teens that neither was going to be possible due to a major lack of talent! When the reality of this became clear, I never really had a specific direction that I wanted to take. I started with CJ Lang in its wholesale/cash & carry division when I was 21 and quickly realised that I actually liked the industry, and I’ve been in it one way or another ever since. What are your interests outside work? My football playing days are well and truly over, but I still try to get a game of golf when I can. My son Robbie, who is six, plays football and I like to go and watch him. In terms of work-life balance, this is something I need to get better at! I’m a member of a gym and I enjoy the odd spinning class and sauna, but I really need to work on doing it a bit more.

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What is your favourite film, book and song/piece of music? In my younger days, I was a big indie music fan and saw numerous live bands – Stone Roses, Oasis, etc were all a huge part of my teenage life. As I’ve got older, the love for that genre has diminished a fair bit, but when an old favourite comes on the radio it doesn’t fail to put a smile on my face. With regards to film/TV, I love a good box set and I’ve just finished watching Ozark on CCM Netflix which was excellent.

Youngest manager Steve Irons started his career in wholesale/retail as a trainee manager with CJ Lang in 1995 (aged 21). At 23, he was appointed manager of its Martex Cash & Carry in Cupar, making him the youngest C&C manager in the country. Over the next 16 years, he managed a number of CJ Lang’s cash & carries and latterly headed up its foodservice division before that part of the business was sold to Bestway in 2011. He then spent six years at Bestway, heading up its foodservice contract business, before moving to Booker’s foodservice division, Chef Direct, where he also spent six years. In late 2021, he rejoined CJ Lang as wholesale sales director.

CCM Chefs Own-B Own-Brand rand A Awards wards 20 2022

CCM Chefs’ Own-Brand Awards 2022 ENTER ONLINE www.cashandcarrymanagement.co.uk

CCM Chefs’ Own-Brand Awards 2022 Now in its ﬁfth year, the prestigious CCM Chefs’ Own-Brand Awards is run by Cash & Carry Management magazine, in association with the Craft Guild of Chefs. We know the care and passion that goes into creating a successful own-brand. It doesn’t just happen by magic: development chefs and supply partners work hard to bring exceptional products of excellent quality and great value to market – products that are driven by customer need and provide innovation in many categories. These awards give cash & carries and delivered wholesalers whose own-brand products hit the mark the recognition they deserve, with endorsement from the Craft Guild of Chefs – the leading chefs’ association in the UK – who conduct the judging in blind tastings. Entries are open for products in all food & drink categories at a cost of £125 plus VAT per product, with one free for every 10 products entered. The closing date for entries is Friday 1 July 2022. The products must be delivered on the date and to the delivery address that will be conﬁrmed on receipt of your entry. Judging will take place in August and the winners will be announced at a prestigious awards lunch in October. For further information, contact Martin Lovell on 01342 712100.

[ BEHIND THE SCENES ]

Building a package of USPs In his first in-depth interview since becoming MD of Q Catering, Steve Clarke talks to Cash & Carry Management’s managing editor Kirsti Sharratt about his plans for the business.

hen competition for customers is intense, independent wholesalers can stand out by focusing on different aspects of their service, believes Steve Clarke (above), managing director of Sittingbourne-based Q Catering. “The independent wholesaler is an integral part of the foodservice arena,” he maintains. “We tend to be a little bit more nimble than the larger corporate wholesalers in the products, service and deliveries that we can offer. “I’ve seen both sides of the coin, being at KFF [Kent Frozen Foods] when it was an independent wholesaler and also when it was part of Brakes.” Clarke spent more than 25 years at KFF before joining Q Catering, a Fairway Foodservice member, in October last 20

June 2022

year. His career in wholesaling started after he had spent three years with Ratners jewellers (“I was bored”) and had completed an HND in business & finance. His first job with the wholesaler was to set up a marketing department. He subsequently became involved with procurement too and was later promoted to procurement & marketing director. After more than two decades, why did he leave? “Well it was sort of already on the books,” he explains. “When Sysco [Brakes’ parent company] bought KFF, the directors were all tied in for two years, and then the two years came to an end. It just happened to be in the Covid era unfortunately.” He continues: “KFF had been a huge part of my life for 25 years, and it’s quite difficult when that routine stops, but I

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had thought about taking some time to think about what I wanted to do next, so I did have a kind of sabbatical period.” His sabbatical didn’t last long: after six months he joined Church & Dwight, a manufacturer of products like Batiste and Femfresh, as global manufacturing services procurement manager. “I hadn’t been in manufacturing before so I was out of my comfort zone, but I had a lot of skills in the management of people, and I think that was what they were looking for. It was a very steep learning curve to understand that market, but I enjoyed my time at Church & Dwight immensely,” he recalls. Meanwhile, in the background, Clarke was talking with Q Catering’s owner Roger Snelling about acquiring a stake in the wholesale business,

[ BEHIND THE SCENES ] which offers next-day delivery on a 2,000-strong range of ambient, chilled and frozen lines to caterers in London and the South East. “It was fortuitous that Roger was looking to retire. By making an approach I gave him visibility of how he could exit the business,” says Clarke. “I knew a couple of people that worked at Q, so I knew what it was all about, and that kind of set the seed. And it had weathered the Covid storm very well for a business of its size, so that was a positive to start a conversation.” It took 12 months for the pair to come to an agreement about Clarke not only joining as MD, but also taking a stake in the £8 million turnover company. “At the moment I have a 40% shareholding,” Clarke reveals, “and I will be looking at some stage to take a controlling interest.” Snelling is still working three or four days a week. “He’s very much involved in the finance and HR side but we are exploring the possibility of employing a finance director, which would allow him to fully exit the business,” Clarke explains. A new finance director is just one of several appointments that Clarke is hoping to make in the coming months. “I want to recruit people in key areas. We don’t have anyone in marketing, so I’m planning to take on a marketing assistant, and I’m working with an agency to put together a PR and social media strategy.” Introducing online ordering through the website is another priority for the business in the next year. A total of 15% of orders are currently placed on the

Q Catering values all of its employees, many of whom are long-serving.

app, which has only been available for a year. “I’m not convinced that we’re as user friendly as we should be,” he says. “Our online function – whether app or website – is going to drive quite a bit of business as we move forward.” Clarke has already recruited someone specifically to deal with quality control and customer complaints, a task that was previously handled by members of the procurement team. He is also bolstering the sales team, adding another telesales executive and a fifth territory manager. The sales team have a crucial role to play in the success of Q Catering, particularly during these times of perpetual price increases. “My sales team have the autonomy to manage profit margin. They’re set a target, and as long as they achieve that and a sales target, they earn a bonus,” Clarke explains. “I allow them

Not a single customer at the start! Roger Snelling (pictured) founded Q Catering in 2003 at the Eurolink Industrial Estate in Sittingbourne, Kent, where the wholesaler is still based, albeit in bigger premises. He rented a 5,000 sq ft unit and stocked it with ambient and non-food lines, but at the very start he had absolutely no customers. However, what he did have was experience of working in ship supplies at Cavendish Ships Stores. His confidence paid off – Q Catering now has a turnover of over £8 million and has just leased a third

June 2022

unit, taking its total warehousing space to more than 20,000 sq ft, capable of storing 520 pallets of frozen foods, 450 of ambient and 120 of chilled.

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to manage each account individually. “Profitability has to be a priority for us with the amount of money that we’re investing,” he adds. Clarke’s experience is proving to be invaluable in moving Q Catering towards its ambitious target of £20 million turnover and relocation to purposebuilt premises by 2030 when the leases run out on its existing warehouse units. “The journey that we’re on here I’ve been on before at KFF, with the growing pains and the understanding of what it takes to grow a business. There’s déjà vu every day and I’m able to make decisions based on facts and knowledge rather than risk,” he notes. Clarke is reviewing every aspect of the business to see if it can be improved. “I’ve basically gone right back to the beginning,” he says, “and I’m trying to instil a sense of procedure to everything we do.” For example, with goods in, he has made sure that the wholesaler is not accepting any damaged or short-dated products, and at goods out, he is checking that the lorries are being loaded properly. “The customer should ultimately receive products in top condition. We are therefore re-evaluating and monitoring every element of what you could call KPIs of the business. I think it’s fair to say that no stone is being left unturned to see if there is a better way of doing things. “This year was always going to be a transitional year,” he continues. “I joined in October, spent the first few months understanding the business fully,

[ BEHIND THE SCENES ] and now we’re making changes, seeing what the impact is and then re-assessing the changes to make sure we’re doing things the right way.” One change that was quickly implemented was switching to full cases for some products that were previously available as single units. Clarke felt that it was necessary because it could be difficult to find the products on the vehicles and they would often get damaged because they weren’t in an outer case. Another change has been to the minimum order value. “When I came here in October, it was £50, but with the spiralling cost of diesel and utilities, we moved that up to £80,” he reports. “I still believe that it’s one of the lowest out there. We didn’t want to go too high that we put people off, but at the same time, we had to put it up just to make profit.” On top of that, Q Catering has removed slow-selling products from its range and is introducing new ones, including a wider selection of plantbased and healthier eating lines to meet customer and consumer requirements. And as the wholesaler targets a wider range of foodservice operators, including restaurants and gastro pubs, it is introducing new ranges including Bridor French bakery products and Gelato Gold premium dairy ice cream. Clarke, a board member of the trade organisation Produced in Kent, is also keen to introduce more locally-sourced products – something he feels can give an independent wholesaler like Q Catering a point of difference over its larger corporate competitors.

Q Catering now operates from three units on the same industrial estate.

June 2022

Steve Clarke is a board member of Produced in Kent and is keen to introduce more locally-sourced lines.

“As the right types of customer come on board, it will be easier to bring in locally-sourced ranges,” he says. “The focus of Q Catering historically has been schools and fast-food operators, and contracts currently account for around 25% of our sales. Now we’re starting to focus more on 12-months-of-the-year businesses to try to remove a bit of the seasonality that exists within our operation,” he says. “I think innovation in its truest sense of the word is not what customers are looking for at the moment,” he adds. “What they’re looking for are solutions to the problems they have, such as satisfying their vegan customers.” Q Catering uses Erudus for information on product allergens and specifications and it encourages its customers to do the same. Being able to assist customers to choose a suitable alternative to an out-of-stock product is especially helpful in these times of challenging product availability. “Our customers are more open to suggestions nowadays because the supply chain is so fragile,” Clarke points out. “We’re doing more training with our customer-facing employees on product information,” he continues. “I want them to be more consultative in the way that they talk to the customers, helping them with menu suggestions while also building a picture of the types of products that are missing from our portfolio so that we can add them.” Many of Q Catering’s 46 employees

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have been with the business for years, if not decades. “I would say we’re lucky that we seem to have a very, very stable workforce,” says Clarke. “The customers love the same driver turning up week in, week out,” he adds. “Let’s face it, the driver sees the customer more often than anybody else within this business. So our drivers are important and keeping hold of them is important, particularly with the current driver shortages.” A good working environment is necessary to encourage a high level of staff loyalty, he believes. “People don’t want to be a number on a wages spreadsheet; they want to have a voice and be listened to. And I think that as long as they understand and feel part of what we’re trying to do, it keeps them on board and they feel more settled. “I went to great pains in the early days to explain to everyone what my vision was for the business. And because I know what can be achieved, I think that gives everyone around me a little bit of confidence and I guess it also contributes to people staying in their posts.” As Clarke takes steps to advance the business, his eyes remain on the customer. “We’re asking ourselves what we can offer that the competition isn’t offering in order to build a package of USPs and reasons to deal with Q Catering. We have to be realistic that if we were to fight on price alone, then we probably wouldn’t be the winner. Customers are prepared to pay a little bit more if they get a little bit more.” He concludes: “We know we’re not the finished article at the moment, but there is very much a willingness to do what we do better, and I love the challenge. Foodservice is in my blood.” CCM

Q Cate ering in numbe ers £8 million turnover (year to end March 2022) £9.5 million turnover predicted for 2022 calendar year and £20 million targeted for 2030 20,000 sq ft of warehouse space 2,000 lines 830 customers 15 delivery vehicles £80 minimum order value 15% of orders are placed on the app

[ FOOD & DRINKS ON THE GO ]

On-the-go opportunities return After a worrying stretch for the on-the-go category, sales are looking healthy for the mission once more. However, wholesalers and retailers need to seize the opportunity to reignite a convenience stalwart that has changed identity since 2020. Siobhan Kielty reports.

here is a ‘new normal’ taking place in the work environment, and shopper habits are bouncing back after a difficult couple of years. Routines are being reformed and on-the-go offerings are once more incorporated into daily life. Suppliers are aligning their ranges with the current consumer needs and priorities. Since the start of the pandemic, there have been marked shifts in shopper demands as people rethink their approach to daily life. Health has become a major concern, elevated by the Government’s impending HFSS action and a stark reminder over the past two years of consumer mortality. The current economic climate of escalating bills and prices is also driving consumer behaviour. Weetabix is highlighting the health and value credentials of its £2.1 million On The Go brand with a sales drive from its field sales teams, who will visit more than 1,000 convenience stores this summer. “Our research shows that breakfast on the move has returned to its long-term behaviour levels, following the understandable dip during Covid lockdowns. There have been increasing on-the-go breakfast occasions, boosted by returns to schools and offices,” says Darryl Burgess, 26

June 2022

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head of sales. “Weetabix On The Go remains ahead of the game in terms of sugar content and nutritionals. “Our entire range is HFSS compliant, with each bottle containing the same amount of sugar as a glass of milk, while the packaging also calls out the drink’s nutritional credentials, offering energy, fibre and protein,” he continues. “This means we can continue to invest in above-the-line advertising and in-store activations, increasing awareness of breakfast drinks at a key time.” Weetabix has continued to focus on health and sustainability developments with the range. Last year the supplier introduced the immunity support range Weetabix On The Go Plus Immune Support. “The breakfast drink is high in fibre, ideal for keeping you ‘on top’ during busy mornings, and also has Vitamin D and 19g of protein,” says Burgess. “Immunity is a top and growing priority for food and drink shoppers, and we wanted to tap into this consumer need.” The Weetabix On The Go range has also been updated with bottles, caps and sleeves that are all 100% kerbside recyclable, and made from 51% rPET packaging.

Weetabix On The Go is the number one breakfast drink* Shoppers love the smooth taste Non-HFSS: Same sugar as a glass of milk 100% recyclable pack Offer your customers health, value and convenience

* Nielsen 52 we 11-09-21

[ FOOD & DRINKS ON THE GO ] The desire for value is now inescapable in everyday life, so price points and price perception are key for convenience retailers. Weetabix emphasises its support for value propositions to bolster sales in convenience. “We’ve used the last two years to test and learn, such as with our £1 PMPs, which we brought back this year across our 250ml core range for the impulse channel,” says Burgess. “These offer great value to customers, with the PMP standing out on shelves, offering an easy breakfast option at an affordable price.” The range sees a return of the limited-edition £1 PMP Caffé Latte breakfast drink to wholesalers, following its trial last year. “The Caffé Latte drink has introduced new shoppers to the dairy coffee drinks category, offering a coffee and breakfast while travelling,” he reports. “The iced coffee market has continued to grow in 2022, with retail sales soaring by 35.4% to £209 million over the past year (Nielsen), and ready-to-drink coffee’s popularity is projected to rise in the UK in the years ahead.”

‘There have been increasing on-thego breakfast occasions, boosted by returns to schools and offices’

“Our range of milk drinks enables consumers to enjoy some of their favourite confectionery brands in a convenient on-the-go format,” says Michelle Frost, general manager. “As people are spending more time out of home, sales of on-the-go formats are rising in tandem with this consumer trend.” The range benefits convenience retailers who may not have a huge amount of chilled space as it suitable for ambient storage – although it is best presented to shoppers in refrigerators, and served chilled. Rich’s bakery products have seen a promising start in convenience with the introduction of the Baked by Rich’s brand. “Baked by Rich’s taps into the growing consumer trend for indulgent treats and includes cookies, muffins and buns that are available either fully finished thaw-and-serve or as a frozen cookie dough for bake-off in store,” explains sales, marketing & R&D director John Want. “It’s a simple bakery solution for stores without an in-store bakery and an effective addition to their food-to-go offering.” The manufacturer has partnered with Nestlé Professional for a range of cookies this year. The Baked Made With… instore bakery range comprises Matchmakers Zingy Orange, Munchies and Little Rolo cookie variants.

Darryl Burgess, head of sales, Weetabix Coca-Cola Europacific Partners has also tapped into the iced coffee boom for summer sales. In partnership with Costa Coffee, CCEP has introduced an RTD Frappé range, initially comprising two popular Costa flavours – Chocolate Fudge Brownie and Caramel Swirl. Available now in convenience, the range comes in 250ml, 100% recyclable bottles made from recycled plastic, and is fully HFSS compliant. “RTD coffee is up 37% in value year on year, but it’s still yet to reach its full potential,” says Martin Attock, vice president, commercial development at CCEP GB. “The Frappé range will help attract more consumers to the RTD coffee category this summer.” To increase brand awareness, the Costa Coffee RTD range will be supported by a summer sampling campaign, visiting major events including Brighton Pride, CarFest and Bristol International Balloon Fiesta. The brand is also launching its biggest nationwide summer marketing campaign, which fits under a global activation platform of ‘Summer is a State of Mind’. This includes out-of-home and social medial advertising and influencer activity, and aims to inspire positivity whatever the weather. Similarly, Mars Chocolate Drinks & Treats advises that wholesalers flag up the flourishing flavoured milk segment to their retail customers. The flavoured milk category has seen an increase of 26% in value compared to last year, with chocolate flavoured milk sales up by 29% (IRI). 28

June 2022

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Thriving bakery brand St Pierre has reformulated its multipack Croissants and Pains au Chocolat to elevate the taste of the sweet treats, plus the recipe tweak now makes the products suitable for vegans. In addition, its best-selling Brioche Burger Buns are now available in a four-pack as well as a six-pack. “We have maximised consumer trends, worked collaboratively with retailers and listened to our customers in every setting and our approach in doing so has put us on the map,” says Louise Reynard, commercial controller. “With sales now over £35 million and growth of 193% in the last two years, St Pierre is the fastest-growing bakery brand in the UK.”

Food to go set to exceed 2019 value The UK food-to-go market grew by 38% in 2021, recovering to 76% of its 2019 market value. This followed a steep decline in 2020 as a result of the Covid pandemic. In 2022, food-to-go recovery continues, with the market expected to grow by a further 32%, which will see it exceed its 2019 pre-pandemic value – reaching £21.3 billion. Beyond 2022, food-to-go growth is set to stabilise, with the market reaching a value of £23 billion in 2025. Source: Lumina Intelligence

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GRAB A CASE OF BIG VALUE ENERGY email: info.uk@refresco.com | tel: 01509 674915 *Independent survey by MMR, January 2022. CLT survey with 203 consumers. https://emergestimulation.com/independent-testing/

[ FOOD & DRINKS ON THE GO ]

Shoppers watching their outgoings are also looking to upgrade their at-home experience if eating out isn’t in the budget, and therefore the trend of premiumisation is still a significant driver. “Shoppers have become accustomed to quality food at home and even in the midst of a cost of living crisis they are looking for ways to elevate their everyday. The reality is that the luxury of dining out and/or travelling will still be out of reach for many, so upgrading certain elements of staple menu items is an affordable luxury,” she adds. To help with this, St Pierre’s new Brioche Bagel combines the two rising bakery performers of brioche and bagels. “It made sense for us to develop a product that caters to the popularity of two growing markets,” says Reynard. “We’re excited to see how customers find new ways to work with our versatile products. We’ve taken the quality brioche for which we’re known and applied it to a bakery staple, and it’s working.” Kepak has developed its lunchtime offering with its innovative Cook in Box burger range for the on-the-go occasion. “The launch of Rustlers Cook in Box format is the brand’s most convenient solution to date,” says Ross Davison, convenience controller. “The range, with a patented cooking method, saw the brand expand beyond chilled ready meals into the food-to-go fixture, further aligning Rustlers with meeting consumer needs both in and out of home.” Davison gives the following ranging and merchandising advice: “Stock a varied range – 46% of shoppers are likely to go elsewhere if they are dissatisfied with the choice available, so it is key to ensure retailers can access a wide range of products. Keep your offering fresh and relevant, bringing in the right products at the right time to reflect shopper needs and consumer trends. 30

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“Grouping popular lunchtime options such as Rustlers, soft drinks and chilled snacks in a meal deal can help boost sales in the chiller. With the return of food on the move, optimise sales by offering a hot eat option.” Tayto is tapping into the continuing consumer interest in spicy flavours with the introduction of Spicy Thai Ringos. The new variant joins the supplier’s £1 price-marked pack range, which is outperforming the market (+19.9% versus +10.7%, IRI). Matt Smith, marketing director, comments: “With a real spicy kick and less than 100 calories per serving like the rest of the Ringos range, Spicy Thai delivers on the Golden Wonder’s brand promise of ‘more punch per crunch’.” “Impulse sales are starting to bounce back,” he continues. “Value for money is increasingly important as many consumers are concerned about their financial situations, so brands that can deliver great taste and value will continue to be successful. An excellent example of this is Golden Wonder Ringos.”

Smith reports that impulse snack sales have seen 12.6% growth in the latest 12 weeks (IRI). Golden Wonder’s 30p/ ‘2 for 50p’ fun snacks range, which includes Tangy Toms, Spicy Bikers, Awesome Oinks and Quarterbacks, is growing faster than the market (+17%, IRI). He adds that price-marked packs are a proven way for independent retailers to demonstrate that they are offering great value when compared to larger stores. “An additional benefit is that it makes it quicker for shoppers on a ‘grab and go’ mission as they don’t have to search for a shelf ticket – the price is right there on the pack,” he points out. Ringos Puffs is a new HFSS-compliant snack from Tayto, available in BBQ and Sweet Chilli flavours in three formats: 20g (rsp 49p) 60g £1 PMP, and 6 x 16g multipack (rsp £1.50). Calbee UK has created a better-for-you snack specifically for children, with its Peppa Pig Cheesy Lentil Puffs. The baked snacks are vegan and contain 82kcal per 18g bag. The 5 x 18g multipacks have all green and amber GDAs, and are HFSS compliant. The supplier also meets emerging adult healthier snacking demands with its Harvest Snaps lentil snack range. “HFSS is set to have a significant impact on the crisps, snacks & popcorn category. The Harvest Snaps brand falls below the HFSS restrictions, meaning the product can still be merchandised in promotional display space after the new legislation comes into force,” says Jon Wood, commercial director.

[ FOOD & DRINKS ON THE GO ] KP Snacks is also looking forward to robust food-to-go sales this year. “We are confident about the future of the category, having already seen significant recovery in the sector, and our portfolio is well placed to capitalise on and drive singles recovery,” says Matt Collins, trading director. While the meal deal may have come under scrutiny recently, it still remains a key draw for shoppers. “Retailers should look to create value by understanding customer expectations, whether that be through premium or value offerings,” says Collins. “Many office workers have not gone back to the office full-time. Hybrid workers may view food to go as more of a treat if purchasing less frequently and will likely be willing to spend more, meaning there is opportunity to create premium lunch deals catered to part-time office workers.” The manufacturer also highlights the benefits of healthy snacking ranges in light of upcoming merchandising restrictions. KP’s Tyrrells Lightly Sea Salted variant and Hula Hoops Puft (Salt & Vinegar, Salted and Grilled Beef flavours) will be spared the HFSS restrictions, having been reformulated. The Hula Hoops Puft range has also benefited from a packaging refresh, and is currently being backed by a £1.5 media campaign. Mondelez also notes that hybrid working and shifting habits necessitate a range review. “It’s important that wholesalers carry a strong range of on-the-go and single-serve products to suit more impulsive shoppers now out and about

and in offices again, as well as larger formats and multipacks for sharing or in-home occasions,” advises Nash. The company’s cheese brands, Philadelphia and Dairylea, have seen growth, due partly to the versatility of the ranges. “Dairylea is the No.1 processed cheese brand in the UK, with products in the spreads & portions, slices, parents to kids and snacking kits segments meeting a range of consumer needs fit to tackle ‘the new normal’. This, paired with the return of the snacking occasion thanks to consumers getting back on the go, has helped Dairylea to grow by 9.6%,” reports Nash.

Energy for on-the-go needs Red Bull continues to see flourishing sales from the increasing demand for functional energy from shoppers. The segment has seen a sharp increase in sales over the past year and is now worth more than £1.2 billion annually (Nielsen). The supplier’s Red Bull Energy Drink 250ml is “the perfect pack size” for a functional energy boost on the move. Meanwhile, the Red Bull Editions portfolio has seen a 115.8% uplift in sales and now totals £16.8 million (Nielsen). Within sports & energy, flavoured variants have increased by 23.7%, with tropical and exotic flavours growing by 39% more than all other mainstream flavours on offer (Nielsen). Indeed, 41% of energy drink consumers are looking to try more exotic fruit flavours (Lightspeed/Mintel).

‘Independent convenience stores need to take advantage of rapid growth in food to go’ Wholesale expert TWC, in partnership with food-to-go and out-of-home tracking programme MealTrak, reports that the food-to-go market has grown by 9% in value within independent convenience stores in the latest 12 weeks (versus the same period a year ago). However, the total market across all channels has grown by 31% over the same period, and total grocery retail outlets have grown by 51%. This has been driven by a particularly strong performance in discounters (+81%) and multiple convenience stores (+63%). This suggests that independent convenience stores are not getting their fair share of food-to-go growth. Tom Fender, development director at TWC, says: “Most convenience stores did extremely well over the pandemic,

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growing sales and attracting new customers. It was understandable that many retailers opted to scale back their food-to-go offer at that time as consumers weren’t commuting or getting out and about very much. But what we have seen in the last few months is the rapid return of consumers eating food to go again. “We all know that the discounters have been attracting new shoppers, as well as benefiting from returning lapsed shoppers. This happens during economically challenging times. But discounters are not renowned for selling food-togo items, so this should be a warning to convenience operators that discounters are now competing on this mission. “Local independents should always have the advantage of knowing what’s happening in their area and adapting their offer accordingly. Discounters are large corporations and cannot flex their range to the same extent. “The issues of prices, price image and inflation are creating a perfect storm right now, so independent retailers need to think about marketing within their communities. Most shoppers travel less than half a mile to their c-store, so catchments are tight, and this gives retailers permission to talk about value for money by shopping locally. “Now is the time to grab food-to-go sales. Whilst many consumers are tightening their belts, food to go is more insulated due to its lower ticket nature versus other eating out occasions – and it also offers respectable margins.”

LL 250ml RA BU

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[ FOOD & DRINKS ON THE GO ] Red Bull’s Summer Edition, an ApricotStrawberry flavour, is positioned to cater to this desire for exotic flavours, while taking into account health demands – a Sugarfree variant is also on the shelves. Sugarfree variants have grown spend by 23.3% (Kantar) and this new SKU will answer demand on both health and flavour counts. Suntory Beverage & Food GB&I is also expecting increased summer sales, boosted by the low and no-sugar segment. “We have seen a long-term trend towards drinks with lower sugar as consumers are becoming more aware of their health and wellbeing,” says Matt Gouldsmith, channel director, wholesale. “When it comes to energy drinks, the no and low-sugar market has grown more than the full-sugar market over the past year.” The other strong performer – stimulation drinks – has been an area of activity for Suntory, with the addition of Lucozade Alert Original. Boost Drinks has focused on value with its new Juic’d range – a £1 price-marked line-up tapping into the fast-growing 500ml can sector. Available in Mango & Tropical Blitz, Watermelon & Lime Twist, and Pineapple & Guava Punch, the range is made with 5% real fruit juice. “Our business operates on listening to the needs and wants of our customers and end consumers. Coupled with the category data, it was clear there is a huge demand for a new brand in the 500ml can space,” says Adrian Hipkiss, marketing & international business director. “With the cost-of-living increases, it’s great to be able to launch a new brand in this thriving category and provide more choice for consumers.” To drive sales and awareness, Boost is activating a cross-channel marketing strategy incorporating out-of-home, digital advertising, social media and creative depot activity. Coca-Cola Europacific Partners (CCEP) has unveiled a new Relentless Zero Sugar range. There are two variants, Peach and Raspberry, which come in a 500ml can in both plain and price-marked options. The NPD is designed to fuel additional growth of the Relentless brand, which is worth over £46 million and is up by 10% in value over the past year (Nielsen). The launch will also help retailers tap into the growth of the wider energy drinks sector – now worth £1.52 billion (Nielsen) – and the continued popularity of sugar-free, HFSS-compliant drinks. To support the launch, CCEP is driving its #WithoutLimits positioning for Relentless and has created PoS materials. CCM 34

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View from HQ Gurms Athwall, trading director, Parfetts To what extent has the food & drinks on-the-go market recovered following the effects of the pandemic? There has been a steady rise back towards pre-pandemic levels, but working from home has stifled some growth. Which categories are performing best in food & drinks on the go? Crisps & snacks (+44%) and soft drinks (+21%) have seen the biggest growth in Parfetts, and our recently introduced sandwich meal deal has proven a great success. The innovation in areas such a Tango ice blast has increased awareness amongst retailers and that has transpired into additional sales with a higher price point, giving an overall better margin. Are there any new product categories/sub-categories emerging in food & drinks on the go? What we are seeing is more linking of products – for example, coffee and pastries, and also high protein bars. Health and wellbeing will continue to grow so it’s vital this category is well executed in store. Iced coffee sales have really grown recently – we’re performing well at +112%, with potential for a lot more future growth. How are you supporting your customers to boost their food & drinks on-the-go sales? We are constantly reviewing trends, and with the support of our store development team we are segmenting stores based on consumer types so we can effectively offer the right food-to-go solution in a more bespoke way to our fascia stores. We also work closely with food-to-go suppliers to ensure we are offering the most up-to-date equipment to our retailers. Minimelts are the latest concept – small balls of ice that turn to ice cream when you put them in your mouth. What are your predictions for the food & drinks on-thego market in the coming year? As more people return to the office and place of work we will see further opportunities open up for retailers within certain categories. At the same time we also feel that the forward-thinking retailers will be looking to exploit the ‘last mile’ opportunity – consumers who have settled into a working-from-home/hybrid working pattern and who want a quick meal solution can potentially order and have it delivered rapidly by their local retailer (as the market and habits have changed during and post lockdown). Innovation will also be key and will drive consumer interest, as we have seen with the success of milk shakes, ice blasts, cold coffees, high protein products, etc.

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[ MINTS & GUM ]

A fresh burst of sales Sales of mints and gum are on the up once more in convenience. Supplier investments including on-pack promotions and flavour innovations look to drive a further boost as the impulse-heavy category bounces back from a difficult couple of years.

he mints and gum categories are reliable performers in the convenience sector, although the changes in shopper habits during the pandemic did have an effect on sales. The convenience channel accounts for 59% of total mint singles sales (IRI), and mint products account for four of the top five sugar singles in independent retailers. “It is very much a functional/destination segment of the confectionery market, with shoppers actively seeking out products to freshen their breath after a coffee or lunch break,” says a spokesperson at Nestlé Confectionery. “As the country returns to more normal living patterns with people returning to work and travel, retailers have had an opportunity to boost their mint sales category once again.”

‘As the country returns to more normal living patterns with people returning to work and travel, retailers have had an opportunity to boost their mint sales once again’ Nestlé Confectionery spokesperson The unlocking of society has driven an uplift of 10.3% in the number of shoppers buying confectionery on the go within the past 12 weeks versus the same period last year (KWP). This has benefited independent retailers and the mints segment which has grown by 6.7% in the past 12 weeks, even outperforming total confectionery in independents (IRI).

Nestlé’s Polo brand has three mint flavours, which between them cover a variety of need states. While Polo original is the best-selling mild mint, Polo Sugar Free is the No.1 sugar-free mint and accredited by the Oral Health Foundation, and Polo Spearmint offers a sweet treat. “Focusing on big brands that consumers know and trust will capture shoppers’ attention in-store,” says the company spokesperson. “Secondary siting best-sellers with food to go is also a strong way to drive additional basket spend.” 36

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Perfetti Van Melle has seen encouraging growth from its Smint brand, which offers a range of formats and flavours in its core range. The brand is the fastest-growing mint brand in the UK (IRI), and has a 100% sugar-free portfolio. “Smint continues to be a must-stock for retailers, and the latest sales stats are a testament to our investment in the brand, which is to continue through 2022 with further product innovations designed to drive category sales,” says Sarah Elmer, brand manager. “We’re in a prime position to cater for the growing demand for healthier choices while still providing that refreshment moment for consumers, especially ahead of the introduction of the HFSS regulations later this year. There’s never been a better time to invest in the UK’s fastest-growing mint brand.” Also flagging the importance of sugar-free options in light of the HFSS regulations is Chocobel, supplier of de Bron sugar-free sweets and Gerio products. “With HFSS compliant legislation due later in the year, cash & carries will need to ensure that they have a suitable compliant range on offer for retailers,” says Tim Hills, marketing manager. “De Bron’s peppermints are a must-have. They are vegan, gluten-free and sugar-free, and available in 12 x 80g bags or in bulk as 3 x 3kg bags.” The distributor also represents Spanish healthy sweet brand Gerio, and offers bulk 1kg bags of extra-strong mints and mini mint boiled sweets. “It’s no secret that over the past two years, mints and chewing gum have taken an unfortunate hit in the market. However, there are now slow positive signs of recovery, with a growth of 8% in 2021,” reports Hills. “With more people returning to a normal office environment, a rise in sales is forecast once again.”

[ MINTS & GUM ]

Mondelez is also seeing growth from its Trebor brand. Trebor Extra Strong Mints is the No.1 mint product (Nielsen) and a must-stock in convenience. This summer, the Trebor brand features an on-pack promotion offering a £10,000 cash prize, along with hundreds of instant-win prizes. The ‘Own It’ campaign aims to treat consumers with confidence-boosting rewards such as access to a personal stylist, personal trainer, nutritionist or business coach. Prizes are revealed online by entering the on-pack barcode and shoppers are entered into the £10,000 prize draw.

ADVERTISING FEATURE Mints is a highly impulsive category so display and promotions are really important! Trebor, the number one* mint brand in the UK, is encouraging consumers to ‘Own It’ in 2022 by rewarding them with the chance to win £10,000 in cash, as well as hundreds of confidence-boosting prizes. Shoppers simply need to pick up a Trebor multipack or single pack, enter their contact details and barcode on Trebor.co.uk to find out instantly if they’ve won. We encourage cash & carries to stock up on the full Trebor range today so that their customers can make the most of this eye-catching new promotion! * Nielsen: Mints data to 26.10.21

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Trebor’s campaign is now live in key locations near convenience stores, encouraging shoppers up and down the country to ‘Unleash Their Minty Confidence’ as part of the ‘Own It’ platform. Around 36 million shoppers are set to see the campaign while out and about, driving visibility and prompting purchase in this highly impulsive category. The Tic Tac range from Ferrero continues to outperform the category through its variety of flavours and formats. “It’s important that retailers are taking proactive measures to ensure their sugar confectionery offering stands out and attracts shopper interest, which can be done through stocking recognisable and trusted brands such as Tic Tac,” says Levi Boorer, trade & shopping marketing director. Sitings that benefit impulse purchasing are key to maximising sales. “Retailers should stock them next to the newspapers/magazines fixture or within their food-to-go section next to items such as soft drinks or single-serve snacks; 88% of Tic Tac is sold from impulsive locations,” Boorer adds. In the chewing gum category, fruity flavours are seeing an increase, according to Mars Wrigley. “Enjoyment is the second biggest reason to chew gum globally. Mars Wrigley’s Extra Refreshers portfolio helps to meet this customer demand, with fruity gum sales now accounting for more than a quarter of gum market value in the UK (Nielsen),” says Katie Walland, gum portfolio director. “Mars Wrigley continues to add to its Extra range of flavoured gum with the launch of Apple and Blueberry. With 33% of shoppers buying Extra Refreshers, this makes them incremental to the gum category and a must-stock for wholesalers.” Chewing gum remains a highly impulsive purchase, and considered ranging is essential. “Ensuring the gum range is visible and accessible is vital in order to boost sales, with 46% of consumers reporting they will not buy gum if the product they want is not available,” says Walland. “Using engaging PoS surrounding any new product launches and creating an enticing display will help create customer intrigue and boost those impulse sales. A secondary siting can also be an effective way of appealing to mission shoppers and maximising sales.” Mars Wrigley recommends that wholesalers and retailers ensure that all consumer missions are catered for, by stocking a range of formats and flavours. “One in three British consumers chew gum, making it an important consideration for wholesalers looking to boost their sales,” explains Walland. “Mars Wrigley has created a hub of information for retailers on how to boost their sales, including planograms CCM and industry insight, at availabilityintoaction.co.uk.”

UK & ROI, 18+ only. 10:00 28/02/2022 – 16:59 30/09/2022. Internet access required. Purchase a promotional pack of Trebor Extra Strong or Softmints (GB only), visit www.trebor.co.uk and select your region. ROI & NI residents purchase not required. Enter your name and contact details including Eircode / postcode (for ROI & NI) or your barcode & batch code (for GB) to find out instantly if you’ve won a prize and to be entered into the Grand Prize draw. Grand Prize: 1 x £10,000/€. Instant Win Prizes: 201 choice of vouchers from spa days, gym/wellbeing memberships, hair stylists and many more up to the value of £50/€ (subject to individual terms and conditions). Grand prize draw to take place on 07/10/2022. Wrap Up Draw: Entrants between 17:00 01/10/22 – 16:59 31/12/22 will be placed in a final draw for a chance to win £250/€. Retain receipt to claim. Max 1 entry per person per day. Max 1 Prize per household. Visit website for full T&Cs. Promoter: Mondelez Europe Services GmbH – UK Branch with registered office at Cadbury House, Sanderson Road, Uxbridge, UB8 1DH. For more details and great category advice go to deliciousdisplay.co.uk

[ TOBACCO & NGPS ]

Less money to burn As shoppers continue to feel the pinch in the current economic climate, value propositions are becoming more important than ever. The tobacco and next-generation product category is wooing adult smokers with lower prices and new value ranges.

he £14 billion tobacco market is now split almost 50/50 between factory-made cigarettes and rollyour-own (ITUK), with value driving movement in the category. Suppliers have an eye on the lower price points, and recent launches focus on value for money. Imperial Tobacco prioritises the consumer desire for value, offering more brands in the economy roll-your-own (RYO) segment than any other tobacco manufacturer. “The lower price tiers now account for the majority of sales, with the sub-economy segment making up 63% share of factory-made cigarettes and the economy segment accounting for 51% of RYO, with both value segments growing at 4% year on year,” says Tom Gully, consumer marketing manager UK. The manufacturer’s JPS and Riverstone

brands are both performing strongly in the RYO category, with Riverstone repositioned to sit within the rising economy RYO segment alongside Players JPS Easy Rolling Tobacco. “Looking at the RYO category in particular, we can see that the consumer drive for value remains a big factor, with the economy segment accounting for 52% of sales, and mid-price and premium products comprising 35% and 14% share respectively. Imperial is well placed to help wholesalers tap into this trend,” continues Gully. In the factory-made cigarette segment, there has been activity with the Embassy Signature range. The Embassy Signature Silver Edition variant is a limitededition release for summer, and offers a host of new

The uphill battle ag gainst illicit tobacco trading g In November/December 2021, the Tobacco Manufacturers’ Association commissioned a nationwide poll of over 12,000 smokers on their attitudes, awareness and understanding of illicit tobacco. There were five key findings: a 71% of those surveyed bought tobacco in the last year that was not subject to UK tax. a One in five smokers claim to only buy ‘branded’ tobacco (ie not plain packaged cigarettes or roll-your-own tobacco), even though it has been illegal in the UK since 2016. a Social media is seeing a surge in illicit tobacco sales, with 19% of respondents buying from social media and/or websites advertising cheap tobacco; this compares to 4% before the pandemic. a Illicit tobacco is a front for other illegal activities: 37% of survey respondents were aware that illicit tobacco is used as a front for other illegal activity such as people trafficking and modern slavery, compared to 25% in 2020. a More people are reporting illicit tobacco: 32% of those surveyed reported illicit tobacco when they were aware of it, compared to 12% in 2017. The illicit tobacco market in the UK remains stubbornly resilient, with more than seven in 10 smokers (71%)

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surveyed claiming to have bought tobacco that was non legal (ie had not had UK tax paid on it) last year – a reduction from a high point of 78% in 2019. There were reductions across the UK, expect for London where the number of smokers purchasing illicit tobacco is unchanged at 85% from 2019. One of the most significant challenges in tackling the illicit tobacco trade remains an entrenched perception among many consumers that it is ‘acceptable’ to trade or buy illicit tobacco. 68% of those asked in this survey had no issue with buying tobacco that had not had UK tax paid on it from a friend, relative, shops etc. If it is viewed as crime, it is viewed as a ‘victimless’ crime, although more smokers are aware that illicit tobacco is a source of funding for organised criminals, bringing financial pain and harm to local communities across the country. According to the most recent HMRC Tax Gap data, illegal smuggling and consumption of illicit tobacco cost the Government £2.3 billion in lost revenue in 2019-2020. In total, the Government has lost close to £49 billion in revenue since 2000; that equates to £2.45 billion in lost tax every year.

The heated tobacco category is growing at over twice the speed of the e-cigarette category¹. Stock HEETS, made for IQOS – the No.1 heat-not-burn product in the UK². HEETS can be purchased from most cash & carry and wholesale channels.

1. Source: Heated tobacco has grown by +87.2% and e-cigarettes at +36.8% MAT to 01.01.22, meaning the heated tobacco category has growing at 2.4x the speed of the e-cigarette category. Source: ©2022 NielsenIQ data, Value, Ȁ ´«ç Í -gX Ǻ Æ´ Íî ĐÍ ǻǫ ' 'ãÔ ãą EóÆî´àÆ ç ɂ gÔî Æ 0ÌàóÆç Ǻ Æ´ Íî ĐÍ ǻǫ ƯƬ ÿǷ ƪƫǪƪƫǪƬƬ ƬǪ Source: Nielsen data as of December 2021 which encapsulates ‘”heat not burn” product category

This product is not risk free and provides nicotine, which is addictive. Only for use by adults who would otherwise continue to smoke or use other nicotine products. This material is restricted to those who are involved in the business of the sale or distribution of tobacco who are aged 18 years or over. This material should not be made available to the public or sent to anyone else.

[ TOBACCO & NGPS ] features usually associated with premium factory-made cigarettes but without the premium price tag. “Embassy Signature Silver Edition benefits from a special reduced smoke smell paper, making it perfect for those who are socialising on summer days or evenings and want to limit the lingering odours of smoke on hands and clothes after smoking. The launch also features a modern shaped filter and textured tipping paper to provide a unique smoking experience,” explains Gully. “The pack has been designed with a resealable ‘fresh protect’ foil feature to maintain product freshness. The Embassy Signature Silver Edition branded trade outer promotes the brand’s modern design with a new luxury embossed sleeve to further enhance the product’s premium positioning.” The Embassy Signature Silver Edition is available until the end of September at the same price as the original product, producing an elevated experience without an elevated cost. “There is a huge variety of different tobacco products available on the market today, so deciding what to stock can be a daunting task,” says Gully. “Wholesalers are therefore in an excellent position to provide advice to retailers on what products they should be stocking, as well as insights into the latest trends shaping the category.”

‘There is a huge variety of different tobacco products available on the market today, so deciding what to stock can be a daunting task’ Tom Gully, Imperial Tobacco’s consumer marketing manager UK Imperial is also a major supplier in the accessories segment, with its Rizla brand offering a dual benefit with the Rizla Flavour Infusions range. The innovative cards can be used with packets of cigarettes or pouches of tobacco to enable adult smokers to tailor their smoking preferences. “Figures show they are flying off the shelves and currently selling around 450,000 packs per week, as consumers look to recreate the menthol experience,” says Gully. JTI similarly believes that sound category understanding is vital for wholesalers. “Having up-to-date knowledge on the latest products is key to offering a good level of customer service. To confidently talk about new products, wholesalers and their staff should use all the platforms available to them,” emphasises Ross Hennessy, sales vice president. “Through stocking a full range and maintaining good availability of products, wholesalers and their staff can provide a successful offering and service to their customers without them having to shop around.” The supplier has extended its familiar brands Benson & Hedges and Mayfair to service the ultra-value segment. Available now, Benson & Hedges Blue Rolling includes 42

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Virginia tobacco blend and 100 papers within 30g and 50g pouches, with an rsp of £13.65/£22.35. In the ultra-value band of factory-made cigarettes, Mayfair Silver is available in King Size and Superkings at an rsp of £10.15 per 20 pack. Promotional prices are available for a limited time of £10 per pack for Mayfair Silver and £13/£21.35 for Benson & Hedges Blue 30g/50g. “By offering brands like Mayfair and Benson & Hedges at ultra-low prices, retailers can capitalise on both Mayfair Silver and Benson & Hedges Blue Rolling’s brand heritage with products that also offer a competitive price point. We have a proven track record of innovation from other established heritage brands, so we’re confident these line extensions will be well received by customers. Retailers should price at the rsp to maximise the sales opportunity and drive incremental sales in the category,” says Mark McGuiness, marketing director. JTI has tapped into the adult smoker’s desire for menthol tobacco products in the wake of the FMC menthol ban, as evidenced by the flourishing sales of the Sterling Dual Capsule Leaf Wrapped cigarillo. The manufacturer has also addressed the category demand for value, with the launch of the 50g Sterling Rolling Tobacco Essential 50g last year. “JTI’s decision to release this larger format of Sterling Essential Rolling Tobacco reflects the increase in demand for value RYO,” says Hennessy. “Over the past year, existing adult smokers have continued to seek out good quality tobacco at an affordable price, and this is a trend we predict will remain popular.”

Republic Tobacco is in agreement about the current desire for value and is optimistic about the opportunities this affords to the RYO segment. “Cash-conscious shoppers are turning to more affordable RYO products as a way of saving money versus factory-made cigarettes,” says Gavin Anderson, sales & marketing director.

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[ TOBACCO & NGPS ] “The pandemic and subsequent lockdowns brought more shoppers than ever to local convenience stores, as people chose to stay local and minimise supermarket visits. This gave convenience retailers an even bigger opportunity to drive visibility of margin-boosting tobacco accessories products.” Although NPD is an important focus and sales driver, wholesalers should help their customers drive awareness of their staple range, maintains Republic Technologies. While most of the tobacco category has to remain behind closed doors, accessories are able to benefit from display. “By ensuring they are fully stocked with a range of tobacco accessories from trusted brands, retailers can cater for every customer and drive sales,” says Anderson.

A smokeless future When it comes to next-generation product alternatives, Philip Morris Ltd (PML) continues to find new followers with its IQOS heated tobacco products. “Heated tobacco is gaining significant traction in the UK among adult smokers looking for cigarette-like satisfaction, which currently no other smoke-free category on the market can match,” points out Kate O’Dowd, head of commercial planning. “Vape, nicotine pouches, heat-not-burn products: the UK is maturing rapidly into a market of smoking alternative stores, offering a wider range of smoke-free categories rather than specialists focused on one category.” The heated tobacco system has seen 70% of its 21 million users switch to IQOS and stop smoking, with the statistic attributed to the following factors: satisfaction (the electronic device heats real tobacco for a more satisfying taste experience); affordability (the rsp of the IQOS HEETS tobacco sticks is less than half the price of the equivalent number of cigarettes); choice (the HEETS variants include menthol and traditional tobacco blends); and reduced risk. “Having only launched in the UK in late 2016, awareness of heated tobacco remains low, but momentum is building,” says O’Dowd. “The number of stores selling HEETS has increased six-fold since January 2018; PML is now selling almost 50 times the volume of HEETS each month than it did on average in 2017.” The latest in PML’s IQOS innovation is its HEETS Mauve variant. The tobacco stick, which is designed exclusively for the IQOS heated tobacco system, is a crisp menthol tobacco blend with a taste of dark forest fruits. 44

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How to drive sales of accessories Gavin Anderson (right), sales & marketing director at Republic Technologies, offers advice to wholesalers on how to maximise the current opportunities in the tobacco accessories category: Product Range: To drive RYO sales, focus on the products that are meeting your customers’ specific needs and stock the brands and formats that they’re seeking in these areas. As consumers demand more choice and variety, effective new product development is more important than ever. Swan is the brand of choice for many RYO shoppers and Crushball filters have built up a strong and loyal consumer following since legislation changed in 2020. We are still seeing more and more shoppers actively looking for this bestselling SKU in their local store. Swan Crushball Filters are available in slim vertical shelf-ready boxes, enabling convenience retailers to maximise returns from their space more effectively. Sustainability: Environmental considerations continue to influence convenience store shoppers. With growing demand for more natural products and reduced packaging, Republic Technologies is increasing its focus on sustainably-sourced products. This has led to a surge in consumer demand for category-boosting products such as OCB Virgin Slim and OCB Virgin Slim & Tips – unbleached papers made using OCB natural gum, which is sustainably sourced from African Acacia trees. Display: Republic Technologies launched an OCB counter display unit last year which contains 10 booklets of each of the three OCB Slim & Tips products: OCB Virgin, OCB Premium and OCB Organic Hemp. Countertop display units are a great way to signpost the category and provide visibility for best-selling products.

Adult smokers looking for cigarette-like satisfaction are increasingly switching to heated tobacco products.

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[ TOBACCO & NGPS ] “With smoking rates continuing to decline, convenience retailers who embrace heated tobacco as part of a multicategory offering will ensure they can offer a better choice – both for their businesses and, more critically, for the adult smokers they serve,” O’Dowd adds. “When it comes to smoking, quitting is always the best option. But, for those adult smokers unable or unwilling to quit, convenience retailers should provide a smoke-free alternative to suit every need and preference.”

‘The UK is maturing rapidly into a market of smoking alternative stores, offering a wider range of smoke-free categories rather than specialists focused on one category’ Kate O’Dowd, Philip Morris’ head of commercial planning Juul Labs is also offering a new smoke-free alternative with Juul2. The innovative product features a more consistent vapour experience; a newly designed Juul device with a long-lasting battery and smart light system; newly designed Juul pods in Virginia Tobacco, Polar Menthol, Crisp Menthol, Autumn Tobacco, Ruby Menthol and Summer Menthol variants; and technology to prevent unauthorised use. The updated system is designed to prevent counterfeit products from being used. In addition, Juul is trialling a takeback and recycling programme for used pods and devices later in the year. “We have focused our resources on the development of technologies aimed at transitioning smokers and combating unauthorised and underage use, and we have a product roadmap in place to accomplish that for years into the future,” says Dan Thomson, vice president EMEA. “As part of our goal to eliminate combustible cigarettes, we are committed to both responsible stewardship and environmental sustainability,” he continues. “We are committed to working collaboratively with key stakeholders to update the regulatory frameworks to ensure a responsible marketplace as the category evolves.” As well as expanding its range of pods and upgrading the device, Juul Labs has updated the Juul app with an authentication feature, a device lock, a ‘Locate my Juul’ device locator and pod information display. “It is critically important that alternatives can continue to compete with cigarettes, especially when it comes to point of purchase, and with Juul2 we believe we are taking another step in that direction,” Thomson declares. “We have been encouraged by the number of existing Juul users who have 46

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transitioned to the new system since launching on our UK website, and we look forward to providing even more adult smokers with an alternative to combustible cigarettes.” As more existing adult smokers turn to next-generation products in place of cigarettes, the vaping category continues to develop and broaden at a rapid rate. Competing with online and specialist retailers is a challenge for convenience retailers, so wholesalers should ensure that they can offer support and up-to-date information to their customers. “By being informed about the vaping market and familiarising themselves and their staff with the different products, terminologies and market trends, wholesalers can provide much-needed guidance to retailers about what consumers are buying,” says Tom Gully, consumer marketing manager UK of Imperial Tobacco. “Figures show that pod systems and cartridges have seen the most year-on-year growth across all channels. Within wholesale specifically, closed devices such as myblu are the most popular, accounting for 3.1% of volume share versus 1.4% for open devices,” he adds. Having upgraded the packaging for its myblu vape system to feature blister pod packs, Imperial has also updated the design to include an improved vignette on the logo triangle to deliver a consistent look across the range, while also making it easier to navigate between the myblu Intense and Regular ranges. “The myblu device combines the performance demanded by experienced vapers with the ease of use appreciated by new entrants to the category,” says Gully. The device’s Liquidpods allow vapers to switch between flavours in seconds via a one-step ‘click and go’ system. The myblu Intense starter kit (rsp £19.99) contains a device, liquid and charger. With supplier activity continuing to develop the vape category, recognising and catering to consumer trends and demand is a must for wholesalers. “As demand for vaping products continues to grow, dedicating ample space to them within depots should be an important area of focus for any CCM wholesaler,” Gully advises.

Prison sentence for cigarette smuggler A removals company boss was caught attempting to smuggle two million cigarettes into the UK. Thomas Coulton from Morecambe has been jailed for two-and-a-half years after an investigation by HMRC. Coulton, who owns the Heysham-based Tommy’s Removals & Storage company, was stopped in his lorry by Border Force officers at the Port of Dover in February 2019 after he arrived on a ferry from France. The officers found two million counterfeit Mayfair cigarettes in the trailer. Coulton and his employee Reece Fox, also from Morecambe, were arrested. The duty evaded on the cigarettes was £615,805. Fox was sentenced to 15 months in jail, suspended for 18 months.

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