Food & Drink Franchise – August 2018 by FDF World

www.fdfworld.com AUGUST 2018

Pan Pacific Hotels Group

Redefining Asia’s F&B sector

AB InBev

Driving an IT transformation at McDonald’s SA

TOASTING A SUSTAINABLE FUTURE IN AFRICA Top 10 alcohol companies in the world

Gastronomy Foods: Boosting employment within North and Mid Wales

@ServAptNews #SASEU

1 0 - 1 1 J U LY, L O N D O N , U K

PA R K P LA Z A , V I C TO R I A

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FOREWORD

elcome to this month’s Food, Drink and Franchise World magazine. Focusing on sustainability and procurement in the Africa region, Laura Mullan – through an interview with Zoleka Lisa, Procurement Director of Capabilities and Sustainability – discovers how the firm is cementing its future on the continent. As the war for grocery space heats up, we feature innovative tech firm Trax, learning how retailers can use digitisation to make sure every inch of the shelf counts. As food safety becomes an ever-present concern, Mike Robach, Chair of the Global Food Safety Initiative’s (GFSI) Board of Directors, tells us how GFSI is enhancing food safety through its Global Markets Programme. Next, we reveal the planet’s top ten alcohol brands and elsewhere in our latest issue, we round up the key industry events from across the globe that you wouldn’t want to miss. Finally, our digital reports boast exclusive interviews with industry giants such as McDonald’s SA, Pan Pacific Hotels Group, Kew Green Hotels Limited, Gastronomy Foods UK, and Cervecería Nacional. We hope you enjoy this month’s offering and, as ever, if you have any feedback, you can find us across social media @FDFWorld.

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F E AT U R E S

AB InBev BETTER BEER AND A BETTER WORLD

36 The Global Food Safety Initiative â&#x20AC;&#x201D; safe food from farm to fork

26 IN THE WAR FOR GROCERY SPACE, ITâ&#x20AC;&#x2122;S TIME RETAILERS DIGITISE THE GROCERY SHELF

56 52

Events

CONTENTS

McDonaldâ&#x20AC;&#x2122;s SA

92 Kew Green Hotels

Gastronomy Foods

106

AB InBev Europe

166

118 Lotte Wedel

136

More Cafe/ Intelligent Foods

Pan Pacific Hotels Group

176 CervecerĂa Nacional

186 SMU

150 Delaware North Australia & New Zealand

AB InBev TOASTING A SUSTAINABLE FUTURE IN AFRICA WRITTEN BY

LAURA MULLAN PRODUCED BY

STUART IRVING

AUGUST 2018

AFRICA

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ANHEUSER-BUSCH INBEV

Brewing the highest quality beers depends on ingredients from a healthy environment and thriving communities. With its 2025 sustainability goals underway, AB InBev is cementing its future in Africa B InBev is undergoing what you could call a ‘sustainable renaissance’. Earlier this year, the beer giant unveiled its ambitious sustainability goals for 2025, channelling a forward-thinking vision that hopes to promote high environmental standards and help local communities thrive. As part of this plan, AB InBev is championing five key principles; smart agriculture, water stewardship, circular packaging and climate action, and perhaps nowhere is this more evident than at its operations in Africa. In 2017, AB InBev acquired rival SABMiller, which made waves in the alcohol sector and cemented its position as the largest beer company in the world. In her previous role, Zoleka Lisa worked at South African Breweries, a subsidiary of SABMiller, but post-merger she rose through the ranks to become AB InBev’s Procurement Director of Capabilities and Sustainability. “It’s a role which I hold close to my heart, as it has the opportunity to

AUGUST 2018

AFRICA

Zoleka Lisa, Procurement Director of Capabilities and Sustainability

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ANHEUSER-BUSCH INBEV

shift the needle of the socio-economic climate we find ourselves in, in Africa,” Lisa says. As the largest beer company in the world, AB InBev’s brewing heritage spans across continents and generations. This mammoth scale can be a challenge, even more so

when the firm has pledged to uphold some of the industry’s highest sustainability standards. For Lisa, this commitment to sustainability only goes to show that AB InBev may have a robust business acumen, but it hasn’t forgotten the importance of the environment and

“AB InBev is a company which genuinely wants to do good by uplifting communities and promoting the drive towards sustainability” — Zoleka Lisa, Procurement Director of Capabilities and Sustainability AUGUST 2018

AFRICA

community it relies upon. “AB InBev is a company which genuinely wants to do good by uplifting communities and promoting the drive towards sustainability,” explains Lisa. “Success for AB InBev goes beyond just the bot-

tom line but resonates in building communities and ensuring the way in which we live in the world is sustainable. For me, it is an admirable trait for a large corporate to be so determined to shift the needle in a positive way. This is what

HEADS UP! TO MAKING THE WORLD A BETTER PLACE.

We support AB Inbev’s Sustainability Goals by promoting glass reuse and recycling in South Africa. • • • •

By encouraging glass resuse and recycling in South Africa we have achieved a 82% diversion rate of glass from landfill Our returnable bottle system is one of the most efficient in the world All new glass packaging has a 41.5% recycled glass content Each recycled and reused glass bottle saves valuable energy, landfill space, reduces CO2 emissions and generates a source of income for thousands of South Africans

We are proud to be associated with AB Inbev and give them a “Heads Up” to making the world a better place. www.facebook.com/TheGlassRecyclingCo

@TRGC Website: www.tgrc.co.za

AFRICA

makes me so proud to say I work for AB InBev.” After much deliberation, the company’s four focus areas were chosen as they were seen to present the biggest risk or opportunity for AB InBev as a company. Yet, specifically in Africa, AB InBev added a fifth additional pillar: entrepreneurship. “Given the significant emphasis across the continent on employment, job creation, and the development of SME’s to alleviate poverty, we felt this

was an import area to include under the Zones sustainability strategy,” notes Lisa. “In the majority of locations where we operate, AB InBev is a local brewer,” she continues. “We sell our products to the local community; our employees live in the communities we operate in and we rely on local resources to produce our products. “To ensure we can carry on operating for the next 100+ years, we have a vested interest in ensuring that we can support w w w. f d f w o r l d . c o m

ANHEUSER-BUSCH INBEV

AUGUST 2018

AFRICA

“ S uccess for AB InBev goes beyond just the bottom line, but resonates in building communities and ensuring the way in which we live in the world is sustainable”

thriving local economic development to support market growth.” Zeroing in on its smart agriculture goal, AB InBev has pledged that 100% of its direct farmers will soon be skilled, connected and financially-empowered. With this in mind, technology is set to play a key role. Malt barley is one of the — primary ingredients in beer Zoleka Lisa, Procurement Director of Capabilities and Sustainability and AB InBev places a high priority on cultivating only the best quality barley for its beer. Aiming to tended to over apply fertiliser revolutionise the agriculture sector, AB which not only increased costs InBev launched its SmartBarley programme but had a negative impact on the in 2013 and today, it plays a pivotal role in environment. This data-enabled its operations in Africa. Leveraging data platform allowed farmers to see technology and insights, SmartBarley is this trend first-hand. helping farmers improve both their produc“We are committed to being at tivity and environmental performance. the forefront of malting barley More than 5,000 farmers have participated research, helping our farmers in SmartBarley so far and the data gathered improve yields and reduce the allows AB InBev to identify and address use of resources like water and gaps through a range of agronomic, envifertilizers,” says Lisa. “Now we ronmental and management initiatives. are taking SmartBarley to the So, for instance, when used in Mexico, next level by using the data to SmartBarley showed that some farmers build sustainability metrics and w w w. f d f w o r l d . c o m

ANHEUSER-BUSCH INBEV

“ For me, it is an admirable trait for a large corporate to be so determined to shift the needle in a positive way. This is what makes me so proud to say I work for AB InBev” — Zoleka Lisa, Procurement Director of Capabilities and Sustainability

AUGUST 2018

AFRICA

S TAT I S T I C S

AB InBev’s 2025 Sustainability Goals • Smart Agriculture: 100% of its direct farmers will be skilled, connected and financially-empowered. • Water Stewardship: 100% of its communities in high stress areas will have measurably improved water availability and quality. • Circular Packaging: 100% of its products will be in packaging that is returnable or made from majority recycled content. • Climate Action: 100% of its purchased electricity will be from renewable sources; and a 25% reduction in CO2 emissions across our value chain (science-based).

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www.kevalichemicals.co.za

Chemistry for life and living Kevali provides customised solutions within the chemicals industr y with a focus on Hygiene &Sanitation, Chain Lubrication, Water Treatment and Adhesives. Kevali prides itself in offering solutions versus just commodities.

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AFRICA

“ U ltimately we believe that it’s only when we address water risk issues at source, in collaboration with partners, that we can achieve lasting, sustainable, solutions to water resource management”

create predictive analytics to help farmers access better insights to make decisions.” In addition, AB InBev has tasked itself with promoting water stewardship. To achieve this, it is making improvements to its plant water use efficiency and is also supporting partners that work to protect and conserve the valuable resource it so heavily relies upon. “To this extent, each of our breweries has mapped out — Zoleka Lisa, Procurement Director of where water use can be Capabilities and Sustainability improved,” comments Lisa. “Globally we have set a target of achieving a water use ratio of 2.8 hl/hl by 2025.” ners to support water As part of this, the beer producer has creconservation at a catchment ated partnerships with both the cities of level,” adds Lisa. “Ultimately Tshwane and Cape Town (in South Africa) to we believe that it’s only when find new ways to conserve or augment water we address water risk issues at supplies. This has seen new pressure mansource, in collaboration with agement systems implemented as well as partners, that we can achieve the rehabilitation of natural springs and lasting, sustainable, solutions wells. In Tshwane alone, the beer firm has to water resource management. been able to add an extra 9600kl per day An example of this is the Outinto the municipal system. eniqua partnership AB InBev “We are also working actively with parthas developed with the World w w w. f d f w o r l d . c o m

ANHEUSER-BUSCH INBEV

“ S ustainability is not just related to our business, it is our business” — Zoleka Lisa, Procurement Director of Capabilities and Sustainability

SUN CHILLED BEER SunArc has recently joined AB InBev on a national project rollout to provide off grid solar power to Tavern fridges throughout Africa. SunArc’s vision, whether it be for B2C, B2B or small utility scale projects, is to create an enhanced customer experience for the supply and consumption of clean and sustainable solar energy for all to enjoy.

SunArc AFRICA

Tel: +27 11 234 7343 Email: info@sunarcafrica.co.za WWW.SUNARCAFRICA.COM

AFRICA

Wide Fund for Nature (WWF) in George, South Africa. “The area is strategically important to AB InBev as is the only area in the country where hops are exclusively grown,” explains Lisa. “However, the infestation of invasive alien vegetation that causes a loss of surface water flow in the river system due to the amount of water the vegetation consumes.” The Outeniqua project has helped to clear around 700 hectares of this vegetation in the

past four years so that it can be replaced less water-hungry indigenous alternatives. The project hopes to return approximately one billion litres of water per year – water that is needed to support development in the region and create AB InBev’s wide-reaching portfolio of beers. Like many companies in the food and beverage space, AB InBev has recognised that the tide is changing when it comes to packaging. As such, the beer giant has also pledged to use cirw w w. f d f w o r l d . c o m

ANHEUSER-BUSCH INBEV

cular packaging by 2025. To achieve this in the Africa region, AB InBev has strived to make its packaging more sustainable and has also improved the systems that help to remove post-consumer packaging waste. “The majority of our beer volumes on the African continent is distributed in returnable bottles,” says Lisa. “These bottles, in turn, can be reused up to 20 times before being crushed and reused to manufacture new glass bottles. The use of returnable packaging can significantly reduce the environmental impact of our packaging. At the same time, we also look for opportunities to optimise our packaging by, for example, by reducing the weight of our bottles. By doing this we reduce the amount of raw materials required to produce the bottles.” Recognising the role it has to play in removing packaging from the market, the beer producer has also helped to invest in recycling initiatives such as Manja Pamodzi or ‘Hands Together’. “This serves not only to reduce litter and the impact on landfills but also forms an important input into supplying recycled materials that can be reused in packaging production,” Lisa adds. As part of its sustainability drive, AB AUGUST 2018

“ I n 2018 our South African subsidiary initiated a project to implement solar energy on its brewery roofs which, once complete, will account for approximately 10% of our annual country electricity purchases” — Zoleka Lisa, Procurement Director of Capabilities and Sustainability

AFRICA

InBev has looked at its energy resources, pledging that, by 2025, 100% of its purchased electricity will be from renewable sources. The beer giant has also vowed to reduce its CO2 emissions by 25% across its value chain. “In 2018 our South African subsidiary initiated a project to implement solar energy on its brewery roofs which, once complete, will account for approximately 10% of our annual country electricity purchases,” highlights Zoleka. “As a zone, we are reviewing similar on-site opportunities in Ghana, Nigeria and Zambia.” It’s easy to forget that a lot of effort, time and energy goes into making AB InBev’s renowned beers. A single bottle of Budweiser wouldn’t be possible without barley and hops or the farmers who grew those ingredients in the first place. Recognising this, AB InBev has rejected a “tick-box” approach to sustainability and is striving to

do not what it ‘can’ do, but what it ‘should’ do. “At the heart of it, AB InBev is a brewery which cares,” reflects Lisa. “It is in a constant and active pursuit of making a positive impact to the world in which we live. This allows us to be strong industry leaders in the business as far as sustainability goes, as we are able to deliver that extra punch of passion, which large corporates so often lack. Sustainability is not just related to our business, it is our business.”

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LEADERSHIP

AUGUST 2018

IN THE WAR FOR GROCERY SPACE, ITâ&#x20AC;&#x2122;S TIME RETAILERS DIGITISE THE GROCERY SHELF In the world of retail, competition for shelf space is rife. Martin Smethurst, Managing Director of EMEA at Trax, believes that by digitising the shelves, the sector can make sure every inch counts WRITTEN BY

LAURA MULLAN

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LEADERSHIP

hen buying groceries, many people don’t think about how their favourite fizzy drink or snack got on the shelves. Yet behind every supermarket shelf and freezer door, there is a competitive market that may determine what you buy long before you get to the grocery aisle. In today’s retail market, the number of branded or private label products may be climbing rapidly but shelf space is shrinking at an equal pace. Many food and beverage companies may also have to pay so-called ‘slotting fees’ for prime positions on the shelves. The hidden war for grocery shelf space is heating up so it’s time to ask: how are the winners getting it right? Drawing upon customer insights and data analytics, Martin Smethurst, Managing Director of EMEA at Trax, says that consumer packaged goods (CPG) companies are increasingly looking to combine retail and technology to deliver a next-generation retail experience. “CPG companies send products to retail shops every single day of the week, sometimes even several times a day, but they often have no idea what their shelf looks like,” explains Smethurst. “How their shelf looks really dictates how much they’re going to sell – this is where tech-

AUGUST 2018

“ I think that the coming together of e-commerce and retail is accelerating. It’s all about improving the experience” — Martin Smethurst, Managing Director of EMEA at Trax

nology comes into to its own. By utilising innovation, this is where you can give an organisation like Coca-Cola or Nestle a picture of what’s happening in stores across the world.” To level the playing field against e-commerce giants, many CPG companies have ramped up their digitisation efforts. For decades many firms conducted manual audits and surveys to see how products looked on the shelves, how they compared to their peers, and whether out-of-stock items are being replenished. This process is not only time-consuming and outdated, it’s also prone to error. Thanks to new technologies, this method is increasingly being dropped in favour of better shelf intelligence. Take Coca-Cola, for instance, which is going to replace its manual auditing system in the US and trial a new technology from the Singaporean startup, Trax. Using mobile apps, fixed cameras or even robots, this platform takes images of product shelves using augmented reality (AR). Using computer vision and deep learning methods, the solution can then identify products and provide fully digitised shelf data. “It allows CPGs to make actionable decisions,” notes Smethurst. “It’s not just saying w w w. f d f w o r l d . c o m

LEADERSHIP

‘my share of the shelf isn’t as good as it should be’. For us, it’s about giving CPG companies insight into the store so that they can see where they can improve and how they can practically change that as well. “Every CPG company is fighting for their place on the shelf and in a lot of instances, they’ve paid a retailer to have that space too. They’re competing to increase their share of shelf and reduce their out of stock prod-

Innovating for ‘On-Shelf Availability’ with Image Recognition (IR)

AUGUST 2018

ucts. If executed properly, both of these things can really increase sales,” he adds. More and more, it seems that CPG companies are gaining control of the in-store shopping experience. By delving into consumer insights and retail trends, successful CPG companies can use technology to bring the concept of their ‘perfect store’ to life. Whilst every store is unique, technologies such as Trax’s software can

Click to watch: Trax — Transform the Health of Every Retail Shelf 31

help to discern the best product assortment for a store, the best location for a product and the best displays, as well as what pricing and promotion strategies are likely to succeed. This can not only help to enhance the customer’s shopping experience but can simultaneously boost sales opportunities. “Generally, a CPG company has a view of what they call a ‘perfect store’ and the use of technology and data science solutions can really help to support that process,” says Sme-

thurst. “We’ve seen a lot of growing trends. CPG companies do a lot of techniques like called brand blocking whereby you have blocks of a company’s products so that you’re drawn towards it and that sells more. “We’ve also started to see more subtle trends: for instance, some products are very ‘elastic’, so the more space you give to a particular product the more it will sell. Then there are other products that are inelastic. It doesn’t matter how much space you give them, they will still sell the exact w w w. f d f w o r l d . c o m

LEADERSHIP

same amount. In fact, if you reduce their amount of shelf space, they may still sell the same amount,” he explains. “Using our technology and using some really clever data science, we’re able to start to identify the products that are elastic and increase their share of that shelf and at the same time we can also identify products that are inelastic and can reduce their shelf space. This means we can actually get more sales from the same amount of shelf area.” The advent of e-commerce has undoubtedly changed the brickand-mortar business for good but physical retailers have one key advantage over their online counterparts: physical availability. If you need a product and there’s a store nearby, you can get the item in a matter of minutes. This is part of brick-and-mortar retail’s competitive edge and should not be taken lightly. By combining this with emerging

AUGUST 2018

technologies, brick-and-mortar retailers have the opportunity to deliver seamless, omnichannel shopping experiences and this is critical for the market today. “I think that the coming together of e-commerce and retail is accelerating,”

“ CPG companies send products to retail shops every single day of the week, sometimes even several times a day, but they often have no idea what their shelf looks like” — Martin Smethurst, Managing Director of EMEA at Trax

Smethurst says. “It’s all about improving the experience. If you make it too difficult to buy from you, there’s a reasonable chance that a retailer next door or online may have a similar or the same product. It’s about elevating the retail experience and making it more enjoyable.” “There’s a lot of work that goes into retail shelves,” he adds. “You need to see where the perfect spot is to put a product, particularly around what’s called the ‘eye to thigh’ level because that’s where your focus is as a consumer. Our technology is helping CPG companies get that right so that consumers can have a better experience in the store.” In driving a next-generation customer experience, the retail sector has deployed robotics, implemented digital signs, used automated warehouses, and more. Now, it seems the grocery shelf is the last place to be digitised although it’s unlikely to stay that way for long.

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TECHNOLOGY

The Global Food Safety Initiative — safe food from farm to fork 36

We spoke with Mike Robach, Chair of the Global Food Safety Initiative’s Board of Directors, about how it enhances food safety through a Global Markets Programme providing a stepwise route towards accredited certification for developing businesses looking to accelerate their transformation WRITTEN BY

AUGUST 2018

DAN BRIGHT MORE

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TECHNOLOGY

he Global Food Safety Initiative (GFSI) was formed in 2000 amidst

a profusion of food safety issues that were plaguing the globe. At the turn of the century the big concern was erosion of consumer trust and not just in the food industry and among retailers. There was a waning confidence in government and fears of government oversight so a group of European retailers came together to tackle the problem and develop a structure around food safety management systems which they could drive down through their supply chains to re38

establish confidence in the food they were bringing to the customer. That was the genesis of GFSI and over the years it has grown from its core of European retailers becoming more than just a benchmarking organisation to include many different parts of the supply chain such as manufacturers, retailers, food services, agriculture and food processing alongside meat and poultry companies who have joined. “It’s truly a global consortium of companies that covers the entire supply chain from the farm and origination, all the way through to distribution and directly to the consumer,” explains Mike Robach, Chair of the GFSI’s Board of Directors. Robach has recently presided over the organisation’s annual conference. This year, GFSI landed in Tokyo where over 1,200 food AUGUST 2018

industry leaders from 50+ countries were in attendance for what has become the meeting place for decision-makers across the food supply chain from both private and public sectors alike. Participants share knowledge, strengthen their networks, showcase their learnings and do business. “Delegates are challenged through thought-provoking talks from a wide range of hand-

Mike Robach, Chair of the GFSI’s Board of Directors

picked speakers – renowned experts and academics, CEOs w w w. f d f w o r l d . c o m

TECHNOLOGY

from the likes of AEON, Costco, McDonald’s Japan, DeVries Global and the UK Food Safety Agency, public authorities, industry leaders, innovators and grassroots players,” adds Robach who is keen for audiences to gain insight into the latest advances in the science, technology and collaborative tools being leveraged for food safety around the world. “If you are involved in the food industry in any way, chances are you have a role in keeping food safe. Whether your operations are producing, manufacturing, transporting, storing or selling food – or supporting those who do – you play a vital role in protecting the 40

consumer, from farm to fork.” Technology can also play a huge role in the industry, enabling improvements to food safety management systems while enhancing the way we can detect and track products and problems. What wider role can technology play in strengthening security across the supply chain and protecting product authenticity? “We’re looking at new developments like blockchain and assessing how we can incorporate them into what we do. We did a blockchain pilot in the US in the turkey business at my company Cargill,” explains Robach, Cargill’s VP, Corporate Food Safety, Quality and Regulatory Affairs. “We were able to label packages of whole turkey with information about the provenance of the AUGUST 2018

“ W hether your operations are producing, manufacturing, transporting, storing or selling food – or supporting those who do – you play a vital role in protecting the consumer, from farm to fork” — Mike Robach, Chair of the GFSI’s Board of Directors

bird, the farm it came from etc. We got a lot of positive feedback from our consumers so we’re looking at ways of expanding that. Traceability opportunities will be greatly enhanced as we work with suppliers and customers to incorporate this in a much broader fashion. The key for us, with blockchain in particular, is that it needs to have interoperability – we’ve got to have a system in place

that’s going to allow all the players in the supply chain to participate in the program. This means that regardless of the technology providers themselves we’ll need a system that’s plug and play so whatever platform your company is using it will be able to connect seamlessly. The industry needs to focus on this so we can make sure we have the right incentives in place so that everybody, including the likes of small farmers and producers, can get in the game.” Robach highlights another area which is also growing and providing GFSI the opportunity to improve the way it manages its systems and help businesses with their transformation. “Analytical technologies are coming w w w. f d f w o r l d . c o m

TECHNOLOGY

to the forefront,” he maintains. “Next

tion across the FMCG sector pose

generation sequencing allows us to do

unique challenges for sustainability

a better job of detecting hazards and

and food safety. “People want to eat

understand how those hazards might

less processed foods and the desire

move through the supply chain so we

for minimally processed foods is grow-

can put appropriate risk management

ing,” he notes. “However, getting food

strategies in place to address those

directly from the farmer’s market still

issues as they creep in, both in terms of

poses risks. The consumer wants natu-

microbiology and chemistry. As we im-

ral, organic produce but they need to

prove the tech in real time we’re better

understand the risks. For example, this

able to face these risks and take action

whole concept of raw milk… Unpas-

against hazards faster to protect the

teurised milk is becoming very popular

overall food supply.”

in America and creating quite an issue

Robach believes trends in consump42

AUGUST 2018

with food-borne illness. People are

coming down with campylobacteriosis

certain foods. At the same time, we’re

and getting sick with salmonella from

doing what we can to diminish the risk

shiga toxins produced in ecoli. They’re

and understanding that with raw prod-

also getting listeria from raw milk and

ucts it’s almost impossible to entirely

products derived from it. That’s a

eliminate the hazard.”

concern, because as folks eat more

Following GFSI’s Tokyo conference

raw foods, the more responsibility

what new initiatives can we expect to

consumers have to take for the prod-

see implemented to enhance food

ucts they’re bringing into their homes.

safety and improve consumer trust?

That’s a process of education and a

“Food safety culture and leadership

part of some of the things we’re doing

will be enhanced,” assures Robach.

around capacity building to enhance

“Business leaders and CEOs are put-

food safety capabilities and driving

ting food safety at the centre of their

awareness of the risks associated with

strategies as a core principle of their 43

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TECHNOLOGY

business model. We’re driving ownership of food safety, not just through food safety and quality, but everybody in a company owning it through the way they do business. That will show consumers how seriously the industry is taking this. Listening to customers drives what we do… We rely on consumers and their feedback so we’re taking steps to ensure we provide them with the information and the assurances they need to have trust in the food they bring into their homes.” What advice does Robach have for companies aiming to upgrade their supply chain management and promote food safety in 44

Click to watch: How a Ukranian company used gfsi to increase sales for ready-to-eat foods

AUGUST 2018

“ There is a great opportunity now for companies to join, and become active in, GFSI, Our Global Markets Programme can help SMEs with less sophisticated supply chains (whether farmers, processers, distributors or retailers) get on a road towards certification” — Mike Robach, Chair of the GFSI’s Board of Directors

GFSI’s Global Markets Programme allows small, developing businesses to join the food safety conversation. The GFSI Tokyo conference heard from two such companies who have built their success via the programme. Tatania Chirva runs Liniya Smaku, a ready meal factory in Ukraine. The programme allowed her to improve safety, gain consumer trust, and increase sales by over 50%. Meanwhile in Malaysia, Samantha Mah, Marketing Manager of health foods brand Wide Tropism, offers a similar success story. Wide Tropism began as a staple-foods distributor based in a shophouse, where Mah and two other employees

their own organisations? “There is a

packaged goods themselves. Despite

great opportunity now for companies

their humble surroundings, they had

to join, and become active in, GFSI,”

big ambitions: a place on the shelves

he pledges. “Our Global Markets

of AEON department stores. They ap-

Programme can help SMEs with less

plied to be a supplier, received an audit,

sophisticated supply chains (whether

and were rejected. After multiple rejec-

farmers, processers, distributors

tions, Wide Tropism worked with the

or retailers) get on a road towards

Global Markets Programme to improve

certification. It provides an incremen-

safety through documentation, batch

tal approach towards building a food

number tracing, and other measures.

safety capacity within an organisation,

They moved into a modern factory and

alongside a program of continuous

hired new staff. Their efforts paid off

improvement.” By providing a stepwise

in 2014, when they went into business

route towards accredited certification,

with AEON and were also named an w w w. f d f w o r l d . c o m

TECHNOLOGY

“ We have great relationships with these international standard setting bodies because much of what we’re doing is harmonising food safety expectations which fits in with the WTO’s push to eliminate non-tariff trade barriers” 46

— Mike Robach, Chair of the GFSI’s Board of Directors

private sector taking responsibility.” To learn how your business might benefit, check out the organisation’s website to find out more about a GFSI Focus Day hosted by a Local Group near you. A core strategic initiative for the GFSI is to deepen its relationships with food safety regulators which in turn will aid the companies it advises in their quest to deliver continued improvement. “We started this back in 2016 with a government to business meeting at the Global Food Safety Conference in Berlin when we had 18 governments and intergovernmental organisations attend,” remembers Robach. “Last year

ASEAN Best Growth Company of 2016. “A small company doesn’t need to

in Huston we had 30 of these bodies attend. It allows us to further develop

compromise on food safety,” maintains

the working relationship between the

Mah. Speaking at the Tokyo confer-

private and public sectors which will

ence, Mike Taylor, former US FDA

grow further following this year’s Tokyo

Deputy Commissioner, applauded the

conference which saw over

GFSI’s ability to provide a stepping

40 governments and intergovern-

stone for emerging businesses like

mental organisations in attendance.”

these to succeed.

Robach is pleased with the level of

“This is a time for optimism,” he

interest which has seen the GFSI strike

declared, “a remarkable time for food

agreements with several countries in-

safety around the world. Private

cluding an MOU in place with the Mexi-

responsibility can’t take the place of

can government and working groups

public oversight, and no amount of reg-

established with administrations in

ulation can make food safe without the

Canada, Holland, France and the UK

AUGUST 2018

on ways in which the GFSI can establish guidelines to utilise accredited third-party certification. “We also have a longstanding association with the Chinese government and have a MOU with their certification body CNCA and have been able to recognise its programme as being technically equivalent to the GFSI’s,” he adds. “We have a similar relationship developing in the US where we’re seeking recognition of the GFSI from the FDA where its agricultural marketing service is submitting its produce safety certification programme for our technical equivalence evaluation. Elsewhere, our Southern Latin America local group (Argentina, Chile and Brazil) is blossoming. We have a letter of intent to work with the ministry of agribusiness in Argentina and we’re looking to establish a MOU with the Chilean government – there are great opportunities for companies to

Click to watch: GFSI – Global Food Safety Initiative

build positive collaborations with regulators through GFSI.” Reaching out and establishing alliances like these is key to w w w. f d f w o r l d . c o m

TECHNOLOGY

the growth of the GFSI which is also working with intergovernmental organisations such as the FAO, Codex, the World Health Organisation and OIE (the world organisation for animal health). “We have great relationships with these international standard setting bodies because much of what we’re doing is harmonising food safety expectations which fits in with the WTO’s push to eliminate non-tariff trade barriers,” confirms Robach, who 48

feels such partnerships are vital. “We’re also working closely with the World Bank and Global Food Safety Partnership with a MOU imminent so we can work collaboratively in terms of providing food safety training on a global scale. We also have a partner-

been with the company for 15

ship to achieve this goal with

years and very pleased to have

UNIDO (United Nations Industrial

been the chair at GFSI for the

Development Organisation) in

past two years and proud to

South East Asia.”

have been re-elected for another

Robach speaks from a posi-

two-year term.” The geographic

tion of genuine understanding

breadth of Cargill (1500 plants

thanks to his role leading Cargill’s

in 70 countries) makes it a truly

global food safety quality and

global company operating in the

regulatory programmes. “I’ve

agriculture supply chain, food

AUGUST 2018

49 ingredients, animal nutrition and protein & salt – just about every aspect of the food supply chain. “It gives me a great sight line throughout the entire global food supply chain helping me in my role at GFSI,” maintains Robach. “Because we’re not just a traditional manufacturer or processer – we’re in agricultural production, raw agricultural commodity processing etc, which gives us at Cargill the opportunity to use GFSI’s tools, like the Global Markets Programme, back in our supply chain where we work with small farmers and suppliers and can help them on the path to certification and at the same time it helps us ensure the integrity of our supply chain.” w w w. f d f w o r l d . c o m

We deliver you the stories that matter… Click to read

www.supplychaindigital.com

H O M E TO I N D U ST RY– L E AD I N G D I G ITAL B U S I N ES S P L AT FO R M S

“ We recently worked with BizClik Media on an article which characterizes and explains the total value that Kudu Supply Chain has on company growth plans. From start to the finish, it was a pleasure working with the BizClik team. The feedback we have received from different audience groups on the article was phenomenal. It has attracted a lot of interest and attention to our company, our growth plans and has definitely created additional value to what we are trying to achieve.”

– Murat Ungun, Senior VP Supply Chain Kudu Corp

HAVE YOU SEEN OUR OTHER TITLES?

EVENTS & A S S O C I AT I O N S

The biggest industry events and conferences WRITTEN BY STUART HODGE from around the world 06—07 AUGUST

International Conference On Food & Beverages [ TOKYO, JAPAN ] Meetings International feels proud and honoured in inviting the contributors across the globe to the International Conference On Food & Beverages, which is to be held in early August 2018 in Tokyo, Japan. This is meant to crease the leading intellects to a platform for round 52

table confab on Food Innovation and its progress. It is the unique service to convey globally renowned universities in the department of food science and beverages, public health nutritional facts, scientists, speculative researchers, food

02 OCTOBER

The Food and Drink Supply Chain and Logistics Summit

researchers, scholar’s etc. This is the

[ RICOH ARENA, COVENTRY, UK ]

congress where you will be having an

Food and Drink Business Europe has

outstanding experience with the gath-

over 20 years’ experience in the food

ering. This conference provides the

and beverage manufacturing industry.

innovative food technology methods

As a result of its knowledge of the indus-

and also you can improve your network

try and its contacts within it, it organises

globally by interacting with the various

food manufacturing events covering the

experts related to the field of food tech-

issues that matter to the industry.

nology across the world.

Click here for more info

AUGUST 2018

01 NOVEMBER

Food Brexit Conference 2018 [ LONDON, UK ] Food Brexit 2018 is the second in

11—13 OCTOBER

22nd International Conference on Food Processing & Analysis [ MOSCOW, RUSSIA ]

a series of three events, providing the food & beverage industry with a platform to share strategy, insight and knowledge. The agenda is designed around the key issues that are critical to the industry, these include…

The 22nd annual conference on Food

• Update on negotiations and forecasts

Processing and Analysis is centred

• Building new European and interna-

around ‘Reinforcement on Modernisa-

tional partnerships

tion Capability in Food Processing’.

• Voice of the regions: England, Scotland,

Topics covered, at what is sure to be

Wales, Northern Ireland, and Ireland

a popular event, include innovation in

• Mitigating and managing risk –

food processing, nutrification, func-

business resilience and the potential

tional foods, nutrigenomics, industrial

for a ‘Black Swan’ scenario

equipment, food safety and quality, preservation techniques, intelligent

• Brexit, the threat to food safety & security

packaging, food waste management.

• Brexit’s global impact

Click here for more info

w w w. f d f w o r l d . c o m

EVENTS & A S S O C I AT I O N S

The biggest industry events and conferences from around the world

12—13 NOVEMBER

28th World Nutrition Congress [ SYDNEY, AUSTRALIA ] Promulgating Improved Innovations in Nutrition. Conference Series LLC

12—16 NOVEMBER

Food Safety Consortium [ SCHAUMBURG, ILLINOIS ]

warmly welcomes all the participants

The Food Safety Consortium focuses

and contributors from worldwide to

on food safety education and network-

attend the “28th World Nutrition Con-

ing for FSQA professionals. This show

gress”. World Nutrition 2018 includes

brings together all the best information

keynote presentations, plenary ses-

on best practices and new technology

sions, young researcher talks, poster

solutions in the food industry. It features

presentations, nutrition workshops

multiple educational tracks, “Ask the

and public health care session and the

Expert” discussions, workshops, training

exhibition of dietary supplements.

programs, and more.

Click here for more info

AUGUST 2018

26â&#x20AC;&#x201D;28 MARCH 2019

ProFood Tech

[ McCORMICK PLACE, CHICAGO ] Delivering on its promise to bring together suppliers and end users from a wider range of food and beverage sectors than any show in North America, ProFood Tech 2017 was an immediate hit. The biennial event is returning in 2019 to present an unbeatable showcase of innovation and crossover solutions for all food and beverage industries. Covering the

28 FEB â&#x20AC;&#x201D;2 MARCH 2019

22nd Euro-Global Summit on Food and Beverages [ LONDON ]

gamut of the food and beverage sector, ProFood Tech brings together 450 processing and equipment supplier exhibitors and 7,000 attendees in their biennial event. Show attendees explore industry innovations, see full-

Meet inspiring speakers and experts

scale machinery in action, and gain

at our 3,000-plus global events with

valuable insight into trends, best

over 600 Conferences, 1,200 Sympo-

practices, and safety and regulatory

siums and 1,200 workshops on

concerns. The show covers 150,000

medical, pharma, engineering, sci-

square feet and includes expert-led

ence, technology and business.

educational sessions for attendees.

Click here for more info

w w w. f d f w o r l d . c o m

T O P 10

Alcohol companies in the world Top 10

AUGUST 2018

The alcoholic beverage industry features high on Forbesâ&#x20AC;&#x2122; Global 2000 list, especially since giant conglomerates often own most of your favourite brands â&#x20AC;&#x201D; so which ones made the top 10? WRITTEN BY

OLIVIA MINNOCK

w w w. f d f w o r l d . c o m

T O P 10

Molson Coors Brewing $10.9bn Coming in at #672 overall, Molson Coors boasts a revenue of $10.9bn, assets of $30.2bn and Forbes places its market value at $13.1bn. The company owns the popular beer brands

Wuliangye Yibin $4.4bn

Coors, Molson Canadian, Blue Moon, Carling, Sharpâ&#x20AC;&#x2122;s and Cobra among many others. The firm employs 18,000 staff and has 31 breweries to supply over 50 markets including the US,

Wuliangye Yibin is a Chinese state-

Canada and the UK. Last year, Molson

owned alcoholic beverage maker

Coors set a series of sustainability

based in Yibin, Sichuan, which special-

targets for 2025, including encourag-

ises in the popular Chinese distilled

ing responsible drinking, reducing the

liquor, Baijiu. Making the #924 spot on

carbon footprint of its brewing, reduc-

the Global 2000, the company boast

ing waste, introducing best practices

assets worth $12.8bn and a market

in agriculture and becoming known

value of over $47bn. Its flagship drink,

as a â&#x20AC;&#x2DC;great place to workâ&#x20AC;&#x2122;.

Wuliangye, is distilled from five grains.

www.molsoncoors.com

Wuliange Yibin owns several brands of alcohol, but the company has operations across machinery, packing, logistics, finance and health. Employing 44,000 people at its main 12 sq km facility, the company currently makes a revenue of $4.4bn.

www.wuliangye.com.cn AUGUST 2018

Kirin Holdings $16.6bn

Kirin Holdings is the holding company of the Japanese Kirin Group, which produces and sells not only alcoholic and non-alcoholic drinks from Japan and beyond, but also pharmaceutical

Constellation Brands $41.6bn

products and biochemicals. Among its alcoholic brands are Smirnoff vodka, Kirin beer, Myanmar beer and Casillero del Diablo wine. The company comes in at #505 on the Global 2000, owning

Constellation Brands is a beer, wine

assets of $21.1bn. Kirin dates back to

and spirits maker which produces

the 1800s when it began as the Japan

some of the most popular alcoholic

Brewery Company, and has since grown

beverages in the world. With a history

successfully to employ over 31,000

dating back around 70 years and a #593

people, bringing in a revenue of $16.6bn.

place on the Global 2000, the company

www.kirinholdings.co.jp/english

owns a diverse range of brands. Among these are Corona and Modelo lager, Nobilo and Charles Smith wines, Black Velvet whisky and SVEDKA vodka. The company is wholly USowned and has approximately 9,600 staff around the world. Constellation Brands also makes a revenue of $7.6bn according to Forbes, with assets of $20.5bn and a market value of $41.6bn.

www.cbrands.com w w w. f d f w o r l d . c o m

T O P 10

Kewichow Moutai $21.4bn Kweichow Moutai is based in Guizhou, China, and is most famous for its flagship Chinese liquor, Moutai. Similar to

Wuliangye, this is another grain-based distilled liquor which is popular in the

Asahi Group Holdings $29bn

country. Aside from Moutai liquor, the

The Asahi group is another Japanese

drinks and packaging, as well as tech-

alcohol maker, this time specialising

nology ventures like IT research and

in brewing, not least the most popular

development and anti-counterfeit

beer in Japan, Asahi. Coming in at

technology. The business is partially

#477 on the Global 2000, Asahi owns

state owned and was founded in 1999,

assets worth $29bn. The group also

having grown to own $21.4bn worth of

produces spirits, soft drinks and food

assets and bring in around $8.5bn in

for markets across the globe. Some

revenue. This companyâ&#x20AC;&#x2122;s workforce of

of is popular overseas brands include

around 24,000 all help bring it to #468

Peroni, Grolsch and Pilsner Urquel,

on the Global 2000 list, and Moutai

and its nine breweries are spread

is also considered to be the leading

across eight countries. Marketing its

luxury brand in China.

products particularly in Asia Pacific as

www.moutai.com.au

well as North America and Europe, the company states its drinks are enjoyed in over 80 regions. In all, the company employs just under 40,000 staff and brings in a revenue of over $19bn.

www.asahigroup-holdings.com AUGUST 2018

company actually as a diverse range of operations producing and selling food,

Heineken Holding $25bn

side from its flagship lager, Heineken also owns a range of beer brands, including Amstel, Tiger, Red Stripe and

Pernod Ricard $43bn

Birra Moretti. In 2007, it took over cider brands Strongbow and Bulmers as well as John Smith’s and Newcastle Brown ales, and it also added FEMSA Cerveza, a Mexican brewery, to its port-

Coming in at #458 overall on the

folio in 2010. The Dutch brewer was

Forbes Global 2000, Pernod Ricard

founded in 1864 and remains based in

owns assets worth $25.8bn and has

the Netherlands, though as a holding

a market value of over $43bn. The

company employs over 76,000 people

French business has been in operation

across the globe earning a revenue

since 1975and produces distilled bev-

of just under $25bn. Forbes places

erages including, as the name would

Heineken at #390 on the Global 2000

suggest, Pernod. Currently, Pernod

thanks to its market value of $28.5bn

Ricard has around 18,500 staff and

and assets worth over $51bn.

boasts that is has ‘the most compre-

www.theheinekencompany.com

hensive portfolio in the industry’. A bold claim, but certainly backed up by the number of international alcohol brands it owns, including but not limited to Beefeater, Absolut, Jameson, Havana Club, Jacobs Creek and Chivas Regal. This affords Pernod Ricard a revenue of just under $25bn.

www.pernod-ricard.com w w w. f d f w o r l d . c o m

T O P 10

Diageo $40.7n Diageo is the world’s largest spirit producer and owns a vast array of household names in the alcoholic beverage sector including beers, wines and spirits. Among its 200 brands include Smirnoff, Tanqueray, Guinness, Jameson, Bailey’s and Johnnie Walker. It also owns a minority stake in Moēt Hennessey. Diageo’s products reach over 180 countries and it has offices across 80 locations. The company began in 1997 in Britain, where it remains based, and has already grown to a market value of over $89bn. It comes in at #272 overall on the Global 2000 and owns assets of $40.7bn with its revenue reaching $15.7bn according to Forbes.

www.diageo.com AUGUST 2018

01 AB InBev $184.3bn

Anheuser-Busch InBev (AB InBev) is the world’s largest beverage company. The Belgian brewer makes beer for brands all over the world, including Budweiser, Stella Artois, Corona and Beck’s. The company also has a strong commitment to sustainability, with Zoleka Lisa, Procurement Director of Capabilities and Sustainability, recently telling Food, Drink and Franchising magazine: “At its heart, AB InBev is a brewery which cares… this allows us to be strong industry leaders in the business as far as sustainability goes. Sustainability is not just related to our business, it is our business.” AB InBev boasts a market value of $184.3bn and its 182,900 employees all work to maintain the company at its #41 spot on the Global 2000 list, with its most recent revenue coming in at $56.36bn.

www.ab-inbev.com

w w w. f d f w o r l d . c o m

VISIT OUR WEBSITE

READ THE LATEST ISSUE

Driving an IT transformation at McDonald’s SA 66

Nishal Ragoobeer was brought into McDonald’s SA less than 18 months ago, but is already spearheading an IT turnaround WRIT TEN BY

JA MES HENDERSON PRODUCED BY

M A LVERN K ANDEM WA

AUGUST 2018

AFRICA

w w w. f d f w o r l d . c o m

MCDONALD’S SA

ishal Ragoobeer is a man in a hurry: less than 18 months into his spell

as IT Director at McDonald’s South Africa (SA), the number of initiatives he has rolled out or is currently implementing befits a man who has been in the job a great deal longer. Tasked with the remit of turning around the fortunes of the company’s IT team, Nishal had no time to relax into his new position, spending a few months getting his feet 68

under the table. One of his first actions was to upgrade the pointof-sale (POS) system, from NewPOS 3 (NP3) to NewPOS 6 (NP6), which has seen a lift in sales contributions. In March 2017, 240 restaurants operated the NP3 system, with just 10 running the NP6 system. Now, that has been turned on its head with just twenty three (23) sites running NP3, and two hundred and thirty seven (237) running NP6. By the end of August 2018, the entire restaurant base of two hundred and sixty (260) would be running the NP6 system. AUGUST 2018

AFRICA

“I have a number of targets; one is to build the leading Quick Service Restaurant IT team in the country, and I’m convinced in five years McDonald’s South Africa will have it.”

— Nishal Ragoobeer, IT Director at McDonald’s South Africa

w w w. f d f w o r l d . c o m

MCDONALD’S SA

In addition, in what is arguably the most significant project rolled out by Nishal and his team – which has grown from Zero (0) when he arrived to a current figure of one hundred and forty (140) and counting – is the introduction of self-ordering kiosks (SOKs), which are now operational in forty five (45) restaurants across South Africa, with plans to install them in eighty percent (80%) of restaurants by 2020.

AFRICA

Also known as New Generation Kiosks (NGK), the technology allows customers to peruse and order their food from large touch screens, usually positioned close to the area in which patrons enter the restaurants. They have proven to be a real hit so far, with stores reporting a 4-8% climb in sales where the NGKs are used. The SOKs have also proved an attractive proposition for franchisee owners and a useful tool for McDonald’s to persuade its franchisees to invest in its new technology offerings – something Nishal says

“We had a situation in June where the data showed us we were having a really flat day, so we pushed out a voucher through our mobile app. In just one day we saw 20,000 redemptions” — Nishal Ragoobeer, IT Director at McDonald’s South Africa

“requires a fair bit of negotiation”. “Being a franchisee means putting down a lot of money and being comfortable knowing that the return on that investment can be three or four years, so I’m conscious of going back to them and constantly asking them to invest more. What was important with w w w. f d f w o r l d . c o m

MCDONALD’S SA

Picture: RapidEye

Click to watch: ‘TV Host and Radio DJ, Cyprian Ndlovu shows us a thing or two about keeping his cool when the heat is on! #MomentsInBetween’

AUGUST 2018

AFRICA

20,000 Number of redemptions achieved by mobile app in one day

237 Number of restaurants running NP6 point-of-sales system

the SOKs was getting them into the corporate-owned stories, proving the results and then pushing them into the pilot franchisee stores,” he comments. “They have seen the benefit and have

200+ Number of selfordering kiosks operational in South African restaurants

been keen to talk about how they have seen an uplift in sales. That caught the imagination of a lot of the other franchisees, which is when we’ve been able to explain that if they want to roll this technology out in into their stores, they also have to sign up to some other upgrades, such as Digital Menu Boards, NP6 Upgrades, etc.” w w w. f d f w o r l d . c o m

MCDONALD’S SA

In a joined-up digital world, Nishal has

“This is a platform our Chief Market-

made it clear that McDonald’s has to be

ing Offer has pushed for aggressively,”

“obsessed” with its customers and use

he comments.

technology to stay ever closer to them. In

“We had a situation in June where the

that spirit, McDonald’s has launched its

data showed us we were having a really

own mobile app, where it can push out

flat day, so we pushed out a voucher

deals, offers and promotions straight to

through our mobile app. In just one day

the cell phones of its customers.

we saw 20,000 redemptions, which

AUGUST 2018

AFRICA

shows that this is a way we can directly

number of stores signed up with Uber

increase sales and bring customers into

Eats grow from zero to 100. Future

our stores.”

e-Commerce developments include,

Complementing these services is a

the roll out of Mobile ordering that ena-

fruitful partnership with Uber Eats, the

bles customers to order ahead of time

ubiquitous delivery service offered by

and pick up from a ‘kerbside’ service.

ride hailing app, Uber. Since September

Further, Nishal has ambitions to install

last year, McDonald’s has seen the

Fast and Better WiFi across all of the

w w w. f d f w o r l d . c o m

MCDONALD’S SA

chain’s South African sites by the end of this calendar year. By any measure, it is an ambitious programme of work, and one Nishal acknowledges is made possible by the corporate and financial might of McDonald’s. “Our competitors won’t be able to keep up with our investment, or the scale in which we are rolling out technology,” he predicts. Nishal is clearly a man on an IT mission; backed by one of the world’s most successful busi78

nesses, he seems confident when mapping out some of his future goals for McDonald’s and his team.

AUGUST 2018

AFRICA

“I have a number of targets; one is to build the leading Quick Service Restaurant IT team in the country, and I'm convinced in five years McDonald's South Africa will have it. Another is to attract the top, most innovative talent in the IT industry in South Africa. And the third and most important one, is to rebrand us so that we're no longer an IT team, we're a Technology team. “Why is that important? An IT team has a traditional connotation that you are only skilled with information technology (can fix computers and servers), but it's no longer information technology. It's digital technology, it's information technology, it's customer technology, and it’s supply chain technology. It's a whole bunch of things that have evolved, and just by virtue that we change and rebrand to a technology team means we can serve a broader spectrum of the business.”

Picture: YAOINLOVE

w w w. f d f w o r l d . c o m

BOOSTING EMPLOYMENT WITHIN NORTH AND MID WALES 80

AUGUST 2018

EUROPE

WRIT TEN BY

CATHERINE S TURM AN PRODUCED BY

BROGAN BAGGOT T w w w. f d f w o r l d . c o m

GASTRONOMY FOODS UK LIMITED

As KFC franchisee Gastronomy Foods leads the growth of the fast food in the UK, it has sought to retain its people focused culture whilst driving quality results

or over 70 years, Kentucky Fried Chicken, now popularised as KFC, has captured the hearts (and appetites) of its custom-

ers. Turning the restaurant industry on its head upon launching in the UK in the 1960s, the brand has become the second-largest restaurant chain worldwide, developing services and products 82

which are quick, high quality, and most importantly, so delicious that customers come back for more. Increasingly busy lifestyles have led to the exponential growth of the food and beverage industry, where it has amassed $90.173mn in revenue in 2018. KFC franchisee Gastronomy Foods has been part of the brand for over a decade, successfully enticing new and existing customers with mouth-watering products in alignment with local tastes and preferences, whilst housing a unique, people-focused culture. Behind the franchise’s ongoing success, owner Akram Khan’s passion for the brand is clear to see. From working as a part-time cook at the age of 16, his emphasis on excellent products and exceptional hospitality, with a focus on speed, has seen the brand recently amass a turnover of £52mn. With 15 AUGUST 2018

EUROPE

“We made our first store one of the best in the country, and in a few years, we had doubled our weekly sales and had the highest year on year (YoY) growth of 12% over four years” — Akram Khan, Owner of Gastronomy Foods

handmade, in store. These are the things that really appealed to me. My aspiration was always to be the overseer of 200 people, working in our business,” he says. “I spent five years with that one particular store, starting off doing £6k a week in sales. We made the store one of the best in the country, and in a few years, we had doubled our weekly sales and had the highest year on year (YoY) growth of 12% over four years. My operating standards were also one

stores under his umbrella, seven

of the highest in the UK and Ireland, and in 2004

which are drive-through outlets, the

and 2005, I was recognised by YUM! Brands as

business has acquired a further 22

‘Franchisee of the Year.’

KFC drive-through outlets at

However, in order to develop the brand further,

£30mn. Now operating 37 KFC’s,

Khan created a shortlist of the franchisees’ that

Gastronomy Foods will aim to build

were planning to retire or sell their stores,

three more by the end of 2018.

targeting all areas in the UK. “One guy, based in the Midlands, North Wales

ORGANIC GROWTH

wanted to sell. He had seven stores in Shropshire

Primarily launching Gastronomy

and Shrewsbury and had run the business for

Food’s first KFC restaurant in

over 40 years. The stores all needed work but

Chingford, East London in 2002,

had great development potential,” he explains.

Khan was always inspired to give

Acquiring the seven stores in 2006, on top of

back to local communities and

the existing restaurant in Chingford, Gastronomy

enable his workers to succeed.

Foods has slowly built up its portfolio, spanning

“The thing I liked about KFC was the providence. Fresh chicken,

Rhuddlan, Aberystwyth, Stoke-On-Trent, Holyhead, Shropshire and Shrewsbury. w w w. f d f w o r l d . c o m

GASTRONOMY FOODS UK LIMITED

Working alongside property company LARS Investments, the business now supports over 1,500 staff members. However, it has not all been plain sailing for Gastronomy Foods. The credit crunch in 2007 occurred as the company was in the middle of building its store in Aberystwyth and relocating two other stores. “I had been promised bank funding of close to £1mn, but the bank pulled the plug on the loan a week before I needed it,” explains Khan. “Nonetheless, I was determined to achieve my goals, so I borrowed as much as I could and managed to cover £600k and the rest through leasing equipment.”

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“ The thing I liked about KFC was the providence. Fresh chicken, handmade, in store.These are the things that really appealed to me” — Akram Khan, Owner of Gastronomy Foods

EUROPE

Click to watch: Gastronomy Foods, Corporate promo 85

Following a move to HSBC in 2011, the

stores and are spending a lot of time with

company has gone from strength to strength,

people like Google, Facebook and

where Khan now spends up to 40% of his

Amazon to see what technologies to

time driving the brand forward, and the

factor in and see how we can get our

remaining time at Gastronomy Foods.

products to customers in the most convenient way,” Khan says.

GROWTH OF CONVENIENCE

“This year, we will do 13 refurbishments,

As customers continue to turn to food

costing approximately £3mn. Getting our

outlets which can deliver food that is quick,

assets right is key, where we refurbish our

tasty and high quality, Gastronomy Foods

stores every five years. Bladon & Kirkham

has placed significant investment in

look after all our new store openings and

introducing new digital tools to support its

refurbishments and are fantastic.”

ongoing services. “We’re putting kiosks into 90% of our

Additionally, the company has added eight new Starbucks, fully diversifying its w w w. f d f w o r l d . c o m

GASTRONOMY FOODS UK LIMITED

portfolio and embracing brands that

four years and they do both our KFC’s and

evolve with its customers’ busy lifestyles.

Starbucks signage. They’re great guys to

“I looked at Starbucks versus Costa and went with Starbucks as I didn’t like the

work with and nothing is too much trouble.” A Trustee for the “KFC Foundation”

Costa brand and the provenance of their

charity, which donates around £2mn a year

coffee,” explains Khan.

to worthy causes in the UK like Children’s

“I like Starbucks’ principles and where

hospices etc., Khan strives to take people

their coffee comes from. With every cup of

on a personal and professional journey.

coffee, a percentage goes directly back to

“I took an Area Manager on, who had

farmers. So, again, the same kind of giving

previously worked for the company as

principle, providence, authenticity,

an operational auditor, and I made him

Starbucks had that people-focused

a shareholder as long as he helped to

approach.”

deliver our goals. That gentleman now

“We have worked with NIS over the past 86

AUGUST 2018

owns 20% of a £50mn business which is

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£52mn Approximate revenue

2005 Year founded

1,500 Approximate number of employees

still growing,” he says. Gastronomy Foods has also become home to cooks which have worked their way to become shareholders, partners, managing directors and in Khan’s position – franchise owner. Internal, organic growth is clearly at the core of the business, where the majority of managers have been with the company for close to a decade. Placing heavy emphasis on the welfare of its staff, Khan remains keen to visit stores to gain essential feedback regarding new, fresh ideas to bring to fruition. “Some of our best ideas come from our staff in store, where the managers bring them forward. 87

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GASTRONOMY FOODS UK LIMITED

Click to watch: Akram Khan career background 88

We get a lot of feedback from our people on the ground because they know what’s going on and know how to get things done,” notes Khan. “KFC is situated in over 130 countries worldwide, so we also look at what’s worked well in different markets and share best practices and products to see what suits our market. “Our zinger double down is soon being launched. You have the double down, which is two pieces of fried chicken, double cheese, bacon, sauce and no bun. It’s really popular,” he continues. AUGUST 2018

“ I don’t believe in mediocrity. I want to be hero or zero, make me the villain or make me the hero, nothing in between” — Akram Khan, Owner of Gastronomy Foods

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“Last year, people were saying,

advertising and comments across social media.

‘we want the zinger version of it’,

We are continuing to dispel some of those myths

which is amazing.”

around the use of processed food,” he says. KFC have also launched open kitchens across

CHALLENGING THE STATUS QUO

the UK, enabling customers to grab tickets and

Renowned across the food and

join the house kitchen, have a go at cooking at

beverage industry worldwide, KFC

various outlets and see how the brand operates.

is often in the limelight. Although the

Becoming one of the four franchisees who sit

recent furore surrounding the

on KFC UK and Ireland’s advertising board, and

brand’s change of UK delivery

appointed as Co-Chairman of KFC UK and

contractor from Bidvest to DHL led

Ireland’s Franchise Council, Khan has also

to what has been described as ‘The

become a company Director of KFC Advertising

KFC Chicken Crisis,’ Khan states

Board Ltd.

optimistically that it has bought a number of positives to the business. “I think a lot of people still don’t

“As part of the advertising board, we take 5% of our net sales and put it towards all kinds of advertising: TV and digital, as well as social

realise that we sell fresh chicken.

media. Any new product development also comes

This really came through in the

through this board, what we should and shouldn’t be launching. This can range from anything to do with the supply chain, operational issues, etc.,” he adds. Channelling strong values and principles, and adopting a cohesive family atmosphere, Gastronomy Foods seeks to make decisions collectively, enabling every employee’s voice to be heard. “It’s not about the bottom line. My lifestyle doesn’t change, whether I have 10 stores or 300 stores. My proudest achievement is how many people we look after,” notes Khan. “When we build a new store, I sit there and you think, ‘we wouldn’t be employing all of these w w w. f d f w o r l d . c o m

GASTRONOMY FOODS UK LIMITED

FACTS

• KFC has become the second-largest restaurant chain worldwide, • The food and beverage industry has amassed $90.173mn in revenue in 2018. • KFC franchisee Gastronomy Foods has been part of the brand for over a decade, whilst housing a unique, people-focused culture. • Khan’s emphasis on excellent products and exceptional hospitality, with an emphasis on speed, has seen the brand amass a turnover of £16mn.

• Gastronomy Foods has acquired a further 22 KFC drive through outlets at £30mn. • Operating 37 KFC’s stores, Gastronomy Foods will aim to build three more by the end of the 2018. • Khan launched his first KFC restaurant in Chingford, East London in 2002 • Gastronomy Foods has added eight new Starbucks, fully diversifying its portfolio and embracing brands that evolve with its customers busy lifestyles • Gastronomy Foods has become home to cooks which have worked their way to become shareholders, partners, managing directors and in Khan’s position — franchise owner • Khan routinely visits stores to gain feedback regarding new, fresh ideas AUGUST 2018

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tradesmen and all of these different companies, if it wasn’t for putting ourselves on the line and saying yeah we’re going to do this, we’re going to borrow the money from the bank and we’re going to build this.’ “If you look at North and mid-Wales and the number of people that we employ, some places were really struggling,” he continues. “When we first opened Holyhead KFC down in Anglesey, 80% of our staff were long-term unemployed as there were no jobs. When people shake your hand and say, ‘thank you so much for this opportunity, I haven’t been able to find a job for the last three years’, that’s such a lovely feeling.”

As Gastronomy Foods continues to expand, Khan will remain steadfast in providing the best quality services, products and results. Currently resting at 37 stores, Khan aims to reach £120mn turnover, with over 60 stores under his belt. “I want to try and do this with the same family values. I’ve seen companies get big and people don’t know who anyone is, that’s the bit I don’t like,” he adds. “I want to be the best at what I do, and I don’t care whether that’s mopping the floor or running a company. I don’t believe in mediocrity. I want to be hero or zero, make me the villain or make me the hero, nothing in between.”

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H O W O U T S TA N D I N G FOOD AND DRINK CAN ENHANCE THE CU STO M E R E XPE RI E N C E 93

WRIT TEN BY

ANDRE W WOODS PRODUCED BY

BROGAN BAGGOT T

K E W G R E E N H O T E L S LT D

A leading hotel management company, Kew Green Hotels has a portfolio of 55 establishments across the UK and prides itself on offering operational excellence, strong revenue development and successful profit delivery. We speak to Abby Hughes, Group Food & Beverage Director across the company’s various concerns, with regards to her aim of delivering outstanding food and drink to all Kew Green’s brands

ith such a varied portfolio of brands, Kew Green Hotels tailors bespoke offerings to each and every property

“We don’t have a ‘one shoe fits all’ approach,” Abby explains. “It is important to us that we actually look at each hotel individually in terms of the food and beverage offering to ensure we exceed our guest’s expectations, whilst driving revenue generation and profit conversion. Essentially, I drive quality initiatives and standards in all areas of our operation focusing on delivering an outstanding food and beverage experience. “One of the first things we looked at was our Cow on the Hill ‘steak restaurant concept’ AUGUST 2018

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K E W G R E E N H O T E L S LT D

which launched in six of our hotels during

further, focusing on the local area and

2017. We assessed the offering to see

direct competition. Many of our guests

how we could develop the menus to fit

stay in our hotels three or four nights a

with our guest profile. Our burger and

week and they wouldn’t want to eat steak

craft beer concept, Stock Burger, based

or a burger every night of their stay, with

at our Holiday Inn Brighton – Seafront,

this in mind, we developed our concept

did well in the first year (it picked up a

restaurant menus to offer more variety.”

Food and Beverage Excellence Award),

So, how does Kew Green Hotels

but was underperforming slightly when

develop their concepts to offer guests

I took over,” says Hughes. “We worked on

more flexibility?

enhancing the concept and developing it

AUGUST 2018

“A lot of my role involves implementing

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a food and beverage offering, which fits

training was working for us. We ensure

with the hotels individuality and profile.

the staff are behind the brand, the

We ensure that our menus are updated

concept and they understand the

and redeveloped on a seasonal basis,

reasons behind it, rather than just being

avoiding menu fatigue and staying in line

people who happen to be skilled in that

with current trends.”

service. We want passion around the

Training is integral to any restaurant

food we’re delivering and to differentiate

experience and it represents an area that

the restaurant concepts from the

Kew Green Hotels is looking to fully

standard hotel F&B”

capitalise on. “We took a good look at service standards to ensure our staff

“People are key to delivering outstanding experiences and to our continued

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K E W G R E E N H O T E L S LT D

BIO

Abby Hughes Group Food & Beverage Director

Abby was appointed as Group Food & Beverage Director in 2018, with responsibility for the development of food and beverage operations across the expanding business. Abby has previously held operational roles across diverse sectors of the hospitality industry and has a wealth of commercial experience spanning across hotels, restaurants, bars and contract catering. She is passionate about driving the highest standards within the food and beverage operations in Kew Green Hotels in order to enhance the overall guest experience. Her focus is on developing new and existing brands and concepts utilising her vast knowledge of the industry and food and beverage trends.

AUGUST 2018

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“It is important to us that we actually look at each hotel individually in terms of the food and beverage offering to ensure we exceed our guest’s expectations” — Abby Hughes, Group F&B Director

success. We are a very peoplefocused company and have a lot of talented people, which we recognise and reward for all their hard work. Our industry-leading learning and development program attracts the best people to work for us, obviously, working with key hotel brands such as IHG, Marriott and Hilton, does in itself attract skilled, talented people. We have also launched a unique chef’s apprentice scheme, Chef School, which works on three levels: foundation, intermediate and advanced, working through the levels you

could expect to become a head chef in five years. Chef School gives our chefs the opportunity to gain vital skills, attend field-to-fork talk experiences and take part in interactive and skill-based classes. They arrive as apprentices and leave as head chefs, working through our hotels. We are launching our next Chef School in September, as chef recruitment continues to be a challenging market.” With 55 hotels situated throughout the UK, Hughes needs to ensure that the hotels enjoy a trusted relationship with w w w. f d f w o r l d . c o m

Power your day with Purdey’s Multivitamin Energy. In a busy world, it can be hard to stay on track. But why bother with the nasty ingredients and synthetic flavours of standard energy drinks when you can get a gentle lift from Purdey’s Rejuvenate & Edge. A sparkling blend of natural fruit juices, spring water and vitamins, the liquid in this can takes its complex flavour from three botanical ingredients: damiana, oak bark and Chinese ginseng. Rejuvenate is based on Grape & apple juice, whereas Edge contains Sloe & Blackberry juice. “It’s all about the blend of botanicals,” says Sarah de la Mare, Senior Brand Manager of Purdey’s. In fact, these botanicals are part of why Purdey’s is an unexpectedly amazing mixer for gin. As Sarah explains, “The ginseng from Purdey’s mixed with the juniper in gin creates a unique, spicy flavour, while the damiana and oak bark combine with orris root, a botanical created from iris roots that’s very commonly used in gin, to create a very specific, delicate sweetness.”

released by the vitamins C, B2, B3, B6 and B12.” It’s the perfect amount of lift to get you through the hardest part of your day, be it getting out of bed on Monday morning or powering through the post-lunch slump, to help you achieve more than you thought possible. It’s a message that resonates in a busy world – so much so, in fact, that Purdey’s has teamed up with Hollywood actor Idris Elba for a number of campaigns designed to inspire. In the latest, ‘Everything You Need Is Inside’, Idris encourages and inspires us to get out of our comfort zones (with a little help from the vitamins and botanicals in Purdey’s!). As Idris says, “I’ve always been a strong believer that when you believe in yourself, you’re halfway there. Everything You Need Is Inside is about being good to yourself, supporting yourself inside and out”.

Purdey’s Secret Garden 165ml Purdey’s 50ml gin 1/2 fresh lime, juiced 4 rose petals 6 sage leaves

Excellent mixed with gin, Purdey’s is also a fabulous drink on its own. Not only do the botanicals taste great, but, working together with vitamins, do a cracking job of giving your brain and body a gentle boost – but all without the odd concoctions and unnatural ingredients so often found in energy drinks. Sarah says, “It doesn’t include all of the bad elements that other energy drinks contain, like taurine, high caffeine content or artificial flavourings. Instead, all Purdey’s energy is

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“ People are key to delivering outstanding experiences and to our continued success. We are a very people-focused company and have a lot of talented people, which we recognise and reward for all their hard work” — Abby Hughes, Group F&B Director

101

their suppliers. “We work very closely

looking at reducing plastic within our

with our suppliers in terms of infrastruc-

hotels, sourcing alternative products for

ture and future menu development

straws and takeaway cups. We, along

ensuring we are not only ahead of the

with a lot of the other hotels, intend to be

game but that they are able to supply new

free of plastic straws in the very near

hotels and concepts we are creating,”

future. Reducing our carbon footprint is

she explains. “It is about being in

also on our radar, our suppliers and have

partnerships that have contingency

cut back on deliveries by about 30% in

plans, we have seen interruptions to

the past year. In terms of sustainability,

service with CO2 and vegetable crop

there are two elements, ensuring our

shortages, but our suppliers work at

CSR whilst working with suppliers to

finding alternative and effective supply

safeguard supply chains.

routes and markets.” As with every sector now, sustainability is a hot issue for KGH. “We have been

“We have always partnered with suppliers we think are sustainable and unlikely to have issues in the near future w w w. f d f w o r l d . c o m

K E W G R E E N H O T E L S LT D

FACTS

• I n 2015 Kew Green Hotels was acquired by HK CTS Metropark Hotels Co Ltd, China’s largest travel corporation.

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• The China National Travel Service Group Corporation (CTS Group) is China’s largest and oldest stateowned enterprise under the direction of the State-Owned Assets Supervision and Administration Commission of the State Council, with travel business at its core. • Kew Green are their first overseas hotel platform and CTS are now working closely with the Kew Green Management Team to expand the business in UK and Europe. • I n addition, Kew Green is assisting CTS with the rollout of Kew Green China and the knowledge sharing between key individuals, including some fantastic opportunities for our employees.

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from a food side. We have been working with Britvic, who supply the majority of our soft drinks, on reducing sugar content and promoting healthier choices. We are also launching a range of Purdey’s soft drinks, which are a new brand for our properties, to offer guests a more grown-up soft drink alternative, a trend which has been growing in recent years, and looks set to continue.” With a large portfolio of proper104

ties, analysing data is essential to Kew Green Hotels success. “We have a very solid analytics team, based at our Commercial hub, who continually analyse and react to our data, and work closely with our sales and marketing teams. On the F&B side, some of our key KPIs are

geographically, and adapted the F&B

driven through the data reported

team, making sure our hotels had the

back to us on a weekly basis.”

support they needed. So that has been

The growth of Kew Green Hotels

quite a challenge, in ensuring that we’ve

requires a team that can adapt

got an infrastructure that can flex to the

quickly to an ever-shifting portfolio.

needs and the growth of the business,

“We have expanded quite a lot

which is essential as there are huge

recently,” Abby explains. “Six Hilton

projects ongoing with the Hiltons at

Hotels joined our portfolio in March

the moment.”

2018, this meant we expanded AUGUST 2018

What does the future hold for food

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105

and beverage at Kew Green Hotels? â&#x20AC;&#x153;Our business is constantly evolving, we cannot stay still in a competitive market. We have seen the recent challenges in casual dining, and it is important not to be complacent. Our teams are currently working on new products and concept development, alongside introducing new brands into our portfolio before the end of the year. Ultimately we want to offer the very best food and beverage experience to our guests in all of our hotels.â&#x20AC;?

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Sustaina sourcing for

world of to

106

WRIT TEN BY

DALE BENTON PRODUCED BY

RICHARD DURRANT AUGUST 2018

ably r the

omorrow

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107

ANHEUSER-BUSCH INBEV

AB InBev has launched its most ambitious sustainability goals in its 650-year history as it bids to create a better world today, and tomorrow B InBev is without a doubt the world’s largest brewer. With an incredibly diverse global footprint, spanning the Americas, Europe, Africa and Asia Pacific, AB InBev produces the biggest brands in beer. Budweiser, Corona, Stella Artois, these are but a few of the biggest, and arguably most influential, beer brands in the world. But being the number one brewer is not the only measure of success for the company. The company was founded with a dream, a dream of bringing people together for a better world. It delivers on this vision by investing into every step of the value chain. From the farmers and the retailers, right through to entrepreneurs and commu-

108

AUGUST 2018

nities that the company serves, AB InBev well and truly goes above and beyond. As a company that brews the best beers in the world, it needs to source the best ingredients in a safe and sustainable way and it does so through an unwavering commitment to sustainable best practice. Overseeing the company’s sustainability and procurement drive throughout Europe is Richard White, Vice President of Procurement and Sustainability Europe. Having worked with AB InBev for nearly 17 years, White has seen first-hand the company’s exceptional growth as well as

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more recently, the amplification of

an internal focus. Over the last six to 12

its sustainability agenda.

months we decided as a team to stretch those

“The bottom line is, we’re a

goals further and it comes down to one, clear

beer company and a brewer. We

vision. We want to continue operating as a

brew our beers using four key,

company for the next 100 years and beyond.”

natural ingredients from the land,

As part of this increased focus on sustain-

so there is an inherent link

ability, AB InBev created its “2025

between sustainability and sourc-

Sustainability Goals.” As White noted, AB

ing those ingredients,” he says.

InBev has always focused heavily on sustain-

“We’ve always had sustainability goals, but predominantly from

ability, but as a company that has successfully delivered on its sustainability w w w. f d f w o r l d . c o m

109

Making an impact on recycling James Piper, managing director of recycling compliance scheme Ecosurety gives his thoughts about how brands can make a positive impact on recycling and explains why they are an essential partner to AB InBev.

In the UK we have compliance schemes to ensure that producersâ&#x20AC;&#x2122; recycling responsibilities are met. Brands often pay considerable amounts to offset their environmental obligations, but have no idea if (or how) this money is making a positive difference. Ecosurety is a compliance scheme committed to making a positive and tangible change for UK recycling and the global environment. How? By capturing more materials from consumers and helping them to recycle more, as well as ensuring that materials are actually recycled at the end of the process.

Our work

Our partnership with AB InBev As a key partner of AB InBev, we ensure that they achieve their environment responsibilities and obligations in the UK. We have helped them focus on initiatives that increase material capture and routes for recycling, and are helping them on their journey to sustainability. For instance we have run a series of school workshops with one of AB InBevâ&#x20AC;&#x2122;s metal can manufacturers in order to help educate the younger generation about the importance of recycling.

From creating high profile consumer awareness campaigns, to funding solutions to recycle the un-recyclable, we help major brands to comply with environmental legislation and align this regulatory need with the need for the UK to recycle more. For example, in 2017 we launched our #BringBackHeavyMetal campaign with an environmental charity in order to encourage the nation to look at battery recycling in a new, fun way, achieving a 64% increase in battery recycling and changing consumer behaviour as a result. In addition, we have also backed an industry led effort to increase plastic recycling, especially in regards to black plastic trays which cannot always be detected by optical sorting equipment at recycling facilities.

Over the next few years, we will also be looking to increase our focus to ensure that glass is captured and recycled, as well as build essential UK partnerships to collect and recycle more glass and metals. We believe that consumer brands like AB InBev can, and should play a decisive role in improving recycling rates in the UK and abroad. To find out more about Ecosurety and the work that we do, visit our website: www.ecosurety.com

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ambitions for more than a decade its new goals for 2025 has been dubbed the “most ambitious goals yet.” The 2025 goals can be broken up into four key areas, Smart Agriculture, Water Stewardship, Circular Packaging and Climate Action. For White, the only way the company can even begin to achieve and actually deliver on these goals is by leveraging its brands and more importantly, leveraging its brand connection points with its consumers.

111

This is where procurement plays a key role. “Historically, procurement has been seen as a cost-quality focused function,” he says. “But over the years, particularly here at AB InBev it’s definitely grown

supply chain function will have

and become much more of an

on delivering these goals.

innovation and sustainability function.” As the main touch point

With a supplier base exceeding 10,000 suppliers and farmers across Europe alone, AB InBev will have to work much closer and

between the company and its

more collaboratively with these suppliers in

supply base, across its entire

order to truly achieve its goals.

global footprint, it becomes

White agrees as much, citing that with the

clear just how much of an inte-

most ambitious goals in the company’s his-

gral role the procurement and

tory, it cannot complete them alone. w w w. f d f w o r l d . c o m

ANHEUSER-BUSCH INBEV

“We cannot even begin to try and deliver these goals on our own,” he says. “We need to work with our suppliers, our private and public partners if we want to achieve them. They are extremely stretching goals and collaboration is crucial.” With an increasing responsibility on the touch points throughout the supply chain, AB InBev is mapping opportunities across its supplier network. This exercise represents a journey towards defining those key metrics it’ll use to allow its current suppliers, and poten112

tial future suppliers, to see that AB InBev walks the walk and invests in future growth. AB InBev truly sees sustainability as

essence, the ultimate guiding principle

not simply related to its business, but as

while carefully described performance

its business. As was the case for the

indicators drive meaningful evaluation.

environmental goals to which AB InBev

“Inherently, as a brewer we need to

committed in the 2012-2017 period, all

make sure that what’s coming into the

its sustainability initiatives both inside

business is sourced sustainably,” he says.

and outside its walls will be comprehen-

“What goes in needs to be right and so

sively measured, tracked and

too does what goes out to our consumer.

benchmarked for improvement.

We set a number of targets and our sup-

White emphasises that the metrics

ply-relationship management programs

behind each initiative are designed

have and will continue to speak very

together with sustainable development

loudly to our commitment there.”

experts and results are audited externally for validation. Sustainability is, in AUGUST 2018

In any industry, the customer and the consumer are the real key driver and

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“ Ultimately, our sustainability goals are but one step in a 100-plus year plan that will enable us to continue to excite our customers with amazing brands and do so in a sustainable way.” – Richard White, Vice President of Procurement and Sustainability (Europe)

113

White believes that its not only the com- this changing consumer mindset and pany that has turned its attentions

White believes that this will prove king in

towards visibility and transparency

the delivery of the sustainability goals.

across the supply chain with regards to sustainability. Consumers are changing and in this

“Our consumers connect with us through our brands and so we have a responsibility to utilise this touch point

modern world where more and more

and continue to innovate and push our

data is accessible in the palm of the

sustainability goals,” he says. “What we

hand, White feels that the consumers

as a business will continue to do in order

have become much more in tune

to achieve this is to activate and amplify

towards the sourcing of the ingredients

them through our consumer touch

or the raw materials in the products

points.”

they buy.

No more is this apparent than in the

To this end, AB InBev remains agile to “Buy a lady a drink” campaign, w w w. f d f w o r l d . c o m

ANHEUSER-BUSCH INBEV

launched through the Stella Artois brand. The campaign? For every multipack of Stella sold,

AB IN

AB InBev and water.org will provide six months of clean water to people in developing countries, where often women need to walk up to 6 hours to get clean water for their family.

SMART AGRICULTURE

Another strong example of AB InBev inno-

100% of our direct farmers are skilled, connected and financially empowered

vating and amplifying its brand, albeit in the United States, is through a partnership with Enel Green Power, an Italian renewable energy corporation. The switch to renewables for AB InBev’s US breweries alone corresponds to taking 114

48,000 passenger cars off the road every year. Budweiser bottles will feature a 100% Renewable Electricity symbol. This is to highlight to the consumer that AB InBev now purchases 50% of its entire electricity for its US breweries from wind power, which amounts to more than the total electricity

CIRCULAR PACKAGING

required to brew Budweiser in the US.

100% of our products will be in packaging that is returnable or made from majority recycled content

“It’s about showing to our consumers the fantastic work that we are doing behind our brands and our innovations towards delivering on our sustainability agenda,” says White. “We need to do so in an authentic, credible

think we can prove that.” With a global footprint, selling

way. The consumer will want to know and

beer in more than 100 countries,

want to feel sure that this is an authentic

AB InBev not only has a respon-

approach to sustainability, and we’re not

sibility to define its own

just paying lip service to it, and I

sustainability agenda but it also

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NBEV 2025 SUSTAINABILITY GOALS

WATER STEWARDSHIP 100% of our communities in high stress areas have measurably improved water availability and quality

115 CLIMATE ACTION 100% of our purchased electricity comes from renewable sources & 25% reduction of carbon emissions across our value chain

has a responsibility to set a

materials that it sources to produce its beers,

standard of best practice that

AB InBev recognises that it can and will play

others can follow.

a huge role in creating a better world for

From the consumers that it

today and tomorrow.

interacts with, the people that

â&#x20AC;&#x153;We must work with our suppliers and

work for the company, to raw

partner with NGOs and government organiw w w. f d f w o r l d . c o m

ANHEUSER-BUSCH INBEV

sations,” he says. “The work that we are doing and what we have achieved should be shared with other companies in the industry because ultimately, it’s for the greater good.” That partnership and collaborative effort is fundamental. As White notes, these sustainability goals are intentionally challenging, pushing AB InBev and the wider industry to double up on its efforts in order to create a better world. Sustainability in isolation is not the key message here. “The creating a better world part of our motto is increasingly important to us and to 116

our consumer,” adds White. “To be a part of a company that not only values sustainability but sees procurement as the spearhead to driving sustainability and innovation,I’m incredibly proud.” “Ultimately, the sustainability goals are but one step in a 100-plus year plan that will enable us to continue to excite our customers with amazing brands and do so in a sustainable way.”

AUGUST 2018

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BIO

Richard White is Vice-President for Procurement & Sustainability (Europe) at AB InBev Europe, the world’s largest brewer. Richard joined AB InBev in 2001 having previously worked in Sales & Account Management roles with PepsiCo & Bass Brewers in the UK. After leading the On-Premise Trade Marketing team in France, Richard moved into AB InBev’s Global Procurement function in 2006 & spent the next 10 years leading a variety of strategic sourcing initiatives in Marketing & Commercial spend categories such as Media & Advertising, before being appointed to his current role in October 2016. Richard is a UK citizen, holds an honours degree in Business Studies & French from the University of Plymouth, U.K, and currently resides in Brussels.

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LOTTE WEDEL PERFECTING THE ART OF CHOCOLATE MAKING

Championing its rich heritage and embracing innovation, LOTTE Wedel has firmly cemented itself as the nation’s favourite chocolatier WRITTEN BY

LAURA MULLAN PRODUCED BY

BROGAN BAGGOTT

nly chocolate made with both innovation and passion can compete in today’s competitive industry, and perhaps this is how chocolate giant Wedel has emerged as one of the strongest brands in the Polish market today. By tapping into the nostalgia associated with the chocolatier, Marketing Director Monika Kolano-Wysokińska says that Wedel is a name which is familiar to every Polish person today.

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“I would say the core vision of Wedel is that we want our consumers to feel childlike joy,” she adds, “because that’s exactly what chocolate is about.” As the oldest chocolate brand in the country, Wedel has won people’s hearts and business for generations since it was first founded in 1851. Over its rich history, the firm’s passion for the art of chocolate making has been evident. Although the company has grown, it seems the values instilled by founder Emil Wedel are still very present today. “We have a long tradition at Wedel and today we are one of the most recognised companies in the market,” says Chief Operating Officer Sławomir Kluszczyński. “Our goal to be the best, most beloved company for our customers is in line with the vision of our parent company, LOTTE Group, as well as our founder. AUGUST 2018

“WEDEL’S STRENGTH LIES IN HOW WE CONTINUOUSLY IMPROVE, INNOVATE AND CHALLENGE THE MARKET” — Sławomir Kluszczyński, Chief Operating Officer

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“When the company was first founded, Emil Wedel looked to hire people with passion, and this is how the company still operates today. We are passionate people who love the product, who love the history of the company, and who act as owners and entrepreneurs so that we can contribute to the company’s history and its present. “For me, this is what Wedel is about: quality, innovation, being

beloved by our consumers, but also the people behind the company,” he adds. Amidst fierce competition, it’s become important for chocolate makers to be innovative; yet it’s equally important to respect the art behind the craft. As such, whilst Wedel has brought unique products and methods to innovate the market, it has also championed its legacy – its wafer cakes, for instance, are hand decorated today just as they have been for almost a century. Striking a balance between the company’s w w w. f d f w o r l d . c o m

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BIO

heritage and its contemporary innovation has been key to its success. When modernising, the Polish firm has made significant investments to maximise its quality, efficiency, process, and product reach. “Our main target is to produce innovative and safe products and to also ensure the safety of our people,” Kluszczyński says. “Investment is vital for this. “The second pillar of our investments is consumer need, so we are looking for the new technologies and new innovations where we can be first to market to meet our consumers’ needs. “Finally, we are also investing in improving our process and efficiency,” he adds. “We want to deliver our products in a way where we are maximising our capacity and reducing overhead costs.” Nowhere can this investment be seen better than the company’s famous factory, which has stood in the Polish capital of

Sławomir Kluszczyński Chief Operating Officer

Manufacturing and supply chain professional with 20 years of experience. Focused on continuous improvement, operational excellence and effective leadership. Kluszczyński graduated from the Warsaw University of Technology, Mechanics of Energetics and Aviation faculty. He has also obtained MBA degree from the Warsaw University/University of Antwerp. He has gained his professional experience in companies such as: Master Foods, L’Oreal, GlaxoSmithKline, Avon and Cadbury Wedel, getting wide manufacturing and supply chain expertise. Currently, Kluszczyński holds the position of Chief Operating Officer in Lotte Wedel, his main responsibilities include investments as well as supply chain and production processes’ management.

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Warsaw for over 80 years. “I think what makes Wedel unique is the fact that that the company has this long tradition and heritage which is seen by our factory, located in Warsaw,” KolanoWysokińska highlights. “The facility has been here since 1931 and we’re still at the same place, producing the same high-quality products.” Wedel has revamped the company’s historic factory and, in doing so, it has boosted its capabilities. “This investment was key to promote the growth of our business,” explains Kluszczyński. “We are growing intensively and so investing in our factory was necessary to adjust our logistics capabilities. Part of this investment involved enhancing the production space and also investing in new lines in the factory.” “We invested in the production lines of some of our most important brands like Ptasie Mleczko,” adds Kolano-Wysokińska. “We invested in the machinery which decorates Ptasie Mleczko with patterns so we could produce limited edition products dedicated to special occasions like Valentine’s Day Easter and Christmas. “That investment is very important because it will help us to increase our marAUGUST 2018

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1851 Year founded Wedel exports to over 25 countries worldwide, but USA, Canada, and the UK are currently its key markets

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“I WOULD SAY THE CORE VISION OF WEDEL IS THAT WE WANT OUR CONSUMERS TO FEEL CHILDLIKE JOY” — Monika Kolano-Wysokińska, Marketing Manager

ket share in the chocolate-covered marshmallows sector, retain our leading position in the market, and set new trends.” Championing lean and kaizen approaches to business, Wedel has strived to maximise and optimise the use of its assets. Technology has undoubtedly played a key role in this. “We’re looking at the most modern trends within Industry 4.0,” says Kluszczyński. “We are exploring the use of process

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monitoring tools and building management systems with a focus on efficient use of the energy and facility costs. “We are also looking at technologies that can standardise our quality parameters and innovations which are focused on efficiency improvement like automation.” This innovative perspective doesn’t just apply to the firm’s machinery and facilities, it is also interwoven throughout Wedel’s eclectic portfolio of products. From chocolate bars and pralines to cookies and Ptasie Mleczko, Wedel’s iconic signature has permeated the chocolate market for decades, anticipating new consumer trends before many of its competitors. “We have our traditional portfolio that is targeted towards consumers that have loved Wedel for years, but we are also introducing new

Monika Kolano-Wysokińska Marketing Manager

Marketing Director at LOTTE Wedel with over 20 of experience in the FMCG industry. Experienced in working in international ICI business, Orkla Foods and investment funds such as IKA Investment Partners as part of her work for Agros Nova Ltd. Kolano-Wysokińska has developed brands such as Kotlin, Superfish, Łowicz, Fortuna, Krakus, Dr. Witt, Tarczyn. Since 2005 she holds the position of marketing director in the rank of board member. At Wedel since April 2016, Kolano-Wysokńska is responsible for marketing and R&D and manages a team of over 40 people.

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“I’D SAY THE EXPORT MARKET IS ALSO BECOMING MORE AND MORE IMPORTANT. WE EXPORT TO OVER 60 COUNTRIES WORLDWIDE, WITH REGIONS LIKE THE UK, USA AND CANADA BEING OUR MOST IMPORTANT MARKETS” — Monika Kolano-Wysokińska, Marketing Manager

AUGUST 2018

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FACT

products that are targeted towards younger consumers that prefer sweeter tastes,” explains Kolano-Wysokińska. “We have also seen how strong the health and wellness trend has become, both in Poland and abroad,” she adds. “This is a great opportunity for Wedel so we have tried to tap into this trend by creating a new bitter chocolate range (80% cocoa solid), for example, which has a higher content of cocoa and is a natural source of magnesium.” Regardless of the product, however, one thing remains consistent at Wedel – its quality. Only sourcing high-grade cocoa beans from Ghana, KolanoWysokińska adds that it’s this superior taste which makes Wedel a national favourite. “The quality is hard to beat,” she says. “Our customers have high expectations and so quality is always a top priority for us. For example, when it comes to cocoa, we only source cocoa

2010

Wedel was acquired by LOTTE Group

LOTTE Wedel has been awarded an accolade for the strongest Polish brand and Polish consume brands by SuperBrands 129

from Ghana. No compromise. This means our customers can depend on the quality of our products.” This appreciation for quality and innovative mindset is in keeping with Wedel’s parent company, LOTTE Group. With a shared strategic vision, the Korean-Japanese conglomerate has invested in the chocolatier’s brand and capabilities to help unlock its potential. “We are very proud to be a part of LOTTE Group because w w w. f d f w o r l d . c o m

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Click here to watch ‘Loteria Ptasie Mleczko®’

AUGUST 2018

the two companies complement each other,” notes Kluszczyński. “They both have similar visions, they both are beloved companies and they are both very focused on innovation. We feel that our owner understands the potential of our brand and after only seven years of cooperating together, we see that this partnership has been very fruitful.” The chocolate industry is a challenging one to be in with growing competition, capacity constraints, and cost pressures more prevalent than ever. Wedel has deftly tackled these challenges, carving out its own pioneering path in the Polish market and setting

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its eyes further afield through its growing international export operation. “We see plenty of opportunities, both in the domestic market as well as in the export market,” Kluszczyński says. “Looking only at Poland, especially last year, we saw tremendous growth with the Polish confectionery market growing 7%.” “I’d say the export market is also becoming more and more important,” adds KolanoWysokińska. “We export to over 60 countries worldwide, with regions like the UK, USA and Canada being our most important markets. “Russia is definitely a market that we would like to explore further as it has similar tastes to the Polish market.” Keen to cement the company’s brand, Wedel also has its own retail spaces in the market. The Polish firm is proud of its rich history and heritage and nowhere is this manifested bet-

“WHEN THE COMPANY WAS FIRST FOUNDED, EMIL WEDEL LOOKED TO HIRE PEOPLE WITH PASSION, AND THIS IS HOW THE COMPANY STILL OPERATES TODAY” — Sławomir Kluszczyński, Chief Operating Officer

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ter than these exclusive chocolate shops. With around 27 retail sites and additional franchises, these chocolate shops provide a unique experience for Wedel’s customers, bringing the chocolatiers vision of ‘childlike joy’ to life. “Our retail sites are perhaps at the foundation of our business,” Kluszczyński says. “You can see the magic behind the company and it brings you back to your childhood

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because you can smell the chocolate, you can see our pralines being made, you can drink our chocolate and get special products for special occasions. It’s something really special.” Marrying the company’s innovative thinking and renowned brand, Wedel has gone from strength to strength through the decades. Kluszczyński says this success wouldn’t be possible without the company’s passionate team.

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“We have over 1,000 employees and we are still growing,” he says. “There are many development opportunities for our employees. We aim to grow our own people by trusting them and giving them ownership of their tasks. “We create an environment which promotes a passion for improvement, a passion for

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delivery and therefore people stay with us for many years. We are proud to have such dedicated and engaged employees at Wedel.” Now, looking forward to the future, the chocolatier plans to continue the company’s legacy, by championing the tradition of the past yet embracing change. “We are a very dynamic company and I think in the next five to 10 years Wedel will AUGUST 2018

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be a very different company in many aspects,” Kluszczyński says. “We want to continue to be the most beloved company in the Polish market but we also want to expand and grow in other markets. “Today, we are also focusing on improving our margins, cost base and production capabilities,” he continues. “We will also need to transform our supply chain and enter new

product categories to support our growth. This all has to be in line with our strategy to develop our brand and get better premiumisation in the market. “We definitely will have to be brave and embrace change,” he concludes. “Many of the changes in front of us will transform what we have inherited from the past but Wedel’s strength lies in how we continuously improve, innovate and challenge the market.”

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PA N PA C I F I C H O T E L S G R O U P

Pan Pacific Hotels Group redefines Asiaâ&#x20AC;&#x2122;s food and beverage sector

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WRITTEN BY

DALE BENTON PRODUCED BY

ALISTAIR WEST

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Pan Pacific Yangon, Myanmar w w w. f d f w o r l d . c o m

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Through the advent of a leading food hygiene and safety management programme and a design guideline tailored to the future of food and beverage, Pan Pacific Hotels Group redefines the guest experience

T 138

he hotel industry is undergo-

A particular challenge, one that is

ing a transformation. With

representative of a changing indus-

technology continuously

try, is food and hygiene. For Golden

redefining the day to day lives of the

Whitehead, Vice President, Food &

guest, so too is the guest experience.

Beverage at Pan Pacific Hotels

The modern-day guest expects the

Group, one of his first tasks upon

same level of connectivity and acces-

joining the company was to work

sibility in their hotel experience as they

on and implement a global food

would in any other stretch of their lives.

safety programme across all of the

So how does a hotel group respond?

company’s operations.

As one of the most established

“Singapore, where we are based,

hotel and property companies in

has always been very focused on

Asia-Pacific with 40 properties oper-

food hygiene with high standards

ated under its Pan Pacific and

in place. There will be significant

PARKROYAL brands, Pan Pacific

changes to its current system in

Hotels Group recognises this ever

the next couple of years and we

evolving, ever challenging space as it

have to be prepared for that,” he

continues to expand its footprint.

says. “Pan Pacific Hotels Group

AUGUST 2018

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Golden Whitehead, Vice President, Food & Beverage at Pan Pacific Hotels Group

w w w. f d f w o r l d . c o m

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has always done very well on adhering to the highest standards and we are now ready to take sustainability to the next level. The traceability of the produce we buy and the amount of waste that’s generated from our hotels are two areas which I am particularly passionate about tackling for a start.” Whitehead brings a wealth of experience across the global food and beverage sector, having worked for companies such as the Shangri-La, Hilton Group in the UK, Hyatt in Australia and even opened up a number of restaurants in the Middle East with the Jumeirah Group. This international experience, gleaned from

“ It’s all about keeping the guest in house and staying with us,” says Whitehead. “Guest experience is crucial and outsourcing is key to enabling greater guest experience” — Golden Whitehead, Vice President, Food & Beverage at Pan Pacific Hotels Group

working in kitchens across the world for hotel groups, has provided Whitehead with the skills and capabilities required to establish a new system across a global operations. “Hygiene and sustainability has become much more of a focus in recent years, and hotels and suppliers need to work much harder than before to stay at the top of the game. Sustainability efforts require not just commitment but also an investment of resources, and that often needs to be balanced with operating costs,” says Whitehead. “When I came on board, we partnered with a company called Diversey and together launched a global programme on food safety

Marketplace, Pan Pacific Yangon, Myanmar

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management which was rolled out

head says. “You’re asking chefs

in the first half of 2018.”

who’ve been cooking a certain

Fast forward to today and White-

142

way their entire lives to com-

head can point to a complete

pletely re-think the way they

implementation of the food safety

have been doing things for

management system across all of

years and learn a new system,

the company’s Pan Pacific and

so training and retraining is

PARKROYAL hotels, which incorpo-

absolutely critical.

rates regular audits and gap

“This extends to the suppliers

assessments for continuous

and purchasers we work with, and

improvement.

some degree of education is nec-

But of course, implementing

essary with suppliers who may not

a system across an entire global

be familiar with the new demands

operation that spans 40 hotels,

of the system. As part of our new

resorts and serviced suites

process, we now audit our suppli-

across Asia, Oceania, North

ers to ensure they recognise the

America and Europe was not

specific products and are able to

without its challenges.

meet the new requirements.”

Whitehead acknowledges

Pan Pacific has seven proper-

that there is a need for a more

ties across Singapore, which is

standardised approach to food

the main hub of its Asia-Pacific

safety and hygiene in Europe

footprint. Having multiple proper-

and Australia. In Asia, he notes,

ties across the city enables a far

there are often more complex

more collaborative approach

food preparation processes.

across its supplier base, not only

“There’s the whole training

in the training of these suppliers

element to consider,” White-

AUGUST 2018

but also on the auditing side.

ASIA

“ We work with the suppliers to help them to improve their operations. This is where we train them and when they improve we sign longer term agreements with them moving forward” — Golden Whitehead, Vice President, Food & Beverage at Pan Pacific Hotels Group 143

PARKROYAL on Pickering, Singapore

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“There will always be demand for F&B. A good hotel, or a good restaurant, will rebuild their concept for today’s market with an eye on tomorrow’s. Then they innovate and redefine it again” — Golden Whitehead, Vice President, Food & Beverage at Pan Pacific Hotels Group AUGUST 2018

Pan Pacific Melbourne, Australia

ASIA

ness and packaging of products. “We work with the suppliers to help them to enhance their operations,” says Whitehead. “This is where we train them and when they improve we sign longer term agreements with them.” These inspections also provide an opportunity to streamline the supply base and generate cost efficiencies where possible. Through the auditing process, Pan Pacific looks at what other prod-

Lime, PARKROYAL on Pickering, Singapore

ucts certain suppliers sell and as opposed to purchasing from 10 different suppliers, there will be

Pan Pacific looks at its leading

one or two key suppliers that both

suppliers and issues a guideline

sell the required products but also

that it measures the supplier per-

comply with the food safety man-

formance against.

agement standards.

“You really need to know the

The second task that Whitehead

whole chain,” says Whitehead.

was tasked with was the develop-

“Where everything comes from,

ment of a design guideline for all

how we receive it and then how

the hotel F&B operations across

we store, clean, cook and serve

the brands. One of the major driv-

the product.”

ing forces of this guideline has

The company also works with

been the question of in house pro-

hygienists to look further at the

duction versus outsourcing, which

supplier performance, analysing

again is testament to the modern

storage facilities, fridges, cleanli-

guest expectation. w w w. f d f w o r l d . c o m

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PA N PA C I F I C H O T E L S G R O U P

“It’s all about keeping the guest in house and staying with us,” says White-

through third party delivery services. “All our new hotels still have breakfast,

head. “Guest experience is crucial and

lunch and dinner services, but we offer

outsourcing is key to enabling greater

smaller order dining,” he says. “The

guest experience.”

hotels don’t have numerous F&B outlets

With that in mind, Whitehead set out

as compared to older hotels, instead,

a guideline to redesign a far more efficient

they come with an all-day dining room

and freestanding kitchen concept. This

and maybe one bar or lounge.

wouldn’t remove the kitchen services, but

“With so much choice in the wider

tailor to the technology enabled guest

market, we’ve had to think differently.”

who would prefer to order into the hotel

Thinking differently in this instance

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AUGUST 2018

ASIA

is exemplified by a separate postcode

tives, the Group is investing in its people

onsite, one that guests can order deliv-

and customers by developing pro-

ery services to the hotel, therefore

grammes which are built on its DNA of

keeping the guest within the hotel but

being “Sincerely Yours” – which makes

catering to the modern day experience

sure that whatever the Group does

they expect.

comes from the heart. In always putting

All these changes are in line with Pan Pacific Hotels Group’s brand refresh, which strategy is about making impact-

their interests and needs first, the Group keeps the trust of its customers. As with any transformation, or imple-

ful changes with eyes on the future.

mentation of change, the journey never

Besides unveiling bold marketing initia-

really ends. As the industry continues to

147

Summit Lounge, Pan Pacific Hanoi, Vietnam

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148

Pan Pacific Beijing, China evolve, so too must the industry players

improvement right across the board.

and Whitehead is aware of this and recog- They are scoring better with our food nises the company must continuously

health and safety management sys-

strive for improvement.

tems and delivering a consistently

“These guidelines are working docu-

high-quality product across both our

ments. We must constantly improve the

Pan Pacific and PARKROYAL brands.”

product going forward,” he says.

Over the next five years, Pan Pacific

“Right now, I’m temperature checking Hotels Group will look to add more hotel all of our properties to see where we

properties across Asia-Pacific and

are along this journey and I’m happy

Europe and widening its global opera-

to say that there are sure signs of

tions. Interestingly, as the footprint gets

AUGUST 2018

ASIA

149

Cinnamon Show Kitchen, PARKROYAL Penang Resort, Malaysia

bigger, Whitehead believes the food and

A good hotel, or a good restaurant, will

beverage offering will get smaller.

rebuild their concept for today’s market

The reason for this, he feels, is the rise of third-party food delivery companies.

with an eye on tomorrow’s. Then they will innovate and redefine it again.”

“You can now eat whatever you want, whenever you want it,” he says. “Hotels in the future will design smaller F&B offerings, which are super-focused on what the consumer wants from their dining – and

Sincerely Yours

not necessarily hotel – experience.” “There will always be demand for F&B. w w w. f d f w o r l d . c o m

Procurement perfection at Delaware North

Just over a century old, Delaware North is among the most admired hospitality groups in the world. Its Australian operations are diversifying, and reducing procurement complexity is catalysing that process Written by John Oâ&#x20AC;&#x2122;Hanlon Produced by Glen White

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port is big in Australia and Delaware North has been a big name in Australian sport since the foodservice giant entered the ANZ market more than 30 years ago. The global company has remained in the ownership of the Jacobs family right through its history, and that culture of family, entrepreneurship and flexibility continues to shape an ethos which is best summed up by Chairman Jeremy Jacobs’ remarks in the 2017 Annual Report: “Our centennial was a great reminder of the core principles and values-driven approach to business on which our company was founded. Since the early days of peanuts and popcorn, Delaware North has thrived on the strength of our industry and client relationships. Trust, integrity and character are values that we hold dear to our family, and they are the same values we have instilled in our company. We know that the strength of our partnership with clients and colleagues is the key to our continued growth and success.” This emphasis on partnership is the key to the supply chain transformation currently being led within the Australian business by Adrian AUGUST 2018

Adrian Lorenzin Adrian Lorenzin

Adrian Lorenzin is Director of Procurement of Delaware North’s Australian and New Zealand operations. A career beginning in airlines in the late 2000s it didn’t take Lorenzin long to move from his educational focus of finance into the world of procurement. A number of years were spent working at Qantas, the country’s largest airline, supporting the procurement efforts in the corporate services category. From here he moved into the procurement team at Coles, the nation’s second largest supermarket, specifically focusing on logistics sourcing. This gave rise to a number of moves made whilst at Coles culminating in his role as Head of Central Logistics, overseeing a team of 16 professionals supporting the central operations of Coles’ $1.2bn-plus logistics network. Lorenzin has managed a vast array of procurement activities with values ranging from $5mn to $200mn across the corporate services and supply chain categories. He is an advocate for the procurement profession in Australia and supporting those who see it is a viable career to drive the success of Australian businesses.

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“We expect our revenue will grow significantly in the next three years: procurement will play a major role in that” – Adrian Lorenzin, Director of Procurement

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AUSTRALIAâ&#x20AC;&#x2122;S MOST LOVED IMPORTED BEER^ BRAND HAS A NEW VARIANT AVAILABLE NOW ^Corona is the #1 imported premium beer and represents 68% of total premium imported pack beer sold in on premise. IRI AU liquor weighted MAT March 11 2017.

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Lorenzin, its (relatively) new Director of Procurement. Lorenzin brought with him extensive experience in the airline and retail industries, most recently with the countryâ&#x20AC;&#x2122;s second largest supermarket chain Coles, but with less knowledge of hospitality. However, he and the leadership that appointed him thought this an advantage rather than a drawback. What was needed was a fresh approach. The Australian business is at an interesting stage. Having established itself firmly as the leader in sports hospitality services, with Melbourne & Olympic Parks (home of the Australian Open), Melbourneâ&#x20AC;&#x2122;s Etihad Stadium

and the Sydney Cricket Ground in its portfolio, it expanded its travel hospitality services business, with an increased presence at the majority of capital city airports around the region. In 2009 it acquired several iconic Australian resorts including Lizard Island, Kings Canyon Resort and El Questro Resort. Growing critical mass Now the business is in growth mode, having just purchased its first two pubs in Queensland. Thus far Delaware North had not owned any pubs or purely gaming w w w. f d f w o r l d . c o m

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operations in Australia, though it’s big in gaming in its other markets such as the US, explains Lorenzin. “The pubs and gaming sector is where we see significant growth coming from and we will look to expand our portfolio in the next few years.” He sees his role as to extract value from the A$100mn current annual spend by developing the procurement strategy and applying that to the growth business: “We expect our revenue will grow significantly in the next three years: procurement will play a major role in that.” With pubs set to become a major business unit, Delaware North will be moving into a very closely regulated and compliance-based environment. This is an expansion that will need to be very carefully managed, though it will be a perfect marriage between the food and beverage core business and the gaming market. Exciting times for Adrian Lorenzin and his team, for whom this is about much more than scaling up an existing operation. In August 2017 he joined a business that was prepared for change. “I have always been mindful that my procurement strategy needs to fit AUGUST 2018

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“One of the best things we can give

this business from a procurement perspective is confidence and commitment in their cost base” – Adrian Lorenzin, Director of Procurement

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into where the business is going rather than have the business fit into my procurement strategy. The basis for the procurement transformation started at the most senior levels with our executive team – they saw some opportunities and green shoots in areas that they scratched in the twelve months before I arrived.” Nevertheless, supply change management was not as mature at Delaware North as he had been used to at Coles or Qantas – multi-billion-dollar companies with a highly advanced procurement function – and very commercial in the way that they go about managing suppliers. But these large ASX companies could also be onerous. “I came in with the view of bringing the best of what I have done previously in bluechip environments while avoiding the things I had identified as slowing those cultures down. The environment that I identified when I came here was a traditional supplier model. We’d engage suppliers without any long-term commitment, negotiating discounts and the like, but with very little true marketing engagement.” The first partnerships Lorenzin forged were internal. After launching

a three-year analysis of value in every corner of the supply chain (the first pillar of his transformation), he looked at how procurement engaged with the operational side of the business. This necessitates a broad cultural change, he believes. Rather than making sourcing decisions centrally and asking the management of sites to live with them, Lorenzin started to invite operations to make their preferences known. “There was an opportunity to increase two-way dialogue and give operators the chance to share input. I was saying to key operational partners, ‘You will have a voice more than you’ve ever had. However, it will be structured.’ We have been very clear as to what we will be sourcing from the market and where we will be seeking their input.” Procurement, he says, is the magnifying glass that draws together the expertise across the business, concentrates it and obtains the best outcome for the business. The Pareto rule applies: 80% of the total spend w w w. f d f w o r l d . c o m

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LEADING BRANDS WITHIN THE IMPULSE / CONVENIENCE CHANNEL ACROSS ALL SALTY SNACK SEGMENTS PepsiCo Australia & New Zealand, under the operating arm called The Smith's Snackfood Company, is Australia’s largest manufacturer of salty snackfood products. Supplying Australians for more than 85 years, PepsiCo Australia & New Zealand operates nationally with extensive operations rights across Modern and Traditional Trade channels. PepsiCo Australia & New Zealand is able to draw on its scale of operational experience from markets around the world along with the global market presence of a portfolio of internationally recognised brands.

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21 ‘mega-brands’ with total estimated worldwide retail sales in the vicinity of US$100 Billion and Second largest food & beverage business in the world.

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“I think I know

the route to the summit, but before I tackle that I want to get the business to base camp one” – Adrian Lorenzin, Director of Procurement 161

is on things that do not require local flexibility; 20% may be on things that really need to be locally sourced. Take wines for example: “We run bars in airports across Australia and we always need to have local wines represented. Often we’d look to the nearest winery – but the largest wine supplier that we work with owns 96 Australian wineries! We are working with a strategic national partner that can satisfy local needs but operations don’t know that because they don’t have the bird’s eye view. Procurement’s job is to create a commercial framework

for the management on the ground to satisfy their local requirements with our national partner.” There are of course occasions when nothing beats a local supplier. For instance, El Questro offers barramundi, a popular fish caught in northwest WA at Wyndham. Lorenzin knows he will never replace that with a less expensive frozen alternative, despite the potential cost savings. “We must always empower operations to support local industries. w w w. f d f w o r l d . c o m

The worst thing we can do is create policies and procedures that stop people from being flexible to the customer base.”

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Founded in

1915

AUGUST 2018

The future state For now technology is taking a back seat to structural and cultural change. The current stock control management (SCM) ordering system holds all the SKUs pricing information and supplier data. “The system works well and with 100% compliance. It is the only way you can order anything within the business.” Lorenzin says he would like some refinements, but these will be addressed in a later phase of the transformation. For now he wants to reduce the SKU list to a manageable size and reduce its complexity, and at the same time reduce the supplier ‘tail’. At the head of the list of strategic partners are the sponsors of major sporting events. High profile food brands and franchises are represented in the Delaware North portfolio through license arrangements. At this stage the extent of the

ANZ

About Delaware North

163

procurement relationship is the use of Delaware North’s systems to do the ordering. There is little upside in this arrangement, Lorenzin says, but there could be a lot more. “There’s potential in the future to partner with these companies and make use of the synergies that exist: there is a real case for forming a buying group with others in the market. An alliance of strong brands that are purchasing in comparable volumes to our own would make us a very significant entity for the supplier market to consider.” Starting with the top categories, the team he has been hand-picking will

systematically go through the suppliers, driving value where it can be most easily achieved. “I have made a commitment to the business that we will reduce like-for-like costs by between 5% and 10%. One of the best things we can give this business from a procurement perspective is confidence and commitment in their cost base.” In the second phase, Lorenzin will look to value opportunities in the logistics operation, through collaboration with partners. By far the biggest transport operator w w w. f d f w o r l d . c o m

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into all operations is their national food distributor, but there are many smaller suppliers, and this can create problems, especially in a city. For example, when there’s a big game at the Etihad Stadium there could be up to 20 deliveries in a day coming through choked streets. “There’s so much room for optimisation here,” says Lorenzin. “The second wave of transformation may well see consolidation in our delivery service with just one temperature-controlled delivery and one ambient delivery each day. That is achievable because we have geographical critical mass – at Melbourne for example where we have the airport, the stadium and the tennis park – to run consolidation into those operations.” The measured approach is very much in accord with the CEO and Lorenzin’s colleagues in the senior leadership. We could look to go more quickly and land this all in the first phase of the strategy, but we’ve been in this market for more

than thirty years and will be around for decades to come. I wanted to take people on the first journey of procurement by which we are rationalising the supplier and SKU bases and forging longer term relations with strategic suppliers: then I want to overlay that with the right technology platform and the right logistics network.” Always fond of colourful analogies, Lorenzin likens the procurement transformation to climbing Everest. “I think I know the route to the summit, but before I tackle that I want to get the business to base camp one. Getting that far has its own rewards and it is achievable. I consider myself lucky to have been able to hire an excellent team and to have the support of an executive team that gives me the autonomy I need.”

w w w. f d f w o r l d . c o m

165

MORE CAFE/INTELLIGENT FOODS

FIVE-STAR FRANCHISING IN THE MIDDLE EAST WRITTEN BY

DALE BENTON PRODUCED BY

HEYKEL OUNI

166

Through a relationship with one of the biggest food manufacturers in the Middle East, More-CafÃ©/Intelligent Foods delivers franchises prowess

AUGUST 2018

MIDDLE EAST

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w w w. f d f w o r l d . c o m

MORE CAFE/INTELLIGENT FOODS

n order to be the most successful franchiser you need the best suppliers and supply network. After all, customers and clients will come to expect each and every franchisee to deliver the same quality and standard of food and service no matter where in the world they visit. For More-Café, proudly delivering the best European inspired hospitality and food services for more than 15 years across the Middle East, that key supplier relationship comes in the form of Intelligent Foods. Intelligent Foods, founded in 2000, has been a key strategic supplier to the most successful 5 and 4-star hotels, airlines, restaurants and cafes in the UAE and 168 across the GCC. “Intelligent Foods is our food manufacturing business that has successfully supplied all More-Café franchises with over a hundred different food products throughout the years to support the International menu,” says James Le Gassick, CEO, More-Café/Intelligent Foods (MIF). “Of course, we are very active in supplying the market for More-Café but we do supply a number of other clients across the UAE and GCC in the HORECA market.” Intelligent Foods can manufacture to any specification with the categories Ice cream, fresh pasta, bakery, pastry, jams, dressings as well as roast and blend coffee. “It’s a very diverse business – we can use that experience of different foods and markets and support the More-Café franchisee with our knowledge, our experience and provide consistency in quality and price.” Le Gassick has been with MIF for two and a half AUGUST 2018

MIDDLE EAST

169

years but has been operating in the food and beverage market in the GCC for 10 years. Over this time, Le Gassick has worked in a number of roles for a number of organisations and this has provided him with a keen understanding of how the sector works, from franchisee to franchisor and from client to supplier. “I think based on the experience I’ve got in the region, and the different food concepts, I pretty much know how things work,” he says. “What do our guests expect, what are the expectations of our clients, and also how much time things can take in terms of logistics w w w. f d f w o r l d . c o m

MORE CAFE/INTELLIGENT FOODS

“The change, using Dubai as an example over the last 10 years, is incomprehensible. Thousands of restaurants have opened in that time and hundreds of new franchisee brands have entered this very competitive market” — JAMES LE GASSICK, CEO, More-Café/Intelligent Foods

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More Café Launches New Icecream Brand in Dubai. More Café started 2018 with a redesign of its outlets, a flagship store in Mercato Mall and introduced a new ice cream brand

AUGUST 2018

and getting to market, because in this region, things can take a little bit more time than perhaps you’d experience in other regions.” MIF launched its first franchise brand back in 2008 through More Café, in Dubai. Since Le Gassick joined the company, MIF has added two more franchise concepts to its portfolio – Pause by More Kitchen and Glow by More Kitchen. Pause is a food-led coffee shop, which Le Gassick feels represents an innovative way of approaching the standard coffee shop that one would expect to see in the high street with a real focus on raising the bar on the quality of food and how it is displayed “I was always taught in my food retail days that people buy with their eyes which

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is something I have never forgotten,â&#x20AC;? says Le Gassick Glow, on the other hand, is an ice cream retail outlet that sells artisan quality scooping ice creams manufactured by Intelligent Foods that has over 1,200 proven high quality recipes and the flavors on sale are regularly changed to meet the demographic of guest in that location. Both franchise brands represent the modern-day expectation of the customer and the current

state of the food and beverage sector, not just in the UAE and GCC but across the world. â&#x20AC;&#x153;The change, using Dubai as an example over the last 10 years, is incomprehensible. Thousands of restaurants have opened in that time and hundreds of new franchisee brands have entered this very competitive market. They are taking advantage of the high uptake of people spending their disposable income on eating out as well as ordering delivery for the home.â&#x20AC;? The impact of this has seen far more international companies set up shop across the UAE and this has forced companies like MIF to be more inventive and to strive for innovation in w w w. f d f w o r l d . c o m

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“We develop long term-partnerships that are built around serviceability, reactiveness and reliability. At the end of the day, if our business is successful, our supplier and our partner’s business will be successful too.” — JAMES LE GASSICK, CEO, More-Café/Intelligent Foods order to deliver new products, fresh ideas and retain and attract new guests and clients. This is a challenge that Le Gassick actively invites, describing the region as a fantastic space for innovation, competitiveness and opportunity. One particular consequence of this increased competitiveness is of course that changing guest or customer mindAUGUST 2018

set and expectation. The modern-day consumer is much more aware of what they are eating and how it is sourced. As an example of responding to this, Le Gassick points to calorie counts that are featured on the packaging of every product sold at MIF’s Pause brand. Rewind the clocks 10 years ago, and Le Gassick feels this wasn’t the case at all within the region.

MIDDLE EAST

“The customers and guests have always been very demanding, but even more so now,” he says. “With more competition, guests know that if a meal does not meet their expectations then they can simply choose to eat elsewhere.” “Their expectations are higher than ever before and I feel that this is probably the biggest challenge that the food and beverage industry faces, trying to guess and anticipate those expectations.” Communication and touch points with the customer prove key in understanding those expectations, and MIF strives to create very open and constructive conversation with both its customers on the franchise side, and its clients in the manufacturing process. Le Gassick himself personally speaks with customers and regularly meet clients, inviting feedback and even criticism as the company looks to continuously improve its service to customers. This level of communication is present both internally and with Intelligent Foods as Le Gassick promotes an open door open communication mind-set. The benefit of this, naturally, is speed and agility. “What we do is very open and very fast acting,” he says. “We are constantly in the market and in our outlets, speaking to both

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BIO

James Le Gassick CEO, More-Café/Intelligent Foods

174

With over 20 years of experience in the UK and 10 years in the Middle East James is heading the worldwide expansion plans for the More brands as well as Intelligent Foods the food manufacturing business behind the More brands. He has a strong background in operations, marketing, franchise development, concept creation, leasing and project management in the food and leisure industry and has managed some of the largest F&B brands in the UAE and has a passion in driving innovation and quality.

AUGUST 2018

customer and clients and we take on board this information and we act fast.” “You have no choice but to act fast in this competitive market, as customers’ expectations are changing quicker and quicker.” Franchising is a journey that not one company can achieve alone and MIF, through Intelligent Foods, can call upon the services of critical strategic partners and suppliers that help the company as it continues to grow across the region. Already operating in Dubai, MIF has recently opened a Pause franchise in Kuwait, has a distribution network in Oman as well as Kuwait and will soon be opening More in Bahrain and More & Glow to open in Kuwait shortly after the summer. The company is also targeting later this year to open a More outlet at Jeddah’s newly developed Corniche in Saudi Arabia which will be used to support future franchisee operations within the Country. Needless to say, MIF will require those partners more than ever before. “We don’t have that many suppliers; obviously Intelligent Foods is the biggest supplier to More, Pause & Glow,” says Le Gassick.

MIDDLE EAST

“ We could probably go and open in the US right now, but I think it’s important not to run before we can walk.”

“But we do have our local suppliers and every supplier is key in our books. We develop long-term partnerships that are built around serviceability, reactiveness and reliability. At the end of the day, if our business is successful, our supplier and our partner’s business — will be successful too.” JAMES LE GASSICK, CEO, More-Café/Intelligent Foods As a franchisor, one that has already begun to achieve undoubtable sucBut importantly for Le Gassick, cess, eyes will no doubt begin to look he understands the importance of to the future and future locations. Le Gassick, and MIF, do have long remaining pragmatic and will do so with the support of the biggest term ambitions of expanding supplier partner MIF has. across the wider “We could probably go and open in the GCC with an additional one or US right now, but I think it’s important two brands to complement the not to run before we can walk,” he says existing More Café, Pause and Glow. “We need to be in and operate in “that said we have worked out in some detail how we could open and support all GCC Countries which we are a franchise partnership in the UK”. not at the moment,” he says. “We are currently focusing on estab“Saudi Arabia is a huge market lishing a bigger base here in the GCC potential for us and so we will which will support the future growth look to finalise a good partner of the brands and with the strength of there to really develop the busiour relationship with Intelligent Foods, ness in that market. “Optimistically of course, we’d MIF will continue to develop some of the best franchises across the region.” love to move into Europe in the future and maybe even into Asia and the US.” w w w. f d f w o r l d . c o m

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An Undisputed Part of Ecuadorian Identity Cervecería Nacional shows an innovative corporate culture that works towards making a positive impact on Ecuadorian society WRIT TEN BY

M ARÍA COBANO-CONDE PRODUCED BY

JULISA VARGAS

L AT I N A M E R I C A

CERVECERÍA NACIONAL

he Las Peñas neighbour-

tally sustainable processes that

hood, in the historic centre

also contribute positively to the

of the Ecuadorian city of

Ecuadorian society.

Guayaquil, witnessed the foundation of Cervercería Nacional (CN) as The

GROWTH SINCE 2016

Guayaquil Lager Beer Brewery

Cervecería Nacional has been

Association in 1887, a brewery and

transformed in all its aspects,

ice-making company.

driven to grow and become

In October, 2016, AB InBev – the larg-

178

stronger and more efficient. This

est brewery in the world – became the

has led to a positive corporate

main shareholder of Cervecería Nacional.

culture that flourishes both

This allowed the company to continue

across production plants and

with its traditional production of

within operative work.

national beers, as well as expanding

As regards its sourced raw

its catalogue with imported varieties

materials such as barley, rice,

in the framework of a great cultural

packaging, labels and cold

and corporate change.

equipment, CN created a

The merger promoted production in

supplier development program

the two plants of Cervecería Nacional

looking for collaborators that

in Pascuales (Guayaquil) and Cumbayá

are close to its expectations.

(Quito), with modern and environmen-

This led to joint work and advice in order to offer world-class products and supplies that, in accordance with government regulations in Ecuador, give priority to local raw materials and Ecuadorian suppliers. These strategies are part of the Decalogue (2016) that serves as a roadmap to CN, where the support of its

AUGUST 2018

L AT I N A M E R I C A

179

FACTS

It has 2 production plants, 1 malting plant and 17 wineries throughout the country w w w. f d f w o r l d . c o m

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L AT I N A M E R I C A

suppliers is key from local producers

programme is aimed at both

to international companies such as

university students who are

Sinel, Amcor, Sivesa, Croner or Matex.

finishing their degrees and those who are still studying too.

ITS TEAM IS ITS GREATEST

Globally, 300 applicants are

STRENGTH

selected who go through two years

Cervecería Nacional employs more

of training and internships in the

than 2,000 collaborators – a key pillar

different areas of the organisa-

of its success. Consequently, CN

tion. When they graduate from

invests greatly in developing the

GMP, they assume immediate

potential of its teams.

middle management positions.

The Global Management Trainee

In the same way, CN is also

(GMT) programme was created to

responsible for enhancing the

select young global talent and offer

skills of employees who are

the possibility of developing a profes-

already part of its team. There

sional career within the company, for

is an emphasis on meritocracy:

which CN opens a call every year in

30% - 40% of the activities on

all the universities of the country.

the agenda are devoted to

The main idea is that students go

coaching and employees are

through a selection process focusing

empowered to work in different

on their willingness to grow, their

areas of the company to acquire

energy and their ability to learn. The

a global vision. CN leaders are evaluated by the quality of their teams – they are expected to surpass themselves. The company promotes and seeks people’s growth within the organisation and is agile in measuring talent potential,

Click to watch: 130 AÑOS CN’

combined with results, year on year. This has led to CN enjoying w w w. f d f w o r l d . c o m

181

En nuestras cajas siempre van las mejores marcas.

PLAPASA, proveedor estratégico de más de 45 años de Cervercería Nacional, se enorgullece por sus 130 años al servicio de Ecuador.

Nos sentimos parte de su éxito.

¡Felicitamos a

CERVECERÍA NACIONAL

por su Aniversario 130 y una trayectoria ejemplar! Para Aon es un orgullo haber formado parte de este hito.

L AT I N A M E R I C A

a high ranking in terms of indicators

tions, CN measures its impact

and results among companies of

on the density of local water

massive consumption in Ecuador.

basins. CN consumes three litres of water for each litre of

POSITIVE IMPACT ON ECUADO-

beer in Ecuador nowadays, a

RIAN SOCIETY

global milestone and one of the

CN has a strong commitment to

best indicators of water

making positive changes to society

consumption for the AB InBev

in Ecuador. Its most ambitious pro-

group as a whole.

gramme, Growing for a Dream, offers

In the same way, CN has

training and education to women in the

global commitments in conjunc-

company who, as an example of

tion with some brands and aims

relevance, make up 60% of the sales

to have all its products pro-

channel in its Latin American stores.

duced with renewable energy

The creation of this program is

by 2025. CN is dispensing with

benefiting 15,000 women and is

thermoelectric energy in favour

based on training, access to financing,

of wind and hydroelectric power,

technology and even scholarships for

a goal that it has already

their children, since part of what the

achieved this year by using

company is looking for is for families

100% renewable energy.

to have a better future. The initiative #MeUno (#IJoin)

A COMMITMENT TO

involves 3,000 volunteers who work on

CONSUMERS

initiatives from cleaning beaches – such

Cervecería Nacional’s approach is

as the Corona campaign in Galapagos

customer-centric; therefore, it offers

Islands – to helping and supporting

products that are integrated into its

children with limited resources and

customers’ daily lives to improve

learning difficulties, as well as building

them in a responsible way.

houses for those affected by the Ecuador earthquake of 2016. In relation to sustainability regula-

The commitment to the customer goes as far as promoting responsible conw w w. f d f w o r l d . c o m

183

CERVECERÍA NACIONAL

184

sumption, since in Ecuador there is a

TECHNOLOGY AND

risk of high consumption even among

DIGITISATION

minors, due to a lack of adequate

Technology and digitisation are

differentiation between low-alcohol

key enablers in offering better

drinks and illegal alcohol (which

quality and services to CN’s

makes up 30% of the total national

customers.

consumption). CN has a commitment by which its

For example, 90% of the company’s sales happen by

portfolio sets the alcohol levels at 30%

teleshopping. CN has created a

for low-alcohol content beverages, as

whole Artificial Intelligence (AI)

well as operating a programme to

system that can offer recommen-

educate consumers and sellers in

dations to customers, according

responsible consumption habits.

to indicators such as the day of

AUGUST 2018

L AT I N A M E R I C A

CN employs 2500 collaborators

ing of its brands is generated since the company’s digital media originates there, too. As development objectives for the coming years, CN plans to help increasing Ecuador’s per capita beer consumption, since it is one

It produces an average of $ 100 MN in revenue every year

of the lowest in the region. It is currently set in 32l of beer consumption per year, unlike the 48l in Colombia and Perú and the nearly 80l of consumption in Mexico and Venezuela.

The company is growing again after 2016 (17% of lost sales)

This generates a very strong growth potential for the beer market, which is linked to the development of beer culture and to boosting beer as part of the life of Ecuador’s population.

185

In addition, CN is developing other product lines, some of which are related to beer such as the malts line, but also non-alcoholic the week and the predicted

beverages. For this an investment plan of

consumption for that area, region

around $400mn has been created for the

and geolocation.

next 5-year period.

For this, CN is integrating a B2B platform where customers can order via an app or through the website, tracking their orders until delivery. The company has also developed the ability to measure trends in real time by monitoring social networks, in a Command Centre from where all the marketw w w. f d f w o r l d . c o m

A solid organisation committed to the Chile’ Supply Chain Digital society discovers the processes WRITTEN BY

MARÍA COBANO-CONDE PRODUCED BY

JASSEN PINTADO

involved in SMU’s strategic management for the supply chain by speaking to Melania Chaverri, Head of Procurement

w w w. f d f w o r l d . c o m

SMU S.A.

SMU

188

is a Chilean super-

restructure the purchasing area in a

market chain and

centralised manner, implementing a

part of CorpGroup,

planned sourcing strategy for

formed at the end of 2007 from the

goods, services and assets that we

acquisition of more than 60 regional

call ‘no retail’. Part of this process

supermarkets chains. Currently, it is

has been to transform decentral-

the supermarket company with the

ised tactical purchasing

largest coverage in Chile with sales

management into a centralised

of $3.6bn annually.

model,” explains Chaverri.

The company has more than 500

“We have also structured purchas-

stores throughout the 15 regions of

ing policies and procedures

the country through its different for-

incorporating technology within the

mats (Unimarc, Alvi, Supermarket

supply process through e-procure-

Wholesale 10, OK Market and Tele-

ment solutions such as Ariba, which

mercados.cl) that adapt to the

will allow us to achieve greater effi-

needs of customers.

ciency in the processes and reduce

Melania Chaverri, Head of Procure-

trading times.

ment, has been a key person in the

“On the other hand, we have a col-

success of SMU. She was part of

laborative work model with the

the company between 2010 and

other functional areas of the com-

2011 as Procurement Manager,

pany, which allows us to align

returning in 2014 as Head of the

supply strategies with corporate

division to help drive the firm’s

goals and objectives set by senior

restructuring and modernisation

management.”

plan. The was applied between 2014 and 2016 with focus on com-

OPERATIONAL COST CON-

mercial strengthening, operational

TROL AND QUALITY

efficiency and financial and organi-

STANDARDS

sational development.

One of the strategies Chaverri has

“My role within SMU has been to

worked on has been the intelligent

AUGUST 2018

S U P P LY C H A I N

“ We have a collaborative work model with the other functional areas of the company, which allows us to align supply strategies with corporate goals and objectives set by senior management” — Melania Chaverri, Head of Procurement BIO

Melania Chaverri started her career in Strategic Sourcing in 2002 in Costa Rica, in the division of Global Procurement Walmart, area of food and fresh fruit. She has an MBA from the Interamerican University of Costa Rica.

189

In 2004, she was transferred to Chile together with Walmart Food Sourcing for the development of export of fruits and processed foods for private label from South America to Walmart worldwide. In addition to her experience in the area of food, she has held positions in retail companies including Cencosud, where she developed in the area of supply for supermarkets and department stores and home improvement. Subsequently, in 2014 she joined SMU as Head of Procurement in the areas of services, operational inputs, CAPEX, facility management and insurance. w w w. f d f w o r l d . c o m

LOGÍSTICA

10,000+ Approximate number of employees

control of costs. “We manage the

gies for each category,” adds

purchases of operational expenses

Chaverri.

under a ‘category management’

Thanks to its optimisation in service

strategy, consolidating the demand

contracts, SMU managed to reduce

of all our business units with each

operating expenses from more than

one of their specifications. In this

25% in 2013 to less than 22% in the

way, we coordinate the sourcing

last periods.

and negotiation activities with

The work with suppliers in terms of

which we increase the added value

quality standards has been another

defining unique and specific strate-

key to cost reduction. SMU sees its w w w. f d f w o r l d . c o m

INTEGRATION OF TECHNOLOGICAL SOLUTIONS FOR THE SUPPLY CHAIN

www.stgchile.cl contacto@stgchile.cl

STG has more than 16 years of experience, with offices in Chile, Argentina, and PerĂş, where we integrate technology to improve end-to-end Supply Chain processes.

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cl.issworld.com ISS Chile

info@cl.issworld.com

With more than 117 years of experience in Cleaning, Catering, Maintenance, Security and Support services; ISS Facility Services has been present in Chile since 2004. It has over 15,000 collaborators and it offers services in more than 3,500 facilities for 300 clients, who they help improve their performance and operational excellence, through the IFS model (Integrated Facility Services), based on the creation of value through outsourcing and integration of services, creating more economical and flexible solutions.

S U P P LY C H A I N

suppliers as strategic partners with whom it develops a clear joint strategy of specifications, establishing the standards that ensure

“At the end of 2012, we created the ‘100% Ours’ programme, a unique initiative in the country with the purpose of empowering SME suppliers throughout the country and the development of the regions” — Melania Chaverri, Head of procurement

the quality of the final product. This is why Chaverri works closely with local producers in Chile. In this line, the company’s commitment to small and medium-sized local entrepreneurs is developed. “At the end of 2012, we created the ‘100% Ours’ programme, a unique initiative in the country with the purpose of empowering SME suppliers throughout the country and the development of the regions,” she says. “Through this programme, we seek to encourage our customers the preference for regional products, highlighting them in our gondolas and privileging, in this way, small local businesses. It also allows us to offer our customers fresher and characteristic products from the area, thus generating shared value among local suppliers, our customers and Unimarc.” TECHNOLOGY, THE SUPPLY CHAIN AND THE CONSUMERS

Process automation is guaranteeing faster and more effective purchases for consumers, with better services. The supermarkets adapt to their customers so that the purchase transactions are made in the best way w w w. f d f w o r l d . c o m

193

SMU S.A.

SMU WAS FORMED FROM THE ACQUISITION OF MORE THAN 60 SUPERMARKET CHAINS

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31 YEARS

OF QUALITY” Inapol, leader in bag solutions for waste management and merchandise containment.

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S U P P LY C H A I N

SMU OPERATES THE BRANDS: UNIMARC, ALVI, SUPERMERCADO MAYORISTA 10, OK MARKET AND TELEMERCADOS.CL (E-COMMERCE)

and in the shortest possible time.

use of this will be in the process

For this, technology is fundamental:

of recurring purchases, that is,

SMU will invest 20% in technology

simple purchases through e-pro-

and logistics in the next three years.

curement applications, as well

“In this context, SMU is working on

as in certain processes, generat-

the optimisation of our web plat-

ing efficiency and performance

forms to enhance e-commerce and

in a context of procure-to-pay in

directly benefit our customers, with

addition to the continuous

the aim of making online purchases

source-to-pay in the technology

safely, quickly and easily. Super-

of classification of expenses.”

markets are also adapting to this trend by creating their own e-com-

TEAMPLAY AND FEMALE

merce capabilities and partnering

OPPORTUNITY

with successful operators in the last

SMU employs more than 30,000

mile.”

employees, being the fourth

Artificial intelligence has also been

employer nationwide with 64%

implemented into supply manage-

women and 1.8% migrants.

ment. Chaverri explains: “The main

According to its transformation w w w. f d f w o r l d . c o m

195

SMU S.A.

“We have also structured purchasing policies and procedures incorporating technology within the supply process through e-procurement solutions such as Ariba” — Melania Chaverri, Head of procurement

196

AUGUST 2018

S U P P LY C H A I N

plan carried out between 2014 and

– cooperation, empathy, the ability

2016, the company follows a strat-

to model teams and make strategic

egy to train and enhance the skills

decisions. This comes to comple-

of its teams, allowing employees to

ment the perspective of the boards

develop professionally and SMU to

of directors,” Chaverri says.

improve results year after year. Chaverri participated in the eighth

POSITIVE IMPACT ON

edition of the BOW Program (Board

COMMUNITIES

Of Women), developed by Business

SMU is committed to reflecting the

Women with the aim of offering

culture and needs of Chilean soci-

training to women to hold

ety, actively working to leave a

positions as C- and V- executives

positive footprint in the areas where

and to lead businesses with high

it operates.

growth potential.

“We have a commitment to inclu-

She explains: “Among the main

siveness of people with disabilities

objectives are the development of

in the workforce, a promise that falls

management skills to face dynamic

within the axis of sustainability in

ventures, the strengthening of stra-

our Strategic Plan 2017-2019.

tegic design capacity and the ability

Since 2012, we have had a pro-

to align the different areas of the

gramme that, to date, has allowed

business. It is also about exercising

the entry of around 250 people with

strategic and transformational lead-

some degree of disability to our

ership to strengthen the work of the

businesses and stores in the coun-

management team.”

try. Their arrival has generated an

In this regard, the executive

excellent working environment and

believes that “it has been proven

is very beneficial for the company,

that a strong female presence in a

sensitising the rest of the staff and

company delivers value. In addition

promoting teamwork,” Chaverri

to professional skills, female leader-

explains.

ship stands out in the organisation

As part of this commitment, SMU w w w. f d f w o r l d . c o m

197

SMU S.A.

FACT

‘THE SUPERMARKET CHAIN WITH THE GREATEST GEOGRAPHICAL COVERAGE AND THE NUMBER OF STORES NATIONWIDE’ 198

AUGUST 2018

S U P P LY C H A I N

will continue to invest in transforma-

development and strengthening of

tion to offer the best of itself as an

the financial position. In terms of

organisation: â&#x20AC;&#x153;SMU is implement-

experience for clients, the company

ing a strategic plan 2017-2019,

is carrying out a remodelling plan for

based on six pillars: customer

130 stores throughout Chile during

experience, operational efficiency,

the next five years (2017-2021),â&#x20AC;?

alignment and commitment, sus-

concludes Chaverri.

tainability, technological

199

w w w. f d f w o r l d . c o m