Food and Drink Franchise - December 2015

w w w.fdf wor ld.c om | D e c e mbe r 2015

2015 a year in review A look back at our top stories of the year

THE TOP FDF PROFILES OF 2015

EDITOR’S COMMENT

Looking Back On The Year I T ’ S D E C E M B E R A T L A S T , and another

year coming to a close. It’s been an eventful year, full of shifts and mergers and new innovations. So in this edition of FDF World, we’re looking back with a recap issue dedicated to some of our favorite stories and reports. So come with us on a walk down memory lane to visit some of the year’s highlights and some of the biggest companies to grace our pages.

What will the next year hold? There’s no way yet to know, but we can’t wait to find out.

Enjoy the issue!

Sasha Orman Editor Sasha.Orman@fdfworld.com 3

CONTENTS

Features

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2015 IN REVIEW THE BEST PROFILES OF 2015

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18 4

November 2015

TOP 10 Top Tens of 2015

Company Profiles

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Garabatos

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Gralco S.A

LATIN AMERICA

26 Costa

EUROPE LATIN AMERICA

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Confectionary Holding

EUROPE

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Rich Sauces

MIDDLE EAST

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BEST OF 2015

2015 IN REVIEW W R I T T E N B Y: R O B E R T S P E N C E

In the evolving landscape of food and drink, what stories defined 2015?

Here are a few we covered that represent the industry this past year

CHANGE COMES TO MCDONALD’S McDonald’s has undergone a transformation over the course of the year—longtime CEO Don Thompson stepped down in January 2015 amid declining profits and was replaced by former McDonald’s global chief brand officer Steve Easterbrook. Since taking the reins, 6

December 2015

Easterbrook has implemented a whirlwind of changes from menu retooling to a full corporate restructuring of regions and divisions. But perhaps the biggest and most widely publicized was the launch of All-Day Breakfast, in an effort to meet consumer demands and keep up with competition.

Was Easterbrook successful in

turning McDonald’s around with the changes he implemented throughout the year? While the switch to all-day breakfast offerings has created frustration among franchisees that must readjust their operations to accommodate the change, it has gained the approval of consumers.

Between the popularity of breakfast and new items like the Premium

Buttermilk Crispy Chicken Deluxe sandwich, sales in the United States increased 0.9 percent in its most recent quarterly review while global sales rose by 4 percent, beating analyst expectations and causing McDonald’s stock to rise. The world’s most widely recognized fast food chain could be on its way back to the top.

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BEST OF 2015 SUPERMARKET SWEEPS It was a tumultuous year for the supermarket industry, with major names consolidating and changing of hands. In the UK, traditional supermarkets like Tesco and Asda saw hardships this year as they raced to undercut prices and stay competitive with discount chains like Aldi. Meanwhile in the United States, after years of struggle to turn a profit and a change of ownership when original parent company Tesco pulled out, Fresh & Easy succumbed to low sales and announced plans to close down completely.

Albertsons was successful in its acquisition of Safeway, and it seemed like Pacific Northwest-based grocery chain Haggen was poised to benefit significantly, expanding from just 16 locations to more than 100 as it took over a large portion of Albertsons and Safeway divestitures. But the chain had difficulty adapting to its new markets, hampered by pricing mistakes and stock issues. The issue ultimately culminated with Haggen filing for bankruptcy protection, pulling out of all but its original 16 stores, and suing Albertsons for undermining its efforts.

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December 2015

HEADLINE

ORGANICS IN THE MAINSTREAM MARKET While it wasn’t too long ago that organic foods were considered a fringe interest, they have been a part of the mainstream consciousness for years now. But never before this year have they seen such a boost in profile and mainstream interest. There is no better highlight of this trend than

the shift that occurred this year in markets providing organic products to consumers.

This year Costco Wholesale CFO Richard Galanti announced that the warehouse store had exceeded $4 billion in annual sales of organic products, a significant increase over its report of $3 billion the year before.

Even bigger than that, the sales 9

BEST OF 2015

numbers put Costco Wholesale ahead of previous industry leader Whole Foods Market—it also means that more than 10 percent of all organic products in the United States are purchased at Costco Wholesale.

FIXING THE FRANCHISE WAGE GAP The fight for a higher minimum wage continued to pick up steam 10

December 2015

this year, with protests and strikes calling attention to the frustration that many franchise workers feel under current minimum wage laws.

Another frustration has been with constant connectivity via e-mail and smartphones giving way to on-call scheduling, which leaves many workers in a state of limbo and unable to plan for the future while waiting to learn whether they will be

HEADLINE

needed for scheduled shifts on any given day.

But times are changing. In September we interviewed one company working to create a better system for scheduling that would give added control and agency to hourly employees and alleviate frustrations of management. Meanwhile cities and states are starting to take minimum wage laws into their own

hands. Following last year’s raise of Seattle minimum wage to $15, this year New York government raised minimum wage to $15 as well.

This has been met with resistance within the industry, but with the momentum it has gained the idea of a higher minimum wage will only continue to grow. Now the question is how the franchise industry will evolve in reflection of changing laws.

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BEST OF 2015

EVERY YEAR WE tell the stories of exciting businesses from around the world—stories of growth, stories of technology, and stories of family businesses through the generations. Here is a sampling of the stories that 2015 had to offer.

Arcos Dorados Sao Paulo, Brazil 12

December 2015

Representing McDonald’s brand in 20 countries in Latin America and the Caribbean, Arcos Dorados is the world’s largest brand franchise. It manages more than 2 thousand restaurants that, together, serve nearly 4.3 million customers every day.

With the exclusive right to hold, operate and grant franchises

PROFILES OF 2015 W R I T T E N B Y: F D F W O R L D S T A F F

of McDonald’s restaurants, the company works with an integrated system in which its collaborators hold a prominent position. With 90 thousand employees, Arcos Dorados is considered one of the largest employers in Latin America.

In Brazil alone the company employs nearly 50 thousand workers in its more than 830 restaurants.

“At Arcos Dourados, we work every day to accomplish our mission of serving quality food, always providing a unique experience based on our values,” says Rogério Barreira, Vice President of Operations.

“The management of the supply chain, for example, is one of the key factors to our success.”

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S U P P LY C H A I N Cargill Centroamerica San Pedro Sula, Honduras Cargill’s presence in Central America has been an ongoing affair since the late 1960s, as this was the year of the company’s first acquisition in the region. In the mid-1970s, a new affiliation changed the company’s business direction, from producing concentrated food to poultry farming, processing and marketing.

Cargill’s main endeavor is to help all countries the corporation has businesses in, to surpass the inherent condition of commodity suppliers by developing and marketing goods with added value.

“Our purpose is to work within clear strategies and investments to cater for and help develop the communities we belong to,” explained Xavier Vargas, President for Cargill Central America. “In this region, in the same way each economy grows, GDP develops and people have more access to these foods.”

Charlesworth Nuts Marion, South Australia Founded in Adelaide in 1934, Charlesworth Nuts is a proudly Australian owned and operated retailer 14

December 2015

Cargill’s presence in Central Americ in the nuts and dried fruits business.

Today Charlesworth Nuts operates 11 locations around South Australia as well as online retailing for all of your dried fruit, nut and gift needs.

Every business has factors that set them apart from the competition.

At Charlesworth Nuts shops it’s all about the friendly smiles, the fresh, high-quality flavors, the thoughtfully conceived gifts, and the promise of hot roasted nuts for

PROFILES OF 2015

ca has been an ongoing affair since the late 1960s every guest—all the little things that put the company’s dedication to customer service front and center.

“We’re very passionate about those things—we live them and breathe them every day—the service side of it especially,” says Brett Charlesworth, Managing Director at Charlesworth Nuts and grandson of its original owners. “If you treat your customers well they’re going to keep coming back to you, so we set out to make every

customer experience a memorable experience. Smiling, engaging, caring, and advising—all of those simple things are things that set us apart.”

ETG Commodities Mississauga, Ontario, Canada ETG Commodities is the North America wing of Export Trading Group, a global leader in the export and supply of agricultural products.

ETG trades in several verticals 15

S U P P LY C H A I N including grains, pulses, oilseeds, nuts and spices, sugar, coffee, tea, fertilizer, and rice. Operating on a sustainable business model of managing end to end supply chain of agricultural commodities from farm to retail shelves worldwide .ETG Commodities has witnessed swift success in the Canadian special crop industry since its inception. Throughout its global growth today and into the future, the business is committed to maintaining its personalized link with farmers and users of its products on a ground level.

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December 2015

“We are a group of people who drive change,” said ETG Commodities COO Harjee Makkar. “In this market things change every single day, and that’s something we are very good at handling. It’s about anticipating change, and sometimes even being an instrument to cause the change. It’s this foresight and anticipation backed with fundamental knowledge of the market that has contributed to the swift increase in our market share. We have a lot of drive and motivation in this team and a hunger to do better.”

PROFILES OF 2015

DTS Food Laboratories Melbourne, Victoria, Australia Nutritional values, pesticides, allergens, GMOs—people want to know what’s in their food, and transparency in the food and beverage industry is more important today than ever before.

In 1954, DTS Food Laboratories (DTS) formed to lend its analysis expertise to Australia’s dairy industry.

Over the years, the company has risen

to national recognition as a trusted name in the marketplace, providing analysis and support to clients including Murray Goulburn, Fonterra and Warrnambool Cheese & Butter, as well as Dairy Food Safety Victoria and authorities throughout New South Wales and Queensland. Maintaining continuous accreditation from the National Association of Testing Authorities (NATA) since 1961, DTS now services the needs of the wider food manufacturing industry as well.

“We’ve been gradually adding to the range of services that we provide to ensure that the companies are able to get their total needs met by a single company,” said Graeme Richardson, CEO at DTS. ““We’ve been adding testing capabilities for those emerging issues such as pesticide residues, allergens, and recently identified bacterial species that can cause sickness or death, [and] we have built significant technical support that we can offer our clients. We have a philosophy that not only should we be able to do the testing, but we should also be able to provide technical advice to our clients to help them understand the results. It’s a total line of service.”

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TOP 10

TOP10

Top Tens of 2015 Written by: Sasha Orman

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TOP 10

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Brands with spirit (July)

Which spirits are your top go-to brands? Depending on the region you live in, the most popular spirits brands might not all be exactly what you’d imagined. In the height of summer we highlighted the top 10 alcohol and spirits brands in the world for 2015 by statistical brand value. Eastern and western brands both ranked highly, with the top two spots belonging to China’s Moutai and Scotland’s Johnnie Walker.

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November 2015

The best in seafood sustainability (October)

In today’s seafood industry, honesty and transparency count for a lot. It’s not enough to claim that you’re offering sustainable choices—you must also have the supply chain accountability to back up your statements.

In October, we looked at Greenpeace’s picks for the top 10 U.S. retailers putting seafood sustainability first, from Meijer and Delhaize to Wegmans and top contender Whole Foods.

TOP 10’S OF 2015

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The hottest franchises in Canada (May)

Burgers that make bank (April)

With hundreds of franchises in the world, how do you decide which brand to buy into? One way to go is to choose a franchise based on what’s the most profitable.

In April we looked at this side of the business by checking in with Statistic Brain’s ranking of the most profitable franchises by overall and individual store sales— McDonald’s came in first, and with its recent turnaround the franchise could be well on its way to even bigger profits in the year to come.

Canada is among the most diverse and expansive countries in the world, with a food culture all its own. It is also home to an extensive network of proudly Canadianowned franchises—in May we checked in with the ten largest, from Coffee Time and Mr. Sub to Pizza Pizza and the ubiquitous Tim Hortons.

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We love a good quality beverage at FDF World, and in November we celebrated some of the top franchise chains embracing the craft beer movement—whether they formed around a love of craft beer (like World of Beer and The Casual Pint) or have adopted craft beer policies over time (like Red Robin and T.G.I. Fridays).

Pizza joints (March)

What’s not to love about pizza? In March we shouted out the top ten pizza chains and franchises in the United States, including takeout favorites like Round Table and Little Caesars plus dine-in classics like Chuck E Cheese and California Pizza Kitchen, along with more unique fare like buffet-style Cici’s Pizza and “take-and-bake” Papa Murphy’s. At the top: Yum Brands powerhouse Pizza Hut.

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Franchises to enjoy a craft beer (November)

November 2015

TOP 10’S OF 2015

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CEOs in high places (February)

The sweetest franchises (September)

In September we satiated our sweet tooth with an examination of the top global franchises operating in the frozen treats and baked goods sector. Frozen yogurt chains like Pinkberry and Menchie’s made the list, along with warm baked goods like Cinnabon and Krispy Kreme. At the top of the list: perennial shopping mall soft pretzel favorite Auntie Anne’s.

Not all CEOs are created equal: some CEOs are founders from the ground level up, while others are promoted into the position or come in from outside. Some keep a low profile, while some are as well known as the brands they helm. But all ten of these CEOs are at the top of their game as the highest paid chief executives in the industry, from Chipotle’s Steve Ells to Starbucks’ Howard Schultz, with Hain Celestial Group’s Irwin D. Simon coming out on top.

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The biggest global franchises (June)

A franchise partnership is one of the best ways for a restaurant chain to grow quickly, utilizing the expertise and knowledge of local business partners and regional

supply chains to move more easily and efficiently into new markets around the world. In June we celebrated the Franchise 500 list’s top global franchises by locations, from traditional QSRs like McDonald’s and KFC to surprise top global food and drink franchise 7-Eleven.

TOP 10’S OF 2015

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The best trends to look out for in 2015 (January)

We always love looking ahead for the next trend, and 2015 was no exception. We kicked off the year by examining some of our favorite predictions for what the year would have to offer, from

more upscale fast casual options and changes in product labeling to a higher emphasis on tackling the problem of food waste. At the top was the rise of technology, including more sophisticated mobile apps, touch screen tablets and more widespread use of commerce-related technology like Apple Pay.

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Growing globally Written by Nye Longman Produced by Richard Durrant

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C O S TA

The UK’s favourite coffee shop has just posted very promising growth results, backed up by an innovative, long-term supply chain strategy

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osta (part of the larger Whitbread group) has accrued a number of enviable accolades over the years and can boast equally impressive growth figures to boot. The coffee shop chain recently posted a massive 28.4 percent growth in underlying operating profits, from £52.4 million to £67.3 million. It has set itself the target of achieving £2.5 billion system sales by 2020; we examine how the company will expand globally and deliver a number of strategic initiatives.

Key Personnel

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Jan Jakubowski Head of International Supply Chain

Operations Costa’s position as the UK’s favourite coffee shop is supported by a large network of outlets, backed up by a rigorously well-organised supply chain. In the past 12 months, it has continued to grow its UK store portfolio taking the total to 1,999 coffee shops and has a further 1,168 spread across the 30 countries; its vending machines (known as ‘Costa Express’) have grown by 416 new units, taking the total to over 4,700 globally with the company hoping to roll-

Jan joined Costa in 2013 taking on the task of establishing an efficient supply chain supporting Costa Coffee’s international business. He established foundations for growth through process development and improvement and team expansion. He manages operations as well as supply chain strategy development.

Prior to working for Costa Jan was managing the customer supply chain function for Coca-Cola.

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Office Branch Profile

We deliver as promised.

Our Food Services aim is to deliver industry leading standards, through an invested network and committed teams, to our current customer base of Whitbread, Premier Inn, Costa Coffee, Greene King Pubs and Kerry Foods, and to our future customer base.

www.kuehne–nagel.com 30

December 2015

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out another 7-800 machines in the next year.

To get an idea of just how strong its position in the UK market is, you only need look at the number of people using its ‘Coffee Club Card’ which now make up 42 percent of all transactions across its stores – now that’s loyalty! What is more impressive is the fact that as many as 2.7 million people hold one of these cards – just under one in 20 people in the entire UK. A major part of Costa’s future growth will come from its international operations. Backing up these extensive, high-value operations is a combined operational and supply chain strategy. The supply chain component is headed up by Jan Jakubowski (Head Of International Supply Chain) and his centrally located team.

He said: “To understand the complex environment in which we operate, it is important to understand our structure of supply chain operations. We manage three main formats and several key categories such as hot and cold drinks, consumable

A major part of Costa’s future growth will come from its international operations w w w. c o s t a . c o . u k

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Costa express franchised machine

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items and sweet range products. The first format is the international franchise business - we have a group of franchise partners with which we cooperate and they are essentially our customer.

“Because we are not contractually empowered to impose solutions, relationship management plays a crucial part. We have developed over the years a mutual respect and our Partners believe in the quality of service that we provide.

“The second group is composed of countries in which Costa Coffee shops are operated by entities in which Whitbread PLC has an equity stake. These are our stores in Poland, France and Singapore; they are still perceived a customer to supply chain but the level of engagement is different compared to a franchise partner. We have, in this instance, greater impact on what choices are made and what specific solutions implemented.

“The third format is through joint ventures which we predominantly have in China. This is an essential requirement to growing a successful business over there. We have two JVs in China.

This business is supported by DHL, a leader in supply chain/ logistics services in the region who manages for us warehousing and distribution.

The international supply chain team supports them with strategic directions as well as providing key products from the UK supply base.

The company’s operations in China are certainly cause for much celebration, since it can now boast over 350 stores (the most

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of any country outside of the UK) which have been formed using JVs and an ambitious goal of reaching 900 coffee shops by 2020; Strategic supply chain Jakubowski was proud to acknowledge that this growing global network of quality coffee shops would not have been able to reach this scale and popularity without the support of his team.

He said: “We are growing at an incredibly fast pace. We are not only concentrating on expanding businesses in existing countries but also working constantly to bring Costa into new territories; to be able to make sure that the business growth is supported we have to have a very well-functioning, future proof supply chain. Supply chain is and will continue to be a key enabler of Costa’s international growth.”

Costa has made the Times Top 25 Big Companies to Work For

Supply chain is and will continue to be a key enabler of Costa’s international growth

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Connect. Create. Enjoy.

CSM Bakery Solutions is an international leader in the baking industry, producing one of the broadest ranges of products for customers in more than 100 countries. Headquartered in Atlanta, Georgia, CSM is dedicated to developing and providing solutions that drive customer growth and success.

(+44) 151 343 1600 www.csmbakerysolutions.com info@csmbakerysolutions.com 34

December 2015 Copyright Š 2015 CSM Bakery Solutions LLC. All Rights Reserved.

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“Our ambition is to establish an end-toend supply chain into which new business partners will be able to easily plug in and out.

Flexibility and adaptability will be important in an ever accelerating business environment.”

“We build our supply chain with the elaborate mixed model and growth in mind and because of this we have particular focus on understanding cost. We need to understand what the cost of serving each country is, and then for each individual franchise or equity partner operating in them. Our model promotes flexibility and is developed to make it a competitive advantage for Costa.”

“Structural solutions enable good cost management but also a focus on continuous improvement. The lean mind-set is in everything we do, from planning headcount, projects, and travel to administration. We make sure that we develop a great service but when it comes to well defined systems (such as 6-sigma) we don’t use them in a structured and holistic way. We do, however make sure that they are used across our key service providers.”

He explained that, in order to reach so many locations with its branded coffee, while simultaneously delivering fresh, locally relevant cuisine, he and the international supply chain team used strategic partners and w w w. c o s t a . c o . u k

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Great fruity drinks, so easy to make!

Le Fruit de MONIN contains up to 50% whole fruit, it is an innovative one-step product, so there is no need to add sugar.

Designed for professionals, shelf stable, it delivers the true taste and texture of fruit for amazing smoothies, frappes, milkshakes and cocktails! Š MONIN - September 2015

For more beverage inspiration see

www.monin.com & the Free MONIN App.

DELIVERING AN OUTSTANDING SERVICE TO COSTA INTERNATIONAL EVERYDAY Market leading

Expertise

Innovation

Part of Bunzl plc a FTSE 100 specialist distribution group with origins back to 1854. Utilizing our global resource we provide Costa and other customers in the catering and hospitality sector an unbeatable range of catering disposables, food packaging and hygiene solutions.

Offering specialist product category advice and guidance on efficiency and cost control to drive customer profit.

Our dedicated national account team works closely with Costa International to deliver tailored working strategies and solutions to meet their worldwide growth plans and export requirements.

Bringing innovation to Costa and our other customers before anyone else; from new product concepts that meet emerging market trends to online service solutions.

Our bespoke print service helps customers raise their profile in the market place.

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December 2015

Blog: innovate.bunzlcatering.co.uk

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Twitter: @BunzlCatering

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were also working to form a global 3rd party logistics (3PL) network. These aspects back up the company’s commitment to customer centricity; covering its end-consumers, its franchise and joint venture partners.

Jakubowski said: “We have a broad range of partnerships in the logistics area ranging from global companies such as Kuehne+Nagel, HAVI or DHL to specialised freight forwarders which have proved themselves in the last years of dynamic growth.

Those relationships were key during the initial years of Costa’s international developments.

Transcargo, for example, has provided us with great freighting services and has a strong understanding of how important collaboration and customer centricity is, two notions at the heart of Costa’s international supply chain.”

“Partnerships are important throughout the entire supply base covering all categories and types of operations. Bells of Lazonby is a good example of collaboration in a category and has supported our ambition to have a strong supply base with great coverage that will enable us to support Costa Coffee shops around the world.

“Bells were able to support us very swiftly in developing or adapting products for foreign markets. With such support we were able to bring the great proposition of the Costa sweet range to all corners of the world.

“Monin, the world famous flavoured syrup provider is a prime example of a great

“Another key focus for us is understanding our cost to serve. We need to understand what the cost of serving each country is, and then for each individual franchise or equity partner operating in them. Our model promotes flexibility and is developed to make it a competitive advantage for Costa” – Jan Jakubowski, Head of International Supply Chain

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December 2015

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understanding of local legal requirements and what needs to happen to deliver products to remote countries at speed.

This is very often fundamental for the successful launch of our campaign drinks. “We also are appreciative of partnerships with suppliers who share our ambition and are ready to support us with services that reach out of their core competency. A great example is CSM, the baking company who, through its excellent understanding of local markets internationally, can support us with insights and quick product adaptations. “We emphasise the need for collaborative planning, forecasting and replenishment. We have partners that understand the international Bells were able to support Costa very swiftly in developing products for foreign markets

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“We emphasise the need for collaborative planning, forecasting and replenishment.

We have partners that understand the international environment and are able to deliver a great service in the nuanced world of global trade” – Jan Jakubowski, Head of International Supply Chain

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December 2015

environment and are able to deliver a great service in the nuanced world of global trade.”

Talent management Since Costa is quickly becoming a globally recognisable brand, it is stepping up its efforts to ensure that its employees are enthused with this sense of pride and direction. Its efforts to this end have received a variety of awards in recent years which Jakubowski was keen to recognise: “In Costa international supply chain we have implemented an innovation panel managed by the Project Manager which identifies opportunities to innovate in our field and bring our operations ahead of the curve. We look at innovations constantly”.

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Furthermore, the company has recently been commended in the press for raising its employee’s pay ahead of the UK National Living Wage; this has been backed up by a commitment of between £15 and £20 million to ensure that it is correctly executed. It has also made the Times Top 25 Big Companies to Work For. Additionally, Costa is looking to employ 2,000 additional apprentices across its stores, offering them an invaluable experience, by 2020.

Having developed a solid, three-pronged business model, Costa has proved time and time and again that it is possible to retain local relevance while having global scope; the culmination of this has been its healthy financial and territorial growth. w w w. c o s t a . c o . u k

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The recipe for

Written by: Lucy Dixo

or success

on Produced by: James Pepper

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C O N F E C T I O N A RY H O L D I N G

A rich mix of innovation and evolution is in evidence at one of Spain’s oldest companies, as Business Review Europe reports

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ith almost 300 years of history producing sweets and chocolates, Confectionary Holding is one of Spain’s oldest companies. It has two manufacturing bases – one in Jijona (Alicante) and one in Alcaudete (Jaen) – as well as facilities in Chile and Morocco where it sources raw materials such as almonds. There are seven distinct brands within the group, producing a range that includes nougats, chocolates, truffles and marzipans.

Andrés Cortijos, the General Manager , describes the markets it operates in: “Spain is our biggest market with around 65 to 68 percent of our sales, and then our biggest foreign markets are South America, thanks to the similarities between our cultures,

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the southern states of the U.S and France, thanks to its geographical proximity.”

As well as its presence in these markets Confectionary Holding has also launched an online shop in the last few years, with over 35 percent of the sales in its first year of operation coming from international customers. The fact that 70 percent of purchasers order a mix of brands from the website is a particular highlight for the company which also reports that classic nougats and Christmas gift packs were the most popular products.

Confectionary Holding has been looking at promoting its presence in Eastern Europe, too, as well as exploring opportunities in Africa. And recently the group has started working with China, where local knowledge is key. Cortijos explains: “To make progress within the Chinese market, we have been working closely with our distributors to provide the right product portfolio for the customers. For example, having the wrong colour packaging could have meant that a product failed in China, so we have been able to make small adaptations using feedback from our distributors to improve our sales.”

All of this activity illustrates the group’s global vision – and the importance of its supply chain.

“Being agile as a company and in our supply chain is one of the pillars of our overall strategy,” says Cortijos, who also highlights that agility is particularly important thanks to its customers’ seasonal buying behaviour. “We have a very short

35% The percentage generated from international customer sales

The 1880 brand

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C O N F E C T I O N A RY H O L D I N G

Christmas is the busiest time of the year for sales

period of time in the lead up to Christmas when we do the majority of our sales, so that agility within the supply chain is crucial to us.� Being able to change the levels of production in the workshops and adjusting the resources to the production demands as required is a balancing act, which Confectionary Holding is achieving by constantly working on improving its supply chain.

And achieving this would not be possible without effective working with people. Cortijos says: “We have put a lot of effort into working with the middle managers who are in charge of different products, geographical areas and key accounts. Working with these managers has

Almendras Llopis was founded in 1974 in San Vicente del Raspeig, Although its roots date back to 1923, when Llopis opened an almond shelling business in Alicante.

Our Company offer the international confectionary and the ice cream markets ingredients of the highest quality, guaranteeing compliance with production chain deadlines. Our main strong points are too be a benchmark of quality and partnership for the Industry, to remain committed to innovation,to be responsible with food safety, And to offer a product with a guarantee of sustainability, to achieve this goal throughout the supply chain.One of the features that sets us apart is that we have our own facilities and plantations in different locations across Spain.

In Almendras Llopis we attach great importance to the relationship with our customers. Therefore, from the outset and thanks to our strong family character, we have maintained a close relationship with each and every one of them. This confidence requires us to immediately adapt to market circumstances, so our team, consisting of more than 90 people and a group of seasonal specialists and technicians, working under quality guidelines designed to comply with all our guarantees.

Tel +34 965 66 12 62 | Fax +34 965 66 64 32 almendras@llopis.es | www.llopis.es

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December 2015

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Agility within the production process is crucial

been very important as they get the feedback that we need on how our business plan is working.

Then we can adapt our processes and adjust our strategy as necessary. We have trained this particular level of our staff so that our strategy can be implemented the most effectively.”

Again, this illustrates how flexible Confectionary Holding can be and how much it responds to the needs and demands of its customers.

“We need to be able to adjust our strategy periodically depending on the feedback we receive – our middle management are completely in touch with the reality of our business, so they enable us to do this very successfully.”

In fact, Cortijos believes that part of this success is because it operates with different

“We have a very short period of time in the lead up to Christmas when we do the majority of our sales” – Andrés Cortijos, General Manager

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C O N F E C T I O N A RY H O L D I N G

Key Personnel

Andrés Cortijos

General Manager

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December 2015

supply chains for each market and each client. “It can be complex, but we need to offer a segmented response,” he adds.

Another significant ingredient in Confectionary Holding’s recipe for success is its approach to innovation. Cortijos explains: “We have developed a process that involves assessing our innovation techniques and the parameters we use to judge it.

This is to avoid wasting resources on innovation projects that won’t go anywhere – because less than 10 percent of innovation actually makes it to the supermarket shelves so we have to make sure we get a return on our innovation investment.”

So new products are chosen very wisely and as a result of studying the feedback from the group’s existing customers. One example is that one of the premium brands, the 1880 range, is now available in single servings. “In response to our customers’ buying behaviour, we have introduced this product – with new packaging – which gives the consumers the chance to enjoy our products in smaller quantities, when they just want to enjoy a taste in a specific moment.”

Using technology – and ensuring it flows around each department – is another example of Confectionary Holding’s understanding of its customers’ needs.

“Before we had a lot of information about our markets – about the country or the sector in terms of big data – but we didn’t

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have effective tools to filter and classify this information. This is something we have improved this year,” says Cortijos. This information management has helped the company to orientate its supply chain in response.

The future for Confectionary Holding includes an expanded product portfolio, but Cortijos cannot divulge what this may include at this time.

He does give a little clue: “We are focused on confectionary but it’s true that we have developed a lot of technologies and knowledge during our 300-year history. Sometimes it’s a simple adaptation to produce another type of product.”

The 1880 range is one of the comapny’s premium brands

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The science of good food Written by John O’Hanlon Produced by James Pepper

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RICH SAUCES

Rich Sauces, the successful Northern Ireland supplier to the food industry, with a long established history in innovation and excellence has partnered with RS Cutting Edge to demonstrate that through innovation and a focus on quality, food can last longer, taste better and be more sustainably and profitably produced than ever before

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T

he story of Rich Sauces has a very Irish flavour to it, mixed with a dash of Northern Irish engineering and a never say die attitude. When Trevor Kells’ fish processing business collapsed in 1985, he went to work in his parents’ fish and chips shop in Belfast. It was his only option, says the man who describes himself as ‘unemployable and unbiddable’!

He wasn’t working there for long, however, before he realised the opportunity right under his nose. He and his mother Maud Kells had been working tirelessly to finalise the best recipe for their chip shop mayonnaise. Once completed, Trevor decided to apply his engineering skills to build a specialised machine in order to produce

Rich Sauces location in County Down, Northern Ireland

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commercial volumes of their product. His unique selling point in those early days was the ability to provide mayonnaise in industrial volumes that was consistently superior to what his customers could produce in their own kitchens. It would save them time and money and improve the quality of their product offerings, something that remains the core principal of the business to this day. This focus on his customers as well as a never say die attitude has led to Kells assuming a position of chairman, mentor and serial innovator in a closeknit family business, that today employs more than 60 people at its factory in Newtownards.

Rich Sauces has upward of 60 catering food suppliers throughout the UK and Ireland, and

60+ Number of jobs to be supported by Rich Sauces

d

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RICH SAUCES

Rich Sauces has upward of 60 catering food suppliers throughout the UK and Ireland, and customers in the USA, the Middle East and continental Europe

customers in the USA, the Middle East and continental Europe, with its products being sold exclusively to food manufacturers and processors. Mayonnaise and its variants are still a stable of the range, which now extends to ketchups, uncooked highly flavoured sauces (another of the company’s proprietary technologies), bouillons and many more dressings and wholesale sauces, sold under the Rich Sauces brand or in the newer Alfees range.

Over 29 years Rich Sauces has built a firm relationship with its food service customers, thriving in a competitive market thanks to a focus on quality and customer benefit. “As with the first mayonnaise we sold, the end product is sold as our customers’, so they can’t afford to compromise on quality and consistency, and 54 December 2015

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our products are the best on the market,” says Trevor Kells. “We have a team of new product development (NPD) “chefnicians” who are all from a culinary background, and have developed a huge amount of Food Science expertise over the years. This means that they understand the importance of flavour, texture, aroma and all the things that the consumer appreciates but also have the technical ability to ensure this quality is present in the final products our customers receive.” According to his mother, Maud Kells, however, “despite all the clever people and expertise in the building here now, and in companies around the world, nobody has yet managed to improve on my original mayonnaise product; but I suppose quality is timeless!”

The Rich Sauces team works with the customer directly to develop an end product they want and in many cases even better than they imagined. Trevor cites the example of a retail customer who wanted to develop a range of boil-in-the-bag fish meals. As each type of fish behaves differently, sauces need to be created to maintain the quality of each fish component during the cooking process, leaving the final customer with consistent results every time.

Another customer is preparing twelve sandwiches for the Christmas season. Working with this customer’s preferred bread supplier, Rich Sauces created twelve menu design ideas with step-by-step procedures on how to implement them in-store, including training the

Rich Sauces created twelve menu design ideas with step-bystep procedures on how to implement them in-store

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RICH SAUCES

The Rich Sauces team works with the customer directly to develop an end product they want and in many cases even better than they imagined

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staff. “We do a lot of extra service beyond just making the best sauces in the market,” says Kells, it’s a good illustration of how Rich Sauces guards the reputations of its customers”.

With 150 products in the catering food supplies range the product development needs of most food producers can be quickly met. All are manufactured at the company’s 55,000 square foot plant, which produces an average of 400 tonnes of product each week. “It is a fully ISO and BRC (British Retail Consortium) accredited site

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Key Personnel

Trevor Kells Chairman

and we have recently won an award for our focus on the environment and sustainability,� he adds.

The really exciting news from Rich Sauces was the creation of a partnership company at the end of 2014, a parallel business, RS Cutting Edge. This business was founded

by Trevor Kells and Dr Liam Ryan, a food scientist with many years of academic and industrial experience, who is passionate about developing and implementing novel technologies in a sustainable and cost effective way.

Trevor Kells has since founding Rich Sauces 29 years ago, been involved in every aspect of the business from developing the initial machine to produce the first mayonnaise, to developing the patent pending technology to allow a number of Rich Sauces products to be produced without cooking, thus maximising flavour delivery. Kells is currently the chairman, mentor and serial innovator/entrepreneur in a close-knit family business including his daughter Sarah, son Tim and son-in-law Clint.

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RICH SAUCES

Technologies are continually being developed in-house to improve food quality at each stage of production

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The challenge of feeding the world’s growing population with the optimal use of resources, to ensure the cost effective and sustainable production of food is a major focus. Waste occurs at each stage of the production process all the way from the farm to people’s dinner tables, with one third or 1.3 billion tonnes of the food produced globally being lost or going to waste (United Nations Environment Programme, 2011).

Technologies are continually being developed in-house to improve food quality at each stage of production with the working relationship, with Rich Sauces and its senior management focusing these technologies on producing better quality food with longer life, at a lower final cost to the producer/consumer.

Recent attention internally has been on chewing gum biodegradability, the nutritional quality of foods and a solution to campylobacter on chicken, all of which cause many billions of pounds in problems every year in the UK and the wider world. In tandem with this, work is currently being performed on implementing some of RS Cutting Edge’s shelf life extension products in developing countries and with the University of Ulster, Coleraine, on the use of naturally occurring algae and seaweed as carbon neutral, sustainable food sources. There is also a large research programme underway to help remove some of the chemical additives currently found in foods on our supermarket shelves, replacing them with natural alternatives that perform as

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Rich Sauces is 90 percent based in the UK and Ireland

well, both functionally and commercially.

“One of the best things about Rich Sauces,” admits Liam Ryan, “is their ability to just get things done and to have fun doing it. Our engineering team is really quick to build the bespoke equipment we need to run trials, dramatically increasing our competitive advantage.”

Rich Sauces and RS Cutting Edge together will be a strong force in the global food market, says Trevor Kells. “We have developed a perfect partnership here. Rich Sauces is 90 percent based in the UK and Ireland, while the sales plan for RS Cutting Edge is global.

But the ultimate goal for both companies is to give competitive advantage to our clients and deliver the best possible end product.” w w w. r i c h s a u c e s . c o m

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INNOVATION & OUTSTANDING

service as operation standards

Grupo Garabatos’ innovation encompasses products and dishes as well as ways to approach their customers in restaurants and boutique bakeries

Written by: Mateo Rafael Tablado, Produced by: Taybele Piven Interviewee: LAE Abraham Bleier, Director General de Grupo Garabatos

G A R A B AT O S

G

Garabatos presence extends along Mexico City and surroundings, Toluca, Queretaro and Pachuca through 13 restaurants and 28 boutique bakeries

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arabatos is one of Mexico’s most successful food businesses. The casual dining restaurant chain — which has grown from the brand’s original success as a boutique bakery chain — is successfully positioned among Mexico City’s consumers, in addition to its other locations in Toluca, Queretaro and Pachuca.

Though the brand and its logo immediately evoke their fine pastry products, the restaurant operations began in 1987, only two years after the bakery shops.

Garabatos’ success is no secret; before growing its presence, it was a small familyoperated business. The brand’s outstanding reputation and success is based on customer service and dedication to creating unique flavors and presentations for each dish, using top quality ingredients from Mexico and elsewhere.

Creations such as cakes with unusual ingredients (such as pieces of Mexican traditional pastries), classic baklava and Garabatos cheesecake, as well as healthy items on the Garabatos menu, would not exist without clientele demand. The house adds its own twist to traditional Mexican items such as pan de muerto (“bread of the dead,” customary for the weeks before the “Day of the Dead”), filled with sweet cream.

“These creations and our unique flavor distinguish us. We are constantly innovating to meet a commitment to our customers,” explained

L AT I N A M E R I C A

Abraham Bleier, CEO for Grupo Garabatos.

Bleier is a first-generation Mexican; he was practically born inside his parents’ bakery, where he learned everything about the trade, from ingredient combinations to everyday chores such as cleaning after a long day of work and deliveries.

Besides a degree in business management, Bleier also earned an MBA from PanAmerican Institute for High Business Direction (IPADE), at Mexico’s Panamerican University.

Up to customers’ demands and beyond Thirteen restaurants and 28 boutique bakeries bring consumers in central Mexico the Garabatos experience. The restaurant chain serves breakfast, lunch and dinner, offering a variety of dishes from chilaquiles to salads, sandwiches,

Key People

Abraham Bleier CEO for Grupo Garabatos Bleier created Garabatos at 22 as his own business venture after gathering experience in his parents’ bakery, where he learned the business. He graduated in business management and achieved postgraduate studies, such as a Master’s in Senior Business Management from IPADE (PanAmerican Institute for High Business Direction, from the Panamerican University, in Mexico).

Garabatos restaurant located inside Antea shopping center (Queretaro), one of the largest malls in Latin America.

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G A R A B AT O S S . A .

“We are committed to offer quality and unique products to our clientele” – Abraham Bleier, CEO for Grupo Garabatos

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meat and fish, and other s boutique bakeries functio outlets for its signature co other unique creations.

Garabatos’ boutique ba some items from the resta including paninis, coffee a The coffee and Italian-sty become favorites among who have requested thes at the boutiques.

Bleier provided some d high quality blend from th Consumers possess plen days, demanding the qua boutiques. Paninis are ide need of a savory item, bu a full meal.”

Welcome to e-commer Every single process in G in house, including order in an effort to close the ga and its customers, as wel expanding role of technol delivery via online food ou HelloFood.

“We are close to integra boutiques and these e-co In the meantime, our resta been delivering for quite s executive stressed.

L AT I N A M E R I C A

specialties. The on as the brand’s ookies, cakes and

akeries now serve aurants’ menu, and other beverages. yle sandwiches have the chain’s consumers, se items as a quick bite

detail: “Our coffee is a hree regions of Mexico. nty of knowledge these ality that we bring to our eal for consumers in ut lacking time to sit for

rce Garabatos is performed deliveries. Nevertheless, ap between the brand ll as incorporate the logy, Garabatos offers utlets SinDelantal and

ation between ommerce platforms. aurants have already some time,” the

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G A R A B AT O S S . A .

Garabatos is aware of new opportunities to expand its restaurant and boutique bakery business

Paninis, coffee and other drinks are now available at Garabatos boutiques

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Ingredients: commitment to the customer and to quality Living up to the Garabatos’ reputation requires the company to bake its own bread and have every restaurant prepare fresh dishes every day.

Each restaurant location makes its own sauces and dressings daily and dishes are cooked to order, which means no Garabatos kitchen has room for food with preservatives or chemicals.

Meanwhile, the packaging for dishes and baked goods for sale at Garabatos boutiques ensures product freshness and shelf life.

Garabatos’ policy of strictly forbidding the use of substitutes for any ingredient has paid off, now that consumers have increased their awareness of product quality and origin.

“We use 100 percent natural ingredients. That’s

L AT I N A M E R I C A

Garabatos in the Mixcoac neighborhood (Mexico City), an ideal place to share a meal

the way we think it should be, considering we rely on chocolate, cold cuts and dairy products for most of our dishes. Our consumers are thankful to us for using high quality products,” Bleier shared.

The importance of training Staff training is a very detailed process in the company, focused on key aspects such as: • Product and associated benefits familiarity • Improved customer service practices • Translation of customer desires and requests Training in interacting with customers provides every visitor in each POS a quality experience, guaranteeing repeat business. Grupo Garabatos invests in prospect hires’ evaluation to ensure the

Delicious Backlava Garabatos style, its natural ingredients provide for a unique flavor

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L AT I N A M E R I C A

right people deal with their customers.

“We do not focus on sales as the ultimate achievement; instead, we strive to find out what the consumer wants the moment they walk into our stores,” the CEO commented.

Steady steps forward The brand enhanced its presence in central México by opening a large restaurant in Antea shopping center in the city of Queretaro. Under the business group’s strict quality control, the Antea location, even as the farthest from the Mexico City headquarters, has been a prosperous venture. The success of the restaurant in Queretaro brings the opportunity to follow suit with a boutique bakery in the same city, as well as to carefully evaluate the next steps into opening new Garabatos locations in other cities.

“I’m proud of the reception our restaurant has had in Queretaro, as our first location that far from our headquarters. This makes us keen to expand into other states,” Bleier concluded.

Company Information NAME

Garabatos INDUSTRY

Restaurants and bakeries HEADQUARTERS

Mexico, Distrito Federal, Mexico FOUNDED

1985 EMPLOYEES

700 WEBSITE

www.garabatos.com

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gl

Written by: Mateo Rafael Tablado, Associate Editor Interview by: Rebecca Castrejon, Editor Produced by: Taybele Piven, Director of Operations for WDM Group-LATAM

7 0 D e c Guillermo e m b e r 2Daw 0 1 5Ă lvarez, Executive Vice President (EVP) of GRALCO S.A. Interviewee:

Reaching

lobal markets

tuna from COLOMBIA

with

Gralco is meeting global business demands for the production of tuna and commercialization of its own brand, Alamar

GRALCO S.A.

G Mothers, Gralco’s collective force

rupo Alimentario del Atlantico was founded by a joint venture of three companies in the year 2000, after these industries acquired a cold meat factory established in 1994, in the city of Barranquilla, Colombia. This association between the Spanish Group Gerlein and the Italian-American corporation Tri Marine, integrated the whole business, developing its production plant, from the process stage to the packaging and selling of precooked and canned tuna, while taking advantage of its added value products, such as flour and fish oil.

Gralco’s high level of sales has provided growth opportunities to its 18,000m2 production area, which translates into a storage capacity of 500 tons.

The company follows international quality standards to support its operations, whether they are working for global prestige brands or community markets. Additionally, Gralco has been certified by Colombian organizations in Good Manufacturing Practices, HACCP (Hazard Analysis and Critical Control Points), BASC (Business Alliance for Secure Commerce), EFSIS (European Food Safety Inspection Services), and ISO: 9000 (quality management standard).

Among Gralco’s prominent customers is Starkist from South Korea (which a vast operation in the United States), and Rio Mare (owned by the

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L AT I N A M E R I C A

Italian corporate Bolton Group). In addition, the company competes locally through its own brand Alamar since 2008.

Key People

Alamar: Gralco’s tuna brand Alamar is now the second most consumed tuna product in Colombia, with a market share of 19 percent. It should be noted that Colombia hosts more than 30 tuna related brands, including some imported from El Salvador and Ecuador. “We can mention with pride that our growth levels have registered double figures,” noted Guillermo Daw, EVP for Gralco.

As a brand, Alamar has become a sponsor of major professional soccer teams in Colombia, and is responsible for the organization and

Guillermo Daw Executive Vice President for Gralco Daw is an Industrial Engineer from Universidad del Norte (Barranquilla, Colombia), graduated in 1989. He has an MBA with an emphasis in marketing.

Prior to being hired by Gralco SA, he developed his career in financial institutions; where he specialized in logistics and management with medium-sized and large companies. Since 2000, he has been de EVP of Gralco S.A.

Promoting recipes with Alamar product w w w. g r a l c o . c o m . c o

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GRALCO S.A.

Recipe with Alamar’s Premium Tuna in olive oil

funding of the amateur tennis tournament “Abierto de Tenis Atun Alamar�, held in Colombia.

Management insight Guillermo Daw is an industrial engineer who -before his experience of 15 years in Gralcoworked mainly in financial institutions that played a major role medium and large companies in Colombia.

Gralco products

Tuna varieties

distributed to supermarkets in Colombia

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Gralco features in the global market due to the diversification of its tuna products and derivatives, providing precooked, raw and packaged tuna material for local brands and

L AT I N A M E R I C A

Inside Gralco’s production plant in Barranquilla

foreign commercialization. As well as raw material for supermarket chains, to supply generic or brand white label within their stores.

“Our main differentiator is the mixture of quality, price, variety and taste, with the premise of being a healthy choice for our consumers,” explained Daw. Alamar: Colombia’s leading seafood brand

Finalizing with quality every end-product

The company’s brand has achieved consistent growth during recent years, determining a larger market share and domestic recognition.

Alamar has been recognized by its diverse packaging solutions, preparations and w w w. g r a l c o . c o m . c o

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GRALCO S.A. condiments. These factors, as well as Colombia’s consumer tastes and demands, have been incorporated in Gralco’s growth plans through diversification and the development of new presentations according to tastes and dietary requirements.

“We are committed to the development of new formulas that will provide better alternatives,” said the executive.

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L AT I N A M E R I C A

Longevity and quality relationships with suppliers Clarity has been one of Gralco’s top leadership values, since its foundation, the company has worked closely with providers, building strong partnerships and for a mutual growth through win-win strategies.

“We have managed to maintain these relationships, that have allowed us to develop more operations in both sides,” said Daw.

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GRALCO S.A. Training, the key to an efficient team

Another Alamar variety product

To meet global demands, Gralco has updated all operative procedures in terms of international standards and food industry compliances, carrying out stealthily practices, whether operating locally or exporting. In this regard, their human resource is constantly trained according to domestic and international regulations such as GMP (Good Manufacturing Practices), and in terms of processes, the correct use of machinery and technology, “The role of our human resources department is key to the company’s success, in both the national and international market,” said the EVP.

Chef Rodrigo Diaz

Gralco’s export growth Since its conception, Gralco has evolved based on its local operations and growth through exports, supplying today’s most competitive countries such as Italy, Spain and the United States, among others.

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L AT I N A M E R I C A

This industrial know-how regarding the export market is now being applied to their brand Alamar, with plans to internationalize their tuna products to neighborhooding Latin American countries, starting with Colombia, Peru and Chile.

“From the beginning, our company has been geared to meet the needs of the international market,” said Daw. Safe fishing

Alamar Productos

Tuna fishing is monitored and regulated globally by both government officials and international NGOs. Therefore, fishing operations at Gralco have the Dolphin Safe certification, plus the rest of the business has received compliance approval under ISO standards: 9001, BRC (British Retail Consortium) and IFSS (Index Fordham Social Health).

“Our plans show a prominent future for our brand Alamar and Gralco” – Guillermo Daw, EVP for Gralco S.A.

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PEOPLE + TEChNOLOGy: Ingredients for a Safer Food Supply.

Let’s get solving at ecolab.com.

I

4x + 2 8t

= food safety

L AT I N A M E R I C A

“Our production process is designed to seek minimal implications on the environment,” the executive said.

Company Information NAME

Future growth The potential growth in Gralco’s operation is as vast as the oceans. The company is able to create new condiments and diversified its portfolio, according to the consumer demand and requirements.

Sustaining and strengthening its local operation, aside from boosting exports to Alamar as South America’s tuna brand, which requires substantial investment in infrastructure to increase the plant’s capacity to 10,000 boxes of canned seafood daily.

GRALCO S.A. (Grupo Alimentario del Atlántico S.A.) INDUSTRY

Food: processing, packaging, commercialization and export of tuna HEADQUARTERS

Barranquilla, Departamento del Atlántico, Colombia FOUNDED

“Our plans show a prominent future for our brand Alamar and Gralco,” concluded Daw.

2000 EMPLOYEES

1,150

“Our main differentiator is the mixture of quality, price, variety and taste, with the premise of being a healthy choice for our consumers”

REVENUE

US $150 million WEBSITE

www.gralco.com.co

– Guillermo Daw, EVP for Gralco S.A. w w w. g r a l c o . c o m . c o

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