www.fdfworld.com DECEMBER 2018
TOP 10
Food & beverage trends for 2019
A digital transformation driven by data analytics
Pepsico Ventures Accelerating startups through the Nutrition Greenhouse
Digitally disrupting the future of food ordering
Rotana Hotel Management: a story of sustainable growth
IF YOU LIKE US
EDITOR IN CHIEF
Laura Mullan. . . . . . . . . . . . . . . . . . .
, FOLLOW US!!
Visit the www.fdfworld.com website and sign up to receive exclusive access to one of the world’s fastest growing business news platforms.
MANAGING EDITORS
Andrew Woods. . . . . . . . . . . . . . Olivia Minnock. . . . . . . . . . . . . . . CREATIVE DIRECTOR
Daniel Crawford. . . . . . . . . . . . CREATIVE TEAM
Frazer Jones.. . . . . . . . . . . . . . . . . . . . Mitchell Park. . . . . . . . . . . . . . . . . . . Lucie Miller. . . . . . . . . . . . . . . . . . . . . . Hollie Crofts–Morris.. . . . . Erin Hancox.. . . . . . . . . . . . . . . . . . . . Alicia Lolotte. . . . . . . . . . . . . . . . . . . PRODUCTION DIRECTOR
Georgia Allen. . . . . . . . . . . . . . . . . . PRODUCTION EXECUTIVE
Daniela Kianickova. . . . . .
04
DIGITAL VIDEO DIRECTOR
CLICK NOW TO SUBSCRIBE FOR FREE
Josh Trett. . . . . . . . . . . . . . . . . . . . . . . . . . . DIGITAL VIDEO PRODUCER
Emily Amos.. . . . . . . . . . . . . . . . . . . . . SOCIAL MEDIA MANAGER
William Phillips. . . . . . . . . . . . . SOCIAL MEDIA EXECUTIVE
Callum Rivett. . . . . . . . . . . . . . . . . . PROJECT DIRECTORS
Stuart Irving. . . . . . . . . . . . . . . . . . . . Alex Page. . . . . . . . . . . . . . . . . . . . . . . . . . . Heykel Ouni. . . . . . . . . . . . . . . . . . . . . Richard Durrant. . . . . . . . . . . . Charlotte Clarke. . . . . . . . . . . . Arron Rampling. . . . . . . . . . . . OPERATIONS DIRECTOR
Alex Barron. . . . . . . . . . . . . . . . . . . . . . UK MANAGING DIRECTOR
James Pepper. . . . . . . . . . . . . . . . . .
PRESS PLAY! WHEN YOU SEE THE PLAY BUTTON ICON, CLICK TO WATCH OUR VIDEO CONTENT
Get Connected! Wherever you see these icons in the magazine click to be directly connected via social media
CHIEF OPERATIONS OFFICER
Andy Turner.. . . . . . . . . . . . . . . . . . . PRESIDENT & CEO
Glen White. . . . . . . . . . . . . . . . . . . . . . . PUBLISHED BY
Click the home icon (when visible at top right of page) to return to contents
WELCOME
H
ello and welcome to the December issue of FDF World magazine.
reveals how white-label technology platforms could offer a helping hand.
For our cover story this month, we sat down with Tim Nall, Senior Vice President and CIO of Brown-Forman, to learn how the Jack Daniel’s maker hopes to cement its legacy with a datadriven digital transformation.
On top of this, we’ll also look at the top industry events you won’t want to miss and the top ten trends that are set to disrupt the food, drink and hospitality sectors in 2019.
Rotana Hotel Management PJSC also features on the cover of our December issue. Catherine Sturman caught up with Christiane Zeidan, the company’s Head of Sustainability, to learn how it has become a leading yet sustainable hospitality player. Elsewhere, we speak to Daniel Grubbs, Managing Director at PepsiCo Ventures Group, to learn how the group’s latest Nutrition Greenhouse accelerator plans to help food and beverage startups cut through the noise.
Don’t forget to check out our company profiles on Accor Hotels, Scandic Hotels and much more. We hope you enjoy this month’s bumper issue and, as ever, you can find us across social media @FDFWorld. Enjoy the issue! Laura Mullan. laura.mullan@bizclikmedia.com
As the takeaway market skyrockets, Preoday’s COO, Matt Graywood,
w w w. f d f w o r l d . c o m
05
CONTENTS
10 Brown-Forman EMBARKS ON A DIGITAL TRANSFORMATION DRIVEN BY DATA ANALYTICS
28 P E P S I CO VE NTU R E S :
Accelerating startups through the Nutrition Greenhouse DECEMBER 2018
42 IGITALLY D DISRUPTING THE FUTURE OF FOOD
54 Top 10 food & beverage trends for 2019
68
EVENTS & ASSOCIATIONS w w w.fdf wo r ld . com
CONTENTS
72
Accor Hotels
Procurement transformation through a commitment to local sourcing
94
Rotana Hotel Management
Rotana Hotels: developing a sustainable portfolio for the future
DECEMBER 2018
114
Arborea Hotels
PROVIDING UNFORGETTABLE EXPERIENCES WITHIN A NEW HOTEL CONCEPT
130
Scandic Hotels
Digital transformation for sustainability, health and the guest experience
152 VLH uses strategic procurement to provide world class hotel services
164
Aditya Birla Textiles
Innovation: the golden thread that ties Aditya Birla Textiles together
w w w.fdf wo r ld . com
Brown-Forman 10
DECEMBER 2018
11
WRIT TEN BY
L AUR A MULL AN PRODUCED BY
ANDY TURNER
w w w.busi ne ssc hief. com
BROWN-FORMAN
Brown-Forman may be better known for its iconic repertoire of spirits and wines, but the American company is also earning its stripes as a digital trailblazer
F 12
rom Jack Daniels to Woodford Reserve, Old Forester to Canadian Mist, today Brown-Forman’s brands
are a mainstay of any bar or cocktail cabinet. The American wine and spirits company was founded almost 150 years ago when the founder, George Garvin Brown, created Old Forester, a brand that is often cited as America’s first bottled bourbon – and it seems that this pioneering approach is still present today. The century-old company is keen to preserve its long-lasting legacy but it isn’t naïve enough to think that the alcohol market will be untouched by the latest wave of digitization. In fact, Brown-Forman has put its weight behind a root-and-branch digital transformation that hopes to cement its brands as household favourites for years to come.
DECEMBER 2018
“ We look at every employee as a tremendous brand builder” — Tim Nall, Senior Vice President and CIO at Brown-Forman
13
w w w.busi ne ssc hief. com
In this transformative Age, the opportunities that emerge from disruption are ready to be seized. ey.com/betterworkingworld #BetterQuestions
The skill to make things work.
The savvy to make things bloom. IT solutions to help design and implement new technologies. Managed services to help support and maintain your IT department. Deep knowledge, creativity and experience. When you need forward-thinking solutions, there's only one provider to think about: Data Strategy. data-strategy.com
Š 2018 Ernst & Young LLP. All Rights Reserved. ED None.
Is the most transformative perspective the one you don’t have?
FOOD & DRINK
15 With over 18 years of experience at Brown-Forman under his belt, this job has fallen partly into the capable hands of Tim Nall, Senior Vice President and Chief Information and Data Officer (CIO/CDO). With an acute understanding of the inner workings of the American company, married with a continuous improvement mindset, Nall and his team have ensured that IT no longer plays a back-end function but rather is a key strategic driver of Brown-Forman’s operations. “Brown-Forman used to be a traditional place where IT was viewed as a back-office function,” observes w w w.busi ne ssc hief. com
BROWN-FORMAN
Nall. “But a few years ago, we began to look at what tools Brown-Forman needed to really advance in this data economy. We began to view IT as an enabler and business partner, a function that could provide true solutions not just for the back office but for production teams, sales teams and marketing teams.” This has been a seismic shift in mindset for Brown-Forman, but it is undoubtedly an essential step for any company wanting to remain at the top of its game in today’s digital economy. Storytelling and brand building are the 16
backbone of a successful food or beverage brand, and it is a skill which Brown-Forman has honed for decades. “We absolutely believe the consumer is king,” observes Nall. “Our ultimate goal is for our consumers to understand our product – we want them to make educated choices, we want them to be fans of our brands.” How best to connect with these consumers is a pressing question for any food and beverage business, and Nall believes that technology could be a key part of the solution. “Whether you’re communicating on social media with that consumer, whether you’re creating interactive tools for that consumer, how you’re targeting that consumer – it all requires technology,” he explains. DECEMBER 2018
CLICK TO WATCH : ‘WHO IS BROWN-FORMAN?’ 17 Over the past few years, the Jack Daniels maker has implemented a slew of technologies to become a more digitally savvy firm. These include everything from cloud-based productivity and collaboration tools to a modern data stack. “First, we realized our existing data stack was not adequate enough for us to really gather, harmonize and interrogate our information. We knew we had to modernize, so we started looking for a modern data ingestion platform that our employees could leverage and we settled on Talend as our partner working with the Talend Data Fabric,” explains Nall. “We knew we also wanted a modern, robust w w w.busi ne ssc hief. com
BROWN-FORMAN
“ We want our consumers to know the stories behind Brown-Forman. We want them to engage with us so that we can tell them about Old Forester, the first bottled bourbon. We want them to understand our recipes so that they can create the perfect Manhattan” — Tim Nall, Senior Vice President and CIO at Brown-Forman
18
DECEMBER 2018
warehouse for all this information to go into so we chose to work with Cloudera. Then we asked ourselves how our employees and our partners would really interrogate and examine the information that we give them. We wanted to ensure that we had modern toolsets out there as well, so we looked at different products and settled on Tableau as our visualization platform and RStudio as our analytical, statistical modeling platform.” Through these cutting-edge technologies, BrownForman has sought to democratize
19
data and its analytics so that employees from all departments can utilize this for their own ad hoc analyses every day. Gaining the data is only the beginning. For this tool to really earn its stripes, Nall points out that you need to gain true insight and analysis of the figures. “We’re always cautious to say that, in a way, the data isn’t doing anything,” he explains. “It’s the insights we’re gleaning from the information that are important. Data without analysis is wasted money. We’ve transformed how we look at the information; it’s w w w.busi ne ssc hief. com
BROWN-FORMAN
surfacing new ideas that are really driving positive action within the company.” At Brown-Forman, data has been the bread and butter of the company’s digital transformation and it’s helping to deliver insights that drive tangible, real-life results, such as more informed pricing decisions. “It’s helped us see how our competitors are moving with regards to their price and how that affects us. Over the past few months, we’ve been rolling out a revenue management application globally that’s been well received,” explains Nall. Data analysis 20
$3.25bn Approximate revenue
1870
Year founded
4,600
Approximate number of employees
has touched every corner of the American company, including the heart of its operations: its production division. “We worked closely with the production organization and we saw that there
well known for its captivating market-
were issues that data analytics could
ing efforts but the company has taken
help resolve. Using data, we’ve taken
this one step further with its use of
a hard look at our barrel yield to see
data technology “We’ve engaged
what issues could be affecting it.
with partners like Salesforce to help us
Leveraging a lot of internal information
provide modern toolsets, and we’ve
and even external information like the
also looked at exact target marketing
temperature and other variables, we’ve
and consumer journeys so we can
provided dashboards that are really
better communicate with our customers
helping our production partners better
and deliver a better experience,” says
manage and forecast barrel yield.”
Nall. The wine and spirits firm has also
With its quintessential southern
made its first foray into chatbots and
American charm, Brown-Forman is
has used SMS text engagement at its
DECEMBER 2018
FOOD & DRINK
21
distillery tours. Additionally, as a sponsor
employees but are also viewed as
of the Kentucky Derby, Brown-Forman
brand ambassadors. “We look at every
says it can use a balance of marketing
employee as a tremendous brand
and data analytics to track whether
builder,” observes Nall. “We want our
event promotions have been effective
consumers to know the stories behind
and to forecast the success of its
Brown-Forman. We want them to
future campaigns. This, in turn, helps
engage with us so that we can tell them
marketing dollars go further and
about Old Forester, the first bottled
increases brand awareness.
bourbon. We want them to understand
The biggest tool for marketing, though,
our recipes so that they can create the
is undoubtedly Brown-Forman’s team.
perfect Manhattan. I think that’s the
With a 4,600-strong workforce world-
real benefit for the consumer: they get
wide, teams are not only seen as
this information and it’s digestible. hief. w w w.busi ne ssc h ief. com
BROWN-FORMAN
We view data and analytics as playing a significant role in our future successes.” Over the past decade, technology has undoubtedly revolutionized the customer experience. With a few swipes and taps of our devices, we can get the goods and services we want when we want them. Today’s consumers expect their experience to be seamless and indeed today’s workforces are no different. “Just like we want to understand the expectations of our consumers, we also want to understand the expectations 22
our employees,” Nall adds. “Our employees expect a consumer-like experience.” Making working life simpler for staff in over 160 countries is not an easy feat, but by leveraging trailblazing technologies and processes Brown-Forman is hoping to bridge geographical gaps and bring its teams closer together. “Whether it’s regarding their paycheques, their communications or their training, we want to make sure that it’s delivered seamlessly and that our employees have a great DECEMBER 2018
23
w w w.busi ne ssc hief. com
BROWN-FORMAN
24
experience with it. We want to make sure
borders and time zones,” says Nall. As
that all our 160 countries are connected.
a Salesforce customer, Brown-Forman
You could do that by hopping on aero-
has not only adopted the firm’s customer
planes but that can be very costly and
relationship management (CRM) tool
so we are leveraging modern technology
globally, but is also using its Chatter tool
to help connect our team.”
that allows employees to keep in touch.
Pushing for better communication,
“Our employees are used to tweeting
Brown-Forman quickly got on board
and using instant messaging apps in
with cloud technology like Google’s G
their personal life so Chatter gives that
Suite platform and Cisco’s Webex tool.
to them professionally,” he adds. “It really
“We believe these tools help eliminate
allows all of these employees just to
DECEMBER 2018
25
“ We definitely believe that technology isn’t a solution, but it’s an enabler for change” — Tim Nall, Senior Vice President and CIO at Brown-Forman
w w w.busi ne ssc hief. com
BROWN-FORMAN
“ Data without analysis is wasted money” — Tim Nall, Senior Vice President and CIO at Brown-Forman
26
DECEMBER 2018
stay connected despite the time zones.” As more and more technologies come to the fore, it seems it’s an exciting time to be in the alcoholic beverage space. However, Nall is keen to point out the saying ‘if you have a hammer, everything looks like a nail’ – that is, if a business relies too heavily on particular tools it may miss out on the perfect solution or idea. Instead, he suggests: “When we think about digital we always think about our stakeholders, our employees and our consumers. We definitely believe that technology isn’t a solution, but it is an enabler for change.”
w w w.busi ne ssc hief. com
27
LEADERSHIP
PEPSICO VENTURES:
28
accelerating startups through the Nutrition Greenhouse As food and beverage companies scramble to cut through the noise, PepsiCo Ventures Group is giving startups the support they need as it expands into the US following European success WRITTEN BY
DECEMBER 2018
L AUR A MULL AN
29
w w w.fdf wo r ld . com
LEADERSHIP
P
epsiCo is no stranger to innovation. From Pepsi to Lay’s,
Tropicana to Quaker Oats, the
food and beverage giant has sculpted brands that are now commonplace on grocery shelves across the globe. Under its banner, PepsiCo has not only created its own iconic flavours and styles but it has also nurtured startups with capital investments and even acquisitions. It’s a good deal for both parties: with an ear to the ground, PepsiCo can stay one step ahead of
30
the hottest trends shaking up the sector, while newcomers can take
“ This isn’t something that you can do on your own. It’s a joint effort and there’s a lot of experience and guidance to be found” — Daniel Grubbs, Managing Director at PepsiCo Ventures Group
advantage of the wealth of experience PepsiCo has gained since it was founded over 120 years ago. The engine behind these partnerships is the company’s trailblazing
management and more, the accelerator
investment arm, PepsiCo Ventures
proved to be a hit and now PepsiCo is
Group. In order to push its venture
bringing the scheme back to North
footprint further, last year the invest-
America to help start-ups gain an edge
ment arm launched the Nutrition
in the ever-competitive market.
Greenhouse accelerator in Europe,
At the helm of Pepsi Venture Group
a six-month program that gave 10
is Managing Director Daniel Grubbs.
start-ups €20,000 (US$22,500)
Having begun at PepsiCo over five
and matched them with a mentor
years ago, he first cut his teeth in
from PepsiCo. Offering guidance on
marketing and consultancy, helping
strategy, fundraising, supply chain
early-stage and mid-tier companies
DECEMBER 2018
31
navigate transformation issues and mergers and acquisitions (M&A). He says that this was the perfect precursor for leading PepsiCo Ventures Group’s agenda. Today, the Nutrition Greenhouse accelerator is underway in North America and the firm is also eyeing up future investments. But when hundreds and thousands of startups are vying to cut through the noise, what advice would Grubbs give today’s w w w.fdf wo r ld . com
LEADERSHIP
“ We want to bring together the expertise of our company with the spirit and passion of these early-stage companies” 32
— Daniel Grubbs, Managing Director at PepsiCo Ventures Group
startups? As well as having a real passion for what they do, Grubbs underlines the value of creating a network of employees and mentors who foster creativity and ingenuity. “I think it’s really important that startups surround themselves with people, inside and outside of the company, who bring a lot of different perspectives; people can provide different counsel and advice. A lot of times, this isn’t something that you can do on your own. It’s a joint effort and there’s a lot of experience and guidance to be found.” PepsiCo has a clear idea of what makes a successful brand and it’s got the figures to back it up: it’s now the third largest food and beverage company in the world and last year 22 of its brands generated more than US$1bn in estimated annual retail sales. Now a month into its North American Greenhouse Accelerator, Grubbs asserts that the startups involved will really benefit from working with people who’ve been in their shoes. “Through the accelerator, we’re trying to understand where startups are at on their journey:
DECEMBER 2018
CLICK TO WATCH : ‘NUTRITION GREENHOUSE LAUNCHES IN NORTH AMERICA’ 33 so how they’re currently operating, what
where our expertise and our history of
their goals are and where they want to be
operating across a wide spectrum of
post-programme. Our mentors really sit
markets can really offer value.”
down and understand these dynamics.
One such company that PepsiCo
Then, it’s a matter of providing advice on
Ventures Group has taken under its
product innovation, product formulation
wing is Your Superfoods, a Berlin-based
and some of the supply chain challeng-
firm that makes superfood powder
es that they might be going through,
mixes for smoothies. “They’ve taken
for example.
a direct-to-consumer approach and
“We’ve been through many of the
are really authentic in terms of sticking
challenges that they’re going through,”
with their methods of delivering super-
he adds. “We’re trying to help them
foods that are organic and without fillers,”
skip past these hurdles so that they
says Grubbs. “They’ve grown from being
can become more viable and more
just a German operation and expanded
efficient. There’s a lot of different areas
across Europe and the US. They really w w w.fdf wo r ld . com
LEADERSHIP
34
DECEMBER 2018
35
benefited from the programme and
continued to drive their portfolio and
have continued to see acceleration
expansion,” notes Grubbs. “They’ve
over time.”
moved into the US market and they’ve
Last year’s winner of the European
continued to refine their positioning
accelerator programme, Erbology, has
with consumers. Erbology has been
also continued on an upward trajectory.
one startup that’s really remained true
The London-based company, which
to what the brand is about whilst building
produces a line of powders, oils, snacks
a deep consumer following.”
and ingredients aiming to boost the
Armed with inventive sustainability
nutritional value of foods – used its
plans, unique taste propositions,
€20,000 winnings to develop new
trailblazing technologies and more,
products and raise brand awareness.
innovation is rife in the food and
“Erbology has really taken the reins and
beverage sector and PepsiCo is w w w.fdf wo r ld . com
LEADERSHIP
keeping its finger on the pulse. Through its venture group, PepsiCo is keeping an eye on the food, beverage and snack sector as well as untapped opportunities of growth known as ‘white spaces.’ Now, as it expands its project to North America, PepsiCo is on the lookout for the next big thing – but what does that entail? For Grubbs, it’s important that the startup has strong business acumen and a long term strategy. “We focus on what segment they are operating in and whether it aligns with our long term perspective. We ask if they have developed 36
a proof of concept with customers even in new channels that could help the company grow. Have they put together a leadership team that we believe will support and drive the company?” By checking these boxes, PepsiCo wants to see the beginning of an impactful brand, one that resonates with customers and meets an untapped market. Whilst the products on their own are crucial, the essence of the company and its connection with the consumer is also a prerequisite for PepsiCo. PepsiCo is also keen to work with startups which align with its ‘purpose with performance’ mission: an ethos that champions sustainable, long-term growth while leaving a positive mark on society and the environment. “We ask DECEMBER 2018
whether there is a sustainable element to the business,” says Grubbs. “We ask if the business model is rooted in an idea that is meaningful and important for consumers but is also financially viable. We’re looking for companies who are akin to the spirit of ‘performance with a purpose.’ As consumers are bombarded with information from media, bloggers, family and friends, the health and wellness trend is firmly at the forefront of the consumer psyche. People are on the lookout for healthier and nutritious foods – and they’re willing to pay for it. Grubbs predicts that this will continue to remain a key trend in the future. “Whether it’s food or beverage, a snack or a meal, I think we will see the continual evolution of more nutrient density in the market,” predicts Grubbs. “It’s not just about the calories,
w w w.fdf wo r ld . com
37
LEADERSHIP
“ We’re looking for companies who are akin to the spirit of ‘performance with a purpose” — Daniel Grubbs, Managing Director at PepsiCo Ventures Group
38 it’s also about what it delivers for consumers in terms of health and lifestyle benefits.” 2018 marks an historic year for the PepsiCo family, with the company’s former CEO, Indra Nooyi, having stepped down after 12 years at the helm of the firm. As the first female boss of PepsiCo she helped to grow its revenue by more than 80%. “I think Indra has really defined what PepsiCo is today and even more broadly, what it means to be a leading consumer packaged goods company not just in North America but globally,” said Grubbs. “The focus and attention towards DECEMBER 2018
39 ‘performance with purpose’ has been
For PepsiCo Ventures Group,
central to who we are and how we
Grubbs says it will continue to work in
are operating and so, I think that
partnership with early-stage compa-
legacy will continue to stand.” Ramon
nies and to give back to the food and
Laguarta, former President of
beverage ecosystem. “As an organi-
PepsiCo, has taken over the reins,
sation, we want to offer our expertise
and Grubbs believes he will continue
to these companies, we want to be
the firm’s upward momentum.
supportive of the wider ecosystem
“Coming from within PepsiCo, Ramon
and we want to bring together the
understands what we are trying to
expertise of our company with the
achieve,” Grubbs adds. “He is very
spirit and passion of these early-
supportive of the company’s pro-
stage companies.”
gressive stance and he’s keen to make sure that we continue to head where our consumers are going.” w w w.fdf wo r ld . com
Covering every angle in the digital age The Business Chief platforms offer insight on the trends influencing C and V-level executives, telling the stories that matter CLICK TO SUBSCRIBE FOR FREE
www.businesschief.com
TECHNOLOGY
42
igitally D disrupting the future of food ordering With the takeaway market skyrocketing and restaurants vying to win over customers, could a white-label technology platform help food and beverage players cut through the noise? WRITTEN BY
L AUR A MULL AN
DECEMBER 2018
43
w w w.fdf wo r ld . com
TECHNOLOGY
W
hether you like a fiery vindaloo or a savoury American burger, the restaurant boom has meant that
whatever cuisine you fancy it won’t be too difficult to find. In fact, in the UK alone, around 740 new food and beverage units have opened annually since 2012 and, in the past year, this figure has nearly doubled to
1,333, according to the Local Data Company (LDC). This has offered more choice for consumers but it has also meant that restaurant owners have to be savvier than ever when jostling for sales. As the fight for 44
profit heats up and restaurant owners scramble to gain more footfall, could the help needed by the food and beverage industry be at our very fingertips? The food delivery phenomenon has seen a meteoric rise over the past decade. With a few taps and swipes of their devices, consumers can have whatever meal they want at their doorstep in minutes. This business model has proven a perfect fit for today’s ‘on-demand economy’. Indeed, worldwide, the market for food delivery stands at €83bn (US$96.2bn), or 4% of food sold through restaurants and fast-food chains, according to McKinsey. Digital ordering platform Preoday has carved a unique path in the takeaway sector, DECEMBER 2018
“Personalised marketing increases the odds of engagement and conversions by appealing to each individual’s likes and needs. Therefore, customers are more likely to go to you rather than the competition” — Matt Graywood, COO at Preoday 45
w w w.fdf wo r ld . com
TECHNOLOGY
“ That direct relationship could to pay, arrange delivery or collect food and beverages with just a few clicks of prove to be the a button. “For our clients, this software is business critical,” says Matt Graywood, differentiator for COO at Preoday. “Some of our customwhether they fail ers take over 30% of their income via or succeed” digital ordering on the Preoday platform.” providing mobile apps and web inter-
face platforms which allow customers
What gives this tool a competitive edge, though, is the fact that it is a white label technology, meaning that it can be fully branded and managed by the 46
restaurant or eatery, rather than a third party. “Our clients recognise that they need to build a relationship with the customer by themselves and so a white label product like Preoday is ideal because the consumer doesn’t see Preoday, they just see the brand,” explains Graywood. “This means that the business is able to engage with the customer directly in terms of communication and promotions. They also own the data from customers’ purchases which they can use to build their proposition and promotions around their customer base. That’s something they don’t get with aggregators in the market. They’ve got complete ownerDECEMBER 2018
— Matt Graywood, COO at Preoday
ship and that direct relationship could prove to be the differentiator for whether they fail or succeed.” Online platforms are an effective way to drive digital footfall. Not only do they offer new revenue streams, but some can also take the customer experience to the next level. Preoday prides itself on creating a functional yet customtailored platform that can meet the niche and often demanding needs of today’s restaurants and eateries. “The differentiator is that this technology has extremely rich functionality but it’s also a very flexible platform,” observes Graywood. “It’s built like a robust transaction engine so it can cope with high-volume takeaway periods like lunchtime peaks during the week or the weekend.” ‘Flexible’ is a fitting word to describe the digital ordering platform. By offering configurable tools, business owners can use a management dashboard to have total control over processing, whe- ther they want to print out orders, send customised messages or even offer push notifications. The best part, according to Graywood, is that the platform also w w w.fdf wo r ld . com
47
TECHNOLOGY
provides rich analytics so that the sector can better understand their customers, whether that’s knowing how much a particular customer tends to spend or what their buying habits are. “We carried out a survey in April which asked what the key challenges are that chains are facing today,” notes Graywood. “The feedback we got was that 30% of respondents were using an aggregator but 70% prefer their customers to order directly because not only is it a better margin for them, but they also get to provide 48
the service they want directly to their customers and get to capture data regarding their customer’s purchasing habits. “Through data analytics, they can start to build a profile of what that person’s ordering, who their best customers are, what they tend to order and how they can better target their promotions around that customer base and really start to engage with them,” he adds. Large retailers have been capturing customer data for years but the restaurant sector has been slower in its uptake. This is undoubtedly untapped potential. By using highly specific data, Graywood notes that eateries can use analytics to target both loyal and infrequent custoDECEMBER 2018
49
mers alike by sending a personal message to encourage a return visit which could include a special discount applicable to their favourite item, for instance. “It offers a new level of differentiation,” Graywood says. “You can use the data as you feel fit. You can focus a promotion right down to the individual which brings them that much closer to your brand. Personalised marketing increases the odds of engagement w w w.fdf wo r ld . com
TECHNOLOGY
and conversions by appealing to each individual’s likes and needs. Therefore, customers are more likely to go to you rather than the competition.” With Greggs, the Aviva Stadium, the Royal Opera House and others all signing up to the service, Preoday’s customer list makes for impressive, diverse reading. The venue, location, and the customer may change but the fundamentals of good customer experience all remain the same. “The requirements of an event-based venue 50
may be different to that of a restaurant in terms of set-up but for pre-order, at the heart of it it’s very similar,” observes Graywood. “From a technology point of view, it’s a cloud-based platform whereby all our customers use the
‘ In the UK alone, around 740 new food and beverage units have opened annually since 2012 and, in the past year, this figure has nearly doubled to 1,333, according to the Local Data Company’
same code base, so everybody’s using the same platform. This means that we can build everything once and provide it to all customers. Then, whenever we make an improvement or a new functionality is added everybody gets the benefit from that.” When peak times hit, and orders are piling up, efficiency can make or break a restaurant’s reputation. By eliminating some of the hurdles, the software DECEMBER 2018
— Matt Graywood, COO at Preoday
CLICK TO WATCH : ‘THE PREODAY PLATFORM — A QUICK OVERVIEW’ 51
platform also helps to shorten queue
and there were missed sales too. They
times, reduce hassle and enhance the
selected Preoday and we implemented
customer experience. “Take Shack, for
a mobile and online ordering app which
instance – a Norwegian burger chain
gave customers the opportunity to
we’ve had as a customer since 2016,”
order ahead, skip the queue and then
notes Graywood. “They had three
pick up the food when it was ready
restaurants which were so popular that
rather than waiting.
people were queuing for an hour every
“The key thing about Shack was that
day to buy their burgers. The problem,
they had a really loyal customer base
whilst everybody kept going back to the
but they had a bottleneck whereby
food, was that they weren’t particularly
customers were all trying to purchase
happy about the waiting time.
at the same time,” he continues. “By
“Customer satisfaction was low, some adding this functionality, the customer people wouldn’t queue for that long,
success rate went right up. Mobile and w w w.fdf wo r ld . com
TECHNOLOGY
52
DECEMBER 2018
online ordering now account for 30% of their sales, so it’s a key part of their business.” With customers across the globe and multi-language capabilities, the opportunities for Preoday are limitless. In its short five-year history, the company has already boarded a variety of food and beverage behemoths, expanded its footprint globally and helped restaurants and food chains overhaul the customer experience. This could be the difference that helps a restaurant cut through the noise in today’s ever-competitive market and, for Graywood, this is what makes working at the firm so rewarding.
53
“Whatever your needs are, we want to be the default ordering technology,” notes Graywood. “At its core, most of the team are the same people who built the technology and started the business in the first place. Everyone feels invested in it; they want to see it succeed, they want our customers to succeed. When we work with a restaurant and we see their vision come alive, we’re very proud that it’s thanks, in part, to Preoday.”
w w w.fdf wo r ld . com
T O P 10
Food & beverage trends for 2019 54
Over the past year, FDF World has kept its finger on the pulse of the food and drink sector. From cutting-edge technologies to unexpected mergers and acquisitions, 2018 proved to be an eventful year — and we expect nothing less in the months to come. Looking forward, we predict the top trends that will shake up the sector in 2019... WRITTEN BY
DECEMBER 2018
LAURA MULLAN
55
w w w.fdf wo r ld . com
T O P 10
56
10 Gut-friendly food With fermenting, pickling and preserving reaching the mainstream, gut health has established itself as a key trend to watch out for next year. It has also received the seal of approval from food and beverage behemoths like the Coca-Cola Company. In October, the world’s biggest beverage company acquired kombucha maker Organic & Raw Trading Co., which makes the MOJO brand of naturally-fermented, live culture, drinks, signalling the fast-emerging trend. As more scientific evidence mounts up in favour of gut-friendly foods, probiotics like kimchi, miso, and kombucha are set to become commonplace on our grocery shelves. DECEMBER 2018
57
09 Technological innovation From AI to blockchain, robotics to big data, digitisation has turned the food and beverage sector on its head. For instance, French retailer Carrefour made headlines this year when it pioneered a new blockchain to trace food from farms to stores, helping to drive food safety. Walmart has also led the way with substantial technology investments, trialling a new robotics system that picks customers’ grocery orders, a hightech distribution centre, automated floor scrubbers and more. Looking to 2019, more food tech is set to enter the mainstream helping to fuel greater omnichannel shopping experiences.
w w w.fdf wo r ld . com
T O P 10
58
08 Moderation is the new mainstream With ‘Dry January’ around the corner, many consumers will be forfeiting their favourite tipple for a month in aid of their health. Yet, growing research has shown that, for an increasing number of people, it could be an entirely dry year as low – and no-alcohol drinks become a more common lifestyle choice. In the UK alone, more than 1.4mn UK households bought a no – or low-alcohol beer in the last year – a 57% increase on two years ago, according to Kantar Worldpanel. Beverage companies, mixologists and supermarkets are increasingly embracing the lowalcohol and no-alcohol trend too. Heineken, Adnams, and Guinness are just some beverage giants that have launched no – and low-alcohol beers this year.
DECEMBER 2018
59
07 The plastic revolution As more plastic packaging is found adrift in the world’s oceans, it’s driving brands to reconsider the way they package their food and drinks. Many have already made significant steps to tackle their plastic use. In London, Starbucks trialled a so-called ‘latte levy’ on its single-use paper cups to reduce waste and McDonald’s has replaced plastic straws with paper ones in all its UK and Ireland restaurants. The world’s largest brewer, Anheuser-Busch InBev (AB InBev), has also pledged to use circular packaging by 2025 as part of its sustainability goals. As the fight against plastic heats up, food and beverage companies would do well to look at how their packaging can be made more environmentally sustainable in 2019.
w w w.fdf wo r ld . com
T O P 10
60
06 Hyper-local supply chains When fruit and vegetables have to travel to reach our plates, it not only results in unnecessary air miles but it may also reduce the nutritional value. This, combined with a consumer desire to see where their food truly comes from, has given rise to hyper-local supply chains. Hyper-local refers to food that is locally sourced or grown in-house, such as restaurant gardens. On a practical level, this trend isn’t for everyone — after all, you need the space and time to tend to a garden, even a small one — but for some restaurants, it’s proven to be a hit. The Black Swan restaurant in Yorkshire, for instance, was named as the “world’s best-reviewed restaurant in the world” in 2017 after it won TripAdvisor’s Travellers’ Choice Restaurants Awards. It was praised highly for its hyper-local produce; with about two-and-ahalf acres of land, almost all of the restaurant’s fruit and vegetables are grown on-site or in their parent’s nearby farm. DECEMBER 2018
05
61
Plant-based food Some trends may come and go but it seems the plant-based food movement is more than just a fad. Last year, sales of plant-based food in the US went up by 8.1% compared to the year before, topping US$3.1bn, according to research carried out by Nielsen for the Plant Based Foods Association (PBFA). Additionally, whilst plant-based milk sales grew 3.1% last year, cow’s milk sales declined 5% and are projected to drop another 11% through 2020, according to Mintel. Recognised by business leaders and executives alike, the plantbased food and beverage market has seen growing investments, mergers and acquisitions. For instance, last year, Nestlé bought vegetarian company Sweet Earth Foods. Commenting on the acquisition, Nestlé USA chairman and CEO, Paul Grimwood, said: “One of Nestlé’s strategic priorities is to build out our portfolio of vegetarian and flexitarian choices in line with modern health trends.” w w w.fdf wo r ld . com
T O P 10
62
04 Food safety Consumer trust in the food and drink industry is waning fast. In fact, a study by the Center for Food Integrity went so far to say that there is a “trust deficit� that exists between consumers and the sector as a whole. As retailers are under greater scrutiny to deliver higher-quality food at more competitive prices and as supply chains become more complex this problem has been amplified by food scandals and food fraud. In a survey by NFU Mutual, for instance, one-third of British people said that they are less trusting of products and retailers than they were five years ago. To tackle this, producers, retailers and caterers may consider using shorter or local supply chains to win the hearts and confidence of their customers. Alternatively, technology like blockchain could play a key role. Regardless of the solution, however, it seems that enhancing food safety and improving consumer trust will continue to remain the issue on everyone’s lips in 2019. DECEMBER 2018
63
03 Convenience In today’s food and beverage market, convenience is king. In 2018, this has given rise to the snacking and ‘grab and go’ market but, perhaps more than anything, it has also helped to fuel the booming takeaway market. Worldwide, the market for food delivery stands at EU€83bn (US$96.2bn) or 4% of food sold through restaurants and fast-food chains, according to McKinsey. This is good news for food delivery brands such as Deliveroo, Just Eat, Hungry House and UberEats but it could also prove to be a key trend for restaurants and fast food chains to tap into in 2019.
w w w.fdf wo r ld . com
T O P 10
02 Cannabis-infused food and beverages As legalisation spreads across North America and beyond, cannabis holds a new opportunity for drink makers looking for the next big thing. Many beverage behemoths are already positioning themselves for the growing trend. Last year, Constellation Brands, the company behind Corona Extra 64
Modelo Especial and SVEDKA Vodka, announced it had bought a 9.9% stake in Canadian cannabis producer Canopy Growth Corporation. At the same time, Keith Villa, founder of Blue Moon beer, announced that he was launching a non-alcoholic, THC-infused beer company called Ceria Beverages. It’s a growing market – last year cannabis beverage sales hit $35.6mn – and if it continues on its upward trajectory it could remain a key trend in 2019.
DECEMBER 2018
65
w w w.fdf wo r ld . com
T O P 10
01 Experience economy Whether dining in a pop-up restaurant or getting a true slice of local cuisine, the rise of the ‘experiential diner’ has created ripples in the food and beverage sector. According to a survey by Eventbrite, 75% of people said that they believe unique dining experiences are worth paying more for. In an exclusive interview with FDF World, Gustaf Pilebjer, Marriott International’s Director of Food and Beverage for Europe, said that there is no “cookie-cutter solution” for food and beverage. He argued that if restaurant owners wish to tap into the rise of experiential diners they need to deliver unique, culturally-relevant experiences. “It’s also about experience,” he explains. “Diners today are seeking out culinary experiences. When our travellers fly to Istanbul, they don’t want to sit down and have a slice of pizza. They want to have an authentic taste of where they are. 66
DECEMBER 2018
67
w w w.fdf wo r ld . com
EVENTS & A S S O C I AT I O N S
The biggest industry events and conferences WRITTEN BY LAURA MULLAN from around the world
05–08 MARCH 2019
68
28 FEB–02 MARCH 2019
22nd Euro-Global Summit on Food and Beverages
Foodex Japan
[ MAKUHARI MESSE, JAPAN ] As one of the largest events dedicated to food and drink across Japan, Foodex
[ LONDON, UK ]
Japan, is definitely an exhibition to pencil
The 22nd Euro-Global Summit on Food
into your diary. Over the four-day event
and Beverages allows attendees to
about 85,000 buyers from food service,
meet inspiring speakers and experts at
distributing and trading companies are
its 3,000-plus global events. The event
expected to attend. Focusing on interna-
includes over 600 conferences, 1,200
tional expansion opportunities, business
symposiums and 1,200 workshops on
talks will be held with both domestic and
medical, pharma, engineering, science,
international manufacturers.
technology and business.
Click to view website
Click to view website
DECEMBER 2018
26—28 MARCH 2019
20–22 MARCH 2019
Hunter Hotel Investment Conference [ ATLANTA MARRIOTT MARQUIS ]
ProFood Tech
[ MCCORMICK PLACE, CHICAGO ] Promising to bring together suppliers and end users from a wider range of food and beverage sectors than any
This year marks the 31st annual Hunter
show in North America, ProFood Tech
Hotel Investment Conference. Designed
has been a major hit. The biennial
to be relevant and educational for both
event is returning in 2019 to present
hotel owners and investors, the confer-
an unbeatable showcase of innovation
ence will offer advice on hotel financing
and crossover solutions for all food
and raising equity, networking
and beverage industries.
opportunities, as well as talks featuring
Click to view website
industry experts.
Click to view website
w w w.fdf wo r ld . com
69
EVENTS & A S S O C I AT I O N S
70
23–25 APRIL 2019
Food and Beverage Innovation Forum (FBIF) [ HANGZHOU INTERNATIONAL EXPO CENTER ] Attracting some of the leading food and beverage companies like NestlĂŠ, Coca-Cola, PepsiCo, Yili Group, the Food & Beverage Innovation Forum (FBIF) has grown to become one of the leading events in the industry calendar. The Asia-Pacific forum offers valuable insights into industry trends and drives further innovation by selecting, displaying and discussing the most successful business cases and advanced technologies worldwide. The event will also feature several sub-forums covering topics such as product innovation, marketing innovation, packaging innovation and food financing.
Click to view website
DECEMBER 2018
23–25 JUNE 2019
Africa’s Big 7
[ GALLAGHER CONV. CENTRE, JOHANNESBURG, SA ] Bringing together hundreds of global suppliers and buyers from every segment of the industry, Africa’s Big 7 is the annual meeting place for food
18–21 MAY 2019
National Restaurant Association Hotel-Motel Show 2019
professionals across the continent to come together. As part of
[ MCCORMICK PLACE CONV. CENTRE, CHICAGO, ILLINOIS ]
Africa Trade Week, the
The National Restaurant Association – a body that
event will also run aside
represents the restaurant industry business in the
other notable exhibitions,
US – is set to host its 100th National Restaurant
namely The Hotel Show
Association Hotel-Motel Show. The annual event
Africa and SAITEX.
aims to showcase the latest innovations in the
In doing so, it will bring
foodservice industry, including new equipment and
together the hospitality,
technologies. As well as this, it also offers opportunities
retail and food and bev-
to hear from and network with industry leaders. Last
erage sectors under the
year’s event made history for the fourth year in a row
one roof, united by the
because, at more than 715,000 sq. ft and with over
theme “Africa — the new
65,000 people in attendance, it was the largest show
home of trade.”
in the association’s history.
Click to view website
Click to view website
w w w.fdf wo r ld . com
71
ACCORHOTELS GROUP
72
Procurement transformation through a commitment to local sourcing WRIT TEN BY
OLIVIA MINNOCK PRODUCED BY
ARRON R A MPLING
DECEMBER 2018
NORTH AMERICA
73
w w w.fdf wo r ld . com
ACCORHOTELS GROUP
SEBASTIEN BRUNEL, SENIOR VICE PRESIDENT OF PROCUREMENT AT ACCORHOTELS, DISCUSSES THE TRAVEL & LIFESTYLE GROUP’S PROCUREMENT JOURNEY IN DRIVING GROWTH AND DELIVERING A UNIQUE GUEST EXPERIENCE WITH LOCALLY SOURCED PRODUCE
W
ith 4,600 hotels around the globe operating across 100 countries, AccorHotels is one of just a handful of hotel operators
in the world with more than 500,000 rooms to its name. As a market leader in many regions around the world, AccorHotels is now making strides 74
across North America as well – with the continent representing significant opportunities for growth and revenue. Investment in the region is revving up with acquisitions including the purchase of the Fairmont, Raffles and Swissôtel brands; an 85% stake in US-based 21c Museum Hotels, an awardwinning hospitality management company which combines a multi-venue contemporary art museum and boutique hotels; and a 50% stake in independent luxury lifestyle operator sbe Entertainment Group. Boasting over two decades of industry experience, Senior Vice President of Procurement Sebastien Brunel is keenly aware of how the hotel industry has changed during this time, and how the evolving needs of consumers have particularly impacted procurement. “Lifestyle is something which is very new to the hospitality business,” he outlines. DECEMBER 2018
NORTH AMERICA
“Procurement is greatly positioned in the organization and part of the leadership committee, making our function a key component for North and Central America” — Sebastien Brunel, Senior Vice President of AccorHotels
w w w.fdf wo r ld . com
75
ACCORHOTELS GROUP
“People, especially the younger generation, are looking for different experiences. They don’t want the traditional hotel experience or a standardized room – they want to have fun, new experiences and make connections.” While AccorHotels currently has fewer than 100 hotels in North America, the region still reflects a notable proportion of its business and is home to some of the company’s largest properties, which average around 500 rooms and several restaurants apiece, meaning total spend is significant for 76
“Today, we’re coming back from global sourcing to more national or even local sourcing. We have a strong desire to buy local, and work with local producers” — Sebastien Brunel, Senior Vice President of AccorHotels DECEMBER 2018
Brunel and his team. Iconic hotels with global notoriety which are present in the region include the original Fairmont, Fairmont San Francisco; The Plaza, A Fairmont Managed Hotel, in New York City; Fairmont Le Chateau Frontenac in Quebec City; and Fairmont Banff Springs, amongst others. AccorHotels initiated investments in the procurement function 25 years ago when volume in key regions started to be significant. Today, the company’s procurement function is organized
NORTH AMERICA
77
regionally and globally, with over 20
making our function a key component
procurement organizations and more
for North and Central America,�
than 180 people around the world. The
Brunel explains.
entire function reports to Paris-based
In terms of the evolution of procure-
global Chief Procurement Officer (CPO),
ment at AccorHotels, the way services
Caroline Tissot, while all procurement
are offered has evolved thanks to
leaders in the regions have dotted lines
consumer feedback. The dynamic
to regional executives.
of buying and category management
In North America, procurement
is impacted by market trends and
also reports to Chief Operating Officer
traditional in-house services are
(COO), Kevin Frid. “Procurement is
increasingly handled by external
greatly positioned in the organization
providers. Laundry is a good example
and part of the leadership committee,
of a category historically managed w w w.fdf wo r ld . com
Efficiency. Visibility. Control. Compliance. • e-Procurement • AP 3-Way Auto-match • Invoice Management • Inventory Management with AccuBar • Recipe Management • Capital Projects • Supplier Management • Sourcing • Contract Management
sales@birchstreet.net www.birchstreetsystems.com
Automate your business processes. BirchStreet Systems is a leading cloudbased source-to-pay automation solution for the hospitality industry worldwide. BirchStreet increases profit and efficiency in a SaaS environment that focuses on improving business processes by automating e-Procurement, AP automation 3-Way, Spend Analytics, Recipe Management, Capital Projects, Supplier Management, Sourcing and Contract Management. Thousands of businesses, including enterprise customers like Hyatt, Marriott, Starwood, Interstate, Omni, Four Seasons, Accor/ Fairmont, Wyndham, ClubCorp and many others, in more than 100 countries, currently subscribe to BirchStreet to connect and do business with a network of more than 400,000 suppliers. The platform and technology connect customers with their suppliers to improve efficiency, increase transparency, provide accountability, strengthen financial controls, and reduce compliance gaps, resulting in significant business process improvements and cost savings. Most BirchStreet customers see a 10 to 15 percent overall cost reduction for all purchasing-related activities. Within a customer’s marketplace, users have access to real-time, on-demand data and pricing. Suppliers can update their pricing and catalogs, which provides accurate pricing and availability. Cutting-edge budgeting tools specifically designed for the hospitality industry help customers plan, track and report on demand. Automating the procure-to-pay process using e-procurement and AP 3-way auto-matching and integration, results in reduced line item expenses and labor hours. In addition, tracking, reporting and spend analytic features provide in-depth business intelligence in a centralized cloud-based platform. BirchStreet offers an easy, intuitive dashboard to give users real-time data both at
a high-level overview and at a line item detailed level. Similarly, BirchStreet’s Recipe Pad is a great mobile tool for chefs and kitchen staff that uses a simple picture-based interface; allowing chefs to browse, search, view and scale published corporate or property-level recipes through an organization’s private online recipe library. The process of automating functions in procurement, finance, operations and food and beverage contribute to a company’s overall success and bottom line. AccuBar, an acquired company by BirchStreet in 2016 is a leading component of the BirchStreet inventory control solution that offers a cloud-based beverage inventory management to maximize beverage profits while being seamlessly connected to BirchStreet’s procureto-pay automation solution. Customers report an average of 10 to 20 percent beverage cost reduction with additional cost savings from efficiency, automation and accountability. It eliminates the guesswork for reordering with par values and alerts, and provides easy scalability for large banquets and events. AccuBar’s bar code scanner will help one person do the work of two in less time, which will drastically lower labor costs. Often, customers aren’t able to detect theft, but with AccuBar’s loss prevention functionality one can quickly hold the staff accountable for loss. Finally, instant profit reporting and business intelligence will benefit any company immediately. Established in 2002, BirchStreet Systems is a privately held company and headquartered in Newport Beach, California, with offices in Denver, Mexico City, China, Singapore, India and Europe. For more information, events and webinars, or to request a personal demo, please email sales@birchstreet.net or visit www.birchstreetsystems.com.
ACCORHOTELS GROUP
CLICK TO WATCH : CPO SEBASTIEN BRUNEL TALKS GLOBAL AND LOCAL SUPPLIES IN ACCOR’S SUPPLY CHAIN 80 in house but moving more toward exter-
the teams in the hotel with different
nal providers. “We have a big evolution
needs and expectations between the
in the way hotels are spending their
managers, chefs, executive house-
money,” he concludes.
keepers – but also the owners of the
In addition, since AccorHotels now
hotels, because it is in their best inter-
manages and franchises its hotels
est to maximize their benefits through
instead of owning the premises
a strong procurement organization.”
outright, the procurement function
As a management company, procure-
has to adapt. “We came from an asset
ment within AccorHotels is very much
heavy model to an asset light model
a service offered to its owners and
– in the past, we owned our hotels
franchisees. “We have become a
but now we have management and
strong intermediate between suppli-
franchise contracts,” says Brunel.
ers and partners, and both owners and
“As procurement professionals,
franchisees are extremely organized,
we therefore have two customers:
business driven and cost driven,” Brunel
DECEMBER 2018
NORTH AMERICA
explains. “Unless we demonstrate
started to manage non-food opera-
savings and value creation, they will not
tions in the early 2000s,” says Brunel.
use our services. We have to monitor
He adds that suppliers and other
the competitiveness of our contracts
organizations had not previously
compared to market prices, and offer
understood hotels as a category to
tracking, distribution, a loyalty program
focus on. “I would say it took between
and procurement program – procure-
five and 10 years to get a strong offer
ment is one of the key departments
of procurement solutions for hotels
to attract new ownership groups and
for food, non-food and beverage.” Brunel notes that since then, suppli-
franchisees.” As the business has transformed, its
ers have begun to see opportunities
supply chain has diversified and evolved,
in the ever-growing hospitality sector.
and so too has the role of procurement.
“In terms of some suppliers, a lot of
“20 years ago, 90% of our function was
businesses didn’t have a hospitality
based on food management – then we
division 10 to 15 years ago – they did not
E X E C U T I V E P R OF IL E
Sebastien Brunel Brunel has 25 years of experience in the hospitality business with 20 years in procurement. Originally from France, he has occupied several procurement functions in the global procurement office as well as working in several countries. Brunel’s first international experience was in the UK, before he then occupied a function of Category Manager in Dallas, Texas in 2002. In 2007, Brunel moved to South America to be the head of procurement of that region, based out of Sao Paulo. He went back to Paris in 2014 to manage the international team. He has occupied the position of SVP of North and Central America since January 2017 when he relocated to Toronto. Sebastien holds an MBA from the FGV University of Sao Paulo. w w w.fdf wo r ld . com
81
CONNECTING AND INSPIRING PEOPLE
You have a story to tell, and we can help you tell it. Our highly trained professionals are passionate about delivering exceptional experiences. We are focused on every aspect of your event, from planning to execution, to help bring your vision to life. Understanding Your Needs Through listening and understanding your goals, we align our resources and solutions to ensure your unique event blends creativity and innovative technology for an inspiring experience. Prepared for Anything We orchestrate more than 1.5 million meetings a year and understand how to bring dynamic events to life. From boardroom to ballroom, we’re ready to do what it takes to ensure you have a successful event. Unmatched Resources Tap into our more than 9,000 highly skilled professionals, more than 40 production branches, and our personalized service to help create your event experience.
psav.com/connect 866-696-8295
NORTH AMERICA
83
know how to attend to the hospitality
strong role, not so much in finding new
businesses. But now, there are people
procurement solutions but in giving
dedicated to hospitality. We work
better access to our procurement-se-
together on value creation. Competi-
lected products and services for our
tive pricing is an important element,
customers. How can we make the
but having sustainable programs,
process easier to access? How can
product development and innovation
we offer a procurement marketplace
take an important share of the day-to-
to make sure people can go to an
day of a procurement specialist – both
online catalogue?”
on the team but also at the supplier.”
Over 10 years ago, Fairmont selected
Of course, process and digitization
Birchstreet which provides procure-to-
have been key to AccorHotels’ procure-
pay solutions with the aim of improving
ment journey. “Digital is playing a very
business processes through efficiency w w w.fdf wo r ld . com
DIGITAL PROCUREMENT MADE SIMPLE Digica Solutions is capable, experienced and ready to help your business acquire its computer hardware at the best possible price! With long standing industry relationships with Canada’s major distributors, Digica has access to all the products you need to address all your IT needs from Desktop to Data Centre. EXPERIENCED SALES PROFESSIONALS: • Over 40 years working with IT clients • Certified to configure/quote on todays latest IT technologies PRODUCT LIFECYCLE MANAGEMENT: • Warranty maintenance program for asset optimization • End of Life Recycle/Disposal and Carbon Credit Management CONFIGURATION SERVICES: • Hardware integration / Image pre-loading • Product customization • Advanced network and storage configuration LOGISTICS: • Custom delivery scheduling
PROUD PARTNERS OF
• Onsite product installation • Enhanced order tracking • IT Rollout Project Management
DIGICA.CA
SALES@DIGICA.CA
NORTH AMERICA
and cost reduction. “Birchstreet brings structure to our process. We have PO approval process, PO management, inventory management, product management and interaction between hotels and suppliers. This is essential for AccorHotels, especially in North America.” The businesses have worked together for many years, and AccorHotels favors the platform as it works well especially for its larger properties. “They’ve been able to invest in internal workflow – hotels with over 1,500 employees need a procurement process and workflow to ensure consistency.” Birchstreet has developed this from a back-office perspective, and the solution is effective
“Guests don’t want the traditional hotel experience or a standardized room – they want to have fun, new experiences and make connections” — Sebastien Brunel, Senior Vice President of AccorHotels
for AccorHotels’ finance department. Brunel adds that, as the partnership
The vast array of products AccorHotels
continues, he hopes to develop a system
buys, and indeed the array of suppliers
with even more benefits for front-end
it works with, presents challenges for
buyers, which he is confident can be
eprocurement. “Eprocurement works
achieved. “So far we have partnered
very well with products but it’s not as
with Birchstreet for 10 years; they’ve
simple for utility developments, such
always supported us in everything
as service companies – you can easily
we’ve done and the platform brings
buy a kilo of coffee, but one kilowatt of
efficiency, good savings and automatic
energy isn’t the same, so it’s not ideal
updates to inventory – we probably
for non-tangible contracts.”
do around US$150mn of annual spend through the Birchstreet platform.”
In addition, prioritizing the luxury experience over recent years, Acw w w.fdf wo r ld . com
85
ACCORHOTELS GROUP
1967 Year founded 10,000+
Approximate number of employees
86
corHotels has developed a strong
“Today, we’re coming back from global
commitment to local sourcing and
sourcing to more national or even local
as such, its supplier mix has changed.
sourcing. We have a strong desire to buy
“Our supplier base is very diverse due
local, and work with local producers
to the products we buy – we go from big
– such as sourcing fish from the coast
global companies like LG or Samsung,
of Canada, rather than importing it from
to large national companies, to smaller
Scotland or elsewhere. This is the way,
regional suppliers of fruits and vegeta-
especially in the luxury hospitality
bles or fish, with five employees,”
business, to provide local experiences.”
explains Brunel. “In North America,
Twenty years ago, AccorHotels had a
I would say 30% of our spend consists
larger range of suppliers, which through
of global providers, 40% national and
globalization was reduced – now, it is
30% regional.”
increasing again due to the Group’s
DECEMBER 2018
NORTH AMERICA
87
local sourcing commitment. “We went
a cookie-cutter outcome, especially for
from a vision of needing to reduce the
the luxury businesses which account
supplier base, to a vision that we still
for an important part of AccorHotels’
need a concentrated supplier base
global operations, and are particularly
but with a lot of choice.” As a result,
prevalent in North America. “We invest
a limited number of global providers
a lot in the lifestyle element and the
consolidate more spend but there is
uniqueness of our brands, we need more
a strong need to develop diversified
products and more solutions – we don’t
local solutions and reduce logistics.
want the same headboards, lighting and
Catering for the unique demands
food all over the world and we’re not ac-
of various owners and franchisees,
quiring new companies to change them
especially since the Group’s latest
into a standardized hotel.”
brand acquisitions, is vital in avoiding
Brunel explains each of the company’s w w w.fdf wo r ld . com
ACCOR HOTELS GROUP
the expected And create an inviting guest experience Veritiv ® Hospitality Advisors provide you with insights and trusted products to connect with guests in all areas of your hotel.
veritivcorp.com/facilitysolutions © 2018 Veritiv Corporation. All rights reserved. Veritiv and the Veritiv logo are registered trademarks of Veritiv Corporation or its affiliates. WF207994
Supporting the hospitality industry and AccorHotels. Ecolab offers services and solutions designed to help your hotel improve guest satisfaction and operational efficiency.
To learn more visit www.ecolab.com/lodging or call 800 35 CLEAN for more information Ecolab USA Inc. All rights reserved. D©2018 ECEM BER 2018
NORTH AMERICA
CLICK TO WATCH : CPO SEBASTIEN BRUNEL TALKS DRIVING PROCUREMENT IN ACCORHOTELS 89 4,600 hotels across the world is treated
Despite the challenges and varia-
as a unique point of production. “It’s
tions facing the procurement function
not like the manufacturing industry
at AccorHotels, this essential element
where everything can be produced
of the business is key to the significant
and distributed from a single location.
growth Brunel looks forward to. He
Hospitality business and decentraliza-
cites the company’s latest acquisitions
tion of ordering points makes our supply
and the new openings it has celebrat-
chain very complex and diverse in
ed as a result: the 1,048-room Fairmont
terms of suppliers and products. We buy
Austin which debuted earlier this year
food, beverages, technology, intellectual
as the brand’s largest hotel in the US,
services, financial services… the quantity,
as well as the planned openings of
too, is diverse, as a small hotel might
Fairmont Century Plaza, Los Angeles;
cumulate an annual spend of $400,000
Sofitel Mexico Reforma in Mexico City
while a large hotel can spend more
and SO/ Paseo del Prado in Havana, all
than $20mn.”
in 2019. AccorHotels will also open the w w w.fdf wo r ld . com
ACCORHOTELS GROUP
Like you, we’re all about customer service. Discover the technology that was designed with Canadian hoteliers in mind.
Get in touch with us at hospitality@telus.com © 2018 TELUS
NORTH AMERICA
first Raffles Hotel & Residences in North America in Boston as well as Fairmont Costa Canuva in Mexico’s Riviera Nayarit and Fairmont Saint Lucia in the coming years. AccorHotels is therefore particularly committed to North America as a region of growth, where it works with over 20,000 suppliers and spends $600mn each year, from small fruit and vegetable suppliers with orders of less than $500 to larger companies receiving millions in investment. On its North American journey, Brunel says the company is keen to partner with suppliers desiring to grow outside of
“Our supplier base is very diverse due to the products we buy – we go from big global companies like LG or Samsung, and large national companies, to smaller regional suppliers of fruits and vegetables or fish, with five employees” — Sebastien Brunel, Senior Vice President of AccorHotels
w w w.fdf wo r ld . com
91
ACCORHOTELS GROUP
92
North America, such as audio-visual
customers and increase our ability to
provider PSAV. “It’s a great example:
offer more contracted solutions.
the legacy contract is coming from
Another challenge is to maintain a
North America and can be extended
good level of compliance at a national
to other places in the world.”
level, while remaining competitive
However, as AccorHotels grows in
against regional offers. The third
size and spend in North America, the
challenge is to find a way to leverage
value offer of procurement will need to
volume while also keeping the
be even further solidified, says Brunel.
uniqueness of the product. And the
“We have to work hard to show the
fourth challenge, of course, is people
importance of procurement with our
– the development and training of our
DECEMBER 2018
NORTH AMERICA
“From a customer perspective and supplier perspective, having a strong procurement organization in North America is key” — Sebastien Brunel, Senior Vice President of AccorHotels
procurement talent. In the UK, they
hospitality player without having
have CIPS (Chartered Institute of
business activities in this region. From
Procurement and Supply) qualifica-
a customer perspective and supplier
tions, but I haven’t seen many global
perspective, having a strong procure-
equivalents so we must find trained
ment organization in North America is
procurement professionals with a
key,” he concludes.
balanced commercial background.” “We want to play a major role in North America as well as globally,” says Brunel. “We’ve started to reinvest here as we cannot be a true global w w w.fdf wo r ld . com
93
94
Rotana Hotels: developing a sustainable portfolio for the future WRIT TEN BY
CATHERINE S TURM AN PRODUCED BY
K ARIM M AS SA AD
DECEMBER 2018
MIDDLE EAST
95
w w w.fdf wo r ld . com
R O TA N A H O T E L M A N A G E M E N T PJ S C
Recently recognised as ‘Company of the Year’ at this year’s Gulf Business Awards, Rotana Hotels is on its way to becoming a leading sustainable hospitality company
C
ombining a unique understanding of the culture and communities of the Middle East with a collective, international team,
Rotana has acquired extensive experience in the hospitality industry. With the aim to reach a total of 100 properties by 2020, the business is focused on delivering its sustainability objectives as it contin96
ues to develop its diverse portfolio. Launching its sustainability objectives in 2012, Rotana has expanded its vision through its global corporate sustainability platform, Rotana Earth. Not solely placing emphasis on consumer demands, but remaining conscious of its ongoing environmental, economic and social impact, the business wants to enhance communities, whilst placing a unique touch within all hotels under its umbrella. Fully guiding its transition, Head of Sustainability, Christiane Zeidan, works with the company’s corporate sustainability committee, as well as Rotana’s President & Chief Executive Officer to develop policies and strategic goals, in alignment with its core values. “There are Environmental Health and Safety managers in every property at Rotana. I work with the DECEMBER 2018
MIDDLE EAST
97
w w w.fdf wo r ld . com
Water From Air...Pure Brilliance
Provide your guests an unlimited supply of the best tasting water in the world.
A compact USA design engineered for finer accomodations worldwide.
The Next Step In Sustainability Starts Here.
DRINKABLE AIR TECHNOLOGIES LLC
1+954-626-0856
| info@drinkableair.tech
MIDDLE EAST
“ Customers are more aware and are expecting a lot from the places they stay, particularly in terms of sustainability practices. We have to make sure we meet that expectation” — Christiane Zeidan, Head of Sustainability, Rotana Hotel Management
team, guide and support them to achieve a mature sustainability programme implementation,” says Zeidan. “Hotels report on key-performance indicators (KPIs) and day-to-day operations, while we integrate sustainability in different audits to ensure progress towards the company’s sustainability goals.” Publishing three sustainability reports in 2012, 2014 and 2017, 50% of the company’s portfolio, located in the United Arab Emirates (UAE) has obtained ISO 14001 environmental management certif99
E X E C U T I V E P R OF IL E
Christiane Zeidan Christiane A. Zeidan is an Agro-Industrial Engineer, who received her three M.Sc. degrees in Science & Food Technology, Enterprise management and Quality control from the “Institut National Agronomique Paris-Grignon, Institut Superieur d ‘A gronomie de Beauvais, France and the Lebanese universities. Subsequently she held several positions in management & Quality Control until she joined Rotana Hotel Management Cooperation where she oversees the environment, health & safety management system in the company. Her work experience has gradually raised her personal interest in sustainability issues in general and set in 2012 the company’s sustainability strategy and is leading its implementation.
w w w.fdf wo r ld . com
R O TA N A H O T E L M A N A G E M E N T PJ S C
“ It’s essential to have a smarter balance, supporting sustainability standards whilst ensuring the guest does not have pay more. This has been a challenge” — Christiane Zeidan, Head of Sustainability,, Rotana Hotel Management
100
DECEMBER 2018
MIDDLE EAST
101
w w w.fdf wo r ld . com
R O TA N A H O T E L M A N A G E M E N T PJ S C
ication, something which is recognised by guests and suppliers. “Guests are more conscious and their expectations are increasing, particularly in terms of sustainability practices. We have to make sure we meet those expectation,” notes Zeidan. “It’s essential to have a smart balance, that the level of guest’s satisfaction should be maintained while ensuring that destinations continue to be attractive and retain their commercial potential.”
PROMOTING ENGAGEMENT 102
Undertaking a sustainability materiality assessment to gain a deeper understanding of all material issues, Rotana has sought to track its performance, in order to fully reach
DECEMBER 2018
MIDDLE EAST
CLICK TO WATCH : ‘ROTANA HOTELS AND RESORTS – TV COMMERCIAL’ 103 its goals, as well as engage all associated stakeholders. “Our stakeholders range from our guests, our investors, our suppliers as well as communities and local governments. When we are expanding into new countries, we look at ways of investing in local economies, whilst placing emphasis on our environmental concerns and social responsibility,” observes Zeidan. “Complexities occur when country-specific sustainability regulations are missing, whether the local community is attracted to sustainability or if the required infrastructure is not in place to support our goals. This is where the challenge of our investor’s economic priority w w w.fdf wo r ld . com
R O TA N A H O T E L M A N A G E M E N T PJ S C
C OMPA N Y FA C T S
• With the aim to reach a total of 100 properties by 2020, Rotana is focused on delivering its sustainability objectives whilst expanding its diverse portfolio
104
• Launching its sustainability objectives in 2012, Rotana has expanded its vision through its global corporate sustainability platform, Rotana Earth • 50% of the company’s portfolio, located in the United Arab Emirates (UAE) has obtained ISO 14001 environmental management certification • Rotana has strived to guarantee supplier compliance, where all data is thoroughly integrated into a sustainability assessment, forming its supplier qualification programme
DECEMBER 2018
MIDDLE EAST
105
w w w.fdf wo r ld . com
R O TA N A H O T E L M A N A G E M E N T PJ S C
106
comes over environmental concerns
From a lack of awareness regarding
and social responsibility which
financial saving, to how sustainability has
requires more efforts from our man-
an impact on driving profit for the com-
agement team to educate and raise
pany, employees feel proud, more eng-
awareness in order to achieve our
aged and wish to continue working for
sustainability objectives.
a company which is keen to reduce its
“The immediate notion is that imple-
impact on the environment.
menting sustainable practices will increase operational cost, which is
SUSTAINABLE PROCUREMENT
completely the opposite. We try to
Through the Rotana Earth platform,
show how much we’re going to save on
the business has sought to introduce
operational cost and by how much we
sustainable procurement, resulting in
can drive business by adopting these
a greater understanding of its supply
sustainability practices,” she adds.
chain capabilities. Creating value-
DECEMBER 2018
MIDDLE EAST
107
“ We have implemented the Rotana Code of Responsible Purchasing. Through this framework we are educating our suppliers and challenging them to become more sustainable” — Christiane Zeidan, Head of Sustainability, Rotana Hotel Management
based suppliers, the business has worked to address all ethical and social issues, such as child labour within the supply chain, whilst supporting local families and its guests. “A thorough understanding of our supply chain enables us to create value for suppliers and our community at large. Wherever we source products, we believe the workers that have produced them, the communities living near the sourcing locations and the environment around it should not be negatively impacted. We want to w w w.fdf wo r ld . com
R O TA N A H O T E L M A N A G E M E N T PJ S C
108
DECEMBER 2018
MIDDLE EAST
ensure that there is no link between our business activities and adverse environmental and social impacts through our suppliers business relationships,” reflects Zeidan. “We take a holistic approach to managing these supply chain risks. This includes the development and implementation of the Rotana Code of Responsible Purchasing and continuous monitoring to evaluate compliance and manage foreseeable risks and social impact from our supply chains. A sustainability assessment criterion incorporated within our supplier qualification programme and procurement survey.” Whilst a large number of products remain imported, the company has strived to guarantee supplier compliance, where all data is thoroughly integrated into a sustainability assessment, which forms part of the company’s supplier qualification programme. “We have integrated sustainability criteria in our supplier’s audits which includes community contribution, environmental sustainability, the employees’ management of those suppliers, their labour practices and their compliance, etc. “This will help us cutting long term procurement costs, averting sustainability risks, reducing operating costs, building a marketable image of Rotana brand, benefitting to society and suppliers and minimising or reducing harm to the environment.
w w w.fdf wo r ld . com
109
R O TA N A H O T E L M A N A G E M E N T PJ S C
SUSTAINABLE ACTIVITIES Focusing on two key goals, poverty and hunger, Rotana has looked at ways to reduce food waste. Signing an agree-
1992
Year founded
ment with Winnow Solutions, 26 hotels in the UAE will monitor all products by size and weight, enabling all hotels to adjust menus accordingly. It will also promote the hotels to reuse food waste as much as possible and reduce its impact on the environment.
110
DECEMBER 2018
11,772
Approximate number of employees
MIDDLE EAST
end of this year with the aim of eliminating plastic water bottles.” “Among other achievements, 20 of our UAE hotels are ISO 14001 certified on the environmental management system, accounting for approximately 45 % of Rotana’s total operating hotels, we have reduced our energy consumption (kwH/guest) by 8.5 % and water (cbm/guest) by 21.5% per guest from 2013 baseline, while in the kitchens we recycled 97,490 litres of cooking oil to biodiesel. Similarly, we have reduced general Waste (kg/guest) by “We’re also doing a lot in terms of plastic reduction. From November,
21 % from 2012. “With workplace diversity and equal
we’re going to stop serving plastic
opportunities being among Rotana
straws in all Rotana facilities unless
most integral values, it proudly employs
requested by guests and gradually
11,772 colleagues from 107 nationali-
replacing it with more eco straws. We
ties. “To date, our colleagues have
are also stopping the use of plastic
participated in 1,352 community engag-
bottles in all our colleagues dining
ement activities since 2012, with
areas, collecting around 97,000 litres
78,531 volunteering hours to the
of frying oil and converting this to
community. 2,740 colleagues have
biodiesel” states Zeidan.
donated 812 litres of blood during 74
“Additionally, we are also working
blood donations campaigns 64.4 %
with Drinkable Air, where we challenged
of our activities have supported health
them to prepare a unit prototype prod-
& well-being causes, 20.4 % environ-
ucing drinkable water form air. We will
mental causes and 7 % supporting
be putting these in guest rooms at the
human rights issues.” w w w.fdf wo r ld . com
111
R O TA N A H O T E L M A N A G E M E N T PJ S C
112
DECEMBER 2018
MIDDLE EAST
LONG-TERM EXPANSION With several properties planned and new projects in the pipeline across the Middle East, Africa and Turkey, the business is on its way to becoming one of the most sustainable hospitality businesses worldwide. Recently recognised as ‘Company of the Year’ at this year’s Gulf Business Awards, Rotana Hotels aims to further deepen and consolidate its leadership position, with its strategy to establish 100 properties by 2020 and double this to over 200 by 2030. “As we expand into various cities and countries, we will ensure this is done responsibly. We want to make sure that the people in the region come to our hotels, that they will love it and respect our brand,” concludes Zeidan. “It’s essential that companies realise the total true value of their business and focus not just solely on making a profit. That’s our understanding and belief at Rotana. We believe in the enforcement of creating value for our stakeholders and to society at large. It’s really important as it will help us with our long-term strategies and maintain our sustainable vision.”
w w w.fdf wo r ld . com
113
114
PROVIDING UNFORGETTABLE EXPERIENCES WITHIN A NEW HOTEL CONCEPT WRIT TEN BY
CATHERINE S TURM AN PRODUCED BY
BROGAN BAGGOT T
DECEMBER 2018
EUROPE
115
w w w.fdf wo r ld . com
ARBOREA HOTELS AND RESORTS GMBH
Launching a sustainable leisure resort concept, ARBOREA Hotels and Resorts has sought to fully transform the traveller experience
W
ith extensive experience of the hospitality and leisure industry across Europe, the Middle East and Africa, Johann Kerkhofs is no stranger
to the challenges and subsequent rewards which the industry can bring. With evolving customer demands, alongside an increased global tourism boom, guests are no longer content with traditional services, but are 116
consistently looking to gain an unforgettable experience at each destination. Specialising in everything related to hotel and hospitality services, Kerkhofs has sought to transform the traditional guest experience by concentrating on communication, community and bringing people together through a new, innovative hotel concept known as ARBOREA Hotels und Resorts. Originating from ‘abor’, meaning ‘tree’ and formed and developed by Kerkhofs during his time in Egypt and Jordan, ARBOREA Hotels und Resorts is focused on bringing people together during their vacation. “The travel behaviour of tourists has changed. Many people now travel for a couple of days, but more often, rather than three weeks in a row,” he explains. “We provide an interesting product and DECEMBER 2018
EUROPE
117
w w w.fdf wo r ld . com
ARBOREA HOTELS AND RESORTS GMBH
118
DECEMBER 2018
EUROPE
all kinds of services for our guests
and tissue boxes at all establishments
and want people to experience more
are also constructed out of old maps
during their vacation through being
and files.
outdoors and undertaking various
Additionally, all establishments under ARBOREA will be powered by 100%
sports and activities.� A variety of rooms will be on offer
green energy sources. The company’s
to cater for families, couples and lone
ARBOREA resort in St Gallenkirch,
travellers, with all beds positioned
Austria will house a pellet heat system
directly into nature, creating a unique
and photovoltaic energy to provide
experience for all guests. The concept
essential electricity.
will only utilise natural materials, sustainable products and locally sourced goods,
EXPERIENCE.TOGETHER
eliminating most plastics and sourcing
With the aim to transform the guest
alternative solutions. Carpets have
experience, ARBOREA houses
been created out of recycled fisherman
a number of communication platforms
nets, promoting upcycling. Hangers
to build a sense of community. An
E X E C U T I V E P R OF IL E
Johann Kerkhofs Part of the Swiss Hotel Association, Johann Kerkhof has become a key figure in the hospitality industry for more than 30 years. Developing internationally acclaimed hotels, he has also worked in a number of senior level roles. With a wealth of knowledge and experience, Johann now provides in-depth seminars and refresher courses at Cornell University, NY, USA.
w w w.fdf wo r ld . com
119
ARBOREA HOTELS AND RESORTS GMBH
“Guests can have a type of living room experience, and it’s very interesting for corporate businesses” — Johann Kerkhofs, Managing Director
120
DECEMBER 2018
EUROPE
CLICK TO WATCH : ‘WE ARE ARBOREA’ 121 amphitheatre, named The Stairs, is an
which tastes great, whilst they learn
essential space for guests to socialise,
how to cook with fresh products,”
relax, and enjoy all the entertainment
says Kerkhofs.
options on offer at all resorts. Secondly, noting that food traditionally brings people together, the kitchens, which have been certified by green
Long tables have also been placed in the dining area, promoting communication across all avenues. Kerkhof’s commitment to promoting
chiefs, have been strategically placed
sustainability across ARBOREA has
in the centre of all restaurants under
also been extended to the food provided
ARBOREA, bringing people together
to guests. Procuring 80% of products,
wherever possible.
which are not only ethically sourced
“When you have a group of eight to
but bought within a 100km radius, strong
10 people who decide to cook for an
relationships with local farmers and
afternoon with our chef, people auto-
suppliers have been established across
matically connect to create something
the business. w w w.fdf wo r ld . com
ARBOREA HOTELS AND RESORTS GMBH
122
“ Many people only eat convenience food, so we are looking to promote the advantages of using fresh products” — Johann Kerkhofs, Managing Director
DECEMBER 2018
EUROPE
123
w w w.fdf wo r ld . com
ARBOREA HOTELS AND RESORTS GMBH
C OMPA N Y FA C T S
• With an increased global tourism boom, guests are consistently looking to gain an unforgettable experience • Kerkhofs has sought to transform the traditional guest experience by concentrating on communication, community and bringing people together 124
• New lifestyle concept, ARBOREA Hotels & Resorts, utilises only natural materials, sustainable products and locally sourced goods • ARBOREA houses a number of communication platforms to build a sense of community. • The kitchens have been strategically placed in the centre, enabling guests to cook together, as well as undertake cooking classes and events
DECEMBER 2018
EUROPE
“We buy our vegetables and fruits locally and have a winery not far away from the hotel. It’s all about local food and a local experience. Guests who come to us know where our food products are coming from,” says Kerkhofs. “Our grill restaurant, for example, provides all different cuts of meat, from a Tomahawk steak to a normal rib eye or fillet steak. Fish and all different kinds of vegetables are also on offer. We have a special grill which we imported from Grillworks® in New York.” A variety of activities are offered through the ARBOREA Experience. From running and cycling to paddle boarding and yoga, water sports are a particular focal point at the company’s hotel in Neustadt, where sailing, wakeboarding, kite surfing and diving are all on offer. The concept of collaborating and creating something new has also been extended to the establishment of a woodwork workshop, enabling guests to create their own furniture and upholstery. “Through these activities, people get to know each other and you get a different kind of atmosphere,” observes Kerkhofs. w w w.fdf wo r ld . com
125
IXMO SOLO
LESS CAN DO MORE. IXMO SOLO
=
mixer r e v le Single
+
IXMO onlineplanner: www.ixmo.de
Offering an E-Mobility Centre in
Wall outl et fo r sh owe rh os e
W
Guests are not sitting in a row, as we
cooperation with GP Joule, ARBOREA
try and make it more collaborative.
also provides e-bikes, e-cars and
Guests can have a type of living room
e-scooters on demand. However, not
experience, and it’s very interesting
content with catering solely to leisure
for corporate businesses. Guests can
travellers, the concept has also been
also celebrate their wedding, birthday
built to serve corporate guests. A num-
or any kind of celebration with us,”
ber of conference rooms have been
observes Kerkhofs.
established to cater to up to 80 attendees, transforming the traditional corp-
EUROPEAN EXPANSION
orate experience.
Noting that 12 projects in total are in deve-
“We furniture the rooms to our guests’
lopment, ARBOREA Hotels und Resorts
preferences. We have three confer-
has an ambitious plan to make it one of
ence rooms and a community room.
the most recognised and widely reno-
DECEMBER 2018
EUROPE
“ It’s all about local food and a local experience. Guests who come to us know where our food products are coming from” — Johann Kerkhofs, Managing Director
w w w.fdf wo r ld . com
127
ARBOREA HOTELS AND RESORTS GMBH
2014
Year founded
80
Approximate number of employees
128
DECEMBER 2018
EUROPE
wned hotel brands across Europe, launching its first resort in Neustadt in July. With a clear strategy to build 19 new resorts in the next 10 years, focusing primarily on German speaking countries, the Dolomite region of Italy and Spain, the company’s unveiling of its hotels in St Gallenkirch and its Schierke will be undertaken between 2020-2021. “It is all dependent on what the opportunities are. We have some special requirements for land plots, how we want to build our hotels and where they have to be built,” concludes Kerkhofs. “We don’t want to build a hotel in urban areas, but always a bit more out the way where guests have a view. We want to be close to urban areas, but at the same time it’s important for us to be green and to be a natural resort which will bring its own lifestyle.”
w w w.fdf wo r ld . com
129
130
Digital transformation for sustainability, health and the guest experience WRIT TEN BY
SE AN GA LE A-PACE PRODUCED BY
BROGAN BAGGOT T
Photo © Scandic Hotels DECEMBER 2018
EUROPE
131
w w w.fdf wo r ld . com
SCANDIC HOTELS
Director of Food & Beverage at Scandic Hotels Norway, Morten Malting, discusses how Scandic Hotels is embracing digital to eliminate waste and operate more sustainably
W
hen it comes to breakfast, there are few hotels that know more about achieving continuous success than Scandic Hotels
in Norway. With the hotel chain having consistently won the prestigious Twinings Best Breakfast competition, including 12 victories out of the last 14 awards 132
at its Scandic Nidelven hotel, it’s clear Scandic is revolutionising the way it provides breakfast. “Unique for the Scandinavian hotel market, a rich and varied breakfast buffet is usually included in the room price. As a consequence, providing the best breakfast offering is a key factor in order to attract new guests and keeping existing guests loyal. What better way to do so by offering hotel guests the very best breakfast?” asks Morten Malting, Director of Food & Beverage of Scandic’s Norwegian operations. In order to achieve this, Scandic has developed and introduced a new breakfast offering together with its top chefs and key suppliers. By emphasising high-quality local produce, healthy products made fresh to order, often by chefs present in the breakfast restaurant, and acknowledging the importance of the service element with things as DECEMBER 2018
EUROPE
133
Photo © Hotel Norge by Scandic / Francisco Munoz
w w w.fdf wo r ld . com
SCANDIC HOTELS
CLICK TO WATCH : ‘ARCTIC SLEEP OF NORWAY’ 134 simple as greeting every guest with a ‘good morning’, Scandic has become the undisputed breakfast champion in Norway.
EMBRACING KEY SUPPLIERS Since Malting became Director of Food & Beverage in 2011, Scandic Hotels Norway has undergone quite the transformation. Over the past seven years, the firm has seen its total number of hotels increase from 16 to 85 with food and beverage sales also rocketing. Currently, Scandic is not only one of the biggest hotel chains in Norway, but also ranks among the biggest players in the restaurant industry. Photo © Hotel Norge by Scandic / Francisco Munoz DECEMBER 2018
EUROPE
“The journey of the quality of our F&B offering has been amazing,” says Malting.
local guests and our core business, hotel guests.”
“Initially, some hotels performed better
Malting mentions restaurant Nova
than others, but today we are an entire
at the newly reopened Hotel Norge by
chain of hotels recognised for great
Scandic as an example of how the
food and beverage experiences, and
company is embracing local love by
we have been successful in creating
selecting the absolute best local prod-
a variety of local restaurant concepts
uce and having the former Bocuse
with one thing in common: we target
d`Or winner Ørjan Johannessen as
the locals. We have managed to do this
the Chef Advisor – Johannessen also
through high-quality local produce
happens to be a local chef who began
and by focusing on telling the unique
his career as a Scandic apprentice.
stories to our guests. By doing this we
Another example is restaurant Bruket
have been successful in attracting both
at Scandic Lillestrøm. Both restaurants
“ We have over 140 items on our breakfast buffet and work lots with local products.We really encourage the hotels to find local products from nearby, so that guests can enjoy the storytelling aspect of the products too” — Morten Malting, Director of Food & Beverage, Scandic Hotels Norway
135
SCANDIC HOTELS
136
“If you really want to embrace sustainability through cutting down on overproduction, you have to start at the beginning” — Morten Malting, Director of Food & Beverage, Scandic Hotels Norway
DECEMBER 2018
EUROPE
137
Photo © Hotel Norge by Scandic / Francisco Munoz
w w w.fdf wo r ld . com
& A. Idsøe.
SCANDIC HOTELS
OLD CRAFTS, traditions
INNOVATIONs SINCE 1828
post@idsoe.no | 47476783
www.idsoe.no
Haugen-Gruppen Foodservice is the proud organizer of Twinings Best Breakfast through 14 years. Thank you to all participating hotels for their effort to improve the breakfast experience of their guests.
www.haugen-gruppen.com
DECEMBER 2018
EUROPE
Photo © Scandic Hotels
139
have become the preferred choice for
pany it was important to choose supp-
locals and hotel guests alike, thanks to
liers where we become their most
their ‘local love’ strategy. “In Norway,
important customer,” he explains.
there used to be a common impression
Malting points towards key suppliers
that hotel restaurants were of subpar
such as Albert Idsøe (A. Idsøe), which
quality and reserved for hotel guests
has provided high quality meat products
only – I’m glad we are changing that impr-
to Scandic, and Haugen Gruppen, an
ession. Now, even food critics recom-
important supplier within the food and
mend our restaurants,” says Malting.
beverage industry, as reasons why the
Malting emphasises the importance of maintaining relationships with suppl-
company has maintained its success. “I think Albert Idsøe was crucial as
iers and believes this has enabled
our meat supplier when we were small.
Scandic to produce a better product.
Even though it’s quite a small, family-
“My strategy has always been very
run company, I believe our partnership
clear that when we were a small com-
with Albert has helped us tremendousw w w.fdf wo r ld . com
SCANDIC HOTELS
1963
Year founded
16,000
Approximate number of employees
140 Photo © Hotel Norge by Scandic / Francisco Munoz
ly with the quality of our products. They
visit more than 400 breakfast buffets
currently have three signature prod-
to identify and crown the breakfast
ucts on our award-winning breakfast:
champion. “This competition has really
breakfast sausage, ham and liver paté.
helped us by creating an awareness
Our guests often comment on social
and interest in hotel breakfast among
media about the fantastic liver paté.
the public, and Scandic has taken the
All recipes are made in cooperation
number one position in Norway. It
between Scandic and A. Idsøe chefs,”
means that when people ask which
Malting explains.
hotel chain has the best breakfast,
“Haugen Gruppen, the supplier behind the ‘Twinings Best Breakfast’ competition, has really helped improve the overall
most people will answer Scandic. It really drives business for us.” Scandic Hotels Norway continues
breakfast offering in Norway,” he conti-
to work with all of these companies
nues. Every year independent judges
thanks to the significant success of
DECEMBER 2018
EUROPE
141
each partnership, but Malting is careful to add that although good relations are important, neither supplier nor customer should become too comfortable and it’s vital to ensure a strict tendering process is maintained for every contract. “I think it’s a fine balance between having a really great network, partnerships and relationships – however, these relationships can never become too close because I think it’s critical that you keep your eyes open to see if there are alternative offerings on the market that can potentially do a better job,” he says. Photo © Scandic Hotels w w w.fdf wo r ld . com
SCANDIC HOTELS
C OMPA N Y FA C T S
• 70,000+ meals have been ‘saved from the bin’ from Scandic hotels in Norway via the Too Good To Go app • Scandic Hotels Norway has reduced waste by 80 tonnes annually — this equals 125,000 meals
142
Photo © Scandic Hotels DECEMBER 2018
EUROPE
143
w w w.fdf wo r ld . com
All Equipment for Professional Kitchens Leading Kitchen Equipment Supplier in Scandinavia www.metos.com
“That’s why we have our own procurement department, both on group level but also here in Norway,” he continues. “They pretty much run the tenders, but we decide together. I think it’s important to consider each company as not just a supplier but also someone that cooperates with us well as a partner. They must have a really great product and be able to offer the best price.”
SUSTAINABILITY THROUGH DIGITISATION In 2016, Scandic Vulkan was the first Norwegian hotel to utilise an app called ‘Too Good To Go’ which helps DECEMBER 2018
EUROPE
Photo © Scandic Hotels
145 eliminate food waste by offering
Scandic has also embraced another
leftover food to the public at discount-
digital solution called ‘Winnow Solutions’,
ed prices. Malting strongly believes
a system which connects a device to
the new app has been an excellent
a weight in order to measure leftover
initiative that has proved mutually
food from a buffet or a customer’s plate,
beneficial to both Scandic and its
affording Scandic an in-depth look at
customers. “The system allows us to
exactly how much is being wasted. The
get money for food that would
daily and weekly reports from the solu-
otherwise go in the bin. At Scandic,
tion enable Scandic’s head chefs to
we like to say that we make our food
produce the right amount of food each
with heart and passion. It belongs in
day and decrease food waste.
the stomach rather than the bin,” says
“If you really want to embrace sustain-
Malting. So far more than 70,000
ability through cutting down on over-
meals have been ‘saved from the bin’
production, you have to start at the
from Scandic hotels in Norway alone.
beginning,” explains Malting. “You have w w w.fdf wo r ld . com
SCANDIC HOTELS
to buy the right quantity, you have to spend the right amount of time on production, and you have to serve the right portions so that you really avoid leftovers. That’s what we’re aiming for.” In fact, Scandic Hotels Norway has signed a trade agreement with the agriculture and food department whereby the hotel chain has committed to cutting its food waste by 20% by 2020. So far, the Too Good To Go app has helped Scandic cut down on 70,000 meals worth of food waste, while overall through total initiatives at all hotels a 10% reduction has been achieved, and 80 tonnes less food waste is created annually – this is equal to about 125,000 meals. 146
GROWTH THROUGH STRATEGIC ACQUISITIONS In recent years, Scandic has made significant acquisitions in a bid to strengthen its position as the leading hotel chain in the Nordic region. The company acquired the Norwegian hotel chain Rica Hotels in 2014, as well as Finland-based Restel in late 2017 in moves to drive Scandic forward. Malting believes the decision to purchase Rica, among other things, was key in allowing Scandic to revolutionise its breakfast. “Rica Hotels were very famous for their breakfast so when we acquired them, we actually integrated Rica into Scandic, and looked very carefully at how they handle breakfast. “We took the best from Rica and the best from Scandic and we turned it into an award-winning DECEMBER 2018
EUROPE
“The ‘Too Good to Go’ app allows us to get money for food that would otherwise go in the bin. At Scandic, we like to say that we make our food with heart and passion. It belongs in the stomach rather than the bin” — Morten Malting, Director of Food & Beverage, Scandic Hotels Norway
Photo © Hotel Norge by Scandic / Francisco Munoz w w w.fdf wo r ld . com
147
SCANDIC HOTELS
148
Photo © Scandic Hotels
breakfast. We have over 140 items on
with a “good morning”. Breakfast
our breakfast buffet and work lots with
is also a great occasion for hotel
local products. We really encourage
managers, or even the general
the hotels to find local products from
manager, to take an hour each
nearby, so that guests can enjoy the
morning to serve coffee or tea and
storytelling aspect of the products too”,
at the same time chat with guests
says Malting.
and create an informal arena to
Another key element for Malting
receive feedback on the overall hotel
is how the hotels are connecting with
experience or on the breakfast offer-
their guests.
ing. Breakfast is often the last impre-
“I think the breakfast has a lot to do
ssion a hotel guest has of a hotel
with the service level, the visible chefs
before checking out, and therefore
who make the omelette or eggs to
an important element of a stay to
order and how we greet our guests
make a good overall impression.”
DECEMBER 2018
EUROPE
Photo © Scandic Hotels
149 Photo © Scandic Hotels
Having achieved such consider-
every breakfast buffet in a specific
able success with its breakfast
section. “Even though I don’t have
offering, Malting points to Scandic’s
any food intolerance myself, I was
mentality of ensuring that every
a little bit irritated that it’s always
customer is catered for regardless of
really low-quality products on offer
dietary requirements. This is a part
for those who do. It’s always affect-
of Scandic’s legacy as a pioneer of
ing the gluten-free or the lactose
accessibility and creating hotel
intolerant person, so they never have
experiences which every guest can
a great food experience when they
enjoy, regardless of disability or
visit hotels or restaurants,” says Malt-
specific requirements. Citing the
ing. “At Scandic today, our guests can
aim to achieve ‘a better morning to
enjoy great tasting allergy products
everyone’, Scandic has introduced
on our Food for All section, across
allergy-friendly local products to
all our hotels in the Nordics.” w w w.fdf wo r ld . com
SCANDIC HOTELS
150
Photo © Scandic Hotels
DECEMBER 2018
EUROPE
FUTURE ASPIRATIONS Looking ahead to the future, Malting believes Scandic must continue to prioritise the guest experience in order to sustain its position as the leading hotel chain in the Nordics. “At Scandic, we are always working to be guest-centric. It’s all about the guest experience and we always make sure the guest comes first. We work hard to make everything as seamless as possible so that it’s easy for you to go on a mobile app to book your room or your restaurant; because we know that the digital journey is really important for us moving forward,” he explains. “I think it’s important for Scandic to lead the way. We are a leader when it comes to sustainability and have been since the early 1990s. We are also a leader when it comes to healthy food and food intolerance. If you don’t take each of these elements – health, Photo © Scandic Hotels
food intolerance and sustainability – seriously, then people aren’t going to choose to stay with you in the future. You could say that sustainability’s part of the Scandic DNA.”
w w w.fdf wo r ld . com
151
152
AFRICA
VLH uses strategic procurement to provide world class hotel services WRIT TEN BY
DA LE BENTON PRODUCED BY
S TUART IRVING
w w w.fdf wo r ld . com
153
V E R A N D A L E I S U R E & H O S P I TA L I T Y
Through an approach to strategic procurement, VLH provides world class hotel services with greater efficiency
A
ll over the world, the hotel industry is changing and now more than ever before the role of procurement is proving key in
adapting to the ever-evolving hospitality landscape. The industry has always been driven by the guest 154
but the modern-day hotel guest has far greater access to information and technology, resulting in a more informed guest which demands more from a hotel operator. For Veranda Leisure and Hospitality (VLH), key to understanding and delivering on this increasing demand lies within its procurement. “We have a hybrid procurement process, that is, we use a mix of decentralised and centralised procurement processes,” says Stéphane Lacoste, Group Procurement Manager, VLH. “With this modus operandi and the input of my great team, we can manage to meet our KPIs and achieve world class standards, ensuring that Veranda Leisure and Hospitality increases its competitive advantage.” VLH is the mother brand of two hotels’ brands: Heritage Resorts and Veranda Resorts. The group is composed of three hotels in the three-star DECEMBER 2018
AFRICA
155
w w w.fdf wo r ld . com
V E R A N D A L E I S U R E & H O S P I TA L I T Y
category, two hotels in the four-star category, two hotels in the five-star category, a 19th century Chateau, 50 luxury villas, an 18-hole championship golf course, one beach club famous for its international events, and its own spa and wellness brand Seven Colours Spa. As Group Procurement Manager, Stéphane oversees a small team of 9 people and is responsible for VLH’s yearly average spend of $30 million. But as Stéphane notes, procurement has changed dramatically in recent years and his teams’ responsibilities have too. “We manage the group’s procure156
ments for every category of items over the group” he says. “We are also part of the Project Management teams and we work with them for all procurement-related actions, decisions and strategies during the renovation of current assets and/or acquisition of new hotels.” This shift in responsibility within VLH speaks to an industry wide shift in procurement, with more and more companies looking to implement a robust strategic procurement function. But what is meant by strategic procurement? “Moving away from tactical procurement to a strategic model was one of the very first tasks I had here at VLH,” says Stéphane. “For me, strategic procurement is defined by information; you don’t know what you don’t know so we must be guided by DECEMBER 2018
“With this modus operandi and the input of my great team, we can manage to meet our KPIs and achieve world class standards, ensuring that Veranda Leisure and Hospitality increases its competitive advantage” — Stéphane Lacoste, Group Procurement Manager, VLH
AFRICA
CLICK TO WATCH : ‘VERANDA — BRAND MOVIE’ 157 data and information coming from the
business model. He found that the
supply chain.”
existing ERP system proved incred-
VLH, like many organisations before
ibly inhibiting.
it, had been utilising a ‘tailor-made’
“To be able to do this, the ERP should
Enterprise Resource Planning (ERP)
be up to standards,” he says. “In supply
system and it required a keen under-
chain, you need a world class ERP
standing and knowledge of how to use
system. The better you have and the
it in order to extract the necessary
better your data is stored, the better
information. Stéphane looked to review
you will maximise your efficiency in
the company’s whole supply chain and
gathering information, the better you
procurement processes, its supplier
will analyse the data and the better
and item rationalisations and its
you will implement cost improvement/
spending in order to better understand
reduction strategies to have the company
how procurement could better fit into
beneficiate from all of it.”
and enable greater value to the VLH’s
“If the ERP doesn’t deliver strategic w w w.fdf wo r ld . com
V E R A N D A L E I S U R E & H O S P I TA L I T Y
158
DECEMBER 2018
AFRICA
information, procurement can’t develop
where used and replaced them with
any strategy.”
eco-friendly alternatives wherever
One such strategy that Stéphane
possible. The group has also replaced
and his procurement team have been
more than 200,000 plastic bottles from
working on is the implementation of
its operations through the implementa-
a more sustainably focused procure-
tion of bottling plants at all of its hotels.
ment function, which echoes a VLH
“Sustainability is at the heart of
groupwide approach to sustainability
everything we do and it’s rooted within
best practice. “We are constantly
our day-to-day thinking and actions in
encouraging and helping our business
order to enable the group to be greener
units to buy more responsibly and in a
throughout every single step of the
better way for the planet,” says Stéphane.
procurement process,” adds Stéphane.
To this end, VLH has removed all
Through the implementation of
plastic straws and polystyrene boxes
a Business Intelligence system, as
E X E C U T I V E P R OF IL E
Stéphane Lacoste, Group Procurement Manager at VLH Stéphane has 13 years of experience in procurement and supply across different industries, namely the banking industry, the FMCG industry, the manufacturing industry and the hospitality sector. His core expertise are strategic sourcing and purchasing, supply chain management, category management, contract management, ERPs, warehouse management, P&L accountability, negotiation skills, vendor management and project management. Since 2013, Stéphane has been a member of the Chartered Institute of Procurement and Supply, a renowned UK-based global professional body for procurement and supply. w w w.fdf wo r ld . com
159
well as the company’s approach to
team working with you and have great
sustainable best practice, VLH contin-
external stakeholders helping you
ues to act on all steps of the procure-
to improve your supply chain” says
ment process with the necessary
Stéphane. “By applying our ESI concept,
controls and measures in place to
we use the knowledge and expertise of
increase overall efficiency and effec-
our partners to improve and maintain
tiveness. Key to any procurement
the quality of our goods and services
function is its supplier network and
in our supply chain.”
VLH has adopted an Early Supplier
In order to implement the ESI concept,
Involvement (ESI) concept designed
Stéphane understands that he and his
to ensure the highest standards are
team must continuously strive to create
met and continue to be met for all its
strong relationships with these external
procurement activities.
stakeholders, suppliers and partners.
“In procurement, each journey is
The goal of this, he feels, is to create
a success only when you have a great
relationships that are built on trust,
DECEMBER 2018
AFRICA
From left: Shamnaz Mowlabocus – Procurement Officer, Xavier de St Pern – Senior Procurement Officer, Stéphane Lacoste – Group Procurement Manager and Arjuna Cuttaree – Procurement Officer
161 mutual respect and honesty. With a supplier database of more than 1500 suppliers and vendors, how does Stéphane foster and develop key relationships? “Face to face communication wherever possible,” he says. “In all relationships trust and honesty should be the more important factors. Win/ lose relationships in supply chain will never succeed and for the relationship to work it must be reciprocal.” “Veranda Leisure and Hospitality is very lucky to have such great suppliers
“If the ERP doesn’t deliver strategic information, procurement can’t develop any strategy” — Stéphane Lacoste, Group Procurement Manager, VLH
to be part of its supply chain. The w w w.fdf wo r ld . com
V E R A N D A L E I S U R E & H O S P I TA L I T Y
process of involving our partners in our decisions is one of our success factors in our relationships.” A key factor to developing these relationships is transparency and data capture through e-procurement. As the procurement sector becomes more agile and embraces technology further, Stéphane can assess its processes and share this information with VLH’s stakeholders. This he feels
162
“In procurement, each journey is a success only when you have a great team working with you and have great external stakeholders helping you to improve at every turn” — Stéphane Lacoste, Group Procurement Manager, VLH
60,000 Clients per year
1982
Year founded
2,000
Approximate number of employees
makes sense in order to foster relationships but also improve and enable growth as a business. “E-procurement allows greater speed in the way we can do business and the easiness in which we can obtain information and make decisions based on that information,” says Stéphane. “Combine that with VLH’s international standard policies regarding good governance and how
DECEMBER 2018
AFRICA
163
we rely on internal and external
VLH’s strategy over the coming years
auditors to challenge our processes
will be defined by an approach to
in order to improve what we do and I’d
continuous improvement, analysing
argue transparency is absolutely
and reanalysing its supply chain and
crucial to the VLH of today and the
procurement as it continues to play
one of tomorrow.�
an ever-increasing role in growing
Whatever the future holds for VLH
competitive advantage.
and the wider hospitality sector, procurement will continue to play a key role in enabling growth. With a number of hotel acquisitions already in the pipeline, w w w.fdf wo r ld . com
164
DECEMBER 2018
AFRICA
Innovation: the golden thread that ties Aditya Birla Textiles together WR IT TE N BY
L AU R A M UL L AN PR OD UC ED BY
A LI S TA IR W ES T
w w w.fdf wo r ld . com
165
A D I T YA B I R L A T E X T I L E S PA R T O F A D I T YA B I R L A G R O U P
United by an innovative strategy, a cutting-edge portfolio and a team of over 13,000 people, Aditya Birla Textiles is making its mark on the textile world
F
rom the clothes on your back to the walls around you, Aditya Birla Group is where
many everyday products come to life. 166 The Indian multinational conglomerate has a far-reaching portfolio – the group has a presence in the industries of metals and mining, cement, textiles including branded apparel, carbon black, chemicals, financial services, telecommunications and much more. Yet, regardless of the market, Aditya Birla Group has continued to leave an impression. Today, the group stands as a world leader in aluminium rolling, viscose staple fibre and carbon black production – and this pioneering approach hasn’t gone amiss within its Textiles, Acrylic Fibre or Overseas Spinning businesses either.
DECEMBER 2018
AFRICA
167
“ Sustainability is a way of life for us. It’s part of our DNA” — Jagadish Barik, Chief Sustainability Officer and VP of Business Excellence
w w w.fdf wo r ld . com
A D I T YA B I R L A T E X T I L E S PA R T O F A D I T YA B I R L A G R O U P
DECEMBER 2018
AFRICA
As a top Fortune 500 company, Aditya Birla Group also boasts the finances to back up its leading reputation, reporting a market capitalisation of about $50bn. Since its foundation over a century ago, the group has grown to become the third-largest Indian conglomerate in the private sector and, looking to the future, it has devised a new strategy to ensure it remains a global leader for years to come. Aditya Birla Textiles – consisting of Textiles (Linen & Wool), Acrylic Fibre and Overseas Spinning businesses, has a jaw-dropping output from nine
“ Our strategy is to offer more technical and value-adding products using innovation and technology” — Kapil Agrawal, CEO of Overseas Spinning
169
manufacturing facilities spread across E X E C U T I V E P R OF IL E
Kapil Agrawal Mr. Kapil Agrawal is the CEO of Overseas Spinning business, taking care of five units in Indonesia, Thailand and Philippines. He is a chartered accountant by profession. He joined Aditya Birla Group as Management Trainee in Grasim Chemicals division and then moved to Chairman’s office, assigned with responsibilities of Textiles and got exposure to the total value chain from pulp to retail. Within the Aditya Birla Group, he worked at Madura Garments, Aditya Birla Retail in various profiles before moving to Overseas Spinning business as COO and then moved up to CEO. He is a key learner, visionary and believes in execution of strategy.
w w w.fdf wo r ld . com
A D I T YA B I R L A T E X T I L E S PA R T O F A D I T YA B I R L A G R O U P
five countries. Its acrylic fibre business has a capacity of about 125,000 tonnes, while its overseas spinning business has as many as 625,000 spindles and a production capacity of around 172,000 tonnes of yarn.
Reinventing the portfolio Countering fluctuating demand and prices, Aditya Birla Textiles has taken a bold step to stay on top: it used to be a commodity player but now it has transformed its strategy to become 170
a firm that creates unique, value-adding products. As part of this, innovation has become a top priority, helping the firm create unique products like its anti-bacterial fibre Amicor or its E X E C U T I V E P R OF IL E
Mr. Thomas Varghese is the Business Head for the Aditya Birla Group’s textiles, acrylic fibre and overseas spinning businesses, which include two domestic textile units, five overseas spinning units and two acrylic fibre units. He joined Grasim Industries in 1999 as Chief Marketing Officer for the pulp and fibre business. He has been the Chairman of CII retail council for 4 Years, Chairman of CII Marketing council for 3 years and Chairman of CII textile council for one term.
DECEMBER 2018
AFRICA
sustainable gel-dyed fibre Radianza. Satyaki Ghosh, CEO of Aditya Birla Group’s Textiles and Acrylic Fibre business, believes the company has devised a thorough plan for success. “In the wool industry, our focus is not only to be a preferred supplier by ensuring quality and availability at competitive prices; we also want to proactively lead the transition of wool from a formal to casual fabric,” Ghosh says. “Therefore, we have recently invested in a facility to produce wool that is more machine washable.” Meanwhile, in the acrylic fibre and spinning businesses, the company has increasingly focused on strategic markets and distinctive fabric applications. “Our strategy is to offer more technical and value-adding products using innovation and technology,” notes Kapil Agrawal, CEO of Overseas Spinning. “We have recently started creating more technical yarns, for instance, which are used for military, firefighting or medical purposes.” Indeed, Aditya Birla Textiles has consistently invested in research and development to ensure it remains up to speed with the latest innovations. w w w.fdf wo r ld . com
171
A D I T YA B I R L A T E X T I L E S PA R T O F A D I T YA B I R L A G R O U P
CLICK TO WATCH : ‘ABG TEXTILES’ 172 In doing so, Agrawal says that if
me an idea. I think that’s one of our most
a fibre can be spun, the company
unique and differentiating factors.”
can spin it, using next-generation
Aditya Birla Textiles doesn’t compro-
technologies like ring spun, vortex
mise on machinery either, using only
and open-end machines.
top-of-the-line equipment from Europe,
“We have also created a unique
Japan and beyond. This helps to ensure
pilot plant which essentially allows
that the best quality products are created
us to create a product from start to finish, from spinning until garmenting,” he continues. “So, let’s say my customer wants to develop a new type of trousers. I can provide a turnaround time of around seven days from when he gives DECEMBER 2018
AFRICA
“ We want to proactively lead the transition of wool from a formal to casual fabric” — Satyaki Ghosh, CEO of Aditya Birla Group’s Textiles and Acrylic Fibre business
and that they are created consistently. It also means that employees no longer need to work on repetitive tasks but can instead focus on more value-adding ones. This pioneering approach has helped to position Aditya Birla Textiles’ brands among the most sought-after brands in India, with the business now standing as one of the leading producers and exporters of acrylic fibre, spun yarn, wool tops and yarns, linen yarns, fabrics and apparel. This reputation has been recognised by leading players in the apparel market like Restoration Hardware, Utenos, H&M, Speciality Fashion and Devold Norway 1853, which have all selected Aditya Birla Group as a key supplier.
E X E C U T I V E P R OF IL E
Satyaki Ghosh joined the Aditya Birla Group in 2016 as a CEO for Domestic Textiles & Thai Acrylic Fibre Business. He had previously been working as a General Manager & Director of Consumer Products Division at L’Oreal India, then in the company’s Paris headquarters. His 23-year long career has seen him involved with General Electric, PepsiCo and Spencer’s Retail; his experience cuts across consumer and retail businesses.
w w w.fdf wo r ld . com
173
A D I T YA B I R L A T E X T I L E S PA R T O F A D I T YA B I R L A G R O U P
174
E X E C U T I V E P R OF IL E
Dr. Jagadish Chandra Barik is Chief Sustainability Officer and VP – Business Excellence for Textiles, Acrylic Fibre and Overseas Spinning business. He has more than 25 years of experience in projects, manufacturing, quality assurance, Business Excellence and Lean Six Sigma. Prior to Aditya Birla Group, he worked as Corporate Head – Quality, Systems & Process at ITC Ltd, Director – Process Excellence at Xchanging Technology and General Manager – Production at Reliance Industries Ltd.
DECEMBER 2018
AFRICA
“ Our entire strategy revolves around quality, achieving scale and size, achieving market share and achieving customer excellence” — Thomas Varghese, Business Head of Textiles, Acrylic Fibre and Overseas Spinning
175
“With access to world class facilities,
A consumer-centric commitment
cutting-edge technology and our
Carving out a customer-driven path
state-of-the-art R&D center, we are
in the sector, Aditya Birla Group had
now the fifth largest acrylic fibre
worked hard to stay one step ahead of
producer in the world,” says Ghosh.
its customers wants and needs. In the
“We’re also at the forefront of the
domestic textiles market, Ghosh says
developing domestic linen market.
that Cavallo, the company’s linen-blend-
Our Linen Club brand enjoys leader-
ed apparel brand, is helping it cater to
ship status in the Indian market and
its value-seeking digital consumers.
is a brand of choice for linen connois-
“We have launched a value-for-money,
seurs across the country.”
linen-rich apparel range that offers the
w w w.fdf wo r ld . com
A D I T YA B I R L A T E X T I L E S PA R T O F A D I T YA B I R L A G R O U P
distinct look and comfort of linen combined with the easy-care attributes of cotton,” he says. “Cavallo has been received well by the digital consumer and we are looking to up the ante here.” Meanwhile, in the wool market, Ghosh points to the mass transition in the global fashion space from woven to knits, formal to casual wear and from dry cleaned to machine washed garments. “To tap into this segment, we have invested in the capability of producing machine washable wool and blended yarns in-house,” he notes. 176
“Meanwhile in the acrylic fibre segment, there has been an uptick in consumer demand for customised yarns for specific applications. Therefore, we have invested in an additional production line focusing on value-added products.”
Fuelling business excellence Continuous improvement is a wellversed mantra at Aditya Birla Group, and as such the Aditya Birla Textiles business is also using innovation to revamp the way it operates. Embarking on its latest project known as ‘Mission Happiness’, Thomas Varghese, Business Head of Aditya Birla Textiles, says that the business is striving to be a top DECEMBER 2018
AFRICA
177 player in each of its segments. “Our entire strategy revolves around quality, achieving scale and size, achieving market share and achieving customer excellence,” he notes. “We use a Net Promoter Score (NPS) to see the loyalty of our customer relationships. To improve this, we get regular feedback from customers; this is fed back to our teams who get into a huddle on a weekly basis to resolve any pain points almost in real time. This helps us enhance our customer satisfaction levels and improve our NPS.” Benchmarking, lean manufacturing and six sigma projects are all commonplace at Aditya Birla Textiles. Additionally, Varghese w w w.fdf wo r ld . com
A D I T YA B I R L A T E X T I L E S PA R T O F A D I T YA B I R L A G R O U P
“ In the acrylic fibre segment, there has been an uptick in consumer demand for customised yarns for specific applications” 178
— Satyaki Ghosh, CEO of Aditya Birla Group’s Textiles and Acrylic Fibre business
points out that customer journey
A greener approach to business
mapping is frequently used by the
Not only is Aditya Birla Textiles taking
business. By examining consumers’
a fresh approach to its business
touch points and resolving any hurdles,
processes, it is also thinking of new
the business ensures that its top
ways it can grow in a sustainable,
priority is always the customer. “We
environmentally friendly way.
always like to ensure that we’re at
United by a common sustainability
the cutting edge by revamping and
vision, Aditya Birla Textiles has
modernising our process periodically;
challenged itself to grow in a way
this ensures we don’t lag behind in
that makes a positive difference to
terms of competitiveness of technol-
consumers and communities alike.
ogy and cost,” Varghese adds.
By using more renewable energy,
DECEMBER 2018
AFRICA
179
reducing its carbon emissions and cutting down its water use, for example, the firm hopes to become the benchmark for sustainable businesses. Chief Sustainability Officer (CSO) and Vice President of Business Excellence, Jagadish Barik, says that sustainability isn’t a second-hand thought at the firm but rather a common thread that runs throughout the business. “Sustainability is a way of life for us,” he says. “It’s part of our DNA.
w w w.fdf wo r ld . com
A D I T YA B I R L A T E X T I L E S PA R T O F A D I T YA B I R L A G R O U P
We want to become the industry benchmark in sustainability processes and practices by 2020 through qualitative engagement with all stakeholders.� As such, the group has adopted the Higg Index, an apparel and footwear industry standard for assessing environmental and social sustainability throughout the supply chain. It has also reduced its energy consumption (increasingly opting for renewable energy sources) and has implemented a variety of far-reaching corporate social responsibility (CSR) programmes which it hopes will develop 180
and improve the livelihood of the communities surrounding its factories. With over 13,000 employees under its wing, Aditya Birla Textiles has been quick to understand that its people are instrumental to its day-to-day operations. As a result, the business has built a meticulous programme to develop its team. The business has increasingly used what it calls ‘two by two’ metrics, whereby employees can work in two departments, two businesses and two geographies to give them exposure to new areas of the sector. Additionally, the business is also keen to promote local talent rather than relying on expats, apparent as the some of the business units has reduced its reliance on expats by up to 30% over the last four DECEMBER 2018
AFRICA
“ We want to become the industry benchmark in sustainability processes and practices by 2020” — Jagadish Barik, Chief Sustainability Officer and VP of Business Excellence
years. This is helping to enrich local communities by providing more investment and employment opportunities. Not only the business teams predominantly local but also diverse, with women accounting for majority of its workforce in many Aditya Birla Textile units. Investing in people, processes, technology and sustainability, Aditya Birla Textiles has established itself as a powerhouse in the textile, acrylic fibre and spinning markets. By not compromising on quality, it has ensured it will remain a leading player for years to come.
w w w.fdf wo r ld . com
181
TASTES BETTER TOGETHER
Coca-Cola (ZA)
Coca-Cola (ZA)
Coca-Cola (ZA)
@CocaCola_ZA
@CocaCola_ZA
@CocaColaZA
ENJOY THE FEELING
TM