February 2018
COCA-COLA EUROPEAN PARTNERS’ THIS IS FORWARD PROGRAMME
www.FDFworld.com
TOP 10 SOFT DRINKS
COMPANIES IN THE WORLD
INSIDE MÖVENPICK’S EUROPEAN EXPANSION AN INTERVIEW WITH VICE PRESIDENT DEVELOPMENT EUROPE & NORTH AFRICA, AMIR LABEBEDI
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FOREWORD HELLO AND WELCOME to the first 2018 edition of FDF World magazine. This year, we start the conversation with Mövenpick’s Vice President of Development for Europe and North Africa, Amir Lababedi. Charged with ramping up the hotel and resort management firm’s European expansion, Lababedi reveals how the UK is a key area of focus for the company and industry at large. Sustainability has been a huge talking point for the food and beverage industry and so we talked to Joe Frances, VicePresident of Sustainability at Coca-Cola European Partners, to find out more. He tells us how his team is spearheading sustainability awareness with ‘This Is Forward’ - a campaign which aims to set the benchmark for positive action by the industry to alleviate its impact on the environment. Speaking to CEO and founder Peter Fedchenkov, we also explore how Russian startup INS is disrupting supply chain dynamics with its unique blockchainfuelled, direct-to-consumer solution. We’re also taking a closer look to see which top 10 food and beverage giants have taken a slice of the lucrative soft drinks industry. On top of this, we’ll be rounding up the top industry events across the globe for this calendar year. We sincerely hope you enjoy the issue, and as always, please tweet your feedback to @FDFWorld
Enjoy the issue!
www.fdfworld.com www.bizclikmedia.com
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F E AT U R E S
E X PA N S I O N S T R AT E G Y
MÖVENPICK’S LONDON LAUNCHPAD
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D I G I TA L D I S R U P T I O N
WHY A PL ANT PROTE IN SCANNING PATE NT COULD POTE NTIALLY CHANGE THE FOOD INDUSTRY…
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FRANCHISING
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DIRECT TO
Indeed shows how to make an ‘unlimited CONSUMER leave’ policy work – grocery transformation
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S U S TA I N A B I L I T Y
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FORWARD THINKING – SUSTAINABILITY
AT COCA-COLA
TOP 10
SOFT DRINKS COMPANIES IN THE WORLD
TOP 10
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Events
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C O M PA N Y P R O F I L ES
66
Marriott International ASIA
80
Burger King ASIA
92
AWJ Investments MIDDLE EAST
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February 2018
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E X PA N S I O N S T R AT E G Y
MÖVENPICK’S LONDON LAUNCHPAD Amir Lababedi, the man charged with ramping up the hotel and resort management firm’s European expansion, discusses his new UK-based role Wr it t e n by TO M WA D LOW
E X PA N S I O N S T R AT E G Y INFLATION, STAGNATION, UNCERTAINTY. These three words neatly summarise the economic atmosphere of Europe throughout the past decade since the financial crisis struck. Add in the UK’s ongoing EU withdrawal process, and it is easy to see why many multinational companies are biding their time when it comes to deciding where to springboard European growth from. Indeed, much coverage has been devoted to big businesses lining up moves away from London, now tussling with the likes of Paris and Frankfurt to remain Europe’s major financial conduit. However, many are also committing to a UK-based European future. Take Mövenpick Hotels & Resorts, a Swiss multinational with more than 80 hotel, resort and cruiser operations across 24 countries. Having overseen rapid growth in the Middle East and Africa over the past two to three years, Amir Lababedi, now Vice President Development Europe & North Africa, heads up a new London office. His objective – to fast-track the company’s European expansion, with the UK as its focal point. 10
February 2018
“The market has been performing extremely well in London and other European regions despite the talk of Brexit uncertainty,” he states. “One concern will be cost inflation, but we will find ways to address this as and when it materialises. “There have been a lot of suppliers entering the market, especially in London, and our overall outlook for here and secondary cities in the UK is extremely positive. We are known to the UK outbound tourism market, and now we want to build up our inbound and internal profile.” Mövenpick’s decision to accelerate UK and European growth is backed up by numbers. The continent’s travel and tourism trade has withstood the widespread economic difficulties more resolutely than most sectors. Growth has been steady – in 2011, travel and tourism contributed €565.6bn ($694bn) to Europe’s GDP, a figure which has consistently risen year by year to €641.5bn ($787bn) in 2017. Come 2027 and the industry is expected to add €816.9bn ($1.001trn) to the European economy. Hotelier heritage Lababedi’s job is to ensure
Mรถvenpick converted an old water tower to create this hotel in Hamburg 11
E X PA N S I O N S T R AT E G Y “I have spent most of my life either living or working in hotels. Having been involved in my father’s business from an early age, it became an ambition to develop a successful career in the industry” – Amir Lababedi, Vice President Development Europe & North Africa, Mövenpick Hotels & Resorts
Mövenpick enjoys a healthy share of this growth. An industry veteran of around 25 years, his experience in both financial and operational processes has proven invaluable throughout his career. “My father was a hotelier so it came as a natural option for me,” he recalls. “I have spent most of my life either living or working in hotels. Having been involved in my father’s business from an early age, it became an ambition to develop a successful career in the industry. 12
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“I chose to move away from the family business to broaden my horizons and experience – I did my masters in banking and finance and looked at various options after that. I looked at proprietary trading and equity markets before being asked about combining my finance and hotel knowledge and going into hotel investments, working for advisory firm HVS in London from 2005 to 2007, and then again in the UAE in 2013.” Lababedi also gained experience at Masdar and the Government
Mövenpick’s hotel in Amsterdam
of Abu Dhabi before moving back into an operational role, joining Mövenpick at the end of 2014. Made in the Middle East The next two and a half years appear to be career-defining. Under the stewardship of Chief Operating Officer for MEA Andreas Mattmüller, Lababedi helped Mövenpick to enter and expand in numerous countries within the region. “Andreas was a brilliant leader and mentor and I learned a lot from
him,” he says. “We had a lot of fun and success working together. Forbes named us as the number one hotel brand operating in the region, so we really consolidated our position in these markets. “We also expanded into new strategic markets, including Oman where we previously had zero presence. Lahore and Istanbul are other destinations further afield where we have opened with fantastic new owners. We now have three hotels in Pakistan.” 13
Mövenpick now operates around 50 hotels across 10 Arab markets, and towards the end of the two and half year period, Lababedi took over responsibility for Africa, and in 2017 oversaw work on five new projects. Then, the opportunity to step into Europe presented itself. “My predecessor decided to move on, and with my previous experience I felt comfortable in 14
February 2018
taking this on,” Lababebdi explains. “It is a different role and a challenging one – the European market is a very sophisticated one in a highly competitive environment.” Record chasing Mövenpick signed a record 20 new hotel and resort deals worldwide last year, and is looking to build on that feat in 2018. In Europe, this will involve
E X PA N S I O N S T R AT E G Y consolidating its existing presence in major markets like Germany, Switzerland, the Netherlands and Turkey, expanding in the likes of the UK, Austria, France and Poland, and looking at opening up in other countries like Spain and Portugal, along with Eastern European markets and Scandinavia. A mixture of management and lease agreements, new properties will include hotels, airport hotels, resorts (which account for one third of company income) and Mövenpick Residences, a recent addition comprising serviced apartments for longer term stays. “My main objective is to develop the presence of Mövenpick in Europe through all of these channels, being seen by the development and investment community as actively targeting this region for growth,” Lababedi states. This will not come without challenges, however. Asides the Brexit uncertainty and potential cost inflation already cited, Lababedi also points to heightened competition, finding risk-free tenants to sign leases, and a possible 15
“My main objective is to develop the presence of Mövenpick in Europe through all of these channels, being seen by the development and investment community as actively targeting this region for growth” –A mir Lababedi, Vice President
Development Europe & North Africa, Mövenpick Hotels & Resorts
labour squeeze depending on the outcome of the UK’s EU negotiations. Modernising Though judgement on Lababedi’s record may ultimately boil down to numbers, a not insignificant feature of 2018 for Mövenpick in Europe will be the curation of its hotel style and feel. This is no better demonstrated than by a landmark new lease deal signed in The Hague, Netherlands. Working closely with American hotel design heavyweight Wilson
“I find it incredibly boring to walk in and see the same setup with no surprises” –A mir Lababedi, Vice President
Development Europe & North Africa, Mövenpick Hotels & Resorts
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Associates, the 72-room Mövenpick Hotel The Hague introduces a new era of design, focusing on contemporary public spaces to reflect the desires of modern travellers. “A lot of our projects will demonstrate this shift that is evident at The Hague, whether it’s making more from smaller room sizes or incorporating our food and beverage heritage,” Lababedi says. “The multi-purpose public lobby areas are going to be a key factor, while we will also see our wine and coffee lounges become more prominent. We want to make a more fun, engaging and socially interactive experience in these ground floor areas. This is the heart of the hotel, not just a place where you check in.” As a frequent corporate traveller, Lababedi began to fall in love with boutique hotels around 12-15 years ago as it became more common to work remotely in the likes of hotel lobbies and other public spaces while on the move.
E X PA N S I O N S T R AT E G Y
“I find it incredibly boring to walk in and see the same setup with no surprises,” he adds. “Yes, you are here with work to do, but you can work from anywhere now and people would rather be working remotely in engaging spaces, able to identify with the destination they are in. I want to feel like the city is inside the hotel.” By bringing hotel lobby areas to life, whether it be through creating
dynamic meeting areas, opening multipurpose bars and eating spaces or simply rolling out superfast connectivity and charge points, Mövenpick is looking to appeal to the modern business traveller as much as leisure-going tourists. Such appeal, Lababedi hopes, will lead to another landmark year. “We keep beating records with deals signed, and our intention is to keep that going,” he concludes. 17
DISRUPTIVE TECHNOLOGY
WHY A PL ANT PROTE IN SCANNING PATE NT COULD POTE NTIALLY CHANGE THE FOOD INDUSTRY… Towards the end of last year, JUST (formerly Hampton Creek) patented its revolutionary plant protein scanning process, but what impact can this have moving forward? Written by S T UA R T H O D G E
DISRUPTIVE TECHNOLOGY WHEN THE COMPANY formerly known as Hampton Creek rebranded as JUST, it did so with a purpose in mind. Over the next five years, JUST and its team of experts aims “to do everything they possibly can every single day to increase the probability that, before we die, a fair, honest and just food system is the food system in every community”. Already, JUST is famed for its products like “clean meat”, alternative mayonnaise and cookie dough, and JUST Scramble, as well as its focus on sustainable ingredients. Overhauling the global food system is not a task to be taken lightly, but the team at JUST believe they have what it takes to make change happen. In September last year, the company was issued with what is believed to be the first ever patent covering machine learning methods and systems for food ingredient discovery. JUST rightfully sees this as a major milestone in its mission and has incorporated automation, machine learning and AI to create what could prove to be a hugely disruptive technological breakthrough. The patent ‘discovery systems for identifying entities that have a target 20
February 2018
property’ took tens of millions of dollars and several years to complete onsite at the company’s 93,000 sq ft headquarters in San Francisco. The system, nicknamed ‘Blackbird’, combines of one-of-a-kind robotics, proprietary plant databases, AI and predictive modeling. This essentially automates the system for researching plant proteins by breaking them down to the molecular level and searching for desirable properties — like emulsification, protein content and thermal stability. The new technology does this by bringing together all manner of expertise and specialisms.
“[the patented technology] can identify materials that help other food companies make their products better for consumers and the planet” – Meng Xu, Director of Bioinformatics at JUST
RAW COOKIE DOUGH
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DISRUPTIVE TECHNOLOGY “The platform is not only a gamechanger for us because it helps JUST dramatically increase the probability of identifying discoveries for our products and our ability to bring healthier, diversified plantbased products to market, but it can also identify materials that help other food companies make their products better for consumers and the planet,” says Meng Xu, Director of Bioinformatics at JUST. CEO Josh Tetrick gives a good description of how exactly the whole operation works. “Try to imagine if we were flying around the world and I took you to Merck pharmaceutical company,” he explained to Food Dive. “And I looked at their screening platform, and I grabbed elements of the screening platform out, and you went to a large protein processor somewhere that’s doing potato protein, and then we got some of their equipment. “Then we went to Genentech into their analytical chemistry lab and I said, ‘All right, let’s bring that over here.’ Then we went to a Michelin star restaurant — let’s bring some of that equipment and some of those benches over here. Then we went 22
February 2018
to Nestlé and took some of the food scientists and the food scientists’ equipment and we put it in there. Then we went to the Carnegie Institute at Stanford, the home of some of our computational biologists that work for us. They look at all this data and find meaningful relationships in it.” That’s easy enough to claim, but how exactly is that the case? FDF World also spoke to JUST’s Director of Automation, Chingyao Yang. He works as a ‘translator’ for the JUST robots, working with biochemists, food scientists, data scientists and engineers amongst others. “While our team has amazing talent working on manual experiments on proteins and food, my goal is to educate these robots with our team’s knowledge since they are part of JUST family members,” he says. “With the goal of making a major impact on how people think of food, we challenge ourselves to find solutions across different disciplines including hardware design, software integration, data analysis, etc. Combined with knowledge from our chefs, food chemists, and materials scientists, robots accelerate our discovery pipeline and explore
VIDEO: JUST FOR ALL
R&D HAS BEEN CRITICAL TO JUST’S SUCCESS TO DATE 23
more opportunities from different corners around the globe.” But why is this particular technological innovation so important to that mission? “This technology speeds up the rate of discovery for new plant candidates for better, more sustainable food production. We first started analysing plant protein content by hand,” says Xu. “Now, we’re using our novel automated discovery platform – using robotics and machine learning – to explore their potential much faster. The more data we gather, the more we’ll discover proteins in plants that will improve the food system. “We’re using data to increase the probability of discoveries to empower our own food production and to empower others in the industry to make better food that’s healthier and more sustainable.” In addition, the technology is especially exciting because it offers a functionality not seen before. “Our platform is integrated with novel ideas and enhanced performances of existing technology,” Yang continues. “We built these workflows from scratch, understanding deeply about food technology 24
February 2018
“This technology speeds up the rate of discovery for new plant candidates for better, more sustainable food production” – Meng Xu, Director of Bioinformatics at JUST
and protein biochemistry. “Connecting dots from multiple perspectives, we deliver rich and interactive information that has not seen before in this industry. JUST proudly owns the advantages of the rate of discovery, precision, accuracy, and the capacity of new technologies. For example, we designed and collaborated with different instrument vendors to create unique robots that characterise the gelling and foaming properties of plant candidates. With
DISRUPTIVE TECHNOLOGY
“Isequidu citistes nis et rem doluptatem velit mi, utem doluptin nimil es et et audit alit estibus et dellaborum” – Name, Position
JUST’S EGG SUBSTITUTE PRODUCT
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DISRUPTIVE TECHNOLOGY
AI, MACHINE LEARNING AND ROBOTICS ARE PREDICTED TO PLAY AN INCREASINGLY KEY ROLE IN FOOD DISCOVERY 26
February 2018
in-house data systems and analysis, we dynamically search for candidates that provide functionalities in need. “With the rich information from a collection of experiments, we started thinking about the multiple iterations of development holistically. Combined with in-house chefs, engineers, and scientists’ experiences, the robots and data systems shorten turnaround time and provide us with an unprecedented perspective on how we utilise these plants in this industry.” The team at JUST is always busy trying to find new ways to innovate and currently, amongst other projects, is working on protein biochemistry and food chemistry experiments as well as making enhancements on the existing systems. These include making different versions of buffer conditions for a high throughput screening process and developing more efficient methods to screen samples effectively on emulsion properties. However, it’s the newly-patented platform the company is most excited about, and there is a quiet confidence that after causing a stir when it was announced, it can now go onto severely disrupt the space and even spark some further innovation.
“We will continue to see the rise of AI, machine learning and robotic systems in food discovery and production” – Meng Xu, Director of Bioinformatics at JUST
“We are proud of be one of the first movers in this industry and at the forefront implementing this novel technology,” adds Xu. “With knowledge and experiences from different disciplines, we look forward to finding more integrations in this industry. We will continue to see the rise of AI, machine learning and robotic systems in food discovery and production.”
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FRANCHISING
DIRECT TO CONSUMER
– grocery transformation Russian startup INS is set to disrupt the hegemony of traditional supply chain dynamics in the grocery industry with a blockchainfuelled, direct-to-consumer solution. We spoke with Founder and CEO Peter Fedchenkov about its imminent launch Writ ten by DAN BRIGHTMORE
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FRANCHISING TODAY’S MANUFACTURERS RELY almost 100% on retailers for their revenue, but with continuing decline in footfall across stores, and with access to improved tech, there is an opportunity for consumerpackaged goods companies to be just as effective as online-only retailers. Through the use of loyalty card schemes, many companies already realise the importance of data on consumers and it’s this big data that could give manufacturers a competitive advantage. Gearing up to deliver this boost to manufacturers, while reinventing the grocery industry in the process, Russian start-up INS is planning a solution which will leverage the power of blockchain allied to a native token which Founder and CEO Peter Fedchenkov claims will be “like airline miles on steroids”. Fedchenkov’s family background in grocery retail – his previous role was Vice-President of Wal-Mart – and the fact that he’s been running Instamart, the largest grocery delivery company in Russia, for the past five years, means this is more than just another tech-fuelled solution. Fedchenkov is poised to disrupt the grocery industry from the inside. “We employ over 200 30
February 2018
people at Instamart, and target revenue in excess of $34mn for 2018,” he explains. “Our business model means we work directly with retailers to deliver goods straight from the stockists’ shelf to end customers. We’ve also worked directly with manufacturers and learned how they were keen to go direct-to-consumer, not only to sell, but to be able to market directly to them. We learned that almost every large grocery manufacturer in the world is looking for directto-consumer solutions as part of its global management agenda.” The grocery market, one of the largest consumer markets in the world, is forecast to reach $8.5trn by 2020. It is reaching a digital tipping point, with much of its growth to come from online. Online grocery, being the target segment for INS, is expected to grow from $98bn in 2015 to $290bn in 2020, according to IDG (International
Data Group) estimates. Noting how the likes of Proctor & Gamble have realised they were losing millennial customers who don’t watch TV anymore, Fedchenkov warns that large companies are in danger of being fixated on their legacy models and are not moving forward in the same way their customers are. “Consumption 2.0 is mostly driven by millennials who want alternative brands,” he adds. “They want to go small, local
and support their own communities.” He explains this social media savvy group are looking for constant and real-time feedback on their experience and the products they consume, but none of this is being supported by the grocery retail sector. “Part of what we’re doing is to acknowledge this with a series of connections between manufacturer and consumer,” he says. “Tech wise we’re using blockchain (provided by 31
FRANCHISING
acclaimed Swiss start-up Ambrosus) to achieve this model with INS. We’ve been analysing the manufacturer/ customer relationship with supply chain experts through our Instamart business and realise it doesn’t make sense to build our own infrastructure which can take decades. But talking to fulfilment operators in Russia and the Netherlands we realise there is a gap capacity in the market for warehouse 32
February 2018
operators and delivery firms who want to increase the utilisation of their assets. The approach we decided on is similar to Uber or AirBnB in providing a platform to harness the assets of those willing to share them with strangers for payment, all the while remaining competitive and offering a high quality of service at a low cost.” For many manufacturers Fedchenkov has spoken to, the days
“Direct-to-consumer will be Online 2.0. Our hope is that in thre to five years this will become mainstream but still expect the retailer model to be the dominant force” – Peter Fedchenkov, Founder and CEO, INS
of full truckloads as the minimum consignment are over as a company might just want to ship a single pallet. A minimum volume shipment into online could be just 200lbs, which supports direct-to-consumer. The INS platform is a three-sided marketplace to connect manufacturers with consumers via a network of fulfilment providers, linked via the blockchain, to overcome the sheer 33
FRANCHISING
‘FOR MANY MANUFACTURERS FEDCHENKOV HAS SPOKEN TO, THE DAYS OF FULL TRUCKLOADS AS THE MINIMUM CONSIGNMENT ARE OVER AS A COMPANY MIGHT JUST WANT TO SHIP A SINGLE PALLET’
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inefficiency of current supply chain processes and target reduce costs. Fedchenkov argues that because retail chains capture a high share of grocery revenue, they exert too much influence over manufacturers, causing deep impact on consumers worldwide: “Retailers dictate what food is grown and how it is processed, packaged, priced and promoted. As an example, in the UK, four retailers serve as a slim conduit for 7,000 manufacturers to sell their products to 25mn households, which demonstrates how the existence of retailer abuse in the grocery industry has not only been allowed to develop but also thrived.” Fedchenkov admits the challenge of taking on such a mature industry with a deep legacy infrastructure is ambitious, but remains confident of what INS could achieve. “We believe in the power of technology and have received interest from over 500 manufacturers (including seven of the top 20 global FMCG manufacturers and brands such as Nurofen, Vanish and Durex) and are working closely with Unilever,” he reveals. “We need to strike a delicate balance between helping them go direct-to-consumer to build additional channels for
communication and sales, while not tarnishing their relationship with retailers who depend on them. “Direct-to-consumer will be Online 2.0. Our hope is that in three to five years this will become mainstream but still expect the retailer model to be the dominant force. Even if manufacturers sell 1% direct-to-consumer, it provides them with an important source of data enabling them to innovate faster with products in the way that private labels do when they disrupt the market with a new product.” Marketing is the second highest
“Thev INS platform will enable manufacturers to do this with the INS token. Think of it like airline miles on steroids. Manufacturers could target and personalise their offerings around certain product” – Peter Fedchenkov, Founder and CEO, INS 35
FRANCHISING
expense for manufacturers after the cost of goods and accounts for around 24% of costs, with 70% of that marketing spend spent on trade channels through wholesalers and retailers. “It’s still quite primitive,” notes Fedchenkov, who proposes a solution through the innovative use of a native token on the INS platform. “Most marketing campaigns bombard consumers via TV or instore – it’s not 36
February 2018
targeted or personalised and this inefficiency leads to higher grocery prices. We will offer a bespoke loyalty program powered by smart contracts where manufacturers can code in certain logic inside the smart contract so that when certain conditions are met the consumer is rewarded. The INS platform will enable manufacturers to do this with the INS token. Think of it like airline
miles on steroids. Manufacturers could target and personalise their offerings around certain product. For example, a customer who stays loyal to Coca-Cola over Pepsi might receive 10% back each month if they spend $60. Or they may note that a consumer had never tried Diet Coke and so offer them incentives to buy. There is no one-size-fits-all solution so smart contracts can provide that custom logic.” Fedchenkov is also excited by the positive impact INS could bring to smaller manufacturers. “We’ve signed a memorandum with a Brazilian coffee partner (a member of Qatar Bank) who represents some of the biggest Arabica producers in the world,” he reveals. “This collective of thousands of coffee farmers currently has a limited opportunity
to sell direct-to-consumer and they give all of their margin to traders, wholesalers and transportation. With the right fulfilment providers, we could expand their markets, allowing them to compete with multinationals and create opportunities for closed border direct trade.” With complex coding work on the INS platform due to complete by summer 2018, and pilot projects primed for Amsterdam and Moscow, Fedchenkov plans to launch in other major cities across Europe and North America in Q4. “We have definitely found the right niche,” he concludes. “I would call it a ‘megatrend’ in retail and I’m pleased that our offering has resonated well with manufacturers, so we’re on the right track towards execution.”
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FORWARD THINKING – SUSTAINABILITY
AT COCA-COLA
Coca-Cola European Partners is spearheading sustainability awareness with This Is Forward, a campaign aimingto set the benchmark for positive action by the industry to alleviate its impact on the environment. Joe Franses, Vice-President of Sustainability, talks packaging and how the group is working towards ensuring 100% of is recyclable by 2025 Writ ten by DAN BRIGHTMORE
S U S TA I N A B I L I T Y A N D C S R
FOLLOWING THE CREATION of Coca-Cola European Partners (CCEP) in 2016, the organisation now has 24,000 employees across 14 countries with a diverse network of 20,000 suppliers. “Around 300mn people enjoy our drinks in Western Europe every year and this gives us the strength and opportunity to make a positive difference,” believes the group’s Vice-President of Sustainability, Joe Franses. This Is Forward marks a considered response by the group to its stakeholders who have voiced 40
February 2018
their need to understand the role Coca-Cola can play in helping to address many of the key societal issues people are most concerned about today by targeting a series of achievable goals by 2025. These include action on: drinks (to reduce sugar content), climate (to cut greenhouse gas emissions by 50%), supply chain (to make sure 100% of agricultural ingredients come from sustainable sources), society (to foster a diverse and inclusive culture in the workplace and support local community partnerships), water (to protect the sustainability of
sources for future generations) and packaging (to make sure 100% of packaging is reusable or recyclable). The action plan has been developed following a year of consultation with more than 100 key stakeholders including governments, NGOs, customers and suppliers - as well as 12,000 consumers across six countries and over 1,000 employees. “We asked them what they expect of us and the role they expect us to play and the feedback we heard was clear,” explains Franses. “They want us to use our position as an industry leader as a force for good to meet complex global challenges. We are acting on this feedback and taking steps to ensure we have a positive impact wherever we sell our drinks. We are also making ambitious commitments on issues including health and nutrition, packaging and recycling, economic development, water scarcity and climate change.” Although the vast majority of Coca Cola’s bottles and cans are 100% recyclable, they don’t always end up being recycled, admits Franses. So, how does he plan to achieve an ambitious 100% collection target? “We
need to continue to collaborate with many different partners, including packaging recovery organisations, local municipalities and industry bodies in all of our markets. We are determined to do more and lead the way towards a circular economy,” he insists. “One where 100% of our packaging can be collected, reused or recycled, and where none of it ends up as litter or in the oceans.” A cornerstone of the action plan is to ensure 100% of packaging is recyclable or reusable by 2025. “The vast majority of our cans and bottles are already 100% recyclable. We are going one step further and, by 2025, we’ll also ensure all our primary packaging
“WE HAVE HEARD FROM CONSUMERS AS TO WHAT THEY EXPECT US TO COMMUNICATE ABOUT; WITH A THIRD SAYING BRANDS LIKE COCA-COLA SHOULD HELP TO INSPIRE AND ENCOURAGE PEOPLE TO RECYCLE” – Joe Franses, Vice-President of Sustainability
S U S TA I N A B I L I T Y A N D C S R
materials, including the cartons and pouches we use for some of our drinks, will also be fully recyclable and compatible with local packaging recovery infrastructure,” affirms Franses. “This is aligned with The Coca-Cola Company’s global pledge to use 100% reusable or recyclable packaging made in October 2017 as part of the Ellen MacArthur Foundation’s New Plastics Economy initiative.” CCEP will also continue to work with its suppliers and invest in the recycled PET (polyethylene terephthalate) value chain, including PET collection and reprocessing infrastructure, to meet the allied goal of using at least 50% recycled PET in its bottles by 2025. “We’ll continue to innovate by 42
February 2018
looking at all aspects of packaging from the design of our packs, to the use of both recycled and renewable packaging materials,” says Franses. Innovation lies at the heart of CCEP’s plan to meet its goals. After leading the way with the introduction of recycled PET into packaging and bringing PlantBottle (the first fully recyclable PET plastic beverage bottle made partially from plants) to market with over 40bn bottles in use worldwide, it aims to go further to find new ways to reduce the need for packaging and minimise waste. “In the UK, we have recently partnered with the University of Reading to reduce packaging on their campus,” reveals Franses. “Students and staff can purchase
bespoke refillable bottles which can be used to access refills from ‘freestyle machines’ that have been installed across the campus. Each bottle contains RFID (radio frequency identification) technology that enables us to track how many times the bottle is used. Seven machines have been installed and over 1,500 refillable bottles were in use within the first week of the programme. We are monitoring the impact of the scheme and will be using these insights to help shape our future plans.” Beyond recyclable PET, the latest significant packaging advancement is the lightweight redesigned bottle for the Abbey Well spring water brand. “The ‘twistable’ design uses up to 32% less plastic and carries a prominent ‘Recycle Me’ message to remind consumers the bottle is fully recyclable,” says Franses. “Its design also makes it easy for consumers to crumple down before disposal.” As CCEP aims to make further inroads towards a circular economy, Franses views it as an opportunity rather than a challenge. “It’s a different way of thinking and it’s about educating consumers to understand
“EACH BOTTLE CONTAINS RFID (RADIO FREQUENCY IDENTIFICATION) TECHNOLOGY THAT ENABLES US TO TRACK HOW MANY TIMES THE BOTTLE IS USED” – Joe Franses, Vice-President of Sustainability
the role they can play, alongside the action taken by businesses,” he says, citing CCEP’s responsibility to inspire everyone to recycle, with an important part of this process educating consumers to understand what happens to their bottles and cans when they go into a recycling bin. “We already support consumer recycling and anti-litter campaigns across our markets,” he adds. “We will continue to use our brands to inform and encourage consumers
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“WE’LL CONTINUE TO LISTEN AND TALK TO OUR STAKEHOLDERS AS WE WORK TOWARDS OUR AMBITIONS, USING OUR BUSINESS AND OUR BRANDS TO BUILD A BETTER FUTURE” – Joe Franses, Vice-President of Sustainability, CCEP
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to recycle. Our recent ‘A Bottle Love Story’ advertisement in the UK is a great example of this.” CCEP is continuously trying to engage the market to become actively involved in the big issues facing our society – and that includes packaging. “We have heard from consumers as to what they expect us to communicate about; with a third saying brands like Coca-Cola should help to inspire and encourage people to recycle,” says Franses. “This campaign is the first in a series of activities which aim to influence consumer behaviour around recycling.” The reaction to This Is Forward has been positive, with many stakeholders expressing their support for the commitments CCEP have set out. “We’ll continue to listen and talk to our stakeholders as we work towards our ambitions, using our business and our brands to build a better future,” confirms Franses. 45
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SOFT DRINKS COMPANIES IN THE WORLD Which F&B giants have taken a slice of the lucrative soft drinks industry? FDF World finds out… Written by SHANNON LEWIS
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ASAHI GROUP HOLDINGS
10 Asahi Group Holdings is a food and beverage company famous for its beer and spirit sales, while also being a fierce competitor in the soft drink market. According to Forbes, it makes a full-year revenue of $15.7bn, with a market cap of $17.8bn. Asahi ranks 635th on Forbes’ “The World’s Biggest Public Companies”. As a soft drink producer, it provides everything from coffee and tea to carbonated drinks, fruit and vegetable juice and water. With 23,619 employees, and its initial foundation dating back to 1949, it centres its headquarters in Tokyo and is famous, according to the company website, for both selling the first canned beer in Japan, and being number one in the Japanese beer market.
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KIRIN HOLDINGS With a full-year revenue of $19bn and a market cap of $17.4bn, Kirin Holdings makes #543 on Forbes’ “The World’s Biggest Public Companies” list. It employees 39,733 people, basing its headquarters in Tokyo. Its main products are beverages and pharmaceuticals. According to the company website, it was founded in 1907 when it took over the Japanese Brewery Co., which had been advertising Kirin beer since 1888. It was only after 1923 that soft drinks became a part of the company, an area which eventually became so large, it was separated as its own business entity in 1991. Its reach as a soft drink company spans the world, with branches and products in Oceania, Southeast Asia, China and Brazil.
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JUGOS DEL VALLE Formed in 1947 by Luis Cetto, Jugos Del Valle began as a grape juice production company. Currently, it offers 14 brands and 163 soft-drink-based products. Although its offices are located in Mexico City, and they are a Mexican company, its acquisition by Coca-Cola Company in 2007 ensured its place in the global market. Forbes sets its full-year revenue at $20.9bn, with its market cap at $33bn, placing it at #380 on “The World’s Biggest Public Companies”. In 2012, it acquired Santa Clara, a Mexican dairy company, before ultimately integrating in 2016.
www.jugosdelvalle.com.mx
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07 HEINEKEN Heineken, famed as an Amsterdam-based beer company, produces a wide range of soft beverages for a global market. It makes #316 on Forbes’ “The World’s Biggest Public Companies”, with a full-year revenue of $23bn, and a market cap of $23bn. Begun in 1873, it currently employs 73,525 people, reaching 192 countries around the world. It was founded by Gerard Heineken as a microbrewery, nowadays seeing 25mn Heinekens served every day. In May of 2017, it launched a non-alcoholic beer. According to Business Insider, this was done with the intentions of cornering a market which is “growing faster than average”.
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DIAGEO Diageo is a London-based company known for producing beer, wine, and spirits. The Financial Times reports that in 2016, Diageo invested in Seedlip, a non-alcoholic beverage company, bringing it into the soft drinks market. Although initially a UK-based brand, Forbes reports plans by Diageo to bring Seedlip into the United States and Western Europe. Forbes places Diageo’s full-year revenue at $15.2bn, and its market cap at $71.2bn, earning it a rank of #261 on “The World’s Biggest Public Companies” list. Founded in 1997, it now employs 31,485 people and has 200 brands in over 180 countries, placing it prominently in the global market.
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DIAGEO EMPLOYS 31.845 PEOPLE AND HAS 200 BRANDS 52
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DANONE Danone, a French food processing company, has a variety of beverage brands under its company flag, including Evian, Aqua, and Bonafont. It makes a full-year revenue of $24.3bn, with a market cap of $42bn. Founded in 1899, it now employs 99,781 people, making #252 place on Forbes’ “The World’s Biggest Public Companies”. Alongside a “Waters” sector, it has an “Early Life Division” which focuses on producing infant milk in compliance with both local laws and standards set by the World Health Organization. It makes #372 on Forbes’ “World’s Best Employers”, and #58 on Forbes’ “World’s Most Valuable Brands”. According to Ad Brands, it is the second biggest producer of bottled water, second only to Nestlé.
www.danone.com
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ANHEUSER-BUSCH INBEV Anheuser-Busch InBev is a Belgianbased beverage company with stakes in the global market, its reach spanning across North America, Latin America, Mexico, Europe and Asia Pacific. Forbes establishes the company’s full-year revenue at $45.6bn, with a market cap of $213.1bn. It places #126 on Forbes’ “The World’s Biggest Public Companies”, as well as #54 on Forbes’ “Innovative 54
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Companies”. Its company website places the beginning of its legacy in 1366, as the origin of its brewing techniques. Forbes places the founding of the official company as 1977, in Leuven, Belgium. In July of 2017, Anheuser-Busch InBev further solidified its role in the soft drink market by acquiring American energy drink company Hiball.
www.ab-inbev.com
COCA-COLA Coca-Cola is a global beverage company with reach in North America, Latin America, Europe, Asia Pacific and Africa. Forbes places Coca-Cola’s fullyear revenue at $41.5bn, and a market cap of $182.9bn. Started in 1886 in the United States, it now offers 500 brands to over 200 countries, according to the company website. Its headquarters is in Atlanta, Florida, and the beverage giant employs 100,300 people. Coca-
Cole features on over a dozen Forbes lists. It is #3 on its “World’s Most Powerful Brands”, #5 on “The World’s Most Powerful Brands 2017”, and #67 on “Top Regarded Companies”, among others. With a soft drink offering ranging from energy drinks to soda, coffees, teas, enhanced waters and juices, it ranks #86 on Forbes’ “The World’s Biggest Public Companies”.
www.coca-colacompany.com
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COCA-COLA OFFERS 500 BRANDS TO OVER 200 COUNTRIES
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PEPSI Pepsi is an American soft drink company with headquarters in Purchase, New York. According to Forbes, its full-year revenue is of $62.8bn, and it has a market cap of $159.4bn. It ranks #84 on Forbes’ “The World’s Biggest Public Companies”. Begun in 1898 by a pharmacist
named Caleb Bradham, it currently places #30 on Forbes’ “The World’s Most Valuable Brands”, and has sponsored the Super Bowl for the past five years. Pepsi’s three main products, Diet Pepsi, Pepsi, and Pepsi Max, make over $1bn in sales each.
www.pepsi.com
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NUMBER OF NESTLÉ EMPLOYEES
328k
01 NESTLÉ Nestlé is a food and beverage company with major stakes in the soft drinks sector. According to Ad Brands, it is the world’s largest food manufacturer. It ranks #34 on Forbes’ “The World’s Biggest Public Companies”, with a fullyear revenue of $90.8bn, and a market cap of $229.5bn. Begun in Switzerland in 1866 by Henri Nestlé as condensed milk factory, it made breakthrough discoveries in infant food production
in 1867, according to the company website. It currently oversees 328,000 employees, with headquarters in Vevey, Switzerland, according to Forbes. It is not only the number one producer of bottled water but other drinks brands include Nestea, which is manufactured by Coca-Cola and owned and distributed by Nestlé in the US, and as part of a joint venture across the world.
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E V E N T S & A S S O C I AT I O N S
Events FDF World casts an eye at the key food and beverage and industry events across the globe for this calendar year‌ Writ ten by S T UAR T H O D G E
E V E N T S & A S S O C I AT I O N S Make sure you’re right up-to-date with the latest available technologies and innovations by visiting the must-attend events and conferences in the food and drink industries this year…
Restaurants Canada Show 2018 Toronto, Canada 25–27 February
‘Innovation Unleashed’ is the slogan for RC Show 2018; Canada’s largest foodservice trade event with over 1,000 exhibits. Attendees can learn about first-class products and services for bar, coffee, technology and such, as well as hearing from leading industry experts, including Jon Taffer (Bar Rescue) and Dr. Irwin Adam (Future of Food Studio). With anything from latte art demos to culinary battles and local tasting bars there should definitely be a little something for everyone. www.rcshow.com 60
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Food Fraud Conference 2018 London, UK 1 March
The estimated annual cost of food fraud to the food and beverage industry is up to $16.5bn annually, so it’s no surprise that there are now events which focus solely on that particular topic. Food Fraud 2018, chaired by Professor Chris Elliott, Queen’s University Belfast, is one such event. Organisers say: “It’s paramount that the industry connects, collaborates and eradicates fraud across the supply chain. “Food Fraud 2018 reunites food manufacturers, supermarkets, processors, suppliers, technology companies, and academia from around the globe for an unmissable day of sharing best practices, lessons learned and detection and prevention methods. Food Fraud is a forum to discuss valuable and relative topics, alternative approaches, reaffirm processes, and provide insight into the industry and how it needs to adapt.” Some of the topics for discussion this year include identifying fraud through supply chain mapping and analysis and the global effort to combat food fraud: what is being done and how will it impact domestic businesses? www.newfoodfraud.com 61
E V E N T S & A S S O C I AT I O N S
GFSI Global Food Safety Conference Tokyo, Japan 5–8 March
This year will be the 17th annual GFSI Global Food Safety Conference, bringing together over 1,000 leading food safety specialists from over 50 countries to advance food safety from a global standpoint. As well as the obvious networking potential, the conference provides the opportunity to share knowledge and benefit from the knowledge of internationally-reputable industry experts. Organisers are excited about the conference’s return to Asia, and are endeavouring to ensure that this year’s event is the biggest ever.
Euro Food 2018 Berlin, Germany 8–10 March
The theme for the 21st Euro-Global Summit on Food and Beverages (to give Euro Food 2018 its full title) is ‘Unfolding the Emerging Technologies in Food and Beverages’. To that end, there will be major sessions on topics ranging from public health significance in food and beverage, to food processing and waste management. food.global-summit.com/europe 62
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SIAL China Shanghai, China 16-18 May
SIAL 2018 is Asia’s largest food innovation exhibition of the year, and is the fourth biggest food and beverage show globally, so this is a really major event on the calendar. This year will be the event’s fifth and organisers are looking to build on the incredible success last year, which saw numbers swell to over 100,000. More than 3,000 exhibitors are expected this year with innovation expected to come from a range of spaces including retail, catering, hotel and restaurant services, food services, the import/export trade and manufacturing. www.sialchina.com
Food Safety & Regulatory Measures 2018 Barcelona, Spain 11–12 June
With a theme of ‘Healthier the Food, Merrier the World’, the Food and Safety Regulatory Measures conference 2018 is very much headlined by three fascinating keynote speeches. Susana SanchezGomez, University of Navarra, will present on ‘Food Quality Analysis Based in Multi-target Rapid Detection Techniques’; Dina Salman, from New Mexico State University, will discuss ‘Water Trading To Maximise Food Security Production Levels’; and American legal expert and food safety activist Bill Marler will talk through ‘Food Safety Lawsuits in the United States – A 25 Year Perspective’. foodsafety-hygiene.conferenceseries.com 63
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ACHEMA 2018 Frankfurt, Germany 11–15 June
Over 170,000 attendees are expected at ACHEMA, a world-renowned forum for chemical engineering, process engineering and biotechnology held every three years. There will be more than 4,000 from over 50 different countries presenting new products, processes and services ranging from laboratory equipment, pumps and analytical devices to packaging machinery, boilers and stirrers through to safety technology, materials and software, essentially covering the multiplicity of needs in the chemical, pharmaceutical and food production industries. One of the things which makes ACHEMA unique is the accompanying congress across the event, featuring 800 scientific lectures and numerous guest and partner events, complementing the wide range of themes covered. www.achema.de/en/home.html
ProPak Asia Bangkok 13–16 June
After celebrating its 25th anniversary last year, ProPak Asia is now very much a fixture on the annual conference calendar. ProPak is the international processing and packaging technology event for Asia, with over 40,000 attendees from more than 60 countries who gather to witness the latest in automation and technological advances for packaging in processing for both the food and beverage and other sectors. www.propakasia.com/ppka/2018/en/index.asp 64
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IFT Food Expo Chicago, USA 15–18 July
With 1,200 exhibitors and 23,000 attendees, the IFT Food Expo is showing strong annual growth in its quest to create a community that explores food science and technology together over the space of the four days. Learning is also of paramount importance at the event, which has more than a hundred educational sessions developed by industry leaders at the cutting-edge of food science technology. www.iftevent.org
22nd International Conference on Food Processing & Analysis Moscow, Russia 11–13 October
The 22nd annual conference on Food Processing and Analysis is centred around ‘Reinforcement on Modernisation Capability in Food Processing’. Topics covered, at what is sure to be a popular event, include innovation in food processing, nutrification, functional foods, nutrigenomics, industrial equipment, food safety and quality, preservation techniques, intelligent packaging, food waste management. 65
P U T T I NG PEOPLE FIRST Marriott International’s approach to building better hotels, restaurants and bars WRITTEN BY F R A N R O B E R T S PRODUCED BY A L I S TA I R W E S T
MARRIOTT INTERNATIONAL’S PEOPLE FIRST CULTURE HAS CONSISTENTLY EARNED THE BUSINESS AWARDS AND RECOGNITION AROUND THE GLOBE. IN ASIA-PACIFIC, THIS CULTURE IS ENABLING THE COMPANY TO BUILD BETTER HOTELS, RESTAURANTS AND BARS
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riginally from Switzerland, Ralph Frehner, Vice President, Food and Beverage, Asia-Pacific at Marriott International has enjoyed a diverse career that has seen him working across 12 countries for some of the world’s most prestigious companies and high-profile individuals – all of which gives him vast experience to leverage on in his current role. “Hospitality, obviously, is a people business and it’s focused on a lot of relationships but also interacting with guests, associates and team members. Having a diverse career helps you in adjusting to the different environment fairly easily and quickly. The second thing is, it also gives you a lot of experience on how to interact with different people in different countries from different cultures,” Frehner comments.
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“I think it was really helpful for me to adjust to these markets very quickly. It was very important also, to learn the culture of different countries and really understand how these cultures work. Respecting the local culture is very important. Really, once you live in the country, it’s very different than when you just visit because you really understand the culture. Today, I think it helps me a lot.”
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MARRIOTT INTERNATIONAL HAS 30 RENOWNED HOTEL BRANDS IN 122 COUNTRIES AROUND THE WORLD
RALPH FREHNER
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In addition to overseeing the food service. “Obviously, every business and beverage operations, Frehner needs to have a vision, so we created is in charge of design development a vision for food and beverage today for Asia-Pacific. “When I look at for the company in Asia-Pacific. design development, it has taken Then we had supporting pillars and me the experience from all these one of those pillars is marketing. countries in Asia I’ve lived in to If I look at the marketing of our actually build better restaurants and business, it’s about how to engage build better hotels, which are much with customers differently because more tailored to the local the generations are changing, customers, rather than like the millennials,” just everything for Frehner comments. AROUND ASIAPACIFIC, THERE everybody,” he Marriott IS ABOUT 50,000 explains. “That is International’s food FOOD AND BEVERAGE very important. and beverage vision ASSOCIATES, WORKING IN 2,700 RESTAURANTS It’s a diversity of is to the favourite AND BARS ACROSS experience which destination for local MORE THAN 620 helps me fulfil my residents to eat, HOTELS position today and meet and drink. This is it’s very interesting but, supported by three pillars – ultimately, that always comes Go Local, which looks at growth back to people and with that, the coming from domestic customers, experiences you’ve had in the past.” F&B Marketing, which as mentioned is focused on attracting millennial ENGAGING WITH customers, and Talent Development. CUSTOMERS DIFFERENTLY “We are building the business Tailoring to local markets and being much more to the local market able to adjust to different cultures is than we used to do in the past. key to any multinational business, We obviously study local markets. especially when it comes to customer Customer service for us is number
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Collection
THE PASSIONATE LIFE The Crystal of Modern Asia At LUCARIS, we aspire to elevate modern Asian consumers’ lifestyle experience through World Class innovation crystal designs. It has been the great collaboration to deliver the world class quality lead-free crystal glass with exceptional clarity and brilliance with strength and durability. LUCARIS has created the world’s first crystal stemware that distinguishes itself by the use of Aerlumer ® to elevate your passionate lifestyle experience. Aerlumer® is the uniquely beautiful bottom curl lines at the bowl to encourage micro-oxidation and soften the wine while swirling. LUCARIS today is the preferred partner welcome by the leading International hotels and restaurantsworldwide.
PROUD PARTNER
M A R R I O T T I N T E R N AT I O N A L
RALPH FREHNER Vice President, Food and Beverage, Asia-Pacific
Ralph Frehner is an experienced Vice President of Food & Beverage with a demonstrated history of working in the hospitality industry. Operational experience includes catering, food & beverage, budgeting, operations management, and integrated marketing. Frehner also holds a Dive Master Diploma Certificate from Scuba Dive Cocos Island.
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ASIA
FREHNER WITH MARRIOTT COLLEAGUES
one. I think I would say, if you take care of your associates, they will take care of your customers.” Around Asia-Pacific, there are 50,000 food and beverage associates, working in 2,700 restaurants and bars across more than 620 hotels.
CREATING MOMENTUM IN THE MARKET Marriott’s reputation for superior customer service dates back to J. Willard Marriott’s original goal for his business: good food and good service at a fair price. Over 90 years on, the team continues to uphold this reputation and business ideals. “I think the most important thing is for a company of our size is that you create an image that your food and beverage reputation is something that attracts people and you create a momentum in the market,” Frehner advises. “I think your actions need to speak
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louder than words. The thing is, with the actions we take, we try to do things a little bit differently.” The Canvas concept lab is illustrative of how Marriott International does things differently. “We look at underutilised spaces in the hotels and we see how we can bring these spaces to life and make money with it. In return, we’re looking for the latest entrepreneurs in the market, who can actually operate these spaces,” observes Frehner. “Rather than hire an associate, which is normal for hotels, we have a different approach, where we put these spaces into the market and say, ‘we have the money, you have the expertise, if you would like to be considered for the entrepreneur opportunity, apply here’. Then we ask people to present their ideas for it.” Once a panel of judges has decided the winner, Marriott gives them the space and builds it for them according to their demands. “They then run that space as an entrepreneur,” Frehner advises. “We let them run it the way they want to. It’s a lot more in line with millennial thinking. We’ve had areas turned into a secret bar. We have food trucks attached to hotels, we have rooftop bars by different entrepreneurs and so, we’re creating momentum for the company. This is only one initiative, where we’re telling the market that we are doing things a little bit differently.”
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“HAVING A DIVERSE CAREER HELPS YOU IN ADJUSTING TO THE DIFFERENT ENVIRONMENTS FAIRLY EASILY AND QUICKLY” – Ralph Frehner, Vice President, Food and Beverage, Asia-Pacific
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YOUR BRAND, YOUR MUSIC Our bespoke sounds are crafted with your business in mind, whether that is a prestige hotel, fine dining restaurant or boutique spa. The audio sensory experience begins the second customers cross the threshold of your business. Music can evoke memories of holidays in special locations, family gatherings in favourite hotels and time spent with good friends. Our unique branding approach can be experienced at over 3,000 luxury hotels around the world in over 10,000 individual music zones. From modern international lobbies to traditional Japanese restaurants and Hawaiian spa resorts to Chicago cigar bars, we have created bespoke music profiles for some of the most sought-after leisure destinations in the world.
musicstyling.com
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A CULTURE OF CARE
HUGE OPPORTUNITIES
Marriott International has 30 renowned hotel brands in 122 countries around the world. Therefore, maintaining high standards throughout its operations is key. “I think Marriott has a longstanding culture of taking care of people,” Frehner comments. “I think even today, we are still living by that culture, that we are actually taking care of people now and we are working closely as a team. To us, it’s very important to take care of each other. Here, any action we take in terms of our associates is normally built around this philosophy and its culture. This culture is very much alive and this was set up by Mr Marriott originally. I must say, Marriott really lives by these standards.” These standards are reflected in the fact that within Asia-Pacific alone, Marriott International has 12 Michelin-Starred restaurants. The beverage offering at Marriott International’s Asia-Pacific properties doesn’t lag behind, with The Other Room, situated at the Marriott Tang Plaza in Singapore, ranking 35th in Asia’s 50 Best Bars 2017 rankings.
Looking ahead, Marriott International expects to continue building on this and expanding its portfolio in the region, with numerous projects currently in the pipeline. “The future, I think, is very bright for us. We are the largest hotel company in the world, so I think we should also have the largest pool of ideas. We had a merger with Starwood Hotels at the end of 2016 and there’s a lot of integration going on. I think we are still in the integration stage going into the second year. Obviously, we have huge opportunities for a much larger team, which has a lot more expertise, and bringing two companies together is obviously exciting because we can learn from each other,” Frehner concludes.
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BURGER KING’S ADVANCE INTO THE INDIAN QSR MARKET
Written by Laura Mullan Produced by Charlotte Clarke 81
With its infamous motto “be your way,” Burger King is renowned for its commitment to customer choice. Now expanding its grasp on the Indian market, the fast food giant reveals how its supply chain is helping to satisfy the nation’s appetite for taste, quality, and affordability
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s one of the most recognisable brands in the world, Burger King is a company that needs little introduction. Every day, more than 11mn customers sink their teeth into the burger chain’s menu and now, thanks to its ambitious expansion plan, the company is expanding its reach in India. Embarking on a mission to become the nation’s leading fast food restaurant, Burger King India has strived to optimise its supply chain, drive innovation, and uphold its core values of taste, quality and affordability. The Florida-based burger chain has made a splash in over 100 countries across the globe. However, this isn’t a matter of taking the brand’s American success and duplicating it abroad, explains Chief Marketing Officer, Kapil Grover. Rather, the company’s entire strategy, brand, and
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menu have had to be tailored to fit the unique tastes of the Indian market. A unique market “Quick service restaurants (QSR’s) operate differently in the western world than they do in India,” explains Grover. “In the western world, QSR’s are focused more on the idea of convenience and so a large number of the consumptions happens via drive-thrus but in India, it’s more about the experience and the aspirational qualities of the brand. “Our overall vision is to be the leading QSR in the country, and we want to achieve that by offering the besttasting burgers, made with highest quality ingredients, offered at the most affordable prices,” he adds. It is an upward trajectory that tells the story of Burger King India. The fastfood giant launched its first restaurant
Kapil Grover, Chief Marketing Officer
BURGER KING
in November 2014 and, since then, it has carefully handpicked more and more metropolitan locations. Rapid growth “The response to our first 10 locations was fantastic. Our menu was well received, our experience was seen to be amazing, and that gave us the confidence to scale up. Now we are perhaps one of the fastest growing companies to launch 100 stores in the Indian QSR market,” notes Grover. Optimistic about the company’s growth, Sandeep Dey, Chief Supply Chain Officer at Burger King India, says that the brand’s franchise growth has offered more opportunities than challenges. “Our overall business philosophy has always been to grow deeper rather than grow wider; to strengthen our existing markets rather than
entering new cities,” explains Dey. “That philosophy is actually helping us to leverage the supply chain cost and make it much more efficient. “When we open a new store in a new city, the initial distribution cost is slightly higher, because we are not utilising the full potential of the warehouses and delivery trucks, for example,” Dey says. “However, when we open five or six stores in that region, the overall distribution cost will go down significantly and the stores will start becoming much more profitable. Therefore, scalability is driving profitability and vice versa.” Transforming the menu Making a mark in the Indian market was no easy feat; it involved adapting the Burger King brand, and specifically its menu, for an Indian market. Locally designed and blind tasted by
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15,000 Number of restaurants operated at Burger King in approximately 100 countries and U.S. territories
11mn Number of guests that visit Burger King restaurants across the world every day
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WE KNOW YOUR TASTE... HyFun Foods is a family business with presence in the potato sector since last six decades and has successfully ventured into production of frozen French Fries and potato specialties including popular Indian snacks. HyFun works closely with potato growers to get best quality potatoes to be processed in a state of the art plant producing high quality products as per global standards. The sales network is spread across India and many other Asian countries catering to Food Service, QSR chains and retail markets.
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local customers, Burger King India developed around 18 unique burgers for the Indian market that cannot be purchased anywhere else in the world. “India is a very different market compared to anywhere else in the world in terms of the country’s taste palate and unique vegetarian preference. Over 50% of the population here is vegetarian, so we couldn’t take the international menu and apply it here. It had to be completely redesigned. “Then we had to adapt our supply
chain to be able to manage that level of complexity, because although it offers unparalleled variety to the consumer, it also has to offer consistency in taste and quality.” Vendor partnerships Menu innovation has been integral to Burger King India’s success. Grover says that this is largely due to the brand’s vendors and processes such as the supplier-led innovation programme (SLIP), whereby
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vendors are given the opportunity to innovate new menu options. “Our vendor partners really demonstrate a huge amount of agility, flexibility, and high speed to market when launching new products,” observes Dey. “The kind of collaborative effort they have demonstrated has been phenomenal. They have an equal conviction to the Burger King brand as our team and I think that’s so important.” Sandeep Dey Chief Supply Chain Officer
Quality, taste and value are the fundamentals at Burger King India and balancing these conflicting priorities is perhaps one of the biggest challenges facing the company today. Cost leadership By optimising the company’s distribution cost and leveraging shared services and infrastructure, Dey and his team are driving down transportation costs. Combined with the company’s relevant brand and flexibility in its supply chain, this has proven to be a recipe for success. “Our supply chain has played a tremendous role in helping set up Burger King as a brand in the Indian market,” asserts Dey. “To be able to find high-quality vendors who can deliver consistent quality at competitive costs has been challenging and a lot of effort has gone into the supply chain to ensure we can deliver our complex menu, but I think that has been the real trick which has helped us succeed in this market. We have developed a strong back end that can support our diverse, complex menu and which can fulfil our consumers’ needs.”
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BURGER KING
“THIS CATEGORY HAS HUGE POTENTIAL, AND WE HAVE JUST SCRAPED THE SURFACE” KAPIL GROVER Chief Marketing Officer
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Lean team Although they boast an intricate supply chain, Burger King India operates with an extremely lean team. By outsourcing everyday non-value-adding work to specialised logistic companies, Dey and his team focus on what matters - meaningful, value-adding, strategic work that truly makes a difference to both customers and employees alike. “Fundamentally, our organisation is based on three key pillars - hard work, hunger, and humility,” says Grover. “When we’re hiring talent, we hire those who actually believe in those core values. We provide them with enormous opportunities to demonstrate this in their day-to-day work life. They are culturally aligned, they’re getting tremendous job satisfaction because they could see the value they’re bringing to the table and making a meaningful contribution to the organisation’s growth.”
burger chain isn’t complacent about the work that lies ahead. Working alongside its vendors, Burger King India has created a meticulous plan to invest in R&D, system processes, and people capability; to create capacity ahead of time through new and improved technologies and to retain cost leadership. In doing so, it hopes to cement its position as the nation’s top fast-food chain. “This category has huge potential, and we have just scraped the surface” observes Grover. “Lifestyles in India are evolving rapidly, especially in metropolitan cities. Income levels are growing, Millennials and Gen-Z consumers are driving consumption and are much more open to Western experiences. There is a lot of opportunity to drive penetration, a lot of opportunity to drive frequency with our consumer cohort, and that’s why we are extremely bullish about the future.”
Huge potential As the brand has penetrated the Indian market, Burger King India has seen success after success - however, the
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A digitised, centralised restaurant supply chain: How AWJ Investments offers a competitive edge Written by Fran Roberts Produced by Heykel Ouni
Awj, the Arabic word for pinnacle, is entirely apt when it comes to AWJ Investments, which has grown over just a few short years to become a key player within the Emirati restaurant industry. The company’s mission is simple – to lead international markets with unique restaurant concepts
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treet food has been sold around the world by vendors since ancient times, but it’s a relatively recent trend that has seen the emergence of high quality offerings. According to thefoodpeople, the global food trends agency, street food is now consumed by an estimated 2.5bn people worldwide each day. One of the most ubiquitous forms of street food, and one that hails from the Middle East, is of course falafel. “AWJ Investments is an investment group which was founded back in late 2013 with a couple of concepts in mind. The main idea behind founding AWJ Investments was to introduce a very vibrant and effective system of change to the look of Arabic street food,” explains Rami Nasr, Head of Procurement and Logistics.
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Operation Falafel is the flagship brand of AWJ Investments, with the first branch opening in March 2014 at The Beach at Jumeirah Beach Residence (JBR). The Beach is a retail complex constructed on the actual beach in front of JBR, a waterfront community located against the Persian Gulf in Dubai Marina. “Operation Falafel offers the authentic Arabic street food. Once you enter any of our Operation Falafel outlets, you feel the industrial and urban ambience with the interiors of the shops. Operation Falafel is the company’s flagship store and it is our mainstream brand,” Nasr says. “Since we started Operation Falafel, we’ve had a great acceptance from the local market and the customer feedback is amazing. At the moment we are running 10 different locations
RAMI NASR Head of Procurement and Logistics
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for the brand. We recently opened one branch in Riyadh, and Operation Falafel has been registered in 82 countries all around the world. We’ve already signed many franchise agreements
obtaining the rights to operate Operation Falafel abroad in different countries such as the US, the UK, Switzerland and the Netherlands.”
Contemporary concepts The Beach is also home to a number of other concepts operated by AWJ Investments, such as Awani – a contemporary restaurant serving the best of classic Levant cuisine. Catch-22, a seafood fusion restaurant, alongside Chicks ‘n’ Friends, which specialises in fried chicken and accompanying sides, join the selection at The Beach, as well as Yalseh, the latest concept operated by AWJ Investments. “Yalseh is the first Emirati beach lounge in Dubai,” states Nasr. “It has been operational for one year now, and we offer most of the traditional Emirati food items where a person can go and have dinner and a
“Since we started Operation Falafel, we’ve had a great acceptance from the local market and the customer feedback is amazing” RAMI NASR Head of Procurement and Logistics
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hookah directly on the beach.” AWJ Investments also operates Smoky Beach, Surf Bite and Lulu & Murjan, and is the sole franchisee of Filicori Zecchini Italian Coffee in the UAE. In order to maintain such an array of brands – each specialising in different types of cuisine – AWJ Investments works hard to maintain a robust supply chain. “Managing our supply chain is a very complex process, taking into consideration that we have many concepts that we cater to,” acknowledges Nasr.
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A competitive advantage In order manage its supplies, AWJ Investments has a main centralised warehouse that functions as a hub. “Everything gets delivered to this warehouse. We have a very proficient team there who takes care of segregating the items based on the specification of every item that they receive, and then it gets dispatched to each outlet based on their requirements. Our consumption of the raw materials is really remarkable,
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taking into consideration the number of outlets that we have, so this puts us in a position where we have a competitive advantage over the other competitors in the market to receive better pricing,” Nasr remarks. AWJ Investments is well known in the market for having a very transparent strategy. “Economy of scale allows us to be more competitive and to be ahead in the market. Having our own logistics team where we cater to all our outlets gives us the responsibility of getting all the items to each and every outlet, based on their timelines, so this is what puts us ahead,” explains Nasr. “We have a centralised procurement system, centralised production facility and a centralised warehousing unit. This definitely gives us an added value and an advantage against other players in the market. Also, we have a designated team for each concept that we own, and that team is well trained on the requirements of each concept that they are taking care of.”
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The current number of outlets in the UAE
$90MN AWJ Investments’ annual revenue
Data is power Technology also plays a substantial role in managing the complex supply chain at AWJ Investments. “Using technology in the supply chain is crucial for any firm nowadays. We are using a very advanced ERP system, which connects all our divisions together in our company. We have a very solid software system, which is being solely used for
1,300 The number of employees at AWJ Investments
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our supply chain,” Nasr states. “Our warehousing system is also connected to this, as is our logistics side. We can monitor and control our deliveries through this advanced system and this also enters through our delivery process where we have centralised deliveries. Of course, data is power in our current times, so having the latest technology enables us to use the data in the best possible way when we plan our supply chain – whether the forecasting or the actual order placing or opening any RFQs, it all goes through this technology.”
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An extensive journey It’s a very extensive journey for any raw ingredients to make it to the plate at any AWJ Investments location. “From the moment that we choose a menu and we start creating the menu items, we start collaborating with a chef and design the menu item or the dish,” comments Nasr. “The journey starts from the chef choosing the best match for his recipe, after which we go through item sourcing and getting the product entered within our sample production facility, where different chefs observe this single ingredient.
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“From the moment that we choose a menu and we start creating the menu items, we start collaborating with a chef and design the menu item or the dish” RAMI NASR Head of Procurement and Logistics
“After this we start sourcing that supplier in a very clear frame process, where we invite the suppliers to get the total specification achieved, which should comply with external regulations, the governmental regulations of the food items and internal quality standards that we use in the company. Once an item is chosen, it then gets into an approved items list, which is totally systemised. Being a supplier or being a trusted vendor with AWJ investments is a privilege. We’ve been lucky to work with different vendors throughout the local and international market.” AWJ Investments’ suppliers are evaluated almost quarterly.
They get rated on different levels, including the consistency of their service, the quality of the product chosen, how consistent the quality is, and how fast their delivery was. Choosing a supplier for an item for AWJ Investments goes through a cycle that starts with selecting a menu item, until this ingredient gets to be supplied on a daily basis to the company’s state-of-the-art production facility located in Dubai. “We have a collection of vendors that we are meeting with and they are our partners of success,” continues Nasr. “Quality comes at a certain cost, so it is always a challenge having the best cost and maintaining the best quality possible.”
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Eye for detail Exploring global opportunities, AWJ recognises the potential of a rapidly evolving food and beverage market, with the aim of acquiring and growing a brand that is internationally recognised and loved. In order to leverage on such global opportunities, AWJ Investments is seeking to draw from the key factors behind its impressive success so far. “There are many factors of our success during the past four years in which AWJ Investments has been operational. One of them is basically the eye for detail that you can witness if you visit any outlet that is owned or operated by AWJ Investments,” Nasr observes. “We ensure that for each client that enters any of our outlets it’s a very pleasant journey from the moment they enter until the moment they leave.” In order to provide a pleasant experience for all customers, AWJ Investments strives hard to maintain the highest standards. “Our key success is our customers and the view that we get from customers, and that underscores many processes,” acknowledges Nasr. “Making sure that every single item is consistent for every client whenever they come to try. Making sure that our standards maintain the highest level possible. Making sure that once the customer receives their food it’s exactly as if they are eating it out of the chef’s hands.”
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“In 2018 we are planning to have 47 outlets spread over the Middle East with one outlet in the United States. Our strategic vision is to operate 97 outlets by 2020� RAMI NASR Head of Procurement and Logistics
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Future plans Despite already operating myriad concepts, AWJ Investments is already working on its next restaurant. “Coopers is our newest project and it is yet to open,” Nasr reveals. “Coopers is a beach urban diner. The food presentation is very simple yet the taste is very flavourful. It is a grab-and-go concept that has been in the making for the past seven to eight months.” Within the next five years, AWJ Investments plans to travel and explore markets across Europe, North Africa and the US, experimenting with new tastes and old, and infusing traditional flavours with a fusion of traditions. “Our future plans are to expand regionally and internationally with the different brands that we have. At the moment
our expansion plan is towards many territories or countries. Our first franchise branch of Operation Falafel opened in the eastern region of Saudi Arabia last month. This is one of many units that we are looking to have in the Saudi territory,” Nasr enthuses. “Of course, our next step will be the United States and we are going there very soon. We are almost done with the preparations for Operation Falafel to be presented to this market. In 2018 we are planning to have 47 outlets spread over the Middle East with one outlet in the United States. Our strategic vision is to operate 97 outlets by 2020.” Having achieved much already in such a short space of time, AWJ Investments certainly shows no signs of slowing down in the foreseeable future.
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