Better Wholesaling Insight - June 2022

June 2022

In-depth analysis, insight and advice for convenience and foodservice wholesalers

Running a lucrative digital-led operation

Why you should be taking advantage of the latest technological trends in wholesale, and how to do so

CONTENTS LEADER The wheels of evolution are in motion

Paul Hill Editor

I

t’s now well over two years since the coronavirus pandemic struck and it’s safe to say the key lasting legacy in wholesale has been the adoption of technology throughout the industry.

In 2019, the wheels of evolution were already in motion for the sector to make itself more e-commerce friendly, but the lockdown made it a necessity.

The result has led to some of the biggest changes ever seen in the channel, with the industry unrecognisable from three years ago.

However, we’re still at the very

start of a long journey and although the vast majority of wholesalers have adopted digital, there is still tonnes of untapped potential there that can help operations grow sales, improve efficiencies and build on customer relations with the help of technology.

For this report, we take a deep dive into unlocking this potential and explain the benefits of running a lucrative digital-led operation.

As well as the likes of TWC and b2b.store offering insight into the benefits of data and e-commerce, we hear from numerous organisations – such as Bidfood, Brakes and Caterforce – to find out what they’re doing and achieving within the sector.

Also in this publication, we have guides on price-marked packs and the tobacco and vaping categories, and take a special look at the conflict in Ukraine, where we discuss five ways in which wholesalers may have been affected by the invasion of that nation

by Russia.

If you have any news to share relating to technology in your operations please don't hesitate to get in touch.

EDITORIAL

SALES

Editor Paul Hill

Head of commercial Natalie Reeve 020 7689 3372

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Editor in chief Louise Banham Head of design Anne-Claire Pickard Production editor Ryan Cooper Sub editors Jim Findlay, Robin Jarossi Designer Jody Cooke Contributors David Gilroy, Tom Gockelen-Kozlowski, Rob Mannion, Tanya Pepin, Charles Smith Production coordinator Chris Gardner

Better Wholesaling Insight's publisher Newtrade Media cares about the environment.

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Better Wholesaling Insight is published by Newtrade Media Limited, which is wholly owned by NFRN Holdings Ltd, which is wholly owned by the Benefits Fund of the National Federation of Retail Newsagents.

Reproduction or transmission in part or whole of any item from Better Wholesaling may only be undertaken with the prior written agreement of the Editor. Contributions are welcomed and are included in part or whole at the sole discretion of the editor. Newtrade Media Limited accepts no responsibility for submitted material. Every possible care is taken to ensure the accuracy of information.

REPORT P4-5: Viewpoint Less jargon, more success stories are key to enticing wholesalers to digital P6-11: Case studies Technological ways of learning from across the sector P12: Data & insight What digital means for the future of foodservice wholesalers P13: Opinion Data is a key enabler to wholesale realising its full potential P14: Interview What are the latest developments for SalesOut in the industry?

P15: Opinion Sustainable awareness is aiding the development of EVs in wholesale P16: Data & insight How digital is delivering on its potential and driving increased sales P17-18: Tips & summary Five key ways technology helps improve wholesale operations SPECIAL REPORT P20: Analysis What will be the impact of the Ukraine conflict on wholesalers?

CATEGORY ADVICE P21: Spotlight Refresco talks through the latest developments on its Old Jamaica brand P22-28: Sector review An in-depth overview of the ever-important category of price-marked packs P30-34: Sector review All the latest trends and product news within tobacco, vaping & next-gen nicotine

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

STOCK UP NOW

REPORT Gilroy’s viewpoint: Technology providers should steer away from jargon and inspire their audiences with success stories

David Gilroy is the founder and managing director of Store Excel

E

veryone likes an inspiring story. In 1961, President John F Kennedy announced the US would land a man on the moon by the end of the decade. At this point, there was the vision, but no real plan. The Apollo project was born. More than 400,000 people across the US came together to accomplish this seemingly impossible task. They would use rockets not yet designed, alloys not yet conceived, navigation and docking systems not yet devised, and a host of related innovations, all without the aid of robots or microcomputers.

The Saturn V rocket alone had more than five million parts. I reckon that’s a story of achievement.

If you turn to page 44 of your Haynes Apollo 11 Owner’s Workshop Manual you will see the mind-boggling cutaway diagram of the rocket’s engineering specification. Prompted by my fascination for space travel, my son bought me the manual as a present. He’d linked it jokingly to the Haynes manual he’d

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seen for my first car. The Ford Anglia.

A basic car designed in the 1950s totally unfamiliar with technology, but very familiar with the hard shoulder of most motorways. I would use the manual extensively to conduct servicing and roadside repairs. This is not possible in today’s world – the manual and my socket set are now dust-covered relics.

Now imagine you are mooching around a car dealership in a reverie of motoring through Europe – top down, shades on, sumptuous leather seats, personalised controls, your favourite music on the surround-sound system.

Sensing they’ve got a lead, the sales person throws open the Haynes Workshop Manual. “Check this out. Look at the wiring specification and get a load of the fuel delivery system…”

There’s a time and a place for the Haynes, and this is not it. What I want to know is how this vehicle is going to fulfil my dreams and transform my life.

Let’s face it –we’re all a bit cautious when it comes to investing in big-ticket projects, so why do the technology companies insist on using their equivalent of the Haynes Manual in sales pitches with jargon such as “multi-faceted modular platform”, “edge-to-edge exchange capability” or “self-sufficient machine learning-based ecosystem”?

Tell me a real-life story about a real-life business to which technology made a real commercial difference: increased sales and margins or enhanced productivity and profitability.

One wholesaler recently saw sales grow by 28% and margins by more than 3%

Maria’s Story: E-commerce and digital in an analogue world Maria is the proprietor of a wholesale distributor to corner stores based in Buenos Aires, Argentina. “We supply a wide range of goods to small stores in our city, which are normally family run.

They often lack access to finance and expertise, and many have low literacy and communication skills. We are using technology to aid this communication.

“There was a range of things happening before we launched our e-commerce store. For example, historically, some customers would have to get an Uber to pick up their goods from us.

“They would leave the Uber running while they collected their order, load it and take it back to the shop,” she said.

“Now, we let them order online and deliver to them. We took some time searching for an e-commerce provider that properly understood our needs as a supplier to businesses.

“This ruled out the big players like Shopify and Big Commerce as they are primarily for transacting with consumers and don’t have all the functionality we need. Our customers work from smart devices, so it was important that we had a solution that linked the app and the website.

Tell me a reallife story about a real-life business where technology made a real commercial difference

“With the literacy issue, being able to populate with product details and images was also important, and we needed a fast response to range changes.

“We needed dynamic pricing based on order volumes to enable us to encourage our customers to trade up and be rewarded for loyalty. We needed to build in reward triggers, such as free stock, for specific actions.

“The majority of our customers are used to paying in cash, so a simple, flexible and smooth electronic payment experience was vital. This had to include the capability for payments on account and full invoice tracking. Of course, a debt-management module offering a full view of aged debt with alerts to potential problem clients to support a credit-control function.

“What confirmed our choice as provider was their ability to supply their solution in our native Spanish.

“In our country, B2B hadn’t really adopted e-commerce, so we were pioneering. Now I would say that six out of 10 customers are using our app.

“They spend more and order more often. We’ve seen our sales grow by 28% and our margins by more than 3%. We are definitely winning business from our competitors.”

Ben’s Story: Warehouse robotics changed my business Ben owns a foodservice wholesale company with two units based in Sydney, Australia. “We have two facilities serving vibrant hospitality communities – most notably the harbour front. Business took a hit in 2020, but started to move forward again strongly in 2021.

“There had been a shift away from walk-in customers and more towards delivered. I was fine with that as we had the e-commerce and transport to support the trade,” he said.

“However, the cost to serve our customers had increased substantially and it became apparent we needed to make savings. My mind turned towards warehouse efficiency and the possibility of using robotics.

“As I searched the technology providers it became clear I would need to consider the issue of ‘dark stores’ versus a hybrid operating model. I was being advised to go the dark-store route.

“This suited the business, as one of our warehouse units was low turnover, and not ideally located for a walk-in operation. I decided to convert it to a dark store and use it as a dedicated delivery hub. The advantages are numerous.

The inventory is easier to track without

customers taking stock during picking, dark stores can accommodate more volume per square foot, can operate in lower-cost locations, the picking accuracy is improved and stock rotation is easier to manage.

“I quickly realised this was going to be an operations management challenge as much as a technology solution.

“All the elements of the operation required engineering in such a way with the potential fail points designed out.

Discipline and rigour applied in all areas. I would need to rethink the facility around workflows: a fast-pick zone for the volume movers on pallets, a stockbin area for slow sellers and a separate location for break packs.

“There could be no room for slow sellers, dead stock or discontinued lines.

Machines would drive the inbound ordering system with forecasting an essential component. Goods received would have to be regimented, properly accounted for and located on a timely basis with the following-up of stock shortages relentless.

“A perpetual inventory checking regime would be essential. Only after all this work was in place would the operation be ‘robot ready’. It transpired the installation of robots was the relatively straightforward part of the project.

“There have been teething problems, but I am reaping the rewards, which include a massive improvement in stock accountability, reduction in waste and a significant increase in productivity. The delivery hub has enabled the business to target and secure sales in new locations.

I reckon I will have a return on my investment inside four years.”

These two stories articulate real-life benefits flowing from technology, without all the jargon. It really isn’t rocket science. l

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REPORT Lessons from the industry

Leading figures from across the channel give their take on how they have implemented technological changes across their operations

By Paul Hill

Stuart Sykes Head of digital, A.F Blakemore

In 2021, we invested in a progressive web app for our B2B foodservice and wholesale distribution customers as well as our Spar retailers.

The e-commerce platform, which works as a website and app, was designed specially to improve the online ordering experience.

Featuring AI-powered search, it can interpret the meaning behind search terms to ensure that results shown are relevant to the user. AI merchandising makes it easier for customers to build their baskets as the app is able to make product suggestions based on their purchase history.

The business has also invested heavily in improving our digital product data, so the app includes better product descriptions and more detailed information on ingredients, nutrition and allergens. This product data is all managed centrally via a product information management system.

Our customers expect a B2B online ordering experience that is akin to how they shop in the B2C world, so this was our aspiration when we designed our new platform where we made a massive investment in digital technology, and the progressive app is just part of that.

It offers customers a fast, friendly and convenient way to shop – enabling them to intuitively find the best products, access essential information on nutrition and allergens, and place orders quicker than before. The site also provides availability updates, links to delivery tracking and links to a finance portal for easy access to invoices. Customers are able to provide the company with immediate feedback. For suppliers, there is more opportunity to effectively market their products to customers, including via brand-led pages.

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David Fieldhouse

Joe Moulton

Chief revenue officer, Adimo

Marketing manager, Birchall Foodservice

A long standing client in the frozen foods industry reached out to Adimo, looking for us to replicate the success of their B2C shoppable marketing efforts across their B2B offering. With Adimo as their preferred technology provider, the client team wanted to drive sales via their wholesale partners by implementing frictionless e-commerce capabilities across their paid and owned channels.

The team at Adimo worked closely with the client to ensure we could successfully integrate with their unique set of wholesaling partners including the likes of Brakes and Bidfood. With ‘add to basket’ capability established, our team implemented shoppable functionality across their site product pages, and created a dedicated ‘Shop’ page housed in the websites’ main navigation. From here, Adimo’s shoppable integrations were used across a variety of paid activity including search campaigns and sponsored content in digital trade publication.

This resulted in the implementation of shoppable capabilities across the brand’s website and through paid activity, our client saw significant uplift in conversions with their wholesale partners, directly from their trade marketing efforts.

Over the past 12 months, we have invested heavily in digital and technology, primarily focussing on the following key areas: • OrderMate – we’ve launched lots of upgrades and enhancements, including the function to offer substitute products to a customer when something is out of stock. Our latest project is the payment portal, which will allow customers to order and view invoices through the app. This should be going live in the summer.

• Warehouse operating system – we upgraded our system in March, which was a big task. This new system will allow us to fix issues quicker and will let us implement upgrades and improvements that will help us improve the efficiency of our warehouse operations.

• Solar power – we’ve had 396 solar panels installed on our main warehouse roof, which will help us reduce our carbon emissions by 50 tonnes each year. We can run reports on our usage via a digital platform, which shows us just how much energy we’re saving – we have also installed 18 electric car charging points at our Burnley depot for our sales team’s electric cars.

Tom Mathew

Kieran Hartley

Director, Dunsters

Information systems manager, Caterforce

Over the past few years we have overseen a period in which Dunsters has an eye set firmly on the digital age in which we have embraced new technology and processes to improve the operations and overall customer experience.

Now delivering to around 800 customers in a multitude of sectors throughout the north of England, the previous two years have been focused on growth and development of the product range within this context.

It has enabled us to compete in new sectors and to provide our customers with greater variety.

We have used technology to enhance our service and have been joined by a number of key staffing appointments to strengthen our team in both sales and operations. Some key tender and contract wins have enabled us to achieve continued growth and we have been working hard on plans for future developments for the business.

In 2021, Caterforce employed me to deliver the group’s technology strategy. Over the past 12 months Caterforce has been working with digital partners TWC, Foodservice Online, Akeneo and Enable to launch platforms to improve rebate management, monitor price changes, manage product information, improve the user experience on members’ e-commerce sites, analyse sales data and improve buying decisions at a group and a local level.

Our plan is to develop a seamless, integrated solution to track the full product journey from initial supplier agreement through to sale.

By leveraging cloud-based software and automation we are aiming to join-up these business functions, eliminate manual input error and provide the group with a unified view of product information and sales data. As the quality of this data improves, we benefit from enhanced reporting and analytics, which allows our buying and marketing teams to make more accurate, data-based decisions and gives the group a greater understanding of our customers.

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REPORT Tom Gittins

Niall Deveney

Managing director, Confex

Marketing manager, Dunns Food and Drinks

Covid-19 was a game changer at Confex. As the world turned upside down so did our wholesale member businesses. The Confex head office has also changed out of all recognition over the past two years and it is technology that has allowed this to happen at lightning speed. Our operation has evolved from a 15 staff member fully office-based business to a 19 staff member home working operation.

We now work from a hot desking office linking up via daily Teams meetings, while also in the process of becoming a carbon negative company.

With technology always at the heart of Confex development we have seen our wholesalers embrace direct-to-consumer selling, which has mushroomed since the growth in online shopping during the various lockdowns. We recently launched Confex Direct aiming to capitalise on home delivery of bulk items. Subscription models and a locally-sourced foodservice marketplace are in the pipeline as Confex wholesalers use technology to grow their businesses via online. There’s a blurring of traditional routes to market.

Along with our supplier partners, we continue to embrace the power of data, with the Confex Data Insight programme now collecting 47% of group sales on a weekly basis. As we roll out this programme, capturing data will enable us to make better decisions.

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Our digital order capture has continued to evolve. We’ve offered a web-based portal and accompanying app for a number of years and facilitate a number of groups ordering via procurement systems (ProcureWizard, Acquire).

This was growing, but the pace has gathered rapidly over the last 12 months and the course of the pandemic. Industry-wide Covid-19-related issues forced us to make operational changes, but it presented an opportunity to introduce more customers online and we are now pushing 65% of sales and orders coming in digitally. We’ve just asked all of our drinks customers to make the switch, which is likely to see that increase further and we’re also rapidly developing the systems for the best customer experience including product data and images. It’s great for customers as they can access our full range at their convenience but also for us as it eases a lot of pain throughout our operation.

We can also nod to our pandemic response that saw us pivot to offer home deliveries and collections for the general public in 2020. It brought a whole new set of products and demands compared to our usual customer base and led us to launch a trio of specialist B2C sites – The Beer Town, Wine Line and Dunns Pantry – which we continue to develop as a new revenue stream.

Yulia Petitt Head of trading & marketing, Sugro

Sugro’s trading and marketing strategy is to concentrate on developing business for our members, with the Sugro app and e-commerce being the centre piece of that. E-commerce is a long-term strategy for the group and we are very pleased to see such a good uptake, with 15 wholesalers already taking advantage of the digital app since launch and 10 more members set to go live in 2022.

The digital app has proven to be very successful for the group and helped members to do business with their customers more efficiently. It allows retailers to browse product catalogues and add products to basket on the go, scan the products using barcodes and pay online via the in-app payment method.

The platform gives members an opportunity to provide the best customer service and experience via the app-ordering facility and personalised marketing capabilities, such as product advertising, push notifications, interactive interstitial videos and full-screen animated trade ads that are available on the app platform.

Since taking up the group app offering, members advised that they have seen a substantial increase in average basket size with their customers as well as a significant reduction in the order taking costs. Wholesalers have been reporting 100% customer satisfaction from it.

David Lunt

Stephen Back

Managing director, NBC

Sales director, Marin’s UK

One of the benefits of being a member of a progressive buying group is that you get the opportunity to network with like-minded individuals about what works and does not work with the latest trends that affect your industry. Never has this been more so with technology – we all know that once you have a new smartphone it is updated within months. So how can a foodservice wholesaler take advantage of technology trends and be confident that they will be in place for a while – but more importantly, making a difference?

Our chairman at NBC – Jason Langmead of V.W.T Wholesalers & Distributors based in Guernsey – has recent and relevant experience of how networking and adopting new technology as a result has made a significant difference to his business, both in how it works and the financial benefits he is gaining. At one of NBC’s early member networking events, we supported a presentation from the company behind Swiftcloud – a B2B app designed to improve the sales order process with customers. The app basically supported a mobile application of the wholesalers’ sales order process, allowing both customers and sales personnel the flexibility of on the go ordering capabilities.

The app was initially adopted during the pandemic lockdowns, which in a way, was changing the landscape of how wholesalers and customers were working together, but not quite the revolution. Once trade channels started to reopen, the benefits across a wide spectrum of users became immediately clear – product files accessed easily; clarity of up to date pricing and product availability; accessible 24/7; seamlessly integrated with the wholesalers’ operating systems.

In order to draw attention to the launch of the Alpro PlantPower range in Parfetts, Marin’s UK (a Quad In-Store company) helped design and create an eye-catching chiller room display for the Alpro products in all seven of Parfetts depots.

The PlantPower display was designed to attract independent retailers’ attention and get them to stock the range in their stores for the first time. As a reward, the retailers were given the chance to scan a QR code on the display and receive a free Alpro PoS kit for their stores and in return for their details, were entered into a free prize draw giving them a chance to win £100 trade credit. Marin’s UK provided Parfetts and Alpro with a joined-up one-stop solution for the whole campaign from production and printing through to fulfilment, digital activation and promotional analytics; an integrated marketing and fulfilment solution merging the wholesaler, the independent retailer and the consumer together.

This POSM-led innovation dovetailed perfectly with Alpro’s work with Parfetts on bringing to light the importance of this fast-growing plant-based sector. By creating a visually impactful display at wholesaler level, this helps independent retailers to understand the importance of stocking the biggest brands in this sector and helps to achieve expanding sales for both the wholesaler and the independent retailer.

This type of PoS activation can help wholesalers like Parfetts create an engaging way for retailers to interact with new brands they may not have considered stocking in their stores before.

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REPORT Tim Adams Director of marketing and corporate sales, Bidfood

As a wholesaler, we have made some big technological strides over the past two years, aimed at improving accessibility and transparency of information for our customers and teams alike. We’ve taken advantage of some key technology trends such as online ordering and apps, voice recognition, and automated management software. Here are a few examples of the key step-change advances that really make our customers’ lives easier and have helped us evolve our service offering: • Menu Planning – Launched just before the implementation of Natasha’s Law last year, this digital tool automatically generates full allergen information for each created recipe. Accessed through Bidfood Direct, Menu Planning will save customers time and money by improving the visibility of key data they need for menu planning.

• Paragon routing and scheduling software – This programme assists our depots with their daily routing activities. By having information on routes for multiple locations in one place, operations can create safe and straightforward journeys for drivers. Paragon also delivers a reduction in road miles so there’s a potential CO2 saving across routes.

• Q-drop driver app – Through their handheld device, drivers can record real-time delivery information such as shortages, rejections or returns.

It also removes the need to carry waybill paperwork, and customer signatures can be captured through the handheld device quickening internal processes.

• Bidfood Direct app – With the introduction of 5G, now is a great time for customers to download our free Bidfood Direct app allowing them to conveniently order, check live pricing and product information from anywhere.

• Voice picking software – Using voice recognition technology, this piece of equipment allows for smoother warehouse operation as stock can easily by identified, picked and loaded.

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Richard Gallacher Marketing communications manager, TrueCommerce

Prior to moving to the TrueCommerce Netalogue B2B e-commerce platform, drinks wholesaler Matthew Clark was using a B2B online ordering platform from a US e-commerce provider. When the incumbent solution was retired from the market Matthew Clark conducted a thorough market review and subsequently chose the TrueCommerce Netalogue B2B e-commerce platform. The move to TrueCommerce signalled a step change in approach from simply a transactional order taking mechanism, to a fully functional e-commerce platform, focused around giving a great customer experience.

Following the launch of its new TrueCommerce Netalogue webstore Matthew Clark has increased sales and customer loyalty, while reducing costs, according to its marketing director Richard Hayhoe, who said: “Our web store is no longer just a bolt on to facilitate online orders, it is a key element of the service and experience we provide our customers and has been a key driver in transitioning our business from analogue to a much more digital experience.”

The next issue of Better Wholesaling Insight will feature a full report on how TrueCommerce and Matthew Clark are working together and allowing the wholesaler to benefit from a fully functional e-commerce offering. l

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REPORT

Why digital is the future for foodservice wholesale

T

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More than

82%

of foodservice wholesalers felt that demand from foodservice buyers for online services is increasing.

Paul Hill he FWD recently released findings of an in-depth survey of its members that looks at foodservice wholesalers’ adoption of e-commerce.

The report is named ‘Mind The Gap’ because of the survey’s key finding: although 100% of wholesalers viewed e-commerce as important to the future of their business, only 5.9% of respondents have a dedicated e-commerce team fully established in their business and 31% of those surveyed have nothing in place.

The survey, aimed at assessing wholesalers’ appetite for digital transformation, shows an overwhelming recognition among foodservice wholesalers of the importance of developing a strong digital e-commerce presence.

However, less than half of those surveyed had set aside a dedicated budget for e-commerce development. While foodservice wholesalers understand and recognise the strategic priority of e-commerce, and more particularly of operating their own marketplace, there remains a very real disconnect between what these wholesalers recognise as necessary, and the action they take or investment they make to implement e-commerce and their own marketplace.

James Bielby, chief executive of the FWD, said: “During the pandemic, the foodservice wholesale sector had to evolve at a rapid pace and those wholesalers unable to deliver digitally faced

KEY FINDINGS

More than

85%

of foodservice wholesalers felt their business was disadvantaged if their competitors had a strong online presence.

More than

65%

of those foodservice wholesalers surveyed wanted to operate their own marketplace.

the very real threat of being left behind when a limited supplier network led to frustrating demand and supply balance issues.

"Those online retailers who were already equipped with an online marketplace of their own at the height of the pandemic were able to leverage the scale and flexibility of their platform to bring together more sellers with more buyers, faster and easier than a traditional linear value chain model ever could.”

“Online marketplaces are, by now, essential for any organisation looking to meet its customers’ ever-evolving needs,” added Marc

Teulières, executive vice president of customer success B2B at Mirakl. “Wholesalers must accept that launching an online marketplace is simply the beginning of a new way of doing business – an opportunity to transform their business so it can both survive and thrive in the new digital-first world of e-commerce.”

Meanwhile, Julian Owen, director of sales marketing at Turner Price, explained that the marketplace model was a no-brainer for the company to deliver the best service to its customers. “Like many sectors, catering experiences fast-moving

trends and customers want to tap into these while also having a broader choice of products.

By launching our marketplace, we are able to meet every new demand that comes along quickly, cost-efficiently and without risk.

“Our marketplace, powered

by Mirakl’s leading technology and expertise, is unlocking greater revenue, better customer relationships and pushing our business ahead of the competition,” he said.

The survey was carried out by the FWD, Foodservice Online and Mirakl, and forms the basis of the report ‘Mind The Gap: Why Digital is the Future for Foodservice Wholesale’. l

REPORT

Data is a key enabler to a wholesaler realising its full potential Tanya Pepin is the managing director of TWC

F

or the wholesale channel to thrive and realise its full potential, it must be able to compete on a level playing field with other routes to market, specifically the multiples. Digital – and explicitly data – are key enablers to this ambition for the channel as a whole, and for suppliers that champion the sector.

Suppliers are spending money on backing the right customers, achieving the right price and executing effective promotions. Data is pivotal to this and, historically, this gave the retail multiples a huge advantage because they offered data solutions that reported stock, sales and consumer uptake.

Most wholesalers are now sharing their shipments data – reporting sales to their customers – giving suppliers clarity on the performance of their category in the wholesale channel and enabling suppliers and wholesalers to take a data-led approach to buying and category management discussions.

Of course, some wholesalers are more insistent their data is used in meetings with suppliers than others, but, equally, some suppliers are better at blending market data with the wholesaler’s own data to show context and genuine opportunity. This is a learning curve and all stakeholders are still working out how to best incorporate data into their regular conversations, but, inevitably, those that do will reap the rewards.

A few wholesalers are now

beginning to share EPoS data from their retail stores. This development will allow suppliers to understand this route to market in a way they have never been able to do before, by evidencing best practice both in store and in depot. This allows product movement to be monitored right from the factory gate through to the end consumer – the holy grail for most marketeers in supplier organisations.

The release of wholesale shipments plus retail EPoS on one platform will allow the channel to operate in the same way as the retail multiples do – with total visibility through the supply chain.

Not only will that enable better analysis of what has happened, but armed with this data, suppliers will also be better able to forecast future demand. Furthermore, retailers (and wholesalers) can be incentivised and rewarded for the right behaviours, driving up standards across the channel.

As well as using this data to reward outstanding behaviour, it can also be a valuable forecasting tool.

With joined-up sales data from the retail estate and the wholesale depots, suppliers and wholesalers can accurately determine future buying patterns. Having visibility of retail volumes and rate of sale makes it much easier to predict what the wholesaler is likely to be buying in over the short-tomedium-term. Conversely, if retail sales slow down and the wholesalers’ sales have also slowed, this is a clear indicator

A transparent wholesale supply chain In-depot performance Wholesale shipments out Evidence best practice in depot

Shipments out of factory

In-store performance

Sale in to wholesale

Retail sales Evidence best practice in retail

Forecasts informed by data and evidence of what works / speed of sale

Advantages l Full visibility of end-to-end supply chain l Better able to measure product throughput l More accurate forecasting l Feedback on what is working and what isn’t l Retailer incentivised for right behaviours that buying in is going to reduce.

These types of metrics are taken for granted in the multiples and in disciplined convenience, but have always been impossible in traditional cash and carry and independent retail. Whilst we are only seeing the first green shoots of combining retail and wholesale

data for this difficult-to-reach part of the market, the potential is unmistakable.

Brexit, stockpiling, hospitality closures, the HGV driver shortage, the current Ukraine crisis – all put huge pressure on our logistics and highlight just how important supply chain data is. l

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REPORT

Interview Paul Hill speaks to Marcus Vallance, head of wholesale & foodservice at SalesOut PH: What service does SalesOut offer wholesalers?

MV: SalesOut is an IRI company that offers a range of services to enable wholesalers to improve their businesses through data and insights.

Using its analytics capabilities, its technology and platform Unify, and in-depth reporting, SalesOut is able to create better joint business planning between suppliers and wholesalers.

Through enhanced visibility, suppliers are empowered to engage better with the right customer types, in the right stores, with the right products and at the right price, thanks to usable, accessible data.

SalesOut’s custom models then make increasingly accurate predictions on what the future looks like.

The company ultimately ensures suppliers can trade more efficiently and effectively through wholesalers.

What work has SalesOut done with the industry recently?

SalesOut has been working on a price and promotion review called an ‘assortment optimisation review’.

It’s needed because one of the big

challenges in wholesale is trying to be a retailer without actually owning the stores. How do you get that share of investment in a brand when you don’t own the stores?

You can buy much better, but you need to sell better as well.

An assortment optimisation review enables the wholesaler to do both. If they implement the actions and/or the predictions turn out to be correct, the value return can be huge.

What new technology should wholesalers be taking advantage of?

Innovations in product and item registration is definitely one.

If you’re a buying group, registration is vital because you’ve got multiple data sources coming in from various wholesalers, and you want everyone to have the same data. Bad data will always give bad results.

Another is a new development in forecasting. Because wholesale is becoming more and more about supplychain efficiency, forecasting has never been more important.

The businesses that succeed in the future will be those that have visibility

The businesses that succeed in the future will be those that have visibility right through from the wholesaler to the consumer, and that will be enabled by through-the-line forecasting

14

right through from the wholesaler to the consumer, and that will be enabled by through-the-line forecasting.

Is the wholesale industry doing enough with data and research?

We’re quite good at looking backwards and at what’s happened in the supply chain, but I don’t think we’re brilliant at sharing good-quality data on sales going out.

We need to be more visible, using data and insights better to work with partners. Retailers are sophisticated buyers because they collect and analyse huge volumes of customer data; wholesalers don’t have that luxury.

Wholesalers would make more informed decisions if they gained a better understanding into what drives retailer motives, so the industry needs to bring the barriers down.

What is the greatest challenge the wholesale industry faces from a technological perspective?

The greatest future challenge for wholesalers is the same as it is for retailers and that’s losing human connections as a result of digitisation.

We now have contactless shopping, cashier-less tills, and e-commerce is going to continue to grow.

Everything is becoming increasingly faceless, and one of the challenges is how to keep personality and relationships within a store environment in which technology will become ever more prevalent.

Whether it’s retailer to consumer, or retailer to wholesaler, losing that oneto-one service element will come at a huge cost. Those human interactions are more important than we think. l

REPORT Why electric vehicles are taking off in wholesale Paul Hill

A

greater focus on sustainable practices are making electric vehicles (EV) look increasingly attractive, and they're becoming the next major technological focus of the industry.

The Scottish Wholesale Association (SWA) recently partnered with Volvo Trucks to offer members detailed insight into the EV and infrastructure market as part of its Decarbonisation of the Wholesale Sector project (see BWI March issue report).

Its recent Electric Vehicle Experience event allowed qualifying participants to drive one of the UK’s first all-electric HGVs and also provided access to sector leaders speaking about Scotland’s transition to net-zero fleets.

Colin Smith, SWA chief executive, said: “We’re experiencing considerable interest from members who are committed to reducing their carbon footprint, and this event provides an excellent platform for wholesalers to learn more about the technology and ask pertinent questions.

“Last November, we shared the findings of the first phase of our project, which focused on our vehicles and fleets, calculating and reporting on the sector’s fleet emissions baseline, and producing a fleet-emissions roadmap to net zero. Phase two is focusing on our buildings and cold storage, while phase three will shine a spotlight on our people

and employees, and how they move around to, from and within their jobs.

Scottish wholesaler Lomond has already taken drastic action to modernise its fleet, with the recent addition of 20 7.5t hybrid refrigeration vehicles as part of continuing its ongoing pledge to reducing its carbon footprint.

Director Barbara Henderson commented: “While the government monitors carbon emissions from vehicles, it doesn’t monitor emissions from refrigeration, which is six times more polluting than category-six engines.”

“We have taken out red-diesel engines and fitted batteries so we now have vehicles in which the refrigeration is powered by electricity rather than red diesel.

“In addition to dramatically reducing pollution, this strips out weight, which means we can carry an additional 1.3t of stock per vehicle, leading to increased efficiency in our business and fewer vehicles on the road.”

The new lorries join the fleet of electric company cars Lomond adopted for its field sales force in 2021. By introducing bespoke, energy-efficient lorries, Lomond has halved its carbon footprint since 2017.

Lomond has also deployed

a fully electric van, which will be used in the local area to demonstrate the wholesaler’s dedication to sustainability and lowering its environmental impact.

The Lomond livery will be replicated on this van, but in green to emphasise the company’s commitment to the environment.

South of the border, Blakemore recently took up a trial of an electric truck at its Willenhall distribution centre, with the Electra e-Cargo refrigerated rigid vehicle delivering to Spar retail stores within a 100-mile round trip of the West Midlands depot.

Logistics compliance manager Dave Higgs said: “This trial will move AFB a step closer to introducing its first electric HGV, and we are excited to be involved in the drive towards a more sustainable future.

“If the test week is successful, the business will be looking at more suppliers of electric vehicles. We are hoping to do a number of trials over the next five years to understand the

potential of electric HGVs and how they could be incorporated into our fleet.”

The vehicle takes up to 10 hours to charge at the company’s Willenhall lorry park and Blakemore has already begun to roll out electric home delivery vans to its Spar stores and has invested in charging points for electric car users at several of its depots.

The company’s commitment to reducing its transport emissions is part of a wider focus on sustainability, and, in January, it welcomed a new environmental sustainability manager to its responsible business team to drive its environmental sustainability strategy forward.

The government has announced it will phase out new non-zero-emission heavy goods vehicles weighing 26t and under by 2035, with all new HGVs sold in the UK to be zero emission by 2040. l

15

REPORT Digital is increasingly delivering on its potential and adding real value by driving increased sales Rob Mannion is the founder of b2b.store

D

igital wholesaling has been changing the wholesale sector for almost a decade, with the speed of adoption accelerating markedly during the Covid-19 pandemic. This digital adoption shows no signs of slowing, but, as one of the only growth channels in the sector for a number of years, wholesalers – quite reasonably – had questions over whether digital growth was adding value to their business or simply moving sales from one channel to another.

Today, figures from b2b.store show that digital is increasingly delivering on its potential, adding real value by driving increased sales.

Paul Michael, of The Soft Drink Company, shared his experiences: “Since adopting b2b.store, we have seen a 50% increase in online ordering – a shift primarily enabled by being able to accept orders 24/7 rather than being restricted to opening hours. Before b2b.store, we used the traditional route and took all of our orders through telesales.

We now operate both online and through an app, removing the need for a person to physically take orders and putting control back into our customers’ hands.

“One of the benefits of the system is that we can announce promotions on our homepage with ease, as and when we want to, as well as sending push notifications when we have new product launches or promotions. It’s

16

a huge help getting the message out to customers in a hassle-free way and our average order size is increasing, partly due to the fact our product range is now more widely available so customers can see stock they may not have known we had.”

Family-run confectionery distribution business R&I Jones reports a similarly positive experience, with 30% of its turnover now generated online and a 212% increase in online orders over the past 12 months.

Aled Roberts, director at the company, says: “We’ve seen our orders come through the online portal quicker than they ever have offline,” he explained. “Our customers also love that they can add products to their ‘favourites list’ and return to it for their order the following week.

“We’ve also noticed custom-

ers doing quick searches for any promotions we have before putting their orders through. It’s a bit like queuing at the till and impulse-buying the stuff around you, except it’s all online.”

Tailoring digital commerce sites to local languages has also enabled wholesalers elsewhere in the world to overcome barriers to getting customers online. Priti is the number-one wholesale supplier of Corona beer in Mexico, supplying mainly small corner stores with everyday items including soft drinks, confectionery, cleaning products and groceries.

Its founder, Emmanuel Castro, said: “The audience we speak to would not know even basic English words you need to use an e-commerce store, so it was crucial to get the language right when launching our digital offer, and b2b.store helped us with this.

“The sector is fairly informal in Mexico and, in some cases, customers would have to get an Uber to pick up their goods from us, leaving it running while they collected their order, loaded it in and took it back to their shop.

“Creating an easy-to-use digital ordering platform allows us to add value to our customers by letting them order online and delivering to them.

“We’ve also found the ability to change pricing quickly a huge benefit to ensure we compete with the prices we offer.

“It might seem like a small detail, but ours is a very price-sensitive market – even a few cents can make a huge difference.

“As soon as we uploaded new prices on the store, revenues increased, so having the ability to update these instantly means we can be very competitive.” l

For more information, please visit b2b.store

REPORT

Five ways technology improves wholesale operations Charles Smith Charles Smith is a journalist with experience writing for the UK's grocery and foodservice wholesale industry

1. Technology can help wholesalers enter new markets and take on new customers

Create a long-term e-commerce vision and make long-term plans, then be flexible. You won’t necessarily get the same speed of return on investment in B2B as in B2C, but give it time. Use social media to find your audience. Budget a percentage of online sales towards buying customer data that matches those who have already purchased your products online.

Marketing director Chloe Staniforth at Pricecheck says they have recently invested in an in-house business intelligence team who analyse data that helps identify and capitalise on trends for them and their customers. This data enables Pricecheck’s wider trading team to promote and source the right products at the right time.

Andrew Wild, managing director at Wilds of Oldham, is developing online purchasing as a B2C addition to Wilds’ site, and then plans to develop the B2B part for their off-trade customers, marketed by Instagram and Facebook. Wilds’ on-trade customer app generated 17% of their March on-trade orders.

17

REPORT 2. Technology can help wholesalers become more sustainable across the business

Wholesalers have many technological options available to help them become more sustainable. Accurate forecasting systems avoid over-purchasing and waste. Online ordering helps reduce the impact of retailers’ vehicles visiting cash and carries. Route planning software, transport management and fleet utilisation systems help cut emissions. LED lights on motion sensors reduce energy use in buildings.

Home working where possible means less travel and strain on the environment. And alternating teams and face-to-face quarterly reviews decreases your carbon footprint.

Marketing controller Anita Oakhill says Unitas’ head office has adopted permanent flexi-home working and gone paperless. The building incorporates various eco-technology features.

Meanwhile, Wild introduced new office software in November 2019. Invoices and statements are now emailed to customers, reducing the amount of paperwork substantially. Wilds used to store two paper copies of every transaction, and everything is stored electronically.

Customer price lists are no longer printed, everything is emailed to customers.

Algorithms are the key to online marketing – the more you harness the data in your business, the more you learn about customers and create more sales

4. Technology can help wholesalers improve efficiency and make systems easier to operate

Gittins advises investing in tech throughout your business, from buying to deliveries, storage and picking through to sales and customer service: “If you invest in tech, you will become more efficient and save money – what’s not to like?”

Commercial director at Dunsters Tom Mathew recommends understanding customers’ technology to drive joint efficiencies – how can you work together to create win-win for both and boost productivity?

Pricecheck has also invested in a new warehouse management system (WMS), improving stock management, order fulfilment and efficiencies across its two sites: “The investment will also enable us to continue our fantastic growth in a controlled manner. Since implementation, we’ve gained greater visibility into our operations, enabling data-driven decisions and helping our buying teams work closer with brand partners. The system also allows us to efficiently serve the wide variety of customers, from small drop ship orders to full container loads.”

5. Technology can help wholesalers offer better customer service

3. Technology can help wholesalers develop export opportunities and build relationships with overseas customers

Online selling provides a shop window to the world, suggests Confex managing director Tom Gittins. “Online selling is thinking globally, so don’t be afraid to enter multiple marketplaces catering for different global tastes and trends,” he says. Buying group head offices should offer members tech expertise to help them diversify into export, backed up by supplier support. E-commerce offers the easiest entry into exports and the Department of Trade’s website (great.gov.uk) provides advice, support and finance.

Chloe Staniforth says after Brexit, Pricecheck’s need for in-house software became more apparent: “With requirements differing across the countries we trade with, we faced new and unpredictable challenges. Our IT team developed bespoke software to manage export consignments, creating all necessary paperwork and maintaining customs compliance, ensuring we could continue to trade across the EU. This capability enables us to offer brand partners and customers a seamless Brexit transition, ensuring correct product information at the touch of a button.”

18

Algorithms are the key to online marketing – the more you harness the data in your business, the more you learn about customers and create more sales: “We’re all essentially consumers, so customers’ habits when at work are the same for your wholesale customers as they are for you as a consumer. Make it easy and fun, and you’ll sell more,” explains Gittins.

Due to its B2B site’s fantastic growth, Pricecheck is now working on launching an even more improved service. Staniforth explains: “The goal is to give our online customers a higher level of support and replicate the level of insight and service usually only possible speaking with sales or business development teams. Using personalisation tools will allow us to create unique customer experiences, presenting products, offers and content highly relevant to them. Technology can help to reduce the friction in purchasing, making customers far more likely to purchase.” l

With thanks to: – Tom Gittins, managing director, Confex – Tom Mathew, commercial director, Dunsters – Chloe Staniforth, marketing manager, Pricecheck – Andrew Wild, managing director, Wilds of Oldham – Anita Oakhill, marketing controller, Unitas Wholesale

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SPECIAL REPORT

What will be the impact of the Ukraine conflict on wholesalers?

Paul Hill

T

he Food and Drink Supply Chain APPG recently held a panel event to hear from experts about the impact of the tragic Ukraine conflict on the food and drink supply chain, the challenges the conflict poses for the sector and what steps the government can take to support the industry at this time.

rate for hospitality.

• The introduction of temporary 12-month workers’ visas, for food processors with 60 of the required 70 points under the skilled visa criteria. Those workers could learn English in the UK and apply for a skilled-worker visa if they can pass their language test, which would take them to 70 points.

Top five things learned:

5. Longer-term steps the government can take – Panellists agreed the government needs to take a holistic view of food and drink policy, tying together everything from farming to trade to education.

A long-term solution needs to found on CO2 production, rather than jumping from crisis to crisis. To support the future of the sector, panellists proposed the introduction of a ‘T level’ specifically for food production. l

1. The four main cost drivers – There are four key costs resulting from the conflict that are affecting food production. The significant price rise in energy; limited raw materials, such as those used in packaging, fertilisers and feed; a reduction in available labour; and a new 35% tariff announced on products from Russia. Ultimately, this means increased costs, and wholesalers will shoulder part of this burden.

2. There will be price increases, but not shortages – The supply chain is incredibly resilient and, over the past two years, has weathered some mighty storms.

The Ukraine conflict will drive up prices of products in the UK, but it shouldn’t result in shortages. Producers will source products and materials from other locations. These may be more expensive, but there are alternatives to Ukrainian and Russian goods.

3. Meal costs could rise – The price of fish and chips in a pub could rise by as much as £1.20.

20

The increased costs of cooking oils, cod and other materials, such as energy and fuel costs, may result in a hefty price rise.

Wheat prices have increased by 60% since September, so there will be pain for chip-butty lovers, too.

4. Short-term steps the government can take – The panellists proposed several short-term policies, such as: • A moratorium on all policies that are likely to add burden to the food and drink sector, such as HFSS and packaging legislation.

• An extension in the 12.5% VAT

THE MEMBERS OF THE GROUP, ORGANISED

BY THE FWD, HEARD FROM: Jayne Almond, director of policy, Food & Drink Federation David Exwood, vice president, National Farmers’ Union Emma McClarkin, chief executive, British Beer & Pub Association Andrew Kuyk CBE, director general, Provision Trade Federation Alex Waugh, director general, UK Flour Millers Tony Goodger, head of marketing & communications, Association of Independent Meat Suppliers Dick Searle, chief executive, The Packaging Federation

INDUSTRY SPOTLIGHT

In partnership with

Refresco FAST FACT Terri Cooper, senior commercial manager, Refresco

Old Jamaica is the UK’s number-one ginger beer brand

BWI: What are the latest developments with the Old Jamaica product and how has it evolved?

TC: Old Jamaica, the UK’s numberone ginger beer brand1, has revealed that fans are in for a treat as it is bringing back its popular and original Old Jamaica Ginger Beer full-sugar recipe.

To the delight of Old Jamaica Ginger Beer fans, the authentic full-sugar recipe has made a permanent comeback, with its original ginger beer formula (15g of sugar per 100ml) now available to enjoy since it disappeared from the sector in 2018.

£1.5m

How has Refresco Investment in a helped wholesalers digital and social grow sales in the past campaign 12 months? day parts, from breakIt has been the biggest fast through to dinner, consumer campaign to date on with consumers increasingly Old Jamaica, with a £1.5m investment looking for ways to add interest and into its brand-new digital and social excitement to their drink’s repertoire. advertising campaign, with the brand Our advice for wholesalers is to back on TV screens in the summer of advise their retail customers to merlast year. chandise according to the occasion.

A wide-ranging communications As temperatures soar and people strategy will also support the brand enjoy more al fresco dining, picnics throughout 2022 and aims to broaden in the park or simply a refreshing Old Jamaica’s brand appeal, increase treat, Old Jamaica Ginger Beer is the awareness and position the brand as perfect drink. the authentic alternative within the soft drinks category.

What trends and opportunities are emerging that wholesalers can take What is the greatest challenge that advantage of? the wholesale industry faces?

Our Old Jamaica Ginger Beer 330ml Shoppers are thirsty for change and provides a real impulse opportunity excitement, and are fatigued by the for wholesalers’ customers to capitalsame category choices. Soft drinks ise on summer sales, while our Old are continuing to grow across all Jamaica Ginger Beer Light provides

the same hit of Jamaican Root Ginger, but with a zero-sugar ‘guilt-free’ alternative.

Promoting multiple end uses of product is key to demonstrate added value and maximise sales. The lines between the soft drinks and mixer categories are increasingly blurring and are showing similar trends and influences. Ginger beer proves to be a versatile mixer across all spirit categories, which is why Old Jamaica’s multipacks or larger formats are equally as important. Offering variation in depot allows retailers to offer choice in store to extend the consumption occasion.

What would you like to see happen in wholesale in the next 12 months?

Old Jamaica has the perfect portfolio of soft drinks to appeal to all those who like to mix it up. We use authentic Jamaican root ginger across our range, which also includes Ginger Ale, Rhubarb & Ginger Ale and Sodas.

Our Tropical Soda joined the family in 2021, with Grape Soda, Cream Soda and Pineapple Soda continuing to delight consumer tastebuds.

In the next 12 months, we would like to see our Old Jamaica range lining wholesalers’ depots as a portfolio, including our NPD, which offers a soft drink alternative and a versatile mixer.

What advice would you give wholesalers looking to grow sales?

When it comes to mixers, our Old Jamaica Ginger beer is as popular as diet cola and is a great alternative to conventional mixers as it offers a different layer of flavour to classic serves. Wholesalers should ensure they stock a variety of Old Jamaica products to meet demand, particularly during summer, with ginger beer seeing a resurgence as consumers require a versatile mixer that offers flavoursome and exciting drinks creation. l IRI Marketplace, Total UK, Soft Drinks, Volume, 52 weeks to 2021 1

21

SECTOR REVIEW

PRICE-MARKED PACKS

Price-marked packs Tom Gockelen-Kozlowski

C

onsumers’ insatiable appetite for price-marked packs (PMPs) is something that the trade has been discussing since at least the early 2010s when store owners began to see them as an essential marketing tool, rather than a threat to their profit margins. A world without PMPs is now unimaginable.

“PMPs are incredibly important for retailers when it comes to demonstrating value to their shoppers, which means they’re important for wholesalers to stock, too.

They need to be balanced alongside shopper insight and store-specific requirements in order to meet the needs of consumers,” says Matt Gouldsmith, channel director

22

(wholesale) at Suntory Beverage & Food GB&I. At a time when inflation is predicted to hit almost 10% and cabinet ministers are advising Britons to switch to own brand products to help pay the bills, PMPs looks set to become an even more essential tool for brands, wholesalers and retailers looking to drive sales of muchloved products.

“Recent research highlighted that price remains the second most important factor for shoppers when selecting their items.

Accounting for more than 69% of total soft drink sales in convenience, PMPs can help to reassure shoppers who are spending carefully but who still want to enjoy their favourite brands,” explains Amy Burgess, senior trade communications manager at

SUPPLIER VIEWPOINT Matt Collins Trading director, KP Snacks

“Price-marked packs (PMPs) have seen significant growth in recent years, with the format expected to continue increasing in both relevance and popularity.

Not only do PMPs offer consumers great value for money, the clear pricing also gives them assurance they are not being over charged. PMPs are a hugely versatile format that caters for multiple missions and occasions, whether that’s for hunger or sharing. Indeed, 54% of shoppers purchase items on impulse and PMPs drive these sales through clear messaging and displays.

Worth £260m in the crisps,

snacks and nuts category (CSN), this format is popular with retailers and consumers alike, with 82% of retailers saying £1 PMPs are must stocks and 40% of snack shoppers saying they are more likely to buy a product in PMP format. Across the CSN market, £1 PMP ranges are growing in value at 6.9%, ahead of overall market growth.

In fact, £1 PMP ranges are the main driver of growth in the convenience and independent sector and represent 70% of the sharing segment. The PMP format is now the largest format within CSN across symbols and independents.”

SECTOR REVIEW

PRICE-MARKED PACKS

PRODUCT NEWS

Cadbury Twirl Orange – Growing quickly to become Cadbury’s most popular single bar, new PMPs are now available and feature ‘striking’ 60p messaging, according to Mondelez.

Lucozade Alert Original – Joining Lucozade Alert Tropical Burst and Cherry Blast flavours, this Original option has been a hit in the convenience channel.

Gordon’s Premium Pink Gin & Tonic RTD – Available in a 250ml PMP can, this pre-made drink offers an on-the-go option for consumers heading to social gatherings.

Tyrrells core range – KP Snacks’ premium crisp brand is available in £1 PMP format for its core Lightly Salted, Sea Salt & Cider Vinegar, and Mature Cheddar & Chive flavours.

Jägermeister – The botanical-flavoured spirit has become a much-loved icon over the past decade. It now offers three price-marked packs for consumers at 20cl, 35cl and 50cl formats.

Red Bull Apricot-Strawberry Edition – This is one of a range of flavours Red Bull has brought to market in recent years. It is available in a 250ml can, price-marked at £1.35.

Coca-Cola Europacific Partners (CCEP).

“PMPs can also offer a unique point of difference for convenience retailers against larger stores. More than two-thirds (68%) of independents are in favour of PMPs, saying the confidence they give shoppers that they are getting value for money is the key purchase reason.”

Susan Nash, trade communications manager at Mondelez, meanwhile, says that the demand for PMPs from shoppers – and therefore, independent retailers – is already having a direct effect on their take up by many wholesalers: “Research shows that PMPs offer a number of advantages for retailers, and are an important part of a wholesaler’s offering.

“For retailers, the perception of improved value, convenience and trust from their shoppers

24

make stocking PMPs a good option – with a fifth of them even going as far as to say they would choose a particular store if they knew it stocked PMP products.”

Growing ranges Over recent years, Mondelez has increasingly offered a wide range of PMPs across its confectionery brands and formats, including countlines, blocks and sharing bags. Nash says this has helped its brands stand out on shelf, with the convenience of clear on-pack pricing helping to drive additional sales for wholesalers. Most recently, the company has produced a 60p PMP for its Cadbury Twirl Orange bar, a first for the brand extension.

If the cost-of-living crisis is driving an increased focus on PMPs, it is not the only effect.

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SECTOR REVIEW

era of austerity a decade ago, but have continued to grow ever since.

Diageo believes wholesalers must prepare for another period of growth for products related to the big-nightin market. Guinness draught is available in a variety of pack sizes ranging from four to 15, including a new 538ml format in a four-pack and a 4x440ml PMP pack.

“Not only are consumers adjusting their food and drink choices based on the occasion, the way shoppers enjoy celebratory occasions has diversified, and people are enjoying holding celebrations at home,” says Lauren Priestley, head of category development (off trade) at Diageo.

“Wholesalers should tap into this trend and make suitable preparations by offering a wide range of pack sizes to cater to every occasion.”

Outside the beer category, Priestley recommends stocking

26

PRICE-MARKED PACKS

ready-to-drink (RTD) formats as summer approaches.

Twenty per cent of the RTD market share is in PMP (growing at a rate of 39.6%), with wholesalers suggested to stock “a broad and interesting range”.

Priestley says: “When it comes to PMPs, stocking recognised brands helps consumers navigate the RTD category.

“Wholesalers should therefore consider stocking big brands in RTD format such as Gordon’s Premium Pink Gin & Tonic 250ml PMP can (5% ABV) and Captain Morgan Spiced Rum & Cola 250ml PMP (5% ABV) as we approach the warmer months.”

Spirit sales There was a time when spirit sales were considered one market where PMPs had less relevance, but in recent years, this category has increasingly embraced the pricing tool.

“PMPs remain popular

throughout the year, meaning they are must-stocks for wholesalers looking to maximise their spirit sales across every season,” says Johnny Dennys, head of brand and trade marketing at Mast-Jägermeister UK. “They

are effective at boosting impulse sales due to clearly labelled pricing.”

The Jägermeister range includes three price-marked packs in 20cl, 35cl and 50cl formats.

The company says its PMP

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SECTOR REVIEW

PRICE-MARKED PACKS

TAKEAWAY POINTS

SKUs have posted positive growth, including the 20cl (14%), 35cl (4.3%) and 50cl (18%).

“Visibility is essential for wholesalers to drive sales of their core PMP range. “Use engaging PoS relating to any recent campaigns to drive consumers to your fixtures and ensure that your range includes consumer favourites, such as Jägermeister,” Dennys adds.

The soft drinks market is also seeing a strong performance for PMPs. “We know that pricemarked soft drinks are growing quicker than non-PMPs (9.7% growth versus 7.8% growth),” says Matt Gouldsmith at Suntory Beverage & Food GB&I. The stimulation drink is available in 500ml PMP and non-PMP and qualifies as a nonHFSS drink alongside the rest of the Lucozade portfolio.

Finally, another company that has fully embraced the potential of PMPs is KP Snacks, which offers options across its family

28

of brands including McCoys, Tyrrells and KP Nuts. The company has focused on offering £1 PMP options in particular.

“At KP Snacks, we help retailers by ensuring we offer the right product range in the right formats, boosted with the right promotions and in-store merchandising,” says Matt Collins, trading director at KP Snacks.

“Worth £67m and growing in value by more than 12%, the KP Snacks £1 PMP range offers an extensive portfolio of products with 24 £1 PMP SKUs designed to excite shoppers and drive impulsive purchases for retailers.”

KP Snacks also offers a range of individual PMP bags including Space Raiders (price-marked at 30p) as well as Skips, Wheat Crunchies and Discos (all pricemarked at 39p).

The message is clear, then.

When it comes to price-marking there appears to be no letup in the appetite from consumers and retailers and wholesalers must react to ensure they cater to it.

1. The demand for PMPs is coming from all quarters- Many wholesalers will not need to be told that PMPs have become an important part of the independent channel, but the sheer clam our for PMPs coming from brands, retailers and – vitally – shoppers means the scale of the opportunity they provide has gone up another gear.

Not only is this popularity responsible for the number of PMPs available in the market, but it is also driving PMPs into new markets from premium crisps to spirits.

Wholesalers that offer PMPs in new categories and help stores to increase their value perception in additional areas of their stores are therefore likely to benefit.

2. Bestsellers need PMP too- There was a time when a certain class of product – those that would sell well however they are presented or priced – didn’t need PMPs. This is no longer the case. Lucozade Alert Original and Cadbury Twirl Orange have gone from a standing start to become some of the bestselling products in wholesale. Yet both products feature prominent price-marks.

As consumers face falling disposable income and question every purchase they make, the broader use of PMPs might help brands showcase the value their products offer. Don’t expect this trend to end any time soon.

3. Shout about your PMPs- Putting PMPs around your depot may well not be enough to fully benefit from them according to Johnny Dennys at Jägermeister. He urges wholesalers to use engaging PoS relating to any recent campaigns and support retailers to do likewise to ensure consumers are attracted to the fixture.

Brands across every category are doing likewise, knitting together the availability of PMPs with strong marketing campaigns and trade support. This point highlights that PMPs are just one in a suite of tools the industry has to maintain and grow sales during what is likely to be challenging months ahead due to the cost-ofliving crisis. l

SECTOR REVIEW

TOBACCO, VAPING & NEXT-GEN NICOTINE

Tobacco, vaping & next-gen nicotine Tom Gockelen-Kozlowski

W

hile the tobacco and vape markets have seen huge shifts over the past few years, one constant has been the value that suppliers see in their relationships with wholesale.

“We work closely with our wholesale customers through a range of tactics, including promotions, to help them maximise their sales of tobacco, vape and nextgen products, and ensure they are offering the right products to cater for their retail customers,” says Tom Gully, head of consumer marketing at Imperial Tobacco.

And it will come as little surprise to learn that wholesalers, too, see this category as continuing to play an essential role in their overall profitability. The tobacco market, specifically, is worth £14bn per year, with an almost 50/50 market share split across the ready-made and rollyour-own (RYO) categories (53% and 47%), respectively.

Lower-priced options “Overall, we’re seeing continued movement towards low-priced propositions across the entire category as consumer demand for value continues to drive tobacco purchasing patterns,” says Gully.

“As part of this shift, the lower price tiers now account for the majority of sales, with the sub-economy segment making up 63% share of the readymade market, and the economy segment accounting for 51% of RYO, with both value segments growing at 4% annually, according to our data.”

30

SUPPLIER VIEWPOINT Ross Hennessy Sales vice president, JTI UK

“Tobacco and vaping have experienced a number of changes over the past couple of years, but it remains a huge category for independent wholesalers.

“Depot managers should ensure good category visibility, giving each category a clear ‘home’ within depot to help retailers with navigation and ensure they leave with a strong product range that aligns to their customers’ needs.

“Through stocking a full range and maintaining good availability of products, wholesalers and their staff can then provide a successful offering and service to their customers without them having to shop around.

“As well as stocking a full range of products, it is impor-

tant that wholesalers maintain good stock levels at all times, so customers always have the choice available to them. They should also observe seasonal trends and busy periods – for example, keep your nicotine pouch range particularly strong in the summer months when demand is highest. In addition, clear signposting aids consumer navigation of the category.

“As the wider tobacco category is rapidly changing, consumers will likely need guidance. Ensure your staff are category experts by working with JTI’s local Business Advisors to leverage all opportunities both inside and outside the depot, assisting retailers in their decision-making process.”

This trend for budget options is being seen across major suppliers with Ross Hennessy, sales vice president at JTI UK, also seeing it as the defining driver of current consumer behaviour: “Price remains a key factor for existing adult smokers. Within the RYO category, value products are the leading sector with a 53.6% share, so wholesalers should stock up on products such as Sterling, while ready-made cigarette brands, such as B&H Blue, are also in demand.”

Despite efforts to provide value wherever possible, it would be fair to say the performance of the tobacco market has been limited by increased restrictions on the category.

Despite this, there are areas of growth. “There are not too many established categories that can say their retail sales value has increased by 15.6% over the past year, but that is certainly the case with cigars – and the sector now stands at just over £290m,” say Alastair Williams, country

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The fastest-growing part of the cigar market is cigarillos, accounting for just over 45% of all cigars sold in volume terms – and worth £95.5m in annual sales.

Williams again underlines the impact of consumers’ economic concerns: “With the current cost-of-living crisis, I would only expect the trend towards value products continuing and probably accelerating, so our Moments Blue brand should continue to grow in importance.”

Vape and heated tobacco Of course, one area of the category that is flourishing is the vape and heated tobacco categories.

One of the biggest recent launches in the vape category is Juul Labs’ sequel system, Juul2, which has been available in all channels since April.

New features include a more consistent vapour experience that “competes with combustible cigarettes” as well as a longer lasting battery and a smart light system that communicates e-liquid level and battery life to the consumer.

Juul2 also features technology to prevent unauthorised use, such as the inclusion of Juulpod ID to further combat counterfeit pods.

“We have been encouraged by the number of existing Juul users who have transitioned to the new system since launching on our UK website, and we look forward to providing even more adult smokers with an alternative to combustible cigarettes,” says Juul Labs’ vice president (EMEA), Dan Thomson.

To support wholesalers as they provide education and support to retail customers, Juul Labs has also developed a new trade website.

PRODUCT NEWS

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Myblu Intense – The Myblu Intense starter kit contains a device, liquid and charger, with RRP of £19.99. Liquidpods flavours include a range of tobacco and menthol varieties.

Signature Blue – Signature Blue is said to offer lots of flavour and has been handmade in Holland since 1963.

It is described as the ‘engine room’ of the category.

Juul2 – Flavours for the newly -designed Juul2 pods include Virginia Tobacco, Polar Menthol, Crisp Menthol, Autumn Tobacco, Ruby Menthol and Summer Menthol.

Nordic Spirit – Nicotine pouches remain an important, emerging sector.

New flavours and strengths for JTI’s Nordic Spirit include Spearmint and Extra-Strong Bergamot Wildberry.

Sterling Rolling Tobacco Essential – JTI’s 30g and 50g formats – without filters or papers – offer the lowest price in the Sterling portfolio, available with RRPs of £13.65 and £22.35.

Embassy Signature Silver Edition – According to Imperial, Embassy Signature Silver Edition – available for a limited time only – offers lower-cost premium features.

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“Our new retailer resource centre – juullabsretailer.co.uk – aims to help our retail partners understand how they can do their part to keep their communities safe and uphold their reputation as responsible retailers,” John Patterson, senior director sales at Juul Labs, says.

Heated tobacco, meanwhile, is another market that has further flourished since the arrival of Ploom, JTI’s competitor to Philip Morris’ Iqos system. As the market has grown and matured, suppliers are now able to stand back and analyse what’s going on in the sector.

“Sales of tobacco-flavoured heated tobacco variants account for 52% of all refill sales in traditional retail, with menthol flavours accounting for 44%,” says Gemma Bateson, head of Ploom at JTI UK. “To cater to current trends, JTI recently launched a crisp apple and menthol variant named Ruby, alongside two new alternative variants with crush capsules, Green and Purple.”

In a still-new market, many depot managers may still have questions about how they can maximise the vaping and heated

34

TOBACCO, VAPING & NEXT-GEN NICOTINE

tobacco categories in their own store.

According to Imperial Tobacco, which owns the Myblu vape brand, only a fraction of vaping sales currently come from traditional retail outlets, meaning there is a huge opportunity to grow market share in the independent convenience channel.

“Wholesalers should make sure they stock a comprehensive range of products that includes both bestselling and innovative new products that are likely to have sales growth,” says Gully.

“For example, as the vape market continues to grow, podmod systems such as Myblu have become increasingly popular, thanks to their ease of use and flexibility.”

Gully also recommends that wholesalers contact their Blu rep to see what display options are available to them to help drive sales.

As is increasingly clear, however, those wholesalers that put the effort into collaborating with suppliers in the tobacco and vape categories are in line to capture an increased slice of a vital convenience category.

TAKEAWAY POINTS 1. Budget brands rise to the moment – Whether in the cigarette, RYO or cigar markets, those brands most associated with value are likely to benefit as UK smokers hunt for ways to make savings wherever possible. While brands such as Sterling Rolling Tobacco Essential are providing smokers with a stripped-back offer (RYO without filters or papers), other products such as Embassy Signature Silver Edition promise a premium cigarette experience without the price tag. Retailers will want to offer their consumers the right option for the right price. Wholesalers should therefore be ready with the knowledge, advice and availability they require.

2. Flavour is winning out – Vape and heated tobacco brands are investing in new eye-catching flavours as the industry learns more about what consumers want and how to deliver it. Alongside a range of improvements to its hardware, the Juul2 system offers users a set of new flavours including Autumn Tobacco, Ruby Menthol and Summer Menthol. In heated tobacco, meanwhile, JTI recently expanded its range of Evo sticks – compatible with its Ploom system – to meet consumer demand. Flavours include a crisp apple and menthol variant named Ruby, alongside two new alternative variants with crush capsules, Green and Purple.

3. Supplier support is out there – While the tobacco and vaping category can be challenging – whether due to the cost-of-living crisis, increased regulation or fast-changing innovation – help for wholesalers is out there. Indeed, in the tobacco market, suppliers have so few options for communicating with smokers that support for retailers and wholesalers is integral to their UK business models.

This means depots have a host of partners out there, who are willing to share advice, data and insights to help the category maintain its success. Meanwhile, as the launch of Juul Labs’ new retailer site shows, vaping brands are also keen to build relationships in the independent channel. l

In the September issue of Better Wholesaling Insight:

Building profits and increasing success: A guide to the most innovative and cost-effective methods that guarantee success in the channel • Data on the highest performing product lines for all of the profitable categories • Key industry insights from across the wholesale channel • Step-by-step guides to improve food service and convenience operations For more information about Better Wholesaling Insight, please contact Michael Sharp on 020 7689 3363 Better Wholesaling Insight: stay informed and get ahead