March 2022
In-depth analysis, insight and advice for convenience and foodservice wholesalers
The future of wholesale and how to prepare for it
Exploring the landscape ahead, and what you should be doing to future-proof your business
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CONTENTS REPORT P5: Data & insight E-commerce should be used to streamline wholesale operations
LEADER As one crisis nears its end, another sadly begins
Paul Hill Editor
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ust as I was about to write my first positive column in almost two years, Russian forces began to enter the Ukrainian capital and brought the largest threat to instability in Europe since the Bosnian conflict of 1992. Twenty-four months of Covid-19 brought disruption and worry never seen before in the wholesale channel. But just as we finally looked to be heading into the final stretch of the pandemic, the tragic conflict in Ukraine and subsequent sanctions on the Russian government could have
major ramifications for the industry. It seems like an afterthought now, but Russia and Ukraine are major food exporters and, together, they are responsible for 57% of the global export of sunflower seed, safflower and cottonseed oil, as well as 26% of the global export of wheat. It’s therefore not outlandish to think that wholesalers could be facing huge supply issues by the time the next edition of Better Wholesaling Insight comes out at the start of June. The wheels are already in motion on how to combat this and, by the time you are reading this, the Food and Drink Supply Chain (FDSC) All-Party Parliamentary Group would have held a session examining the impact of the conflict on the supply chain. Keep an eye on betterwholesaling. com in the coming weeks to find out what came from it and what wholesalers need to be prepared for. It seems poignant, then, that this edition focuses on the future of wholesale and how to prepare for it. Let’s all hope for a peaceful future for Ukraine.
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, Kaan Hendekli, Rob Mannion, Tanya Pepin, Charles Smith, Josh Williams Production coordinator Chris Gardner
Better Wholesaling Insight's publisher Newtrade Media cares about the environment.
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.
P6: Data & insight Why kindness should form the foundation of the future of the channel P8-9: Viewpoint David Gilroy revisits his 2017 predictions on the industry in 2022 P10: Profile Creed reveals its industryleading sustainability plans P11: Profile Why Parfetts has expansion at the heart of its future P12: Viewpoint Good customer service will always retain its importance P13: Data & insight The threat of Amazon can’t be escaped when looking into wholesale’s crystal ball P14: Profile Pricecheck’s innovative methods are leading the way in wholesale P15: Profile How Trevors Foodservice is carrying its legacy into the future P16: Legislation The FWD looks at the legislative challenges facing its members P17: Legislation Why learning from the pandemic should be at the forefront of agendas P18-19: Tips & summary Five ways wholesalers can prepare for the future CATEGORY ADVICE P20-24: Sector review An in-depth overview of the fast-growing breakfast category P26-31: Sector review All the latest trends and product news within soft drinks and sports energy
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STERLING
R O L L I N G TO B ACCO
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Rolling papers Filters Cellophane overwrap *Retailers are free at all times to price JTI products at whatever price they choose.
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HELPING WHOLESALERS’ PROFITS SOAR NEW FLAVOUR
What is Nordic Spirit?
NEW STRENGTH
BEST SELLER
Nordic Spirit is a convenient and discreet 100% tobacco-free nicotine pouch that can be used in situations where smoking and vaping might not be possible. The range is available in three flavours - Mint, Bergamot Wildberry, and new for this year, Spearmint. Mint and Bergamot Wildberry are available in Regular and Strong strengths, with all three flavours offering an Extra Strong choice to meet the demand for higher strength variantsi.
Mukesh Vithlani, Dhamecha Trading Director, says: “Being recognised by JTI for our £1.2 million of Nordic Spirit sales makes our work at Dhamecha even more rewarding.
We couldn’t have reached this milestone without the support that JTI has provided us over the past year. They have continually helped us profit from the Nordic Spirit range with their ongoing wholesale support and helpful advice about ranging and merchandising.” Want to achieve the same level of success
as Mukesh? Stock up on Nordic Spirit now! Wholesalers should visit www.jtiadvance.co.uk or speak to their local JTI Business Advisor for more information. *IRi Market Place, Volume Share, Nicotine Pouch Category, Total UK, Q4 21. For more information or to verify comparison contact Nordic Spirit on Facebook or Instagram: @nordicspirit_uk or using our details at nordicspirit. co.uk/contact **Wholesalers are of course free to sell JTI products at whatever price they choose i. IRi Market Place, Volume Share, Nicotine Pouch Category, Total UK, Q4 21 vs. Q1 21. For more information or to verify comparison contact Nordic Spirit on Facebook or Instagram: @nordicspirit_uk or using our details at nordicspirit.co.uk/contact ii. IRi Market Place, Value Sales, Nicotine Pouch Category, Total UK, Annualised Figure Based on Dec 2021
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REPORT
E-commerce will enable wholesalers to streamline into the future Rob Mannion is the chief executive of b2b.store
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-commerce has been gradually changing the way the wholesale sector operates over the past few years, with technological developments making it easier for smaller wholesalers to enter the digital sphere by removing prohibitive entry costs, while the Covid-19 pandemic accelerated more widespread adoption. While growing numbers of wholesalers now offer an e-commerce platform – enabling customers to order any time, any place – many of the supporting operations, such as fulfilment, account management and logistics, have remained essentially unchanged. This is now evolving, with many ‘behind the scenes’ operations moving ‘behind the screen’ as technology develops to enable greater operational efficiencies. Typical e-commerce operations have to deliver multiple jobs at once, from managing payments to marketing and customer service activities. Converting some of these manual workflows into automated ones saves wholesalers time and money, allowing them to maximise profits while providing a smoother experience for customers and, crucially, keeping them happy. Payments are another area where automation can be used to streamline back-office processes. For example, creating and sending invoices, managing telephone calls to take card payments and so on all take time and create opportunities for errors to creep
into the system. Embracing new technology, such as open banking in the UK, can also provide wholesalers with new ways to reduce any friction in the payment flow, and significantly reduce the cost of accepting payment from customers. At b2b.store, not only are we constantly developing new features in response to customer feedback, but we are also partnering with other technology specialists to integrate functionality such as in-app payment, chat functions and customer sales ledger features into our platform. For example, our platform can now communicate as frequently as wholesalers require with their ERP systems, transferring data every few minutes if necessary to enable up-to-date stock levels, product details and customer information.
Then there’s the improved customer communications that can be realised through automating processes. For example, highly-engaging content can be set up to respond to specific conditions, triggers or events, such as when customers leave items in their baskets before checking out. We’ve all received follow-up emails from high-street retailers reminding us about forgotten items, in the hope of tipping us over to complete those purchases. The same approach can now be used in wholesale e-commerce, with push notifications being used to prompt customers to complete their orders and even sending personalised special offers to incentivise them to do so. Features such as integration with ERP systems, automated stock control, in-platform payment handling and account man-
agement might not be the most ‘exciting’ technology developments in the sector, but they all have a role to play smoothing operations, freeing resources for reinvestment elsewhere in the business and ultimately maximising profit. Crucially, with greater backoffice integration comes a smoother customer experience, and with that comes increasing customer satisfaction, loyalty and more frequent, larger repeat orders. All that and lower processing costs. It is a fast-evolving world and our mission is to ensure that wholesalers of all sizes have access to the latest cutting-edge technology that can optimise their commercial performance and grow with their business. Are you realising all the benefits e-commerce has to offer? l
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REPORT Kindness is playing a bigger part in the consumer mindset and it should form a foundation for the future of wholesale Josh Williams is the head of wholesale & convenience at KAM Media
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lmost 75% of UK adults believe it is important that we learn from the pandemic to be kinder as a society. As we reflect on lessons learned over the past two years, there is a clear question coming from the ashes: perhaps we could be a little kinder to ourselves, to each other and to our planet? As the dust settles, we’re seeing 2020 trends reappear on our 2022 landscape. Sustainability is back and this time it’s serious – Brits say the environment is now the third-most-important issue for the UK, after health and the economy. One-third of Brits believe a company’s impact on the environment and their ethical stance are major factors in influencing their purchasing decisions. Seventy per cent claim they buy products with eco-friendly packaging even if they are slightly more expensive. Think of it rather like Maslow’s ‘hierarchy of needs’. When the basic needs such as price, quality, customer service and so on have been established and compared, there are psychological and self-fulfilling needs, and this is where the ethics and ideals of the business in question come into play. However, it’s not as easy as just saying you care about the environment, you need to ‘live’ your ideals to resonate with consumers. There are many impressive examples of wholesalers already considering their impact on the
planet in a plethora of ways. For example, Brakes recently became the first wholesaler in the UK to sell milk in plant-based packaging. Creed Foodservice (see page 10) has announced plans to achieve net zero by 2035 and carbon neutral by 2025 as part of a set of new sustainability targets, whereas JJ Foodservice pledged to cut its carbon footprint earlier this year by moving its total computing infrastructure to the cloud. Recent KAM research tells us 41% of Generation Z think about the impact a brand will have on their health before deciding whether to buy from them. Customers are more aware of what they consume, especially since lockdown, when we were cooking all meals and providing all snacks ourselves. Full disclosure of ingredients, allergens and calorie counts will become essential, whether due to government legislation or consumer demand. Choosing companies that care isn’t just about being good to the environment – it’s also about being ethical, inclusive and fair towards humans, who might be in team meetings or at the distant ends of supply chains. How we treat our teams and suppliers, our political stance, what we stand for, what your directors say in public – all this and more has a profound impact on what your current and future customers think of your business and brands, and ultimately the extent to which they will engage with it.
Kindness and respect need to be a bigger part of our company policies, strategy and culture. The immense challenges that the wholesale industry has experienced over the pandemic should be an opportunity to question and reaffirm core values and beliefs. If a building fell in an earth-
quake, we wouldn’t reconstruct exactly what had been there before, we’d build something better. We have a once-in-a-lifetime opportunity to reimagine a kinder wholesale industry that puts the mental and physical health of its customers, teams, communities and our planet front and centre. l
A KINDER FUTURE FOR WHOLESALE Kinder to our planet • One in three UK adults say a company’s impact on the environment and their ethical stance are major factors in influencing their purchasing decisions • Seventy per cent say they buy products with ecofriendly packaging even when more expensive • Brits say the environment is now the thirdmost-important issue for the UK, after health and the economy Kinder to ourselves • Fifty-four per cent of UK adults say they’re making a conscious effort to eat more healthily • Forty per cent say they’re making a conscious effort to do more exercise • Thirty-seven per cent say they’re making a conscious effort to look after their mental health • Twenty-six per cent say they’re making a conscious effort to eat less meat For more information from KAM Media, please visit kam-media.co.uk
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REPORT Gilroy’s viewpoint: Wholesale will always be around, but the adoption of technology will determine who thrives and flourishes Wholesale will always be relevant, provided that it continues to add value. The shape and form may change, but the six fundamentals done exceptionally in wholesale will always apply: right product, right price, right service, right solutions, right format and right time. Dynamics in certain key areas will determine the direction of travel.
David Gilroy is the founder and managing director of Store Excel
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obots, space stations, mobile video communicators and nuclear fission were all far in the future when I was a kid, but are now a reality. Future gazing inspired me to write an article in 2017 for Better Wholesaling: ‘Wholesaling: A message from the future’. In it, we followed Marwan, a retailer in the reimagined world of wholesale in 2022. Originally from Syria, Marwan enjoys a partnership-style relationship with his wholesaler. The emphasis being on information sharing, technology and retail solutions. All his ordering, payment and communication is electronic. His visits to the cash and carry are for top-ups only and as a destination for learning, discovery experiences and business events. The depot offers a frictionless checkout experience, electronic PoS methods, electric vehicle charging and an electronically secured car park. Time saved frees him up to focus on serving his customers. Now we are here in 2022, what lies ahead?
Consumer trends Consumers will demand sustainable food production, more local sourcing, less plastic and a demonstrable commitment to renewables. The government-initiated drive, combined with awareness to eat and drink more healthily, will precipitate a change in diet. Wellness and health-enabling products will also grow in importance. We are already seeing a shift to lower fat, sugar, salt, dairy and alcohol products. Suppliers will reformulate ranges, and design and launch new products. New suppliers will emerge with exciting ways to offer healthy indulgence. The emphasis on fresh food will increase with fresh produce brought to the fore. Plant-based protein will pose a challenge to the meat industry and it is conceivable insect-based protein will enter the diet. Wholesalers will need to be agile to respond to these trends. Customer resilience The future of wholesale depends on the resilience of its customers. Clearly illustrated during the height of the pandemic. Hospitality effectively closed down while, by and large, the local small retailers prospered. This is why I have always argued
Technology realises imagination and protects the business
that wholesalers should de-risk by diversifying and by widening their registration bases. Companies such as JJ Foodservice did a brilliant job in shifting its businesses towards consumers and has benefitted as a result. Although the hospitality industry is still facing tough challenges, all the indications are that it will emerge strongly, with consumers showing a keenness to eat out and socialise. The future for small retailers is more nuanced. Who would have thought in 2019 that small stores would enjoy fabulous growth, and many would be offering app ordering and delivery? However, a year of restructuring activity is predicted due to high inflation. There are pressures all across the sector. The major multiples are stepping up their small-store acquisitions. Every store that moves to multipleowned is one less for the wholesalers to serve. The term ‘convenience’ is being redefined by the quick delivery operators such as Getir, Gopuff, Gorillas and so on. They are well financed and expanding rapidly. Their experiments with click & collect sound a warning. This is true disruption, and it will affect small stores, particularly in urban areas. I predict the wholesaler accessible-retailer universe will shrink in size and quality.
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appears to be having great success with its move to employee-owned status. Higher productivity and lower labour turnover flow through to brilliant customer service. The successful wholesalers of the future will put their people first.
Technology Wholesalers that best harness technology to improve service, customer engagement and efficiency will win out. Customers seeking value through speed and simplicity will shop around for great service – this will be the competitive battleground. E-commerce hitherto relatively under-exploited in wholesale is primed for explosive growth. The Sunday Times reports that Shopify, valued at $144bn, makes it easy to set up an online store. They are now targeting business users. Check out b2b.store as well, which delivers this service for wholesale. Convenient electronic trading will become dominant in the future. The warehouse will work in tandem with e-commerce acting as a showroom, more of a destination and immersive experience. Till-free trading has to be the ultimate objective. Payment methods will widen to include cryptocurrencies, blockchain and non-fungible tokens (NFTs). Another prediction has been the rise of this class of digital assets. Electronic shelf-edge labels (rolling out now in Carrefour stores and in Musgrave) will become the standard. The cost is reducing, and as well as dynamic pricing, they offer product attributes, picking efficiency, stock-taking facilitation and
profit enhancement. Customer loyalty and retention will become increasingly important. Wholesalers will find ways to turn customer data into income. Effective strategies to maintain a continual focus on loyal customers through personalised instantaneous offers, bespoke pricing, added value and tailored experiences will offer wholesalers a powerful competitive device diminishing the dependency on price-led promotions. Another projection is that consumers will spend $5tn on electric vehicles and self-driving software in the next decade. Tesla already offers $200-permonth self-drive software packages. Long-haul trucking must be ripe for driver-assist software, and wholesale distribution must be the next frontier for robot picking and order assembly. People People are central to success in any business. Loyalty is a two-way street, and I hope the move to valuing colleagues and providing for their welfare continues in the long-term. For progressive wholesalers this will include fair remuneration, training, development, job enrichment, diversity and decent working conditions. Despite our sector being a low-cost industry, investment in people pays back. Parfetts
Competition and disruption Wholesalers of the future will be more profitable than currently. This is essential for investment in technology and facilities to see off competition from all sides: multiple grocers, Amazon – now hitting £1bn in grocery sales – and the plethora of direct to store operators. Tesco-owned Booker will continue to exercise a vice-like grip on the industry as it leverages its scale. The successful introduction of its Jack’s brand being a case in point. Other such retailer/wholesaler combinations cannot be ruled out. If wholesalers remain true to the six fundamentals, they will be robust enough to deal with competitors. Disruption is a more unpredictable matter. It comes down to this: can anyone out there do a better job than you in your field? Can they get their goods to your customers at a lower cost than you? I foresee two possible models. The first is a stripped-back, ultra-lowcost discount cash and carry offering a focused range at unbelievable value. The second is a virtual ‘dark’ operation, using AI and machine learning, no legacy systems, no physical stock with a just-in-time aggregator model based on linked two-way communications with its customers. Market conditions and political interventions Just a few years ago we were sailing serenely along. Then came Brexit, followed by the pandemic, and now conflict in Europe. The price of food and fuel is escalating. This is where we need coherent long-term government policies across energy, transport and food security. Successful wholesalers can mitigate by planning ahead for stable workforces, energy savings, sustainable energy sources, transport efficiencies and by adopting renewables in all facets of their operations. Asked to prioritise one key area for securing the future, I would choose technology. Technology realises imagination and protects the business. l
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REPORT
Profile: Creed Foodservice Paul Hill
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holesalers can’t escape future planning without incorporating sustainability as a focal point of any long-term strategy. Creed Foodservice has taken this one step further and put it at the heart of every decision it makes Its new “industry-leading” sustainability targets are what chief executive Chris Creed (pictured above) hopes will lead to greater commitment to braver, more robust action within the industry as a whole. Following extensive planning and forecasting with specialist corporate climate-action consultancy ClimatePartner, Creed, which was recognised as one of the top places to work in the UK in The Sunday Times’ ‘100 best companies to work for’ list, has committed to achieving net zero by 2035. This target will be preceded by the wholesaler’s commitment to becoming carbon neutral by 2025. With its net-zero target being a decade earlier than many other foodservice providers, it is moving at pace and is already implementing schemes to drive down carbon emissions. The latest of which is the installation of 1,650
solar panels at its Ilkeston depot. With the installation due to be completed by the end of May, it’s estimated 30% of the power used at the site will come from sunlight, while 181,000 kWh of renewable energy will be fed back into the grid to provide green energy to other users. Creed’s sustainability director, Philip Creed, comments: “We’ve stuck our neck out with these targets, which is something the entire team unequivocally agrees is essential if we’re serious about continuing with what we have already started, and to set a clear example to others in the industry. “We’d be remiss to deny the huge challenges that reducing emissions so significantly presents, but with the support of ClimatePartner – which is part of the international CCS+ initiative, championing technology that is in line with the Science-Based Targets initiative (SBTi) guidance – we are absolutely committed to delivering what we’ve set out to. “With this being our 50th year in business, we’ve seen a multitude of challenges face this sector over the years, but never have we been confronted with one so pressing that requires such rigorous and determined action. Not only will we continue to
evolve the way we operate in line with these targets, but we’ll also be working with our 380-plus suppliers and thousands of customers to achieve this endeavour and support them in their own.” In addition to the solar-panel installation, Creed continues to invest in technology across its sites that contributes to emissions reduction. This includes LED lighting systems being used across all
warehouses, offices and yards, with voltage optimisation installed where it makes operational sense; a commitment to using suppliers of renewable energy where energy isn’t coming from solar panels installed on site; electric charging points at all sites for electric vehicles, and use of Euro 6 lorries, which are claimed to feature the highest standards and cleanest engines on the market today. l
Creed Foodservice in numbers
Net zero target
2035
£90m
The company’s pre-pandemic revenue growth Year founded
300+ 1972
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REPORT
Profile: Parfetts Paul Hill
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arfetts is a business synonymous with always keeping an eye on the future while maintaining a distinct connection to its routes as a traditional convenience wholesaler. It recently set its sights on expanding its network across the UK, and has fast-forwarded its growth plans over the past 18 months. “We already had the frameworks in place to grow, but Covid-19 and the resulting lockdown has accelerated those plans. We’ve now expanded in the digital and delivered spaces and improved our cash-andcarry capabilities,” explains joint managing director Guy Swindell (pictured left with fellow managing director Noel Robinson). The wholesaler has seven depots as far as down as Birmingham and is cautiously looking further ahead for new opportunities. “We have a national ambition, but it’s a cautious one. We’ve proved you can grow with our existing sites and we will have the capacity one day. “We’ve invested in the distribution sites we’ve got, and four of them are the compasses covering the north, south, east and west,” says Swindell.
“As we continue to accelerate our growth and expand our footprint across the UK, we are investing record amounts in our people, technology and service to ensure our retailers continue to have the support they need.” Zoe Taylor, in her newly created role of employee voice manager, also exemplifies ways Parfetts tests out innovative ideas within its operations, with Taylor now responsible for supporting team members through voice groups and the company and employee trust boards. Martin Race, chairman of the Employee Trust Board, says: “Parfetts’ continuing success is based on its people, who are all part-owners of the business. Zoe’s appointment will further strengthen our employeeowned culture. “She has already held several roles within Parfetts and she will now lead the maintenance, communication and future development of the employee ownership culture at the wholesaler and work alongside the voice-depot groups to arrange employee activities around social and charity events and keep abreast of employee ownership developments that may benefit the company.” As well as this newly created
role, Parfetts has launched a management development scheme that will see apprentices complete 16 weeks in key departments across the business over two years. The first four trainees will spend the first two weeks focused on getting a basic understanding of the business by spending time in each depot, retail and all departments within head office. Swindell says: “As the business continues to grow, it is
clear we need to diversify our talent pool and develop the next generation of talent, and I’m confident that we’ve developed a scheme that will provide a best-in-class experience for these young people. “We’ve called the scheme the ‘limitless programme’ because we believe the depth and breadth of the training will equip the participants for a thriving career in the wholesale sector.” l
Parfetts in numbers
Growth rate
20%
Annual turnover
£570m Year founded
850+ 1980 11
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REPORT Why good customer service remains vitally important to future growth in the channel Kaan Hendekli is the head of operations at JJ Foodservice
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ustomer service has taken on a new definition over the past few years. Companies that care and listen to customers will build stronger relationships for years to come. No one needs reminding about the challenges our sector has faced in recent years – from supply chain issues and rising food prices to workforce shortages and fuel costs. Added to that the more-than10,000 restaurants and pubs lost to the pandemic, and wholesalers must reassess how they operate if they want to retain and grow market share. Using technology to improve service One thing that hasn’t changed is the importance of customer service. Changes in market dynamics have redefined what customer service means. In 2020, 87% of UK internet users made online purchases, whereas in 2008, online shopping penetration in the UK was only 53%. Digital-led experiences are required by today’s consumers and will continue to gain popularity. Organisations that move swiftly and innovate with their online strategy to successfully assist consumers will gain a significant competitive edge. JJ enjoys being at the cutting edge of digital innovation – 80% of our customers order online using the mobile or app and 70% of all our customers choose us because of the ease of online ordering,
but great technology needs to be backed by amazing people. It takes more than one person or department to provide great service. It’s a company-wide mission that requires a change in culture and attitude from every member of staff, and a commitment to upholding best practice and delivering outstanding results. Personalising support A key first step in caring for customers is to reach out to them – not for marketing purposes or to gain a competitive advantage, but to offer genuine support. For our customers at JJ Foodservice, it’s about providing convenience and flexibility. During the major market disruptions two years ago, we asked our customers what support they needed. In response, we lowered our minimum-order delivery value to £79 for next-day deliveries to make it easier for customers to
shop with us. They were so pleased with the change, and we’ve kept it at £79 to this day. We also launched a revamped online ordering app to respond to the record number of customers who were ordering online. To encourage more people to move online, we offered extra discounts when they paid online by card. We also launched a delivery notification service to improve convenience and allow you to follow your order minute by minute. These experiences contributed to a more seamless shopping experience and helped to build positive relationships that will, no doubt, be very long-lasting. Great service is not just about technology, it’s also the mindset and culture of your team. A happy staff means happy customers. I believe true customer care starts with thinking about your employees – particularly those who
are on the front line with eyes and ears on the ground. Listening to team members is an important way of getting a sense of how your clients are feeling and how their everyday encounters are evolving. All of our customer-facing employees, from drivers to counter staff and warehouse employees, are currently undergoing a comprehensive customer-service training programme at JJ. Our colleagues can talk to a qualified well-being staff member at every JJ branch regarding anything from emotional well-being to financial support. Most recently, we have announced that we will share 5% of our profits with staff, starting from the next financial year. We want every member of JJ to share in the company’s success and see themselves as part of our future, and to be great ambassadors for our customer-care promise. l
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REPORT
You can’t escape the threat of Amazon when looking to the future of wholesale Tanya Pepin is the director at TWC
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he first thing that comes to my mind when looking to the future is the encroachment of Amazon into our wholesale channel. This is already playing out in a number of ways, but the scary bit is what’s to come. I’d liken Amazon to an enormous submarine sat beneath wholesalen – we know it is there, but we are not yet feeling the ripples of its presence. Amazon already sells tech to convenience stores for cashless payment, selling products into c-stores – albeit in relatively low volumes – and opening its own stores, thereby competing with wholesalers’ customers and executing its own last-mile fulfilment. This is all currently small scale, but with bold ambitions, illustrated by its plans for a physical presence of 260 stores by the end of 2024. We stand by our prediction that Amazon will become one of the UK’s biggest supermarkets – and arguably the best informed with its relentless focus on data. There is also increasing demand for quick delivery, digital and instant gratification. These things are already influencing customer interactions with the likes of Deliveroo and Uber Eats. These delivery platforms are disrupting consumer shopping habits – and the direction of travel is clear, with younger consumers most likely to opt for delivery over a supermarket-sourced home-made meal for dinner. Indeed, more than half of under-44s can foresee a
time when they won’t visit supermarkets at all. Wholesalers therefore need to support their customers to be able to keep pace with delivery platforms and offer products suitable for dark kitchens, which specialise in particular ranges designed for maximum taste, but able to withstand prep, cook and sit for 20-to-30 minutes while it is being delivered. Food needs to be available on demand to meet the needs of a consumer who is increasingly on the go and grazing rather than eating meals at fixed timeslots. Within wholesale, we’re seeing the two biggest operators – Booker and Bestway – shifting to cover all parts of the channel: foodservice and retail, delivered and cash and carry, and everything in between, partnering with other brands when needed to reposition themselves and expand their offer. Booker’s parent company, Tesco, is arguably the ultimate example, as it moves beyond pure big store into hospitality, convenience, wholesale, electronics and digital – creating the perfect hub-and-spoke model to fulfil orders of all kinds: big shops and small shops, in store and delivery, food and non-food, in-home and out-of-home occasions. Amazon has driven this market shift, and some wholesalers have been watching and acting, but others have not. As the market shifts, wholesalers and retailers need to have flexibility in their offer to keep pace with the market and competitor movement. Wherever
TWC TRENDS RESEARCH 1. Amazon could become the sixth-largest supermarket if current shoppers swapped one grocery shop per month to the online retailer. 2. “Would you choose Deliveroo/Uber Eats for dinner tonight?” Millennials: 15%, boomers: 1%. 3. “I can envisage a time when I won’t go/need to go to supermarkets anymore – I’ll only buy food and drinks from smaller retailers or have food delivered/picked up/I will eat out.” Gen Z: 54%, boomers: 19%. 4. Sixty-four per cent agree “food retailers who don’t take sustainability or environmental issues seriously are likely to lose out in the future”. you sit in the supply chain, you must adapt to meet these evolving demands or risk being left behind. Recent TWC Trends consumer research highlighted the almost universal importance of ‘do good, feel good’ – incorporating health, sustainability and supporting local. Wholesalers are well placed to support retailers with their customers’ desire for lower-impact shopping, but this requires a mindset shift, some of these products are low volume now – wholesalers have historically only been strong at high volumes and have ignored emerging categories. There is a risk some stores will
miss the wave and become viewed as outdated, and consumers could shop at outlets that appear to have broader ranges, more local lines and lower carbon footprints. Wholesalers should therefore support retailers by flexing their range and educating retailers. Future-proofing wholesale involves spotting the ‘submarine’ and being ready to adapt. The demand for local, sustainability and health are challenges to the traditional model, but can be repositioned as opportunities for operators willing to evolve. Consumer demand suggests those that do will be rewarded. l
For more information from TWC, please visit twcgroup.net 13
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REPORT
Profile: Pricecheck Paul Hill
F
resh from achieving its previous five-year target of £100m turnover by 2020, Sheffieldbased Pricecheck has outlined the next stage of its growth, with an extension of the wholesaler’s Amazon and B2C capabilities forming part of an new half-decade strategy. The company is perhaps the most innovative in the industry and now offers full-service management within the frameworks of Amazon’s fast-paced sales structure and recently added to its e-commerce team as part of this growth. It is now also aiming for its brand management arm to contribute towards 50% of business growth leading up to 2026, as part of a plan for the wholesaler to double its turnover to £200m in the same period. Joint managing directors Debbie Harrison (pictured above, left) and Mark Lythe (right), as well as commercial director Darren Goldney (centre), reveal how the building on relationships in the form of contractual agreements with brand owners is the main area for growth. “We aim to represent brands and do everything for them in certain parts of their business,” says
Goldney. “This already contributes to 15% of our business, but we can see it contributing to 50% of our growth by 2026. And to do that we’ve put the systems in place. We have the people capable of it and now we’ve put them through an academy programme so they’re able to fully account manage brands.” The brand management forms part of a new ‘supplier services menu’, explains Harrison. “We have always offered a range of services, but never laid them out for suppliers to see in a clear and concise way. This supplier services menu will now give our suppliers a clear idea of what we can offer and they’ll be able to pick the services that specifically fit their needs. “Words can be cheap, but actions can be tough to demonstrate. We have heavily invested over the past 18 months, and this has included growing our number of staff from 200 to 300 over the pandemic. This includes a business change team, which is a new emerging area that has been created specifically to help us grow.” Lythe adds that Pricecheck has invested heavily in a new warehouse management system as well as putting the infrastructure
in place for small pick services within the warehouse, on top of purchases of electric forklifts and LED lighting. “The capability of a supplier sales force built on the efficiency of a wholesaler is what we’re aiming for, and if you can do those two things, you earn the right to be a truly valued partner,” says Goldney. Elsewhere in the business, it recently launched a guide of
HFSS-compliant products to help its customer base navigate the upcoming legislation, which comes into force in October. This guide equates to a wide range of SKUs including confectionery, snacks and drinks. Pricecheck also released a nonfood version consisting of beauty, toiletries and household products, which it claims will fill the gaps in impulse traditionally dominated by confectionery. l
Pricecheck in numbers
Growth rate
6%
303
(including agency workers)
Annual turnover
£100m Year founded
1978
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REPORT
Profile: Trevors Foodservice Paul Hill
E
stablished in 1962, Trevors Warehouses – as it was then known – started out with a retail shop, from which it soon began offering the then-thriving local hotels, cafés and B&Bs around Blackpool a local food-delivery service. With an eye on the future back then and still to this day, managing director Gary Hitchen (pictured right) and director Dianne Whitehead have evolved it into the leading catering and wholesale supplier in the Blackpool area. However, third-generation purchasing director Matthew Hitchen (left) is now seen as the “new driving force, carrying the legacy for the future”, according to Gary Hitchen. “We offer a wide range of products across categories while also setting foundations to enter new markets in the future,” Matthew Hitchin explains. Whitehead adds that Trevors’ support to its local community through charitable initiatives, educational support, donations and aid sets it apart from other wholesalers, alongside offering industry advice and resources to help its customers maximise profit in their business. “Our main customers include
education, healthcare, cafés and restaurants, hotels, workplace and events, alongside a range of other sectors we supply and support. “However, our biggest customer segment comes from our work with education and healthcare,” she adds. As Trevors Foodservice looks to the future, Gary Hitchen is aware the company constantly needs to be looking beyond the horizon at ways in which it can evolve. “Looking at this year, we plan to grow across our online and e-commerce presence. “To achieve this, we will look to strengthen our product offering, alongside increasing our brand range for our customers,” he says. “Another way we plan to grow is by expanding our warehouse area and hiring more staff to meet our growth plans, while placing a key focus on responsible and ethical purchasing to meet the demands of the consumer.” However, Gary Hitchen is well aware that with these changes come challenges: “As we look forward to becoming a more digitally centred business to reach a wider audience of customers, this often comes a high price. Our challenge is identifying the technology that will help the
business progress while ensuring we are keeping pace with the rate technology is moving at.” Sustainability is also a key facet of any planning Trevors makes. Staff are encouraged to cycle to work and car share into the office when possible. It also has a strong digital inventory-management system that highlights expiration dates. “The reduction of food waste is extremely important to us,
with any stock being donated to local charities and food banks,” Matthew Hitchen says. “The buying team at Trevors Foodservice have placed a great importance on reduced packing and waste, in addition to rapidly growing our plant-based/ free-from offering. Also, our buildings are equipped with energy-saving lighting, with more than 200 solar panels on the roof,” adds Gary Hitchen. l
Trevors Foodservice in numbers
Growth of
10-15% for 2022
Annual turnover
£11.5m
60
Year founded
1962 15
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REPORT
The FWD looks ahead to the future legislative challenges facing its members Paul Hill
A
s the point of conleveraging national media to get nection between its messages all the way to the the wholesale secchancellor and prime minister. tor and the highest And it worked. Both Boris level of decision Johnson and Rishi Sunak refermaking in government, the FWD enced the plight of wholesalers has never been busier than when in the House of Commons (the articulating the challenges of the chancellor described it as an “ampast two years to ministers, MPs bush” by MPs keen to highlight and officials. their plight), giving the industry a From the first imposition of clear indication that the awareCovid-19 restrictions in March ness battle was being won, and 2020, it was clear the government by March of 2021 we were seeing had only a hazy idea of how food the first significant awards of gets to the consumer outside grants to companies in our sector. the supermarket chains. In its Since then, the rollercoaster initial hasty decisions to allocate ride has continued, as the comfunding to support food supply, bined effects of Covid and Brexit the Treasury overlooked the have, at various times, thrown wholesale sector completely, up labour shortages, stock seemingly unaware that shortages, fuel shortschools, hospitals, ages, wage inflation Boris Johnson care homes and and huge increases and Rishi Sunak prisons rely on the in energy costs. referenced same distributors It’s an extraordithe plight of whose hospitality nary confluence wholesalers in the House of customer base of pressure points, Commons had suddenly been and the battle to closed. keep supply lines Two years on, what FWD open, reliable and affordawholesalers do, the services they ble has barely begun. Grappling provide and the role they play with these issues is going to be in preserving businesses big and the top priority in the coming small, and public services, is months. a lot better understood by That’s why, in February this decision makers. year, the FWD encouraged a Throughout the pandemgroup of MPs to form the Allic, the FWD kept up pressure Party Parliamentary Group on the through meetings with ministers Food and Drink Supply Chain. and MPs, giving evidence to Chaired by Matt Vickers MP, Select Committees, parliamenthe group will launch a special tary questions, roundtables with inquiry examining HGV driver wholesalers and department availability and its impact on officials, members feedback, and retail and foodservice.
The issues wholesalers face over the coming months:
before the October implementation date.
Plastic Packaging Tax This comes into force on 1 April 2022 and will be charged at a rate of £200 per tonne on plastic packaging components that contain less than 30% recycled plastic. In addition, Defra has published plans to ban single-use plastics including cutlery, plates, expanded and extruded polystyrene cups and food and beverage containers from April 2023, and the government has also called for evidence on commonly littered single-use plastic items, such as wet wipes, tobacco filters, sachets and cups.
School meals Free school meals for infants have been a lifeline for many children and parents through these difficult times, and with the cost of living rising, they are perhaps more important than ever. Unfortunately, the government has not increased funding, which makes providing the service less attractive for caterers. That, in turn, impacts the distributors they work with.
DRS Scotland’s deposit return scheme (DRS) for drinks containers goes live in August 2023, but with a phased implementation that will see bottles and cans returned from November 2022. With the rest of the UK still to decide when and how to adopt DRS, wholesalers working across the border warn of chaos and confusion once the scheme goes live. HFSS Restrictions on the promotion and placement of high fat, sugar and salt (HFSS) products disproportionately impact smaller shops, and as it stands now (February), it’s still not clear exactly what the requirements on convenience retailers will be. There are currently more questions than answers, so there’s plenty of work to be done
Alcohol duty The government has also pledged to make the alcohol duty regime simpler, more economically rational and less administratively burdensome on businesses and HMRC. The FWD has told them it believes rates should be reduced across the board to make the sector more sustainable. Duty fraud is mercifully less of an issue than it was at its height, but we still need stronger enforcement to remove trade from illegitimate wholesalers and reduce the alcohol tax gap using the AWRS registration programme. Brexit Since January, businesses importing products of animal origin have had to pre-notify imports in advance of arriving into Great Britain, and full customs declarations are also required. July sees the next raft of changes, and all the signs point to disruption up to and well beyond that date. l
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REPORT Planning for the future and looking to learn lessons from the pandemic should be very much at the forefront of agendas, says the SWA Paul Hill
W
holesalers have clearly adapted to changing circumstances and, in some instances, changed the way they did business after Covid-19 effectively shut them down in March 2020. However, it gave businesses an opportunity to look closely at their operations and implement new strategies. “The wholesale industry has always been resilient, willing to embrace change and also be prepared to take risks – but the pandemic ramped this up to a new level,” explained SWA chief executive Colin Smith. Smith points to the recent Scottish Wholesale Achievers Awards, which saw hundreds of wholesalers and suppliers attend a celebration dinner in Edinburgh, as a prime example of this resilience. “Suppliers were quick to get back on board and, crucially, wholesalers were as well – wholesalers who have been SWA members for a long time, but also new members who joined us during the pandemic because of the support we have provided. “Everyone wanted to get back out there to celebrate our industry, show how they’d adapted and coped with the pandemic, and the steps they’d taken to future-proof their business. “One of the mainstays of Achievers has always been the feedback we get from the
suppliers who sponsor and support the event – that has been really interesting this year as clearly wholesalers are even more focused on long-term strategic thinking than they were. “Everything points to ever-more innovative use of technology, sustainability, the importance of local supply chains and, importantly, supporting the people who work in wholesale and the communities they serve.” He continued: “What was clear across all of the areas judged was that simply investing in one area of your business is not enough. Creating new digital apps and websites isn’t enough without creating in-depth relationships with suppliers to help drive sales and product launches. “Investment in staff isn’t all about salaries, but the value they feel from
being part of a team and sharing a vision, along with the training, career progression opportunities and the support received in their well-being.” Meanwhile, Smith added that sustainability and local supply chain themes link into the SWA’s current decarbonisation and Delivering Growth Through Wholesale projects. The SWA recently published a report on the first phase of its project, which focused on the Scottish wholesale sector’s fleet emissions. “This project is one of the most detailed undertaken by any sector and is based on real data and evidence, compiled directly from our wholesale members,” Smith pointed out. “As well as helping our members cut through the vast amount of information that is available out there and assisting them in focusing their minds on the action they can take to start their own net-zero journeys, we also want to highlight to the Scottish government and its agencies the scale of the challenge to the food and drink and wholesale sectors in
transitioning to net zero.” The SWA has also been invited by Transport Scotland to sit on a proposed Zero Emission Truck Task Force. Meanwhile, the SWA’s Delivering Growth Through Wholesale project has been well received by wholesalers and suppliers alike. The project continues to pick up pace, and is working with the Scottish Agricultural Organisation Society (SAOS) and Scotland Food & Drink to deliver a ‘Meet the Wholesaler’ event in March as part of the next phase of the programme. “This is designed to facilitate engagement and business between local Scottish producers and wholesalers,” Smith explained. “The event follows a series of workshops that we’ve run to provide the tools and information needed to maximise opportunities when working together in developing markets for ‘local’ products. “There’s definitely an appetite for this,” he added. “As we build back from the pandemic, it’s vital wholesalers engage with more local producers to help them access new markets – many producers haven’t worked with wholesalers before or even considered how our members could help them grow their business. “It’s been really interesting to see these producers grasp a better understanding of the role of the wholesale sector, strengthening Scotland’s food and drink supply chain for all suppliers – locally and nationally.” l
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REPORT Five ways wholesalers can prepare for the future Charles Smith Charles Smith is a journalist with experience writing for the UK’s grocery and foodservice wholesale industry
1. Be flexible and move to supplying customers in different channels
Start by understanding individual customers’ needs and adapting to their requirements, depending on the channel. Knowledge of the impact products and service can have on particular customers’ businesses, and what will add value to them specifically, is key to building valuable relationships. Focus on categories you’re strong in, to provide customers with a one-stop solution. This saves them engaging with multiple suppliers when they don’t have the resources. Create unique customer profiles, including categories they engage with and customers they service. Present tailored proposals, highlighting your range by key categories and bestsellers in different channels. Keep customers updated through social media, websites and email chains. Anita Oakhill, marketing controller at Unitas Wholesale, says many of its members are adopting a more entrepreneurial approach, to compete with their corporate rivals. She cites HT Drinks, a London wholesaler, developing its online drinks supermarket business, and Filshill moving into international markets with its craft beer operation.
2. Diversify your product ranges to keep up with changing consumer trends
Be bold in taking on new ranges. Not everything will work, but that’s the risk you take to find the next big thing. Use suppliers’ markets and consumer insights, and keep an eye on current trends through publications and shows, and adapt products, ranges and services accordingly. Engage with customers, and analyse their buying habits and behaviours. Share information about trends with them, and collaborate on identifying how best to respond. In HFSS legislation, for instance, create food and non-food HFSS-compliant front-of-store range solutions and present it to customers, to help them be prepared and seen as proactive by shoppers. Andrew Wild, managing director of drinks wholesaler Wilds of Oldham, confirms that successfully diversifying ranges to capitalise on trends involves being alert to change and responding quickly. Over the past year, he has sold more premium beers and spirits, and his no- and low-alcohol drinks range has increased substantially.
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4. Make your business greener
View sustainability as a necessary shift, not just a box-ticking exercise. Start by appointing an environmental and social agenda (ESG) champion to lead the business in this area, and root out the many initiatives, grant support options, and carbon footprint and energy saving solutions. On the product front, drop the bottom 10% of SKUs, and set suppliers sustainability targets. Where possible, smaller wholesalers should collect from suppliers, saving time lost in groupage supply chains. Give leftover products from trade days and shows to food banks, and convert food waste to renewable energy by sourcing waste contractors using anaerobic digestion. Recycle product and transit packaging, and offer customers on-site recycling. In depot, use eco-friendly cleaning solutions. Insulate buildings, and control door opening, to conserve heat. Install lights that turn off in unoccupied areas, and consider solar panels. Switch to lithium ion forklifts, and electric delivery vans and cars, and encourage staff to cycle to work and car share.
5. Work more closely with suppliers, customers and the community for mutual benefit
3. Grow your export business
When you start your exporting journey, it’s important to understand what you want to achieve and engage with organisations that can help you. This includes the Department for International Trade, which supports UK businesses in international markets. Research and patience are key, so wholesalers should research markets and work on building relationships and nurturing accounts. Once the account is established, it’s about maintaining the relationship and making sure you have the resources to give it the focus and attention it deserves, which will be rewarding in the long run. Make your life easier by using the available software from buying groups and vendors to manage export consignments, create the necessary paperwork and maintain customs compliance. Lastly, don’t rely on overseas customers coming to see you. Exporting takes time and investment, and as a wholesaler you should visit them and attend trade shows abroad, to show you are serious about operating within certain international markets.
Inflation is back. Work with suppliers to help retailers fight price inflation with price-marked packs (PMPs), and focus on growing non-PMPs and rationalising ranges to drive profitability. Partner with suppliers to support customers with websites and apps offering range guidance, planograms, seasonal advice and business support, and help them develop their social media presence. Tap into suppliers’ expertise to offer customers added value, including trialling new products. In foodservice, support them with menu creation, allergens, pricing and hygiene practice. And engage with suppliers and customers in suppliers’ community initiatives. Join forces with supply chain partners on energy saving initiatives, waste and carbon footprint reduction, and community engagement. When appropriate, co-ordinate your retailers’ and other customers’ food and drink and monetary donations to charities. Assist local charities with temporary storage of bulk items in depots, and encourage colleagues’ involvement in volunteering. l
With thanks to: Tom Gittins, managing director, Confex; Dean Attwell, chief executive, Oakland International; Darren Goldney, commercial director, Pricecheck; Andy Morrison, trading director, DeeBee; Adrian Gibson, group compliance manager, Michael Organ, head of purchasing, and Josh Robinson, business development coach manager, all Savona Foodservice; Anita Oakhill, marketing controller, Unitas Wholesale; Andrew Wild, managing director, Wilds of Oldham 19
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SECTOR REVIEW
BREAKFAST
Breakfast Tom Gockelen-Kozlowski
B
reakfast is a meal that 97% of Britons eat each week, according to Kantar data, and yet it has also been a market that many independent wholesalers haven’t historically focused on. This has changed. With the cereal market alone worth £70m a year and on-the go options such as breakfast micro-snacks worth £17.7m, it is clear that this has become a key market for both retail and foodservice customers. This is good news for brands with a long-standing connection to this key meal time. “Breakfast is one of the fastest-growing areas of the food market, with consumers taking a vested interest in not only what they consume and how they prepare their meals, but how the end result looks, too,” says Levi Boorer, customer development director at Nutella brand owner Ferrero UK & Ireland. Boorer adds that one of the
long-term impacts of the pandemic has been a widespread trend for consumers taking a little more time preparing breakfast. “More recently, and during the 2020 lockdowns, we saw consumers spending longer preparing meals, with the average breakfast taking seven-and-a-half minutes, as shoppers sought to get creative and try something a little less ordinary, such as croissants, crumpets or waffles.” Of course, it is also true that many Britons are busier than ever, which has led to supplier investment in quick options for shoppers on the go. Monisha Singh, shopper marketing manager at Kepak Consumer Foods, says its Rustlers All Day Breakfast Sausage Muffin has become a key multimillion pound brand in this segment of the market. “With research from Kantar showing enjoyment is the number-one priority for breakfast (78%) alongside practicality (34%), Rustlers enables whole-
SUPPLIER VIEWPOINT Darryl Burgess Head of sales, Weetabix
“Lockdown certainly saw a once-in-a-generation boom for breakfast cereal sales, with many people eating breakfast at home and using cereal as a snack throughout the day. So, we weren’t surprised to see cereals sales fall since March with more of us able to escape the house. “Some still enjoyed a bowl of cereal at home or at work, but for others they returned to previous behaviours, such as picking up a snack bar or breakfast drink on the way to work, or buying breakfast with their morning coffee. It’s a promising time for breakfast drinks and bars, which are again showing signs of longterm growth. “We’ll continue to see cost pressures throughout the in-
dustry in the next few months, meaning shoppers will be focussing on value for money more than ever. This is where cereal has a huge advantage compared to other breakfast options, however, as it is by far the cheapest solution – offering affordability, convenience and great taste in a bowl from big brands that consumers love. “PMPs will also be even more important in the year ahead, offering value reassurance to shoppers. “For foodservice wholesalers, meanwhile, Weetabix recently introduced some exciting new additions to its foodservice portion pack range to ensure out-of-home operators make the most of breakfast sales.”
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Introducing our new additions to the Weetabix portion pack range
Weetabix Original boxed twin pack (48x)
Weetabix Chocolate boxed twin pack (28x)
Weetabix is the UK’s No.1 Breakfast Cereal * Weetabix Chocolate and Crispy Minis available in portion packs for the first time Convenient, easy to prepare, hygienically packaged and portable All the new products are non-HFSS & CQUIN Compliant Visit our website for more information about our delicious Foodservice range
+20%
Crispy Minis Chocolate 40g portion pack (32x) **
% Onloyf co3 m nsu ers
portion pack growth L13W v LY
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*
Crispy Minis are worth
£27m
www.weetabixfoodservice.co.uk
*Source: Nielsen Answers May 2021 52we. **Combined wholesaler sales data w/e 18.02.21
RN Full page ad.indd 1 28440.015_Weetabix_Cash & Carry Portion_Ad.indd 1
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SECTOR REVIEW
BREAKFAST
PRODUCT NEWS
Rustlers All Day Breakfast Sausage Muffin – The number-one breakfast product in the impulse channel, according to Nielsen. Manufacturer Kepak Foods says the product is worth £11.5m.
Smart Blend Croissants – Délifrance says its Smart Blend range offers wholesalers viennoiserie products at a lower price. The firm is running a £1,000 prize draw for wholesalers.
Nutella – According to polling firm IPSOS, Nutella is perceived by consumers as the number-one chocolate for brand trust, brand love, great taste and good mood.
PureOaty – Glebe Farm’s oat milk drink brand says that unlike many widely stocked oat milks, its products are made in the UK with UK-grown oats. The alternative to cow’s milk is gluten-free.
Weetabix Crispy Minis Chocolate Chip – For foodservice wholesalers, Weetabix has its Crispy Minis Chocolate Chip format alongside portioned packs of the classic Original and Chocolate lines.
Shreddies The Honey One – Nestlé Cereals has launched a honeyflavoured version of Shreddies, which is exempt from upcoming government HFSS regulations.
salers to meet retailer and shopper demand for convenient breakfast solutions,” Singh says. The team at Kepak has created a guide for wholesalers who want to maximise this opportunity in their depots. Singh says: “It is crucial to make the chilled room in depots as quick and easy as possible to shop for retailers. Stocking SKUs by occasion, including breakfast, helps retailers maximise the dual-siting opportunities in their stores. Keeping the chilled room tidy and clean also allows the retailer to navigate quickly and find what they came looking for with ease.” Singh adds that consistent availability avoids lost sales and a strong, well-merchandised range
will further boost sales. “We recommend blocking products in good and better ordering from left to right, which highlights clear options to trade up. Blocking similar products together also helps with ease of shop,” Singh adds. One breakfast option that straddles both the at-home and on-the-go opportunities is baked goods such as croissants, pains au chocolat and Danish pastries. Stéphanie Brillouet, marketing director at Délifrance, says the sector has performed well despite the pandemic. “Lockdown affected consumption habits, with 34% of consumers increasing at-home breakfast pastry consumption. This is expected to change, however, with 17% saying they will eat more pastries at home, 30% saying they will eat more in hospitality and 26% that they will eat
22
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https://www.nescafe.com/gb/gold-wholesale-win-cash/ †GB only. Wholesaler customers, including Bestway, Batleys, Booker, Unitas members, responsible for purchasing coffee, 18+ only. Employee/employer consent, internet access, purchase of NESCAFÉ Gold Blend 6 x 95g case, personal/business registration and receipt upload required. Promotion open 00.01 01.04.2022 to midnight 31.05.2022 for a daily prize draw for a chance to win a case of NESCAFÉ Gold Blend 6 x 95g and a case of NESCAFÉ Gold Frothy Cappuccino 6 x 8 sachets, or 1 of 200 cases of NESCAFÉ Gold Blend 6 x 95g via a monetary advance, plus entry into one of the two monthly draws for a chance to win a £2,000 cheque drawn on 04.05.2022 & 01.06.2022. Scan QR on Gold Blend tray or visit website, register online and retain/upload one valid/unique receipt for each entry. Max 1 win/prize type/ person & 1 win/prize type/ business. To enter & for full T&Cs, including exclusions, visit: https://www.nescafe.com/gb/gold-wholesale-win-cash/
RN Full page ad.indd 1 Assets - Better Wholesaling A4.indd 1 NUK1973 Gold Blend Win
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SECTOR REVIEW more on the go.” To further widen this opportunity, Brillouet says her firm has developed a range of healthier and vegan friendly options. “Other strong breakfast focuses are health and wellness, and vegetarian and vegan options. This is one reason why we introduced our ‘Feel Good’ vegan croissant range, with spelt-based croissants and a new vegan croissant, which perfectly replicates a classic French butter croissant using wheat flour and shea butter,” she says. Building on the rise of vegan options, Glebe Farms recommends wholesalers focus on the alternative milks market. “A recent Mintel study showed up to one in three Brits now drink plant-based milk, with oat drinks officially topping the list of alternatives, reaching a market value worth £146m,” says Phillip Rayner, co-founder & owner of Glebe Farm Foods. Glebe Farm’s PureOaty range sits alongside a wider range of alternative milks produced by the firm, including Almond, Soya and Coconut. Weetabix is another supplier that sees potential for growth in this market and the firm says, despite the pandemic, the number of out-of-home breakfasts has grown by more than 20% in recent years. “Weetabix recently introduced some exciting new additions to its foodservice portion pack range to ensure out-of-home operators make the most of breakfast sales,” says Darryl Burgess, head of sales at Weetabix. “Weetabix Original and Weetabix Chocolate are available as two-biscuit portioned packs, and, for the first time in foodservice, Weetabix Crispy Minis Chocolate Chip is available in a 40g portion pack.” As with Délifrance, Burgess also sees healthier options as being a crucial trend to follow. With the arrival of restrictions on the promotion of high fat, sugar and salt products (HFSS) in October, Weetabix recommends stores offer a range of healthier
BREAKFAST
options in store. In the cereal bar category, Weetabix recently launched a White Chocolate, Raspberry & Shortcake Alpen Light bar, which contains 70 calories and is high in fibre. One recent launch directly aimed at meeting HFSS regulations is Nestlé Cereals’ Shreddies The Honey One. Honey-flavoured cereals is a fast-growing trend and the supplier says it is part of a transition that has seen it remove 59 million teaspoons of sugar and three million teaspoons of salt from its products since 2003. Finally, suppliers say consumers are also seeking out brands they know and trust in uncertain times. This benefits wholesalers that serve both foodservice and retail customers. “It’s clear that 2020 was a challenging year for shoppers, so it’s understandable that in hard times, consumers turn to products they trust for great quality and taste,” says Ferrero’s Boorer. As depots plan out a profitable strategy for the breakfast category, these brands also provide great partners for success in the months ahead.
TAKEAWAY POINTS 1. On-the-go breakfasts are returning – As commuters return and offices roar back to life, quick breakfast options are becoming more important. Responding to this can mean updating and increasing availability of cereal bars and breakfast drinks, but it also means a growing market for pastries from Délifrance for retailers as well as foodservice customers. Another product that is likely to benefit is Rustlers All Day Breakfast Sausage Muffin. Manufacturer Kepak Foods says this product alone is worth £11.5m and it provides a quick option for any customer with easy access to a microwave. 2. Consumers’ expectations are rising – For those of us not rushing to work, there is also a trend for spending more time preparing breakfast – seven-and-a-half minutes on average, according to research. Consumers are also taking a vested interest in not only what they consume and how they prepare their meals, but how the end result looks, too. While this means ‘Instgrammable’ brunches are on the rise, higher consumer expectations are also reflected in the rise of vegan options, including vegan pastries by Délifrance and Glebe Farm’s PureOat oat milk, for example. 3. Preparing for HFSS restrictions – The arrival of restrictions on high fat, sugar and salt products are likely to have a profound effect on a number of key categories for wholesalers, and breakfast is no exception. Shreddies The Honey One meets a fast-growing flavour trend, but it has also been developed with the new restrictions in mind. Nestlé says it has removed 59 million teaspoons of sugar and three million teaspoons of salt from its products since 2003. Weetabix also recommends maintaining a strong range of healthier options and this includes in the cereal bar sector, where it has launched a White Chocolate, Raspberry & Shortcake Alpen Light bar. l
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Nestlé Cereals Right pack, Right Price, right size!
whole grain is the no.1 ingredient
SOURCE OF FIBRE
NO ARTIFICIAL COLOURS OR FLAVOURS
® Reg, Trademark of Société des Produits Nestlé S.A. It’s important to have a varied, balanced diet and healthy lifestyle.
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SECTOR REVIEW
SOFT DRINKS & SPORTS ENERGY
Soft drinks & sports energy Tom Gockelen-Kozlowski
SUPPLIER VIEWPOINT Adrian Hipkiss Marketing and international business director, Boost Drinks and Rio Drinks
I
t may not be a surprise to learn that the soft drinks category is a huge opportunity for independent wholesalers, but the scale of the sector is still extraordinary. The energy market alone is worth £1.6bn in the UK, and growing by 14.2% despite years of similarly strong growth. “More than one in three soft drinks sold in convenience stores are an energy drink,” says Adrian Troy, marketing director at Barr Soft Drinks. “Big-can energy formats are driving the growth
at 22%, with flavoured drinks accounting for more than half of all volume sold. It’s therefore important retailers offer a wide range of formats to cater for all shoppers,” he adds. This data highlights why suppliers are so keen to work with wholesalers to maintain this strong performance. “The ‘one size fits all’ approach does not work for soft drinks. We work with wholesalers and retailers to ensure they prioritise their fixtures using local sales data rather than the national picture.
“When selling to retailers, it is crucial for wholesalers to provide key insights into which brands are performing well in the market in order to secure their trust and repeat custom. Therefore, by providing wellinformed stock recommendations for brands that are in growth, wholesalers can improve their chances of strengthening their loyal customer base. “Within the soft drinks and sports energy market, flavours continue to be a key trend, accounting for a significant 62% of total energy stimulation sales. “We strive to provide wholesalers with flavours that are trending and enable them to
offer a varied range to retailers so they can cater to different tastes and maximise their sales potential. Currently, sour flavours are particularly popular with consumers, as they look for citrus-flavoured soft drinks as the ultimate refreshment. At Boost, we offer citrus flavours both as a 250ml energy stimulation SKU and 500ml sports isotonic PET bottle, enabling wholesalers to capitalise on the trending flavour while appealing to multiple categories. “For wholesalers specifically, we offer exceptional in-depot PoS, in-depot sampling and even bespoke PR stunts. It is vital we work closely with our wholesale customers.”
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COMING SOON!
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SECTOR REVIEW
SOFT DRINKS & SPORTS ENERGY PRODUCT NEWS
Lucozade Alert Original – The launch of the Original format builds on the arrival of the sub-brand’s Tropical Burst and Cherry Blast flavours.
Rubicon Raw – Barr drinks launched this brand last year, made with 20% real fruit juice, plus caffeine from green coffee beans and B vitamins.
Reign Total Body Fuel – Developed to meet the demand for healthier energy drinks, CCEP’s range includes Peach Fizz and Orange Dreamsicle flavours.
Red Bull Sugarfree – Available in both PMP and non-PMP, Red Bull Sugarfree 250ml sits alongside Red Bull Original 250ml, 355ml and 473ml as its core.
Boost Energy Fruit Punch – Boost Drinks has relaunched its Fruit Punch flavour in time for spring 2022. It joins the firm’s eight-flavour portfolio.
Irn-Bru Energy – Bringing the iconic Scottish brand into the energy drinks market, the range is available in sugar and no-sugar variants.
When this advice is followed, wholesalers and retailers can expect to see a significant increase in sales,” says Troy. And the value of the category is also leading suppliers to focus on developing new products and flavours. “The category has to be exciting and varied to keep these shoppers engaged – more than £130m of category sales was generated from new products last year,” he explains. In 2021, this led to Barr launching Rubicon Raw, an energy drink made with 20% real fruit juice, which, together with caffeine from green coffee beans and B vitamins, provides “a big energy hit that is full of flavour”. It has also led Suntory Beverage & Food GB&I (SBF GB&I) to launch what has been, perhaps, the most significant FMCG launch of the past 12 months: Lucozade Alert.
First launched last September, the range was expanded in January with a new Original flavour. “Building on the success of the launch of its Tropical Burst and Cherry Blast flavours, Original is the latest addition to the Lucozade Alert range, which generated £1m in sales in under two months through wholesale and convenience stores,” says Matt Gouldsmith, channel director for wholesale at SBF GB&I.
Another aspect of the energy market that is increasingly important is health. “The energy segment continues to benefit from the healthier lifestyles trend, with consumers increasingly seeking food and drink with functional ingredients to help achieve maximum results, during sports or when working out,” says Amy Burgess, senior trade communications manager at Coca-Cola Europacific Partners (CCEP).
More than one in three soft drinks sold in convenience stores are an energy drink
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TOP 5 BIG CAN ENERGY BRAND*
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To capitalise on this, CCEP has developed the Reign Total Body Fuel range, which, the firm believes, has outgrown its nearest competitor by more than three and a half times in value terms over the past 18 months. “To build on this success, we expanded our Reign Total Body Fuel range last year with the launch of two new variants – Peach Fizz and Orange Dreamsicle. Reign Total Body Fuel Peach Fizz is packed with the flavours of succulent peach and a hint of citrus fruits, while Orange Dreamsicle is inspired by the classic frozen treat with orange citrus and vanilla bean flavours,” Burgess adds. CCEP is also investing in new flavours in a bid to offer more choice to consumers and further grow the category. For the Monster brand, this includes the Monster Juiced range, which features Monster Juiced Monarch, Mango Loco and Pipeline Punch. Last year, the ginger-flavoured Monster Mule was added to the
brand’s core range alongside Monster Nitro, which is “supercharged with a blend of nitrous oxide and carbon dioxide gas, to deliver a uniquely light, dry carbonated texture”. And the launches are continuing with the release of Monster Ultra Watermelon, which, Burgess says, “combines a juicy watermelon flavour with the renowned Monster energy blend, giving consumers a delicious, refreshing energy boost with no calories and no sugar”. The new flavour is available in four-can multipacks to capitalise on the rise of at-home consumption. Boost Drinks has seen a similar trend emerge and has launched Tropical Berry, Mango and Exotic Fruits Boost Energy variants. Explaining the trend, Adrian Hipkiss, marketing and international business director at Boost Drinks and Rio Drinks says: “Exotic fruits have been a sustained flavour trend since
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In the June issue of Better Wholesaling Insight:
Running a lucrative digital-led operation: Why you should be taking advantage of the latest technological trends in wholesale, and how to do so • The benefits of moving to a digital-led operation • Step-by-step guide for wholesalers moving online • Technology options in review • Working with suppliers on e-commerce frameworks For more information about Better Wholesaling Insight, please contact Michael Sharp on 020 7689 3363 Better Wholesaling Insight: stay informed and get ahead
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SECTOR REVIEW
SOFT DRINKS & SPORTS ENERGY
TAKEAWAY POINTS
D S¹
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IN A ST O HT
N
BOU G
MORE MULTIPACKS. MORE SALES. RE
to cater to the evolving demands of consumers, and help give retailers and wholesalers more variety to drive their soft drinks sales.” This has been complemented with further investment in at-home multipack formats. Gouldsmith added: “Last year, we launched 12x330ml cans of Lucozade Energy and 6x380ml multipacks of Lucozade Zero Pink Lemonade while we continued to support Lucozade Sport multipacks. This approach delivered strong growth of 9.1% in Lucozade Energy’s drinklater portfolios.” Whether it is by stocking the right on-trend flavour or the most convenient format for shoppers, suppliers are confident their ranges are ready to drive sales and profit in this key category in the months ahead. l
EV
2020, with 63% of global consumers finding exotic beverages appealing, supporting views that consumers want to travel vicariously through their drinks while travel has been limited.” While soft drinks have been selling well throughout the pandemic, one area of uncertainly for wholesalers is which formats to stock. SBF GB&I’s Gouldsmith says a return to normal has already resulted in a boost for on-the-go formats. “At-home remains an important occasion for the soft drinks category, so the popularity of our multipacks and larger formats continues, yet we’ve seen the on-the-go occasion return in a big way over the past year,” he says. “We’ve maintained innovation with the launch of two Lucozade Energy flavours (Zero Tropical and Raspberry Ripple 500ml)
O Y 2 .5 SEC
1. Energy is king – The energy drinks market has been growing quickly for more than a decade. How does it continue to expand after all this time? Brands are investing in new sub-sectors that cater to new and different shoppers. CCEP’s Reign Total Body Fuel range caters to those doing sports or working out, whereas Lucozade Alert offers an energy drink option to consumers that have, up until now, not considered buying energy drinks. Ensuring your depot represents each of these distinct areas of the market is crucial. Suppliers are keen to offer ranging advice and data to help tailor your offer. 2. Be flexible with formats – Soft drinks have performed well in a challenging market and, while sales growth has been achieved, there has been a change in the consumer behaviour that underpins it. As more of us were enduring lockdowns, at-home formats became critical, while on-the-go formats returned to prominence as restrictions have been reduced. Many brands have invested in formats that cater to this and wholesalers should ensure they can offer both at-home and on-the-go options to maintain a retailer’s ability to react to an often-unpredictable world. Offering PMP and non-PMP stock has also become key. 3. Choice is vital – One of the areas where the most innovation is happening isn’t in new products or brands – it’s in bringing new flavours to consumers. So, Monster Ultra Water is one of the big arrivals on the market, while it took SBF GB&I less than six months to add Lucozade Alert Original to its two-flavour range. Rubicon Raw, meanwhile, brings the popular soft drink into the energy market. Exotic fruits and citrus flavours are particularly on trend, but the key to success appears to be offering a wide set of options to allow shoppers to choose the flavour that suits them best.
SOURCE: ¹NIELSEN SCANTRACK, SPORTS & ENERGY, TOTAL GB COVERAGE, UNIT SALES, RED BULL ENERGY DRINK 4 PACK, 52 W/E 19.02.2022. *RED BULL ENERGY DRINK 4 PACK.
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The wholesale sector is evolving, and so are we. Take a look at our new-look website betterwholesaling.com where you will find: • More news and thought leadership • In-depth wholesaler profiles and video interviews • Sector and category reviews • Easy-to-digest infographics highlighting key industry trends
Stay informed and get ahead with betterwholesaling.com
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