On the path of innovation and progression

were forced to move towards b2c/digitally-led frameworks, but the wheels were already in motion at the start of the decade, and have continued at a pace ever since.

Paul Hill

Editor

I’ve been working in this role for more than four years now and the way the industry innovates has increased exponentially over that time. Gone are the days of wholesaler’s relationships with customers being purely transactional. They now deal in a diverse range of services that go beyond what a traditional wholesaler would offer.

Of course, the Covid-19 pandemic accelerated innovation after companies

In this edition, David Gilroy uses examples from the likes of Elon Musk and Pixar to highlight why businesses need to innovate or risk getting left behind. Claire Williams, of Zest Food Partners, then argues the same point within the context of product range. Meanwhile, Rob Mannion, of b2b.store, takes a deep dive into one innovation that has yet to fully take hold in the channel – WhatsApp for businesses.

I also took a visit to Kent to see how the new owner of Q Catering, Stephen Clarke, plans to increase turnover to £20m through innovative investment.

As well as this, we hear from the FWD’s Dawood Pervez and Country Range’s Martin Ward to find out their strategies as they both begin new roles.

EDITORIAL

Editor Paul Hill

Editor in chief Louise Banham

Head of design

Anne-Claire Pickard

Production editor Ryan Cooper

Sub editors Jim Findlay, Robin Jarossi

Senior designer Jody Cooke

Junior designer Lauren Jackson

Contributors David Gilroy, Tom Gockelen-Kozlowski, Carl Hillier, Rob Mannion, Charles Smith, Claire Williams

Production coordinator

Chris Gardner

SALES

Head of commercial

Natalie Reeve 020 7689 3367

Senior account director

Charlotte Jesson 020 7689 3389

Account managers

Marie Dickens 020 7689 3366

Megan Byrne 020 7689 3372

Lindsay Hudson 020 7689 3366

Commerical project manager

Ifzal Afzal 020 7689 3382

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Report

P4-5: Viewpoint

Why keeping pace with innovation is hugely important

P6-7: Insight

Is WhatsApp the future of wholesale?

P8: Opinion

What could Bestway’s investment in Sainsbury’s mean?

P10-11: Profile

How Q Catering plans to achieve £20m turnover by 2030

P12: Viewpoint

Why you should be embracing disruption

P13: Overview

How Alibaba’s innovations can aid UK wholesalers

P16-17 Interview

What is the plan for the new chairman of the FWD?

P18-19: Opinion

Innovation is key in making the industry competitive

P20-21: Interview

The man now at the helm of CRG outlines his plans

P22-23: Summary

Five ways wholesalers can innovate to build profits

Category Advice

P24-27: Foodservice focus Exploring the opportunities hotels and restaurants present to the channel

P28-30: Sector review A look at the latest trends and NPD in the breakfast category

P32-36: Sector review

How to navigate the wide-ranging and evolving soft drinks sector https://bit.ly/3lvj7FC

“To infinity and beyond!” The immortal words of Buzz Lightyear from the film Toy Story. Sitting behind these words is an inspiring journey of innovation and entrepreneurship. Released in 1995, Toy Story was created by Pixar and was the first computer-generated animation (CGA) feature film.

It went on to gross $373m at the box office worldwide and it changed the landscape of animation forever. Pixar had its origins in the 1970s with George Lucas and Lucasfilm. It continually struggled financially until becoming a separate company in 1986, when Steve Jobs invested $10m and took a seat on the board as chairman.

The company’s financial troubles weren’t over, however. By 1995, it had to do a deal the Walt Disney Company to help fund and release Toy Story. Disney recognised that Pixar, and in particular John Lasseter, their creative lead, had a skillset that they lacked and they wanted a piece of it. By 2006, The Walt Disney Company knew that CGA expertise was essential and it bought Pixar outright for $7.4bn. Disney treats Pixar as a separate standalone business unit and the merger is often quoted as one of the most successful in recent years. Pixar’s average box office gross per film is $350m compared with Disney’s at $324m. The innovative upstart has eclipsed the established incumbent.

Pixar’s connection to Steve Jobs is apposite. One of the great innovators of our time, he changed our world with Apple computers, the iPod and the iPhone. Most of us have on our person more computing power and connectivity than beyond anything we could imagine in the turn of this century.

Big-scale, adventurous innovation is exceptionally powerful. Jeff Bezos travelled a similar road with Amazon. He recognised early on the potential of the internet and, in 20 years, he completely revolutionised the way we shop.

To the extent that Amazon, starting from zero, is now pushing hard against Walmart to be the largest retailer in the world. Elon Musk, for me, is the greatest innovator of them all.

If you haven’t already, check out The Elon Musk Story on BBC iPlayer. This is a three-part lesson in how to innovate, survive and prevail against overwhelming odds. It should be on the school curriculum.

To create and scale Paypal is some achievement. To go on to found and build Tesla into a major-league vehicle maker worldwide is another level. At the same time, to successfully launch

Space X and Starlink, eclipsing NASA technology, is beyond incredible. What is it that connects these people? Martin Zwilling, writing for Forbes, says: “The goal of innovation is positive change, to make someone or something better. Entrepreneurs need it to start and established companies need it to survive. The front end of innovation, or ‘ideating’, is the energising or glamorous part. The execution seems like behind-the-scenes dirty work.”

One of the most brilliant aspects of all of Amazon, Apple and Tesla is the applied operational excellence in scaling the product. To manufacture such high-quality leading-edge products and services in volume and in short timescales is seriously impressive. Elon Musk put himself right out there.

He took multimillions of dollars in payments from customers up front before he had built a single car. The pressure was then on to deliver. After much angst and turbulence, Musk positioned his desk on the factory floor and personally supervised production until he was satisfied that it was running effectively to achieve output targets. Ideas are the front part, but execution and scalability are vital for success. Jobs, Bezos and Musk were fully immersed in the detail of their respective projects until happy that they were operationally robust. The connecting thread is innovation driven by technology, operational excellence and a relentless focus on the customer.

Martha Lane Fox, who co-founded Last Minute during the dotcom boom at the turn of the century, says: “We ain’t seen nothing yet with tech.” She and other informed commentators seem to agree that digitising business needs to be the arena for innovation. Where are the innovation and digital opportunities for our industry?

Steve Jobs, launching the iPhone in 2007, declared: “Every once in a while, a revolutionary product comes along that changes everything.” ChatGPT is a language model developed by OpenAI. This technology is the latest innovation set to have a major impact on business.

Hamish McRae, writing for the i newspaper, predicts ChatGPT will transform the service industries making them vastly more efficient.

Danny Forston, for The Sunday

Times, writes: “Software appears to be taking a giant leap up the ladder of jobs that, until a few months ago, could only be done by humans.”

Taking the theme of digitising, ChatGPT seems to offer the pathway to massively improving efficiency and service in customer-facing roles. Apply it to telesales: voice recognition, order prompting, order taking, up-selling, cross-selling and substitution recommending. All at high speed and open 24/7. Apply it to the field sales force making it better informed, smarter and more effective: outlet reporting, information gathering, order placement, intelligence recording, competitor activity, unique customer requirements and feedback. This unlocks the real power of the human assets.

Here’s a few slightly controversial digital innovation thoughts on procurement and payment as inspired by Ilija Ugrinic at Proactis. Spurred on by the constraints of Covid-19, he states that more than 80% of major businesses are seeking to digitise their back office. This means junking the spreadsheets, opening up and giving suppliers direct access to the product files. There are manpower savings to be realised by providing suppliers access: to ensure that their own details are correct, terms of trade are accurate, product details updated, range changes queued, barcodes and product links up to date, promotions plotted and cost price increases granulated.

This could go as far as allowing remote order placement within an agreed set of parameters. Pushing the boat right out, how about an industry-wide framework of product categories and product abbreviations that, in turn, would regularise data analysis?

John Reay, of Rewrite Digital, writing in The Sunday Times, emphasises the need for businesses to innovate by looking outside of their sector. “B2B should be looking at B2C and what they’re doing because that will come next, so it will give you a better idea of what needs to change in your industry,” he suggests.

Let’s apply this thinking to many of the checkout operations and e-commerce platforms across our industry. Thinking about customers first, how do we give them a smoother experience? Payment at tills is a must. Eliminate cashpoints. Offer the full range of payment methods, including open banking at the point of payment. Install a self-scanning operation and extend this to personal mobile-device scanning.

Given that many wholesalers are broadening their customer bases, the e-commerce experience needs to be upgraded. Payment at the completion of the order is essential. Of course, the VAT element needs to be included and clear. People expect to be able to pay at the point of order. Therefore, a full understanding of product availability at the point of order is vital. By all means have the product on the view, but grey it out and restore it when it is back in stock. Include an expected in-stock date.

Innovation inspires, excites, scares and threatens in equal measure. It leads to change, which, in turn, stirs the blood. Strap yourself in. If you never innovate, you risk going backwards.

The final words are from Martha Lane Fox. She says: “Business models keep changing and companies need to keep innovating to survive – most acutely, those that are customer-facing. Look at the rapid flight of the younger demographic from Facebook to TikTok – the advertising dollars have followed.” l