ADVICE COLUMN

Andy Edwards Business unit controller – wholesale, Ferrero

“At Ferrero, wholesale is a key and vital part of our business, and data support is engrained in how we work with customers in this sector. Within this, data transparency is crucial to unlocking online opportunities and can help us see which of our products perform best online, which may differ to what we see in depot. The more information suppliers can gain from wholesalers, the better they can plan ahead and put steps in place to help ensure e-commerce in the channel goes from strength to strength.

“Our recent research, in collaboration with Newtrade Insight, has revealed 31%1 of wholesalers asked are not sharing data with suppliers, with only 15%1 saying they take a fully transparent approach. Being able to differentiate between online and in-depot sales allows suppliers to understand the impact of online media, optimised imagery and app- or web-focused activations have on online sales. Ultimately, it can help suppliers understand where support is required and where to focus spend.

“Data transparency is crucial. This will lead to engagement and decision-making that ensures mutual benefit between the wholesaler and supplier. An e-commerce plan being implemented is a vital step to being more transparent in data sharing. We know wholesalers are facing resource issues which are preventing them doing this. It’s therefore important that suppliers acknowledge this and do their bit to support.

“The transparency of data offers opportunities around e-commerce, enabling wholesalers to make more informed decisions about product range, pack formats, pricing and revenue, and profitability management.”

Hotels and restaurants

Paul Hill looks into wholesale’s relationship with the evolving sectors

Two sectors to suffer the most during the pandemic era were undoubtedly the hotel and restaurant industries. Almost overnight, their customer bases disappeared, with no indication of how long it would last or what government support they would receive.

Then, despite the end of the lockdown period, a deadly mix of surging energy costs, staff shortages and falling bookings has led advisory firm Mazars to report that UK restaurants are going out of business at a faster rate than during the Covid-19 period, with 1,567 insolvencies over 2021-22, up from 984 during 2020-21.

“Most restaurateurs have not seen this combination of negative factors before,” says Rebecca Dacre, a partner at Mazars.

A similar set of factors has affected the hotel sector after post-Covid recovery slowed following a hugely strong rebound. Recovery in the UK market is now set to stall in 2023 due to continued volatility of trading conditions and rising operation- al costs. Research from PwC revealed there are deviating fates for hotels depending on where they are in the country, with lower growth in certain UK regions.

However, with 35,129 full-service operating restaurants within the UK and a hotel industry worth £19.8bn, there is still a huge opportunity for foodservice wholesalers.

Service offering

Birchall Foodservice is a company heavily involved in the former, with hospitality making up a third of its customer base, according to marketing manager, Joe Moulton. “When you look deeper at our hospitality customer base, over 20% of it is made up of restaurants. We offer a range of services for our restaurant customers,” he says. “For those using us as their main supplier, we offer free menu design, which has become a very popular service. We’re also proud to offer the expertise of our development chef for menu development, and we can provide allergen and environmental-health advice through a couple of expert partners we work closely with.”

Bespoke menu design and appointments with an in-house development chef are also services Harvest Fine Foods offers customers. Head of sales Sarah Hall-Attah says chefs and caterers are looking to be more streamlined and efficient than ever, and this has resulted in menus reducing in size in many venues. She says: “We’ve seen many of our customers switch to online ordering to save time and for greater product visibility, as well as a switch to more local and seasonal produce to help manage costs while maintaining quality.”

Tom Styman-Heighton, the development chef at Funnybones Foodservice, echoes these thoughts, saying: “We are on hand to support our restaurant operators however we can. Each customer account has a variety of support options, ranging from account management, to a dedicated customer service agent, so we can get to know our customers personally, and ascertain their exact business needs.”

Tough conditions

Styman-Heighton goes on to discuss the challenges. “Restaurants have faced a volatile year in 2022 and operators are also contending with logistical struggles with sup- ply chain issues – largely due to increased ingredient cost, labour shortages and ongoing illnesses. To combat this, restaurants are looking to reduce menu size and complexity,” he adds.

Hall-Attah, meanwhile, has noticed customers closing for longer periods in the winter, which may be due to operational price increases. “To add to this, local provenance has become really important to customers over the past few months,” she says. “This is to show they are supporting local farmers and growers by showing they are a sustainable and ethical place to eat by using their produce in their menus.”

Emma Chamberlain, marketing director at Pilgrim Foodservice, explains how in these tough times, the Lincolnshire-based wholesaler still offers each of its customers their own relationship

Hotels

UK hotel’s annualised market size growth 2018-2023

UK hotels’ market size in 2023 -2.9%

£16.4bn

UK hotels’ market size growth in 2023

20.3%

Ranking of accommodation and foodservice activities industry by UK market size

4th

(All stats from IBIS World Hotels in the UK –Market Size 2011–2029 report)