DBC Foodservice is expecting to boost its turnover by more than 50% after a consortium it belongs to won one of the biggest and most complex foodservice contracts in the world. Purple Foodservice Solutions, a specially created consortium comprising DBC, the Vestey Group and Supreme Foodservice, has been awarded the worldwide food supply contract for the Ministry of Defence in a deal worth around pound;150m a year.
The contract requires that 1,500 ambient, fresh, chilled and frozen food products be delivered on a frequent basis to 1,200 military locations, including operational and exercise locations, and HM ships and submarines. Current locations include the South Atlantic, Germany, Bosnia, Afghanistan and Iraq, as well as bases in the UK. The deal is for an initial five years, with options for two extensions, each of two years.
DBC will provide logistical requirements within the UK, Vestey Group will be the major supplier of meat and poultry products, and Supreme will operate overseas depots.
Peter Judge, who took over as managing director of DBC in January, said he was delighted to have won the contract. He commented: “We have been widely known as the quiet man of the trade, but the paper tiger has become the fighting force.” But he added: “We will not be looking for a higher profile. We want our service to speak for itself.”
All the products required worldwide will be sent by DBC, except for ultra short-life products such as bread, said Judge. He expected this would add around pound;100m to pound;120m to DBC’s annual turnover which currently stands at around pound;200m.
As part of its preparations to take over the contract, which is due to begin on October 2, DBC will be opening three additional depots to increase its capacity. One, in Scotland, will handle MOD requirements north of the border, a 68,000sq ft depot in Thatcham has just been purchased, and a depot in Brentwood that DBC mothballed earlier this year will be recommissioned. Judge said the Thatcham depot would not be involved in the MOD work, but would provide additional capacity for existing contracts.
Neither Judge, nor the current holder of the contract 3663, would comment on rumours that DBC would be acquiring the Scottish depot 3663 used for MOD work. The holder of the contract for the previous nine years, 3663, said it was still assessing the implications for its staff and suppliers, adding: “3663 is committed to its people and will endeavour to redeploy the company’s resources where possible.”
Additional logistical capability will also be provided by 60-70 new trucks and a similar quantity of mechanical handling equipment, and Judge said the company would be recruiting around 300-400 additional staff.
He would not be drawn on whether the company would be expecting enhanced terms from suppliers because of its much greater buying power, but he said he expected to be working with some additional new suppliers. Judge did not believe the deal would affect DBC’s membership of Landmark Wholesale. He said: “Some companies tend to move away from groups when they reach a certain size, but that is certainly not on our agenda.”
Martin Williams, managing director of Landmark Wholesale, commented: “We are extremely pleased for the team at DBC, as it is good to see our members’ hard efforts being rewarded by winning lucrative and high-profile contracts such as this. In the past year Landmark Wholesale has put a lot more focus on the foodservice side, so it is fantastic to see our members doing well in this growing sector also.”
Judge said the new contract capped a six-month period which had also seen DBC win a pound;25m a year contract with a vending company, although confidentiality agreements prevented him from revealing the identity of the other company. He said: “These two deals demonstrate that we are a very credible competitor in this market, and I believe the more competition there is in a market the better it is for customers.”