Foodservice as a sector is seen as the ‘Holy Grail’ to both wholesalers and manufacturers. This has been fuelled by predictions in the late 1990s that showed the UK would match the US by 2010, with almost half of all the spend on food going on eating out of home, and that by 2013 out of home would overtake retail.
These growth predictions, coupled with the increasing difficulties the manufacturers have been experiencing dealing with the major multiples, made foodservice with its lack of consolidation, growth opportunities and perceived better margins, seem like an oasis of opportunity.
But the foodservice sector is complex. Rewards are there for the best players on either side of the supply chain but you have to do your homework, be committed, resilient and flexible to change.
Both end user and consumer habits have been changing rapidly. One stimulus for this has been a succession of government initiatives such as the smoking ban and the focus on healthy eating. Other factors like the extremes in our weather and issues surrounding food safety, such as foot and mouth, continue to make both the end user and consumer act and react locally.
This local action and reaction makes it more difficult to predict future trends and opportunities out of home. The major national wholesalers such as 3663 and Brakes have responded to this with national distribution networks to enable product to be moved to any part of the country, and by working with local producers to supply the end user with local products.
But as the national chains of end users have perceived they are ‘paying’ for the national wholesalers need to maintain large stock ranges to satisfy a diverse range of customer needs, they have pushed for more ‘wheels only’ agreements with the wholesalers.
The current business interaction and relationship between the major end users and the national wholesale operators can make it even more difficult to get new products developed by the branded manufacturers into the consumers hands. That can mean that manufacturers lose faith in the foodservice opportunity and make the choice to push even more resource into the multiple retailers. This is a situation that is not good for the wholesaler, the manufacturer or the consumer, because new products and new ideas are the lifeblood of the foodservice industry and will fuel growth for many years to come.
All wholesalers and manufacturers need to work closer together in the foodservice industry and hold onto some commonly held principles and questions, which are:
The Management of Knowledge
Does your business really know what it knows? And how does it get to what it doesn’t know? What would happen if the wholesaler worked with the manufacturer to combine their knowledge? How do you turn all of this knowledge into insight?
The Management of Change
What are the drivers for change in your Features > Business, and your sector? Are you reacting to those changes or predicting them? How can wholesalers and manufacturers in foodservice be the force of change the way that the multiple retailers have become?
Businesses today have just three resources, time, money and people and only your people have the real power to grow your business. Are they empowered to make that difference? Why should they be led by you? What do you need to do to unleash the power of your people?
Targets and Contact Strategy
So you have identified the opportunity, but how do you ensure that your new product doesn’t get strangled by excessive expectation? Which of the big operators do you need to stock your new product? How do you maximise distribution in the foodservice market to give your new product the greatest chance of success? How do you deploy your sales resource?
Creating Customer Obsession
No business survives without customers, but how do you create a culture in your business that puts customers at the heart of your business rather than an inconvenience to your daily job of taking phone calls, having meetings and answering emails. Businesses that are obsessed about customers always win.
All the above subjects are fundamental to a successful business and they will be covered in more detail in a series of articles in ProWholesaler.