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SPOTLIGHT ON DARREN GOLDNEY OF TODAY’S GROUP

THE BUSINESS MAGAZINE FOR CASH & CARRY/DELIVERED WHOLESALERS

APRIL 2018

FRIEND NOT FOE

The banks support wholesalers’ ambitious expansion projects Exclusive!

The healthy way to grow your tea sales The s n’ Natio rite Favou and* r Tea B

John Mills urges suppliers to address the margin squeeze

CATEGORY INSIGHT

4Bottled Water 4Hot Beverages 4Cider 4Confectionery 4Flavoured Milk *Kantar 4.11.17


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Contents

April 2018

This month don’t miss... 08 6

08

16

C&C Group takes over the wholesale arm of Conviviality.

Bestway’s Zameer Choudrey is awarded the Sitara-e-Imtiaz.

Darren Goldney: ‘Family is the most important thing.’

ESSENTIALS 07 08 36

17

Editor’s Comment Industry News Products & Promotions

FEATURES 14

Speaker’s Corner Landmark’s John Mills on steps the industry must take to survive.

16

Spotlight featuring Darren Goldney, managing director of Today’s Group.

17

Special Report The banks invest in United Foods Cash & Carry and DCS Group.

25

Supplier Strategy Grace Foods highlights the growth of Caribbean and world cuisine.

OPINION 13

Bradford-based United Foods Cash & Carry has opened a new depot, five times the size of its former premises, with help from Lloyds Bank.

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25

Product of the month

Employment Law HR expert Cate Ritchie discusses vehicle tracking and the GDPR.

CATEGORY INSIGHT 18 26 28 32 38

Confectionery Cider Hot Beverages Flavoured Milk Bottled Water

Robert Walker: Grace Foods is building its C&C/wholesale sales.

Kepak targets the food-to-go breakfast opportunity.

www.cashandcarrymanagement.co.uk

April 2018

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[ EDITOR’S COMMENT ]

Dozen it meet their needs? n the late ’90s, after Booker bought Nurdin & Peacock and I was working on another food trade paper, I recall speaking on the phone to Booker managing director Barry Skipper and asking him about plans to integrate the two businesses. I mentioned that I had heard there would be something like 20 closures because of the territorial overlap of the two concerns. He refused to confirm that cutbacks were on the agenda and was adamant that anything negative in print should be avoided. Notwithstanding this pressure, we ran the piece anyway and, sure enough, some weeks later we were proven right when closures were announced. I was reminded of this when Blakemore announced, in a brief statement early this month, that it would be selling its 12 cash & carries. Nine months ago the company was forced into issuing a denial that this side of the business was on the market after national press reports suggested otherwise. Large companies, in all businesses, are often at pains to ward off rumourmongers even though they know there is some truth behind the questions. It could be that the share price would be hit, staff would panic or a takeover bid could be thwarted. So what of Blakemore’s C&C operation? Who is leading the rush to buy? Will the price be right?

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Assuming the buildings continue as cash & carries, Bestway would be the hot favourite to purchase the business. Indeed, last August when the disposal speculation was first leaked, it was being talked about as the likely buyer. Outside of Bestway, with Booker’s mind concentrated on the small matter of Tesco, I don’t think there are any operators in a position to buy Blakemore’s C&C business; one or two depots maybe, but not all 12. That leaves the possibility that all, or most, of the chain could apply for a change of use. It would be a blow to Landmark Wholesale, of which the West Midlands giant has been the leading member for many years. Losing Bestway’s support in 2003 was a major shock for the group; Blakemore’s cash & carry operation going would also be a disappointment, although it’s some comfort that Blakemore’s foodservice and wholesaling sides are to remain within Landmark, which would still have more than £2 billion of buying power. Meanwhile, Blakemore will continue to consolidate those sides of its business along with its SPAR distribution operation – the company delivers to more than 1,000 SPAR shops, including nearly 300 that it owns.

Mervyn Gilbert News Editor

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Address Winlove Publications Ltd PO Box 366 East Grinstead RH19 4ZE Tel (01342) 712100 Email mail.winlove@btconnect.com Publisher Winlove Publications Ltd EDITORIAL Managing Editor Kirsti Sharratt News Editor Mervyn Gilbert Deputy Editor Siobhan Kielty ADVERTISING AND MARKETING Publishing Director Martin Lovell Media Sales Manager Clare Phillips 4,570 July 2016 – June 2017 Audit Bureau of Circulations Printed by Bishops Printers ISSN 1352-254X All media rates, feature lists and deadlines can be accessed online by visiting: cashandcarrymanagement.co.uk

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April 2018

07


[ INDUSTRY NEWS ]

Choudrey honoured Bestway Group chief executive Zameer Choudrey CBE was last month presented with the Sitara-e-Imtiaz (Star of Excellence) by the President of Pakistan, Mamnoon Hussain. The award was largely in recognition of his contribution to advancing the country through philanthropy. Choudrey chairs the Bestway Foundation Pakistan and the UK advisory council of the Prince Charles British Asian Trust. He is also a founding trustee of Bestway Foundation UK and a trustee of Crimestoppers UK and GroceryAid. The philanthropic arm of the C&C/wholesaler, Bestway Foundation, was established in 1987 in the UK and 10 years later in Pakistan. a Bestway Group 0208-453 1234

Who’s in the running? As this issue of Cash & Carry Management went to press, no announcement had been made by AF Blakemore & Son about prospective purchasers of the 12 cash & carries that the company is offloading. The sale will leave the Willenhall, West Midlands, concern to concentrate on the remaining parts of the business, headed by SPAR distribution and foodservice. There were strong rumours nine months ago that the C&C side – a longstanding member of Landmark – would be sold for around £100 million, but Blakemore issued a denial that anything was planned. The conjecture began soon after the company closed its 10,000 sq ft Hexham, Northumberland, C&C, formerly operating as Lowrie’s. There were also plans that, beginning with the Wolverhampton unit, the

company would rejig the whole chain, with greater concentration on foodservice. As part of this process, it was intended that the number of suppliers would be almost halved to 355. Blakemore joint managing director Geoff Hallam said: “The move away from cash & carry will allow the company to invest further across its wider business and focus its future strategy upon its remaining divisions as it continues to drive innovation within the retail and wholesale distribution sectors.” Some 520 people are

affected by the decision to withdraw from the C&C trade, including James Russell, managing director of Blakemore Wholesale, which includes C&C as well as delivered wholesaling. Landmark MD John Mills commented: “We understand that in this consolidating market, AF Blakemore have to do what is right for their business. We will work closely with their management team during this process.” Total Blakemore turnover is more than £1.3 billion. a AF Blakemore & Son (01902) 366066

Bestway and C&C Group share Conviviality In a rapid twin deal, both sides of the stricken Conviviality drinks business have been sold – the wholesale operation to C&C Group in Dublin and the retail chains to Bestway Group. For Bestway, it means control of 769 stores in the UK, mainly operating through franchisees trading as Bargain Booze (398 outlets), Select Convenience (213) and Wine Rack (31). Earlier this year – part of the same package – Bestway bought WS Retail (127 Central Convenience stores), previously part of Palmer & Harvey but later bought by Conviviality. Zameer Choudrey CBE, 08

April 2018

Bargain Booze: now under Bestway control.

Bestway Group CEO, said: “The deal provides much needed certainty to these stores. Our priority will be to stabilise the supply of stock. We are able to provide job security to over 2,300.” Dawood Pervez, Bestway Wholesale trading director, added: “The purchase of the four businesses further

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strengthens our position within the convenience retail sector.” Last year, sales of Bargain Booze, Select Convenience and Wine Rack were £445 million; WS Retail turned over £75.7 million. C&C Group, owner of Magners, Tennent’s and Bulmers, has taken over the

Matthew Clark and Bibendum wholesale companies, paying a nominal £1 and assuming £102 million in debts. The takeover was supported by AB InBev. The former Conviviality wholesale operation, which has been supplying bars, pubs and restaurants, was recently valued at £750 million. Just months ago it won a contract to supply the JD Wetherspoon pub chain. Matthew Clark was acquired for £200 million in 2015 and Bibendum for £60 million a year later. a C&C Group (00353) 1506 3900 a Bestway Group 0208-453 1234


[ INDUSTRY NEWS ]

‘Bold acquisition’ by Dunns In a deal involving two Glasgow wholesalers, Dunns Food & Drinks has acquired premium spirits business Hot Sauce Drinks for an undisclosed sum. Dunns managing director Jim Rowan said: “This acquisition is bold, but we like that. It says to our customers that we’re constantly trying to keep at the forefront with regards to consumer trends.” Operating from a 65,000 sq ft depot, Dunns, a member of Country Range Group, covers the whole of Scotland with its 28 vehicles.

Operations director Julie Dunn said: “Not including Hot Sauce Drinks, we have a turnover of just under £30 million, around 60% coming from food and 40% from drinks. Among our biggest customers are Dobbies Garden Centres and The

DRG restaurant chain. We also deal with lots of independent operators.” The Hot Sauce Drinks site has been closed, the business now operating from Dunns’ Blantyre head office. a Dunns Food & Drinks (01698) 727700

Group’s most successful show Landmark Wholesale’s latest Caterer Connections show staged well over 400 one-toone meetings between branded foodservice suppliers, own-brand specialists and group members. The two-day event in Nottingham – the seventh of its kind – was attended by 32 branded foodservice suppliers, plus 10 offering ownbrand products and 17 group

foodservice members. Landmark Wholesale foodservice trading controller Les Mohammed said: “This was our most successful own-brand trade show, with more than 400 deals available to every member. “An amazing effort was made by all, particularly as the terrible weather made it very difficult for some to travel to and from the event.”

Group MD John Mills added: “Now in their third year, our Caterer Connections events are a fantastic opportunity to bring together our suppliers and members to better support everyone’s businesses to mutual benefit and gain, to share best practice and keep Landmark ahead of the competition.” a Landmark Wholesale (01908) 255300

Vehicles halted Food and drink supplier GSR Distributions, of Rutherglen, South Lanarkshire, trading as Spiceway, has been suspended from operating vehicles for a month by Scotland’s traffic commissioner, Joan Aitken. It was “shocking”, she said, that the company had operated a defective lorry in July last year and that it had last been given a routine safety inspection four months earlier. Vehicles were supposed to be checked every six weeks, she added. Aitken commented: “The six-weekly safety inspection cycle for the operator’s vehicles had fallen into a haphazard state.” It was unacceptable to “put business priorities ahead of a tight regime for ensuring vehicles are roadworthy”. Three years ago, the company was prosecuted for contravening food hygiene regulations. a GSR Distributions 0141647 7575

Quick response to minimum unit pricing Glasgow C&C/wholesaler JW Filshill has put a minimum unit pricing (MUP) action plan in place ahead of the new legislation being introduced on 1 May. The company, which supplies over 175 KeyStore outlets across Scotland and the north of England, is working with retailers to ensure they fully understand the MUP implications. Minimum unit pricing is designed to cut the intake of problem drinkers by raising

the price of the strongest, cheapest alcohol, with the extra revenue going to retailers. The Scottish Government has set the minimum price for a unit of alcohol at 50p. Craig Brown (pictured), Filshill retail sales director, said: “We have been providing information to KeyStore retailers every three weeks through our promotional guidelines since February and have sent out an information sheet to all customers.

Craig Brown: Information has been sent to all customers.

“The MUP price is also listed on the sales pages of our website and app.“

Posters highlighting the legislation are also displayed in the company’s Hillington cash & carry. Filshill’s ReScan EPoS system has been updated to block the sale of lines below MUP. Both the Scottish Wholesale Association and the Scottish Grocers’ Federation have produced guidelines on the minimum unit pricing legislation, as has the Scottish Government. a JW Filshill 0141-883 7071

www.cashandcarrymanagement.co.uk

April 2018

09


[ INDUSTRY NEWS ]

Click & collect nationwide Benefit of more stores Delivered wholesaler and symbol chain operator Nisa Retail, which is being taken over by the Co-op, produced sales of £377 million in the final quarter to 1 April, compared with £299 million in the previous corresponding period. The board reported that member numbers in the 13 weeks grew by 1,115 as a result of the Palmer & Harvey shut-down. However, when defections were taken into account, there was a net gain of 778 outlets. This meant that the total number of retail sites served by Nisa over the year was up by 38.4% to 4,797. Earnings before income and tax were “in line with expectations”. As well as the additional stores, the directors said there have been benefits from investment in pricing, promotions, consumer leaflet development and further success of the own-label range. However, they added: “The market continues to be as competitive as ever, and like-for-like sales over the period were down 1.1%, although in the last six weeks there was a 0.5% improvement. “In a market where cash is all important, it is pleasing to report that cash generation in the quarter was excellent, reflecting the continued and improving support from our suppliers.” a Nisa Retail (01724) 282028 10

April 2018

The Hancocks Cash & Carry click & collect service, which was launched across the north of the country at the end of last year, is now available through the 20 branches nationwide. Customers can use the company website to place their orders before collecting stock at any site. The confectionery specialist is owned by IB Group, which also includes Bobby’s and Bonds of London. The parent concern has over 55,000 direct customers, excluding major grocers and discounters, and has a sales force of around 150 handling more than 5,000 confectionery products, plus snacks and soft drinks.

IB Group CEO Wayne Beedle said: “It is exciting to see a strong initial uptake, with 10% of ecommerce customers engaging with the new click & collect service. “Traders can collect stock

seven days a week. A visit to the stores will also give them access to additional offers and a chance to see the latest confectionery innovations.” a Hancocks Cash & Carry (01509) 216644

Country Fare cooks up interest More than 30 culinary experts, as well as business owners, were present at the latest Chef Days Out event arranged by Country Fare, a Landmark Wholesale member based in Bournemouth. At the foodservice wholesaler’s ‘Chocolate & Molecular’ show, guests could watch demonstrations by award-winning chocolatier and pastry chef Mark Tilling

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and mingle with local producers and suppliers. The company’s marketing manager Tim Whyatt said: “We are always looking for new ways to partner with our customers. “Now in its sixth year, the Chef Days Out event grew out of our passion for food and the desire to provide customers with knowledge about local produce and

showcase innovation within the foodservice sector. “It provides an opportunity for chefs and business owners to network with key people in the industry while gaining knowledge that will ultimately help their own businesses grow.” Country Fare, whose annual turnover is £10 million, offers a wide range, including fresh fruit & vegetables, artisan cheeses, freshly baked breads and a growing selection of dry and frozen foods. From its 18,000 sq ft depot, the company’s vehicles deliver as far west as Bridport, east to the New Forest and Southampton and north to Salisbury, Shaftesbury and Sherborne. The 18-strong fleet is due to be expanded later this year. a Country Fare (01202) 574999


[ INDUSTRY NEWS ]

Year-long key supplier initiative Landmark The ‘Big Brand Event’ is a new initiative for customers of Today’s Group wholesale members. It enhances national three-weekly promotions by showcasing the chosen brand of a featured supplier over four pages within the national leaflet. The first, for McVitie’s and Jacob’s owner pladis, includes advice on the biscuit category and a competition for retailers, encouraging them to build in-store displays for a chance to win £250. The aim of each Big Brand Event campaign is to include the “most competitive” exclusive group deals, new product developments, expert advice and retailer competitions.

The promotions are being supported by an in-depot, digital and social media marketing campaign, giving Today’s supplier partners significant brand exposure, and providing the membership with regular activity to drive volume through their depots and deliver a strong proposition to customers. The Big Brand Event will

run until March 2019, with more than 20 global suppliers supporting the scheme. In a separate development, 17 Today’s foodservice members have signed up with Erudus, which provides information on allergens, nutrition and technical matters. It brings the total number of wholesalers who have enrolled with the system to more than 100. David Sabin, Today’s Group head of trading, said: “The Erudus system has been enhanced considerably over the last few years and we are coming on board at just the right time in what will be another step forward in its development over the next year.” a Today’s Group (01302) 249909

additions

Following the success of its Santa Loretta prosecco, Landmark Wholesale has launched a frizzante wine under the same label. Simon King, trading controller, said: “The latest addition to our prosecco range is perfect for wine lovers who prefer a subtler alternative to prosecco or champagne.” The group has also added chocolate brownies to its coffee shop selection. They come in boxes of 30 portions, which are pre-cut and frozen. Foodservice trading controller Les Mohammed said that the range is experiencing “significant growth”. a Landmark Wholesale (01908) 255300

Two on the scoreboard for Liverpool At a gala dinner in London, Bestway Wholesale presented performance awards to staff throughout the business – from drivers to depot managers – with both the Liverpool branches collecting top accolades: depot manager (Naveed Anwar, Bestway) and depot of the year (Batleys). The awards, revised this year to reward staff from the depot floor upwards, also saw three suppliers honoured: Coca-Cola European Partners (supplier of the year), AB InBev (most innovative supplier) and Nestlé Confectionery (most improved supplier). Bestway Group CEO Zameer Choudrey CBE told the 400-strong audience: “We have grown to be an outstanding success story through hard work, commitment,

Driver of the year: Andrew Whitfield, Batleys Southampton. a Bestway values: Anton James, general manager, Batleys Southampton. a Unsung hero: Zahid Akbar, deputy manager, Batleys Manchester. a Catering salesperson: Karen Longstaff, territory sales manager, Leeds. a Retail sales: Alan Webster, new business development manager. a Pet salesperson: Hazel Nish, regional sales development manager. a Picker: David Young, Batleys Gillingham. a Receptionist: Mel Hughes, Batleys Swindon. a Depot colleague: Stephen Daykin, branch admin manager, Batleys Southampton. a Bestway Group 0208-453 1234 a

Eugene Mulroy, Batleys Liverpool general manager (second left), with (left to right): Bestway Wholesale MD Martin Race, group CEO Zameer Choudrey CBE, and Bestway Wholesale chairman Younus Sheikh.

brave decisions, strong leadership and mutually beneficial relationships. “We have some of the best talent in the wholesale sector working for us.” Eugene Mulroy, general manager of the winning Batleys Liverpool cash & carry, said: “The past year

has been challenging, but my staff have been superb in seeking ways of operating for less while still maintaining the high standards they set for themselves.” Individual winners were: a Head office colleague: Roopinder Singh Toor, director of trading.

www.cashandcarrymanagement.co.uk

April 2018

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[ INDUSTRY NEWS ]

Mixed fortunes

Oriental food specialist Wing Yip suffered a decline in pretax profit from £4.8 million to £3.5 million on sales up from £101 million to £109.8 million in the year to 30 September. In a statement with the results, the company, which has sites in Birmingham, Manchester, Croydon and Cricklewood, north London, blamed “challenging conditions” affecting spending patterns and customers’ disposable income. “Exchange rate fluctuations and the state of agriculture worldwide also impacted upon our results,” said the spokesman. ”With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside our control.” a Wing Yip 0121-327 6618

Today’s event Last month’s report on the Today’s Group trade show in Liverpool contained some inaccuracies, for which we offer our apologies. Around 2.3 million cases were traded (not £2.3 billion in sales) and about 700 people attended the event (not 700 wholesalers). a Today’s Group (01302) 249909 12

April 2018

Bestway’s ups and downs Despite sustaining a 2% decline in turnover to £2.13 billion in the year to 30 June 2017, Bestway Wholesale increased pre-tax profit by £23 million to £42.7 million (including an exceptional profit on property disposal of £13.5 million). Sales in the licensed, retail and catering sectors all achieved “good growth”, which contributed to a total rise (excluding tobacco) of 1.9%. Managing director Martin Race attributed the overall revenue decline to the industry-wide deterioration in tobacco business. During the year, the company continued to maintain its focus on the three pillars of symbol & club, foodservice and digital. Sales through the bestone symbol chain increased by 19.7% excluding tobacco and 12.9% overall. Retailers

Martin Race: ‘Back on track after a year of investment.’

also benefited from rebates of over £1 million through the My Rewards scheme. In foodservice, Bestway Wholesale saw sales rise by 7.6%, with growth both in catering and the contracts side. Pet turnover increased by 7.9%. The company now has 62,000 online users compared with 37,000 in the previous year. Their weekly sales grew by 12%, with total app and website income averaging £26 million a month.

Bestway’s mobile app accounts for nearly 25% of all online transactions, against 15% in the previous corresponding period. Race said market conditions in the wholesale sector remain challenging, with wage inflation and the continuing pressure of multiple convenience providers and supermarket chains taking a keener interest in the sector. “This latest set of results puts Bestway Wholesale back on track after a year of investment in 2015/16,” he commented. “While market conditions continue to be challenging, we are seeing fantastic growth in our bestone symbol offer and multiple accounts businesses. Bestpets and catering have also performed well, but we still think that we can develop these two sectors further.” a Bestway Wholesale 0208453 1234

Big turnout for first trade show The inaugural trade show of Thomsons Foodservice, of Heathhall, Dumfries, attracted more than 250 people, including many caterers and 56 suppliers. Visitors were able to discuss the latest food trends and access special deals. More than half of the customers have supported the the family-owned company since it was founded by Dennis Thomson in 1987. It moved to its present 15,000 sq ft premises four years ago. The wholesaler, which has eight vehicles, delivers throughout Dumfries & Galloway, Ayrshire, the Borders and Lanarkshire. Customers include small general stores, caravan

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parks, cafés, butchers, bakers, restaurants and hotels. Sales director Jackie Watt said: “Everyone has been talking positively about the trade show. We have 500 customers, and to get 250 people through the door for our first show was fantastic, particularly as we cover a big

geographical area, which includes some remote places that are not readily accessed by larger and national wholesalers.” Thomsons, with a staff of 20, is a member of Fairway Foodservice. a Thomsons Foodservice (01387) 250533


[ EMPLOYMENT LAW ]

Vehicle tracking: dos and don’ts Meet the HR expert Cate Ritchie, 121 HR Solutions Cate Ritchie is a fellow of the Chartered Institute of Personnel and Development

f your company uses vehicle tracking devices there are a number of rules and regulations that apply. Failing to comply can lead to fines and convictions. A GPS tracker installed in the vehicle collects data on time, date, speed and locations. Timely analysis of this data can provide employers with daily reports of performance. This allows them to make faster and more informed decisions. Most of these benefits are drawn from the fact that employers can track their employees. This can be considered as ‘spying’ or ‘infringement of privacy’ if not done properly, so to protect employees from their employers and any misuse of personal data, there are some established laws. It is completely legal for a company to track their own business vehicles. However, the collected data must only be used for the management purposes of the company. Tracking devices are not in place to track employees at their workplace – they are there to track vehicle movement. If the data gathered is used for observing employee behaviour,

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the company is in breach of the vehicle tracking law and risks fines and penalties. Sometimes, business vehicles are used for personal use by employees. An employer may install a GPS tracking device in business vehicles that are used for private purposes. However, when the employee is contractually entitled to use the vehicle for personal use outside of working hours, the GPS tracker must be turned off. Privacy tracking can be avoided by use of a ‘privacy button’. This button allows the employee to turn off the data collection and ensure that they are not being monitored outside of their working hours – but ONLY if the employee is contractually entitled to use the vehicle for private mileage away from work. If this is not the case then the tracker can be left enabled throughout.

Covert tracking means hiding a tracking device in a vehicle. A reason for hiding a device might be to prevent theft. This is allowed only with the driver’s consent and knowledge of what kind of data is being collected. Always communicate with employees before making any decision or changes regarding the vehicle tracking device. To avoid any confusion and mistakes, make sure that employees know and agree to where the device is and what, when and how it tracks. There are multiple benefits that the data extraction from GPS trackers can provide: a Real-time tracking gives opportunities for faster assistance if employees are in need. a Location data safeguards against theft, as the vehicle location is known. This often leads to discounts in theft insurance of up to 30%. a Employees are more aware of their driving, which can reduce accounts of speeding by 60%. a Overall, employee efficiency can CCM improve by 10% to 20%.

121 HR Solutions provides employers of all sizes with professional, cost-effective human resource support. If you would like guidance about any HR matter, contact Cate at cate@121hrsolutions.co.uk or phone (0792) 121 3890.

Employers admit they are simply not ready for the GDPR A new report has warned that 60% of companies are unprepared for the EU’s General Data Protection Regulation (GDPR), which will apply to UK organisations from 25 May. Under the legislation, companies will be subject to new rules around the collection and processing of individuals’ data, and could face fines of up to £17 million, or 4% of their annual turnover, for failing to comply. Despite this, three in five organisations said they were not ‘GDPR ready’,

while a quarter were deemed ‘at risk’. According to the report, companies could be forced to spend eight hours a day, or 172 hours a month, on data searches after the implementation of the GDPR, with more than one in three UK-based directors saying they were concerned about their ability to be compliant. More than one in 10 UK companies said they were not confident they knew where their data was housed, while 12% reported that they had not accounted for all databases.

The Information Commissioner’s Office (ICO) has issued GDPR guidance, and it may enforce more collaborative actions to help businesses learn about the changes rather than punishing any that fail to comply straight away. However, the ICO will possess enforcing powers, so if there is a breach or if data is not being processed as it should be, those organisations that have ignored the GDPR altogether could face significant consequences.

www.cashandcarrymanagement.co.uk

April 2018

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[ SPEAKER’S CORNER ]

‘Margin squeeze needs action’ John Mills (right), managing director of Landmark Wholesale, urges suppliers to set higher recommended retail selling prices across all trade channels and to work with wholesalers to take other necessary steps for the industry to survive.

ince Brexit was announced in June 2016, the British Pound (GBP) has softened against the Euro and the US Dollar. As a result, imported goods are now more expensive for UK food manufacturers and they, in turn, have sought to pass on price increases to wholesalers and retailers and this has contributed to the increase in inflation to the current rate of +2.7%. We know that the independent retail sector is dominated by price-marked packs, which dictate a shared margin for the wholesaler and retailer, and the manufacturer usually maintains this shared margin when cost increases come through. However, this shared margin doesn’t take into consideration the barrage of new legislation facing retailers and wholesalers which is dramatically pushing up their cost base, such as pensions auto-enrolment, the apprenticeship levy and the National Living Wage. All of these initiatives can be seen positively from a moral and ethical standpoint but we must not overlook the impact they have on wholesalers’ margins. Wholesalers work on incredibly low margins so when their costs go up they either pass them on to retailers or they swallow them. Either way, that shared margin is being squeezed hard. Recent events have demonstrated that wholesalers are working on borderline margins, and as a sector we simply can’t continue to absorb these cost increases. We need help from suppliers, so my plea to them is simple: we need recommended retail selling prices

S

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April 2018

(rrsps) to be set higher across all channels to ensure that the shared margins accommodate increasing costs, but also don’t make the independent retailer less competitive. If manufacturers want a strong route to market for their brands then they need to increase their rrsps to ensure that wholesalers and independent retailers survive. On a separate but related topic, I’ve been asked my view many times over the past weeks about the changing shape of the UK wholesale market and what we need to do differently to survive.

The impact of a weaker GBP has benefited exporters but has resulted in the cost of imported raw materials and goods going up and this is being passed on by suppliers. Add to this a tsunami of new legislation, all well intentioned but again driving up the cost base, and no wonder that wholesalers are suddenly losing money. The impact of the National Minimum and Living Wage increases (this year and for the next two years) could potentially wipe out wholesalers’ profits.

‘Promotional retros are the bane of suppliers’ and wholesalers’ lives. Suppliers need to discount off invoice for the promotional period’ Whilst nothing is as inevitable as change, many have been shocked by the rapid decline of so many large wholesaling businesses recently. However, this consolidation was inevitable. Wholesaling food and drink is a complex business with so many moving parts: people, logistics, SKUs, suppliers, customers, to name but a few. Although wholesalers enjoy high turnover, margins are incredibly low and so very vulnerable to external factors that can wipe them out very quickly.

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For wholesalers to survive in this market, I believe there are several key strategies that need to be adopted: Suppliers and wholesalers have to share the burdens of increased costs: suppliers need to find cost saving efficiencies in production and logistics and wholesalers need to streamline their overheads. Recent results published by the multiples indicate that suppliers are working closely with them to mitigate price increases – suppliers need to do the same with wholesalers.

a


[ SPEAKER’S CORNER ] The focus has to be moved from price to service. Selling goods at or below cost or even at marginal cost is no longer sustainable. Price is important but so is value. Wholesalers have to be competitive but not always the cheapest.

a

Suppliers need to review their promotional strategies. High/low promotions encourage the wrong behaviour: wholesalers only buying on promotion and therefore retailers doing the same, cash being tied up, massive promotional retros being claimed, tons of administrative costs for wholesalers and suppliers, and inefficiencies in production which reduces service levels. If there is one thing that the discount retailers have taught us, it is that every day good value (EDGV) is what consumers are looking for.

will minimise the administrative costs of running promotions and improve cashflow overnight. If suppliers are concerned that wholesalers will “bridge buy”, ie only buy on promotion, then they should set their promotional price at a level that takes this into account.

a

Promotional retros are the bane of suppliers’ and wholesalers’ lives. The number of hours spent in managing retros is staggering and the solution is simple. Suppliers need to discount off invoice for the promotional period. This

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For wholesalers, the product mix and customer mix are incredibly important. Selling a few lines at cost as a traffic builder is fine so long as the rest of the range is profitable. Likewise, a marginal contract serviced at cost to gain scale is okay but other customers must be profitable. So, focus on the mix. Walk away from unprofitable deals and customers!

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this channel. Bulletins, brochures, flyers, spreadsheets, etc. Retailers and end users are busy and need to be able to make orders and schedule deliveries on line. There are several apps on the market that wholesalers can install to develop their online service. If the wholesaler doesn’t deliver, then why not encourage a click & collect service? One of our members now benefits from over 50% of sales being via click & collect.

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There is no substitute for good people. We need to attract, train and develop intelligent, hard working and committed people into our channel. We need to pay them well, incentivise them for excellent performance and reward them for loyalty.

Make the most of technology. There is far too much print and paperwork in

If we want a vibrant, profitable, sustainable wholesale channel as a route to market for both independent retail, catering and foodservice outlets, then we as an industry will have to do things a little differently. That’s what we need to be talking about and working together CCM to achieve.

Suppliers have to improve their availability and service levels. Since I have taken this role, I have been staggered by the high level of non-availability of core lines from many of the ‘blue chip’ suppliers. The message is clear: we need 98.5% service levels to survive.

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CCM Chefs Own-Brand Awards Lunch Venue: Westminster Kingsway College, London Date: Tuesday 5 June 2018

To book, contact Martin Lovell on 01342 712100

www.cashandcarrymanagement.co.uk

April 2018

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[ SPOTLIGHT ] Darren Goldney, managing director of Today’s Group

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What most frustrates you in business (and in life generally)? Attitude. In the industry we’re in, we all work with clever and capable people. It’s attitude that’s the real differentiator. I also don’t like a problem without a solution; even in a world where there is no perfect solution, it’s still always better to hear someone’s first stab at the best direction – it’s normally 90% right and shows the desire to lead.

‘Be honest and brave’ What has been the major milestone or turning point of your career? Undoubtedly the decision to leave Coca-Cola in 2013, after having joined as a graduate over 20 years before. I enjoyed a fantastic environment there but, without knowing it at the time, staying in one place means the way you operate changes. In the early days it’s about intense learning and progressing through ability and drive, but over time it becomes more and more about leveraging experience and knowledge. By moving on to environments where, in some respects, your knowledge is less than those around you, it re-energises the desire and the need to learn again, enabling you to do broader things. Who has been the biggest inspiration to you? Rather than an inspirational person, there was a memorable inspirational moment, and that was in my first role after leaving university – as a rep in wholesale. That was a ‘growing up fast’ time and I remember distinctly an independent wholesaler in the North West who ruled the roost and was, in my eyes, an intimidating buyer. No dialogue was allowed until the damages were 16

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cleared and then it was a one-way conversation! One day I saw him on the floor of a cash & carry walking past a customer. He grabbed a case of NPD from a display, went straight to the customer and deposited it onto his trolley, simply saying to him in a very friendly way: “This looks a great line, let me know how it sells for you when you’re in next week”. He walked passed me, winked, and said: “That’s how you sell, Darren”. That moment made me realise that the reason he was a strong buyer was that firstly he’d become a strong seller, and I’ve always found the best wholesalers operate like that. How do you maintain a work-life balance? Whilst I enjoy the challenges of work, the most important thing by a mile is my family, and it’s my brilliant wife (pictured with Goldney) and two lovely daughters that help me retain balance. I’m soon reminded when work is affecting my behaviour at home! When managed well, smartphones etc can help you stay on top, but I try to avoid constantly responding when in ‘downtime’ – we’re all more effective when we get appropriate time to switch off.

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If you were able to retire tomorrow, how would you spend your time? I don’t think I’m ready for a pipe and slippers just yet! Given the chance at some point, I would like to put my skills to use in a charitable field, especially cancer where I, like many others, have had some challenging family experiences. What advice would you give someone starting his/her first job? To be honest and brave. Generally, people recognise and respond to people who want to learn, are prepared to try, and do so in a open and honest style. What type of business would you go into if it wasn’t C&C/wholesale? I would enjoy owning and running a self-catering holiday complex. We like to holiday that way, and I think it would be a great challenge to ensure that the time someone spent in your business CCM was the best of their year.

All-round grounding Darren Goldney commenced his career at Coca-Cola in 1992 on a commercial graduate programme and worked his way up through a variety of roles to become sales director – wholesale/impulse. He left Coca-Cola in 2013 to join Whitworths as managing director for brands before moving to Palmer and Harvey in 2015 as commercial director. He was appointed to his current role, managing director of Today’s Group, in November 2017.


[ SPECIAL REPORT ]

The banks: friend or foe? The scandal surrounding RBS’s “widespread inappropriate treatment” (FCA) of small firms by its Global Restructuring Group made some wary of applying for bank loans, according to the Federation of Small Businesses. However, there are many cases of banks continuing to support their wholesale clients’ expansion plans. In this report we highlight two examples. nited Foods Cash & Carry has opened a new 89,000 sq ft depot in Planestree Road, Bradford, with help from a £2.2 million finance package from Lloyds Bank Commercial Banking. The warehouse is more than five times the size of the company’s former 16,000 sq ft premises in Mulgrave Street. The family-owned firm, which supplies goods to restaurants and fast-food outlets across the north of England, expects its £7 million turnover to increase by 20% with the opening of the new depot. The relocation has already seen United Foods take on 10 more staff, and it plans to upscale its butchery department, launch a range of crockery, and add five more delivery vans to its fleet. United Foods Cash & Carry forms part of the Jinnah Group, a Kashmiri dining restaurant chain with restaurants in Bradford, York, Harrogate and Selby. Managing director Saleem Akhtar, says: “The growth and success of the cash & carry, which started in 1982, is down to a thriving hospitality industry in West Yorkshire and across the north. “Lloyds Bank has been an invaluable partner in helping us to grow our business. The support goes beyond finance and guidance, with tools like its

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Saleem Akhtar, MD of the Jinnah Group, with Lee Rycraft of Lloyds Bank.

International Trade Portal helping us to identify suppliers that can provide us with quality goods for our customers.” Lee Rycraft, relationship director at Lloyds Bank, comments: “This is another huge drive to expand from the Jinnah Group, which also recently announced plans to open a world-food centre and hotel in Bradford. “The group’s initiatives will help to create many new jobs in Bradford. Ambitious companies like this are helping Britain to prosper, which is why we’re happy to support its latest project.”

DCS’s Denys Shortt OBE (centre) with fellow executives at the Banbury site.

Meanwhile, leading health, beauty and household goods wholesaler DCS Group has received a £5 million funding package from Barclays to expand its site in Banbury, Oxfordshire. The company moved to its present 25-acre headquarters only last year but is already finding the space insufficient for its needs. It is adding 40,000 sq ft of warehousing to hold 9,000 pallets plus a 500-pallet area to store products requiring temperature control. DCS chairman & chief executive Denys Shortt OBE comments: “Barclays’ approach to working with DCS over the last seven years has been a vital ingredient to the continued success of the company. Barclays’ close relationship with us and its understanding of our business and challenges have ensured it has provided flexible facilities to match our growth as well as our future ambition.” Jim Quantrill, relationship director at Barclays Corporate Banking, adds: “DCS has enjoyed 23 years of successive growth which is not only great for the company but also the staff and the local area where jobs are being created.” DCS aims to reach a turnover of £300 million within five years and employ a CCM further 50 people.

www.cashandcarrymanagement.co.uk

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[ CONFECTIONERY ]

Hitting the sweet spot Confectionery is the biggest food and drink category in convenience (Kantar). Sugar confectionery has grown by 3.9%, while chocolate is up by 1.5% (IRI), and suppliers are actively targeting consumption trends like sharing/big night in, treating and premiumisation. lthough there are different motivations for buying chocolate and sweets – to share, to eat ourselves or to give as a gift – confectionery has always been an important category in the convenience channel. Wholesalers and their customers can make the most of it by stocking innovative NPD along with a core range of bestsellers and by using the expertise of suppliers, their own sales data and knowledge of their customer base to manage the category effectively. The total sharing bags sector in the UK is worth around £1.2 billion, making up 20% of total confectionery, and although sales in the category are flat, chocolate sharing is still enjoying growth (Nielsen). NPD is key to driving growth – in 2017 it was worth £59 million to the category (Nielsen). Ferrero’s Kinder sharing bag formats, Kinder Choco-Bons and Kinder Chocolate mini, continue to perform ahead of the category, with volume up by 23% and value by 22%. Also ideal for sharing is the Kinder Bueno Mini Mix Box (rsp £2), which performed well with adult shoppers during the trial period and is now being rolled out across the trade. The importance of sharing is also emphasised by Mondelez International, which reports that chocolate bags is the fastest growing standard chocolate segment (IRI). The company has introduced new size £1 promotional price-marked packs in its chocolate bags range that provide more value for consumers. The 95g PMPs, 10 to a case, are available for Cadbury Dairy Milk Giant Buttons, CDM Caramel Nibbles, Cadbury Twirl Bites, Cadbury Bitsa Wispa and Terry’s Chocolate Orange Minis. The company has also brought another brand to the bitesize category with the launch of Cadbury Oreo Bites, comprising Cadbury bitesize pieces filled with a creamy and crunchy Oreo filling. The new variant joins other recent additions, Cadbury Fudge Minis, Cadbury Curly Wurly Squirlies and Cadbury Picnic Bites, all designed to recruit pre-family consumers and younger families and drive penetration. Building on the success of the Cadbury Dairy Milk Oreo co-brand is CDM Oreo Sandwich. The new tablet has a layer of chocolate sandwiched between mini Oreo biscuits. Another trend in the chocolate category is premiumisation, with consumer spending on premium chocolate up by 1.6% (IRI). Dark chocolate has seen consistent growth for the last three years and is now worth £211

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Innovation in a new light A “pioneering lollipop with a light projector” has been launched by Hancocks. Pix Pop (rsp £1) is available in Blue Razz, Strawberry and Cherry flavours, with six different multi-coloured images that consumers can collect. Manufactured by Crazy Candy Factory, the new lollipop range bolsters Hancocks’ rapidly expanding confectionery portfolio, which already features 5,000 branded and own-label products. Jonathan Summerly, purchasing director of Hancocks, comments: “I have no doubt the product will excite both the retailer and the consumer, as there is nothing quite like it currently on the market. Consumers continue to look for innovative, novel sweets that taste great and Pix Pops deliver on both of these things in a big way.” Pix Pops are an ideal pocket money purchase and offer retailers a lucrative opportunity, maintains Hancocks. Customers can expect a 34% return, resulting in a £5.40 cash profit, on packs of 12. Several introductory promotions will run throughout the year netting retailers £6.60 in cash back.

million. It accounts for 5.7% of total chocolate and 70% of the premium market (Nielsen). To tap into this growth, Mondelez introduced the Velvet Edition range in August. This sits alongside the Green & Black’s range, which was recently extended with Green & Black’s Praline in Milk and Dark Chocolate varieties, presented in gifting boxes. Mars Wrigley Confectionery claims five of the top 10 chocolate brands. Its pouches account for six of the top 10 lines, its singles take three of the top five spots, and it has four of the top five bitesize lines (Nielsen). Sharing packs continue to be important, thanks to the popularity of the ‘Big Night In’. “Consumers are opting for larger formats to share everyday treats in company,” says brand & trade PR manager Lauren George. Meanwhile, protein bars are already worth £34 million in the UK (Euromonitor) and the category is growing. “Mars and Snickers protein bars are a great option for wholesalers as well as consumers, as they are driving a strong rate of sale,” George reports.


*Nielsen total coverage, 02.12.17


[ CONFECTIONERY ] To highlight its wave of new lifestyle products, including Mars and Snickers protein bars and goodnessKNOWS, the company ran a ‘New Year New Choices’ campaign. “As people’s lives are becoming busier, lifestyle products offer a new type of snack – something that is convenient, in more flexible formats without compromising on the quality of ingredients, as well as matching the values consumers live by,” George explains. Wholesalers looking to raise awareness and boost sales of confectionery should ensure that their core confectionery display is always merchandised in line with how a shopper navigates the fixture, Mars maintains. “In-store theatre and a tactical use of PoS materials can drive additional sales, especially in high footfall areas, and as more and more consumers are buying chocolate confectionery on impulse, wholesalers should maximise this opportunity,” says George.

Candy, gum and mints “Mints have an important role to play in the candy category – our insights show that 45% of consumers buy mints (Kantar),” says Susan Nash, trade communications manager at Mondelez International. Trebor is the UK’s No.1 mint brand, accounting for three of the top five SKUs in the market (Nielsen), with Trebor Extra Strong the UK’s bestselling mint. Mondelez has announced that Trebor’s exclusive promotion for the convenience channel, ‘Get Minted’, is returning for a second year. Running until 17 June, the promotion offers consumers a chance to win one of 102 prizes from £50 up to £5,000. Prize coupons will be hidden within selected wrappers of the following Trebor products: Extra Strong (Peppermint and Spearmint) 41.3g, Softmints (Peppermint and Spearmint) 44.9g and 100g, Mighties (Mint and Berry Mint) 12.6g and 44.5g. Price-marked packs and unmarked packs are involved in the promotion. For retailers who stock Trebor products and use the ‘Get Minted’ PoS material, Mondelez will match the value of each cash prize for retailers where the winning packs are bought. Last year, ‘Get Minted’ boosted sales by 8.5% in independents and symbols during the activation period (IRI). In the candy category, Maynards Bassetts is the UK’s No.1 candy bag range (Nielsen) and recent additions, including Tangy, Tropical and Merry Mix candy bags, have brought extra shoppers to the market, with Merry Mix alone attracting more than 300,000 additional shoppers (Kantar). Further NPD will be launched in the near future, aimed at broadening appeal to younger adults, reveals Mondelez. Innovative NPD has contributed to the success of the candy category, reports Mars Wrigley Confectionery, which recently introduced a ‘candy-like experience’ with the launch of Starburst chewing gum. Starburst Fruity Mixies, Strawberry Cubes and Red Berry Sticks are sugar-free and designed to bridge the gap between gum and candy. 20

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Earlier this year, the core Starburst portfolio benefited from the addition of Very Berry, which comprises four flavours – strawberry, raspberry, blueberry and cranberry – available in single (45g), hanging bag (150g) and sharing pouch (192g) formats, including pricemarked options. “Starburst flavour variants have proven to be 89% incremental to the brand (Nielsen), and the launch of Starburst Very Berry is projected to drive nearly £4 million in retail sales,” says confections marketing manager Dan Newell. Another fast growing flavour trend is tropical, reports Newell, and 19% of sales of Skittles Tropical pouch (174g), launched last year, have been incremental (Nielsen). Skittles is supported with a television commercial, ‘Discover the Rainbow, Taste the Rainbow’, as well as social media activity – the £33.7 million brand now has 390,000 followers on Twitter and 23 million ‘likes’ on Facebook. With 47% of consumers spending less money on out-ofhome entertainment and 50% eating out less, the ‘Big Night In’ remains a key sales opportunity, says Newell. “Skittles are a vital offering for Big Night In, with 60% of Skittles being consumed as an evening snack, over-indexing against total sugar confectionery (Kantar).”

The ‘Big Night In’ remains a key sales opportunity for confectionery as consumers spend less on eating out.

As consumer demand is currently focused on value-formoney and sharing occasions such as the Big Night In, Swizzels’ bagged confectionery with added £1 flash “provides the perfect opportunity for cash & carry and wholesalers to add value-for-money sweet treats from popular brands to their sugar confectionery offering,” says the company’s sales director Mark Walker. Swizzels is the UK’s fastest growing sugar confectionery manufacturer, with sales up 18% year on year (IRI). It recently entered the soft chew hanging bag category – which is worth £97 million and growing by 5% (IRI) – with the launch of Choos. Available in two variants, Drumstick Choos provides five double flavour combinations including peaches & cream and strawberry & banana, while Refreshers Choos offers five fizzy flavours, such as pineapple and apple, with the brand’s unique sherbet centre. Both products are suitable for vegetarians and vegans.


[ CONFECTIONERY ] “The soft chewy texture is in keeping with consumer demand for softer products, and the recognisable Drumstick and Refreshers names are sure to draw the attention of shoppers seeking a sweet treat from popular brands they know and love,” says Walker. Swizzels’ Drumstick and Refreshers stick packs are also now available in a new soft chew recipe. The Drumstick variant comes in the original Raspberry & Milk flavour, while the Refreshers style is offered in two varieties, Original Lemon and Strawberry. Furthermore, the sweets have been reformulated to make them suitable for vegetarians, vegans and other special dietary requirements, opening up new markets. When it comes to sugar confectionery, stocking bestselling lines is important, Walker maintains. Squashies is now the UK’s fastest growing sugar confectionery brand, worth £36 million and selling at a rate of one bag every second (IRI) and the Squashies £1 PMP offering has grown by 80% yearon-year in the wholesale and cash & carry channels. “Cash & carries and wholesalers should be aware that Drumstick Squashies is Swizzels’ No.1 selling brand in the wholesale channel,” says Walker. “In many instances, it is also the bestselling item on the confectionery fixture, so providing these sharing bags as part of their sugar confectionery offering is sure to boost sales.” As well as the original Refreshers and Drumstick Raspberry & Milk flavours, the Squashies £1 PMP range includes Drumstick Bubblegum and Drumstick Sour Cherry & Apple variants. The three Drumstick Squashies styles are also now available in a new controlled portion-sized pack – a 50p PMP, on promotion at ‘3 for £1’. Another development from Swizzels is the introduction of new packaging for its price-marked Loadsa Sweets, Loadsa Lollies and Loadsa Chews. These £1 PMPs now include a clear window to showcase the treats inside and a flash stating how many sweets are in each pack. Each individually-wrapped sweet is under 100 calories, tying in with Public Health England’s new Change4Life campaign encouraging parents to look for 100calorie snacks. Tangerine Confectionery has announced the return of the Barratt brand, marking the 170th anniversary of the label that was founded by George Osbourne Barratt in London. Top seller DipDab is now available under the Barratt name, along with Refreshers, Nougat, Sherbet Fountain, Fruit Salad, Black Jack, Wham, Refreshers Softies and Fruit Salad Softies. The reintroduction is being supported with an initial investment of £1.5 million, including a new website and TV advertising. The decision to bring back Barratt, last seen on shelves in 2013, was prompted by customer demand and market 22

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research revealing that the majority of consumers (75%) still hold a strong affinity and fondness for the brand. The majority of the Barratt brand portfolio will be made up of singles, currently worth upwards of £350 million per year (IRI). Russell Tanner, marketing & category director, says: “We’re optimistic that the return of this much-loved brand will help to further increase our standing in the kids’ singles market to 10% market share.” He adds: “Our recent research has shown that a key global trend for 2018 continues to be ‘Kidulting’, the popularity of treats and sweets geared towards adult consumers who are looking for ways to relive their childhood and eat the sweets that remind them of their youth. Barratt’s key messaging and range of products align perfectly with this trend.” In a separate development, Tangerine Confectionery has launched Sour Apple flavour DipDab, with a sour sherbet dip that turns the tongue green. The new flavour has been designed to meet the increasing demand for sour tasting confectionery, which has grown by 213% in the last year. Like Barratt, another brand with a long and successful heritage is Walker’s Nonsuch, which dates back to 1894. Today, its toffee range includes bars, slabs and bags in different weights to suit different markets, and all styles are free from artificial colours, preservatives, hydrogenated vegetable oil and gluten. New for 2018 from the family company are Salted Caramel Toffees, a recipe developed by Jonathan Rae, grandson of the late Ian Walker, who recently passed away. Rae joined Walker’s Nonsuch two years ago and is said to have the same passion as his grandfather for the quality of the product and also the enthusiasm to research up-andcoming varieties. The new recipe is made with whole milk and butter, a natural caramel flavour and Anglesey Sea Salt that is derived from the seawater of a designated area of the Menai Straits in accordance with its Protected Designation of Origin (PDO) status, laid down by the independent EU Commission. The twist-wrapped Salted Caramel Toffees are presented in 150g bags, 2.5kg bulk bags and 1.25kg gifting jars, and the packaging is bright blue and metallic bronze, giving a modern appearance that is distinctively different to the other 12 varieties available. Marketing director Emma Walker says: “Salted Caramel has become one of the nation’s favourite tastes over the last 12 months. Combined with our creamy toffee, it gives a taste and chew second to none.”


White Chocolate

White & Milk Chocolate For Illustrative Purposes Only.

Brand new products to the MILKYBAR range 73% of independent retailers said they would stock a brand new product from Milkybar which had 30% reduced sugar and a strong launch campaign.**

Reach

PEOPLE ® Reg. Trademark of Société des Produits Nestlé S.A.

* 30% less sugar than similar chocolate products

£7m media

ON TV May - Oct

**Research carried out by Bolt Learning gathered from 150 retailers through telephone interviews in February 2018


[ CONFECTIONERY ] Reduced sugar innovations

Nestlé UK & Ireland has unveiled Milkybar Wowsomes, the first chocolate bar in the world to use Nestlé’s innovative sugar reduction technique. Nestlé researchers are said to have made a scientific breakthrough when they transformed the structure of sugar through a newly developed process using only natural ingredients. This allows someone to perceive the same level of sweetness as before while consuming less sugar. Milkybar Wowsomes has 30% less sugar than similar chocolate products and contains no artificial sweeteners, preservatives, colours or flavourings. It has milk as its number one ingredient, contains crispy oat cereal pieces, is a source of fibre and is gluten free. Milkybar Wowsomes comes in two variants, white chocolate and a combined milk and white chocolate, and is available in a single 18g bar that has just 95 calories, a 8 x 10g multipack, and a 105g bag containing individually-wrapped single pieces of both variants. Stefano Agostini, CEO of Nestlé UK & Ireland, comments: “It is with great pride that the UK and Ireland becomes the first market in the world to use this exciting technology to create such a great tasting confectionery product. “We announced earlier this month that we have taken out more than 60 billion calories and 2.6 billion teaspoons of sugar from across our food and drink portfolio in the last three years. A new product like Milkybar Wowsomes introduces greater choice and allows parents to treat their children with chocolate that tastes great but has less sugar. “We are demonstrating how we can, and will, contribute to a healthier future and that we take our public health responsibilities very seriously.”

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Perfetti van Melle has added to its range of less sugar and sugar-free products with sugar-free Fruittella Fruit Drops. Available in citrus and red berry mixes with added Vitamin C, the hard candies are made using natural colours and flavours and come in a convenient flip-top pack. With 92% of UK consumers now consciously purchasing reduced sugar options across all categories, the company is hoping to tap into incremental confectionery sales with the new product, which has an rsp of £1 and is supplied to the trade in cases of 20. A £2 million campaign will support the launch. This NPD follows the addition of Jelly Foams and Gummies with real fruit juice flavours to the Fruittella 30% less sugar chewy bags range. They are available in resealable bags (rsp £1.25), seven to a case. More than a million samples of Fruittella products have been given out across the UK in recent months. Matthew Navier, Fruittella brand manager, comments: “Stocking a range of sugar-free and less sugar confectionery options is proven to drive incremental sales for retailers by +73% on average (Kantar).” For the Mentos brand, Perfetti van Melle is investing in two above-the-line campaigns and an ‘all-new’ product range. This follows the introduction last year of sugar-free CCM Bubble Fresh Mentos gum.

For further information: Ferrero 020-8869 4000 Mars Wrigley Confectionery (01753) 550055 Mondelez International (01214) 582000 Nestlé UK & Ireland 020-8686 3333 Perfetti van Melle (01753) 442100 Swizzels (01663) 744144 Tangerine Confectionery (01977) 692500 Walker’s Nonsuch (01782) 321525


[ SUPPLIER STRATEGY ]

Moves to spice up your sales Robert Walker (pictured), commercial manager at Grace Foods UK, encourages wholesalers to tap into rising consumer demand for Caribbean/world cuisine.

All data unless otherwise stated: IRI

What proportion of your business goes through the cash & carry/ delivered wholesale trade? Approximately 47%, which is 6% up on last year. We sell across all sectors of the UK market place, but our origins are in the convenience channel where we’re strengthening sales and increasing the number of authentic Caribbean products, appealing to both loyalists and newcomers to the category.

For example, Grace Foods’ annual Caribbean Food Week, the UK’s biggest celebration of Caribbean food, drink and culture and now in its seventh year, typically sees a 25% increase in sales of Caribbean food and drink against standard promotions and so is an opportunity not to be missed by C&Cs and delivered wholesalers.

How are you looking to strengthen your relationships with cash & carries and delivered wholesalers? As the UK’s No.1 supplier of Caribbean food and drinks, Grace Foods is the ‘Caribbean Category Champion’ for most cash & carry groups. We provide expertise and in-house resources across category management data analysis and bespoke range planogramming solutions, plus merchandising recommendations for depots looking to offer Caribbean food from scratch, as well as for those looking to maximise an existing Caribbean range in depot. We focus on product mixes that best match local-to-depot shopper demand, together with suggested promotional and NPD strategies to maximise sales opportunities throughout the year.

pepper sauce brand, which is growing at 15% year on year; and Grace Say Aloe, which has an 80% share of the UK’s aloe vera drinks market. Other Grace brands are also rising stars of the Caribbean food and drink market. These include Grace Plantain Chips (+38%), Grace Tropical Rhythms (+9%), Grace coconut products (+33%) and Grace soups (+32%). We have also launched a number of reduced sugar and salt versions of our most popular food and drink lines, providing more consumer choice in light of initiatives such as the sugar tax, without compromising on quality or taste.

Which are the most dynamic products within the Grace Foods portfolio at the moment, and are wholesalers tapping in to the latest market trends? In today’s challenging trading environment, the UK’s Caribbean food and drink category represents a real opportunity for growth, fuelled by increased consumer demand for authentic, exciting, new ‘world flavours’. The market is worth £95 million and is growing at almost 4%, with Grace Foods UK supplying over 40% of the category. We have a broad portfolio, but our hero products include Nurishment, the UK’s No.1 nutritionally-enriched milk drink; Encona, the UK’s No.1 hot

How can cash & carries and delivered wholesalers improve their sales of Caribbean food and drink products? We’re working closely with cash & carries to maximise key calendar seasons and occasions to boost sales. This might involve building secondary/frontof-depot Caribbean product displays with supporting PoS materials and theatre, including product sampling to drive awareness and encourage trial. Key periods, such as Easter, summer (including Notting Hill Carnival and Caribbean Food Week in August) and Christmas, can deliver an incremental 40% value growth to the wider AfroCaribbean category.

Are there any C&Cs or delivered wholesalers you wish to highlight as being particularly progressive? We’re really pleased that all our cash & carry and delivered wholesale partners recognise the growth potential of Caribbean products. They include Bestway and Dhamecha, which have really embraced our Caribbean Food Week concept in recent years with dedicated in-depot sampling, using our Caribbean Street Food Truck and in-depot promotions supported with theatre to help drive awareness and promote trial of Caribbean produce. Is there anything else our readers should know about Grace Foods’ operation or strategy? Grace Foods UK Group is a true ‘world foods’ business, specialising in Caribbean, African, Oriental, Tex-Mex, Mexican and American cuisines. With our global sourcing, manufacturing and distribution network and NPD expertise within the GraceKennedy Group family (headquartered in Kingston, Jamaica), we’re perfectly positioned to tap into and deliver new trends to the market. We’re increasing our focus on innovative NPD – offering conveniencefocused product innovation alongside traditional, authentic Caribbean favourites to bring a wider mainstream audience into Caribbean cuisine. Caribbean/world cuisine is growing across the whole of the UK, not just in London and other major cities. As a consequence, we’re dedicating resource nationwide in promotions and activity CCM support.

www.cashandcarrymanagement.co.uk

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Consumers upgrade cider

[ CIDER ]

The cider market last year was worth £3 billion in the UK and exceeded the £1 billion mark in the off-trade, with growth of 5.1% year on year and 45.7% of households buying cider.

All data unless otherwise stated: IRI/Kantar

A

s spring gets underway and influences shopper choices, it’s time for wholesalers and retailers to review their drinks range. “As soon as these first warm days arrive, the demand for cider increases as shoppers begin to look for a more refreshing alternative to wines and spirits,” says Toby Lancaster, category and shopper marketing director at Heineken. There has been plenty of activity from both major and artisan suppliers of late in the cider category – and consumer tastes are evolving – but the majority of sales still lie with established offerings, according to Heineken: “Mainstream cider is still key to the success when considering a core range,” states Lancaster. “Strongbow, the UK’s favourite cider, remains the mainstream leader, with Strongbow Original accounting for 44.7% of volume share and the Dark Fruit flavour adding £22 million to the category.” The supplier advises that while retailers keep their core range centred on proven performers, they also trial possible new growth drivers. “Wholesalers should consider streamlining their cider range to make space for premium ciders that will drive value and encourage customers to trade up,” says Lancaster. “Heineken is continuously responding to the premiumisation trend to help retailers take advantage of it, with the majority of cider purchases driven by occasion.” Heineken has also tapped into demand from consumers looking to moderate their alcohol intake without switching to soft drinks. Its Old Mout Alcohol Free Berries & Cherries in a 500ml bottle (rsp £1.30) is the latest NPD from Old Mout – a New-Zealand born cider brand that is delivering 13% value share growth (Nielsen). The new offering is designed to tap into spring sales opportunities and commands a higher rsp than soft drinks. Thatchers Cider is benefiting from the premiumisation trend, with its Thatchers Gold and Thatchers Haze brands. “We would recommend ensuring your cider selection is fewer but better, rationalising the range to a few of the top performing brands,” says James Kennedy, head of off-trade. “Apple remains the dominant flavour in cider, so strong performing apple brands need to play an important part in your range.” The cidermaker has the No.2 best-selling apple cider in cans in Thatchers Gold, while Thatchers Haze is the 26

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No.1 cloudy cider. “Think about the formats you are selling cider in. Cans continue to drive the market, they’re the go-to format in the off-trade, accounting for nearly half of all cider spend,” points out Kennedy. “Consumers are prepared to spend more to enjoy a high quality, premium cider like Thatchers that demonstrates strong and genuine values of heritage, provenance, and where the focus is on quality and taste.” This year, the two brands are the focus of attention through a marketing campaign that includes TV, digital, social media, PR and consumer and trade press, as well as experiential and sampling activity. The ‘What Cider’s Supposed To Taste Like’ campaign is running throughout spring and summer. Westons Cider has added to its premium cider can lineup with a new variant of Rosie’s Pig. The raspberry and cucumber flavoured Rosie’s Pig Raspberry Roller Cloudy Cider is the fourth in the flavoured cloudy cider range, which has performed well since its 2016 launch, and is available in a 330ml can for the off-trade and a 10 litre bag-in-box for the on-trade. “The fruit cider category is growing at 10% year on year, and the category now accounts for 27% of all cider sold,” says Tim Williams, Rosie’s Pig brand manager. Berry-flavoured ciders account for 87% of all fruit ciders sold, and Westons Cider is introducing its Stowford Press Mixed Berries draught this month for the on-trade. “Thanks to the substantial interest in fruit cider nationwide, within five years we expect it to account for just under 50% of all cider sold,” says Holly Chadwick, brand manager for Stowford Press. The launch is backed by a consumer brand campaign for Stowford Press in May, including media, PR and social channels. Also for the on-trade is Weston Cider’s partnership between its Mortimer’s Orchard brand and the Lawn Tennis Association. The premium cider will be served at a series of high-profile tournaments from this month and the Mortimer’s Orchard Cider Bar at the Fever-Tree Championships. The partnership is supported with a digital CCM campaign.

For further information: Heineken 0131-528 1000 Thatchers Cider (01934) 822862 Westons Cider (01531) 660233


Ranging to reflect café culture

[ HOT BEVERAGES ]

With an ever-growing number of people buying hot beverages out of home, it’s important that wholesalers and retailers capitalise on these changing habits and ensure they have the range to cater to consumers expecting coffee-shop quality in convenience. Suppliers are seeing growth from premiumisation and innovation in the category – are you?

T

ea drinking remains ingrained in the British culture, with more than 165 million cups of tea drunk every day (UK Tea and Infusions Association). Black tea remains the most favoured type of tea in convenience, but category growth of 0.2% in value in the total market and 2.3% value in impulse are being driven by growth in speciality, fruit & herbal, and green teas (Nielsen). Tata Global Beverages has the highest volume share of tea brands with Tetley, at 32.1%. “Relative to other categories, own-label is weak in tea,” says Peter Dries, director of customer and shopper marketing. “Retailers don’t have elastic shelves so selection of the right range of teas is essential to increasing sales.” Consumer interest in health is benefiting tea sales, where higher-margin healthier segments such as fruit & herbal, decaf and green SKUs can boost retailer profits. “The real winners in tea are those who can successfully complement their core offering with a careful selection of products from the growth areas in tea that they feel are most suited to their customers,” says Dries. He also highlights additional sales opportunities presented by stocking the right tea range: “Of all the hot beverages, tea buyers are more likely to buy complementary products with their tea purchase – whether cakes and pastries for on the go or biscuits and cakes to enjoy at home – and these potential sales can be lost without the right tea offering that the shopper has come in to buy,” he advises. The impulse sector has a heavy reliance on black tea, which accounts for 93.8% of volume sales, but range selection should reflect current habits. Dries offers this guidance that wholesalers can pass on to their customers: “Everyday black should remain core and a selection of no more than four different-sized packs from the top-selling brands would work well here; add to this an essential decaf option and sensible selections that will not sit on-shelf for long, like a fruit and herbal, green and a speciality tea like Earl Grey.” Taylors of Harrogate recently launched a price-marked 40-bag Yorkshire Tea Decaf pack for the convenience and wholesale channels. With shopper habits changing, decaf is becoming increasingly important in the tea fixture – up by 9.3%. Equally, PMPs drive sales in convenience, providing a price assurance that shoppers trust, so the smaller £1.89 packs – previously, Yorkshire Tea Decaf has been available only in PMP 80s – are exclusively for these channels. 28

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Tea drinking out of home Top five category leaders:

Favourite non-black blends:

Tetley: 27.3% PG Tips: 25.3% Twinings: 18.1% Yorkshire Tea: 13.7% Typhoo: 6.2%

Green tea: 18% Speciality black tea: 17% Herbal tea: 15% Fruit tea: 14% Matcha tea: 3%

Source: The Tea Report 2018 – Tetley

“We understand how important price-marking is for the wholesale and convenience sectors; this new PMP is the perfect size and price for both sectors,” says Helen Boulter, channel controller. The supplier also stresses the importance of the correct core range, again recognising the strength of brand loyalty in tea drinkers. “Wholesalers should always consider stocking popular brands, as research has revealed that only 5% of shoppers would choose to buy a retailer’s own brand over a more well-known one,” Boulter advises. “Often, breakfast beverages are purchased as a last-minute, top-up shop, so having a strong and varied range on offer will encourage impulse sales.” As shopper tastes and requirements evolve in the category, Unilever has unveiled NPD for the tea fixture this year to cater to the growing number of consumers with particular dietary requirements. PG Tips Perfect With Dairy-Free is a blend of tea that complements dairy-free alternatives to milk – which can sometimes overpower the natural taste of tea and leave the tea tasting a little bitter. The new product comes in 70s and 35s pack sizes (rsps £2.60 and £1.70 respectively), with a design that features a dairy-free alternative liquid. Also new to the shelves is PG Tips The Tasty Decaf, which has been created to provide a depth of flavour comparable to regular black tea, while containing less than 0.2% caffeine. Pack sizes available are 180s (rsp £5.80), 70s (rsp £2.60) and 35s (rsp £1.70). Both innovations are supported by a £3 million marketing investment that includes a new TV ad campaign.


[ HOT BEVERAGES ]

Consumers are looking for quality and variety from an on-the-go offering to replicate the coffee shop experience.

Coffee drinking is an established out-of-home occasion, as the proliferation of coffee shops attests to. According to the Campaign for Real Ale, if the rates of opening continue, the number of cafés in the UK will overtake the number of pubs in less than 12 years. The UK coffee market is worth over £3 billion (Mintel), an increase of 37% since 2011. But opportunities aren’t limited to coffee shops, evidenced by Nestlé Professional’s consumer research. “Of the 53% of people who buy coffee to go, just 40% buy from a barista, with 30% using supermarkets, 20% purchasing from forecourts and convenience stores, and 15% from leisure centres,” says Simon Baggaley, Nescafé Beverage Solutions category manager. “With the right technology, non-specialist venues that offer takeaway barista-style coffee can grab a slice of the coffee market. As convenience and customisation become the deciding factors, the market will continue to face competition from pubs, hotels, retailers, bakery shops and forecourts, which are now competing in terms of price, and even geographical reach,” he adds. There are also many shoppers choosing to upscale their at-home and at-work coffee drinking, with premiumisation combining the dual demands of indulgence and convenience. JDE Professional has invested £7 million in an integrated advertising and marketing campaign for Kenco The Coffee Company, following its brand refresh and increased household penetration of 900,000 in 2017. The Kenco portfolio showed growth of 7.5% in premium instant and 4.2% in wholebean instant (Nielsen), and JDE is focusing on the out-of-home workplace opportunities as an area for development through its Cofficionado campaign, working with out-of-home coffee suppliers, C&Cs and delivered wholesalers to encourage customers to trade up to Kenco Millicano and Freeze Dried. “Coffee experiences are changing and the coffee shop world is now the benchmark for quality coffees,” says category marketing manager Martyn Bell. 30

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Rombouts has extended its range in the premium segment with new products that showcase its continually evolving commitment to sustainability. “Consumers are more and more interested in the origins and sustainability of the products that they are buying, making it more important now than ever before to support this cause,” says Simon Remmer, sales director. “We offer new products that are both Fairtrade and organic-certified.” The supplier’s latest additions adhere to the requirement that the coffee is purchased under specific conditions, including supporting the preservation of ecologically fragile regions. The new Déca Aqua blend and the Bio & Fairtrade range are made with Arabica coffee beans. Déca Aqua ground coffee is available in a 250g tin while whole beans comes in a 250g foil pack. Bio & Fairtrade ground coffee is available in a 250g tin and whole beans in a 500g foil pack. Mars Chocolate Drinks & Treats has added a flavour twist within its Galaxy range, with Galaxy Mocha Latte (rsp £3). “Galaxy Mocha Latte sees the first coffee variant to be added to our hot chocolate range, offering consumers something new and innovative,” says Michelle Frost, general manager. Also added to the line-up is Galaxy Luxuriously Thick Hot Chocolate (rsp £2.79). “Consumers are keen to recreate ‘coffee house moments’ at home,” she continues. “Galaxy Mocha Latte and Galaxy Thick Hot Chocolate offer both traditionalists and more adventurous consumers the opportunity to try something completely new, at home. For these two new product lines we also chose a new tin style packaging, adding an indulgent feel and eye-catching design for enhanced on-shelf appeal. With the combination of strong brands and premium packaging, we hope to drive category growth even further and maximise sales.” With the hot chocolate segment worth £86 million (IRI), it’s not an area to be overlooked. Wholesalers can advise retailers to ensure that they stock a core range that incorporates instant, added milk and indulgent, malted and cocoa CCM variants to complement their tea and coffee offerings.

For further information: JDE Professional (0845) 271 1818 Mars Chocolate Drinks & Treats (01256) 471500 Nestlé Professional (0800) 745845 Rombouts (0845) 604 0188 Tata Global Beverages 020-8338 4000 Taylors of Harrogate (0800) 515988 Unilever UK (0800) 731 1597


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Shaking up the product mix

[ FLAVOURED MILK ]

The flavoured milk category has grown by 6% and is worth £326 million (IRI). Consumer demand is being met through lower sugar, higher protein and nutritionally-enhanced variants.

N

ew product development is key to driving growth of the flavoured milk category, insists Grace Foods UK, which has introduced Nurishment Mojo, the UK’s first multi-vitamin milkshake, positioned as ‘The Perfect Pick Me Up’. The new product comes in three flavours – Strawberry, Chocolate Brownie and La La Latte – and has an rsp of £1.89 for a 330ml bottle. “We know that millions of shoppers are looking for healthier milkshakes and almost half (46%) of adults take multi-vitamins either daily or occasionally,” says Nimal Amitirigala, GraceKennedy’s global category manager, beverages. “Nurishment Mojo is breaking new ground in functional milks. It fills a taste and health gap in the chilled dairy aisle by offering consumers a multi-vitamin milkshake, enabling them to top up on vitamins and minerals whilst enjoying a greattasting, refreshing drink.”

‘We know that millions of shoppers are looking for healthier milkshakes’ Nimal Amitirigala, GraceKennedy’s global category manager, beverages Nurishment Mojo will benefit from a wide-ranging programme backing Nurishment this year. The campaign will include online advertising, social media activity and sampling that will target on-the-move consumers. Grace Foods has also launched a no-added-sugar variant of vanilla-flavoured Nurishment Original, the UK’s No.1 vitamin-enriched milk drink (IRI). The new 400g can comes as a £1 PMP and is said to have the same taste as the bestselling regular Nurishment Original Vanilla, but with only the naturally occurring sugars from milk. “We want to give Nurishment consumers more choice and variety,” explains Amitirigala. “As in many other categories, flavoured milk drinkers want the option of both regular and noadded or lower-sugar products, without any compromise on taste.” Nurishment Original, which is suitable for vegetarians, is the UK’s only enriched milk drink providing more than 80% of people’s recommended daily intake of nine essential vitamins and four minerals, plus 20g of protein. The new variant will benefit from 32

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the £1 million support plan for Nurishment this year. The ‘Built For Strength’ campaign will emphasise that Nurishment provides the goodness that keeps consumers going throughout the day. marketing support Trade includes Nurishment’s biggest ever point-of-sale distribution drive in cash & carries and thousands of independent stores across the country, backed by an online competition giving consumers who buy four cans the chance to win £100. Ready-to-drink protein sales grew by 14% in 2017 (Euromonitor). Boost Drinks, which supplies only independent retailers, claims to have spotted a gap in the convenience market for a milk-based protein drink that offers a great taste and has mass-market appeal. “We look at trends and what shoppers are putting in their baskets and it was clear there was a huge market for those that are looking for simple ways to include more protein in their diets,” explains Simon Gray, managing director and founder of Boost Drinks. “The business took the success it has enjoyed in the energy drinks market due to its focus on offering great tasting drinks at great value and successfully applied this to the protein market. “Other brands within the category have focused on sport and health messaging whereas Boost focused on creating a product that has a delicious taste and that will also help retailers make the most of limited space because of its wider appeal.” According to the company, Boost Protein appeals to several consumer groups, including everyday shoppers simply looking for an on-the-go snack, as well as people looking for a protein hit. Boost Protein drink contains 20g of protein and, as the Government indicates we need approximately 50g of protein per day, Protein Boost can help consumers to reach their daily recommended intake. There are two variants of Boost Protein – Chocolate and Strawberry – and each comes in cases of 8 x 310ml bottles. In addition to unpriced bottles, the company offers a £1.49 price-marked option in recognition of the role PMPs can play in driving customer purchase and increasing basket spend by giving the customer quick, key pricing information at the crucial decision-making point.


[ FLAVOURED MILK ] Mars Chocolate Drinks & Treats reports that its £1.29 price-marked 350ml milk drinks range has sold strongly since its launch last year. The 350ml bottle, with its ‘on the go’ top, provides a clear point of difference to other brands, claims the company. On the back of the success of the PMP, Snickers and M&M’s Peanut were added to the range. The Snickers milk drink combines the peanut and chocolate flavours of the chocolate bar, while the M&M’s Peanut milk drink incorporates the nutty taste of the globe’s No.1 confectionery brand in a creamy chocolate milk. Michelle Frost, general manager at Mars Chocolate Drinks & Treats, says: “Our PMP range continues to prove popular with retailers and consumers alike. We hope that these new SKUs will encourage even more consumers to enjoy their favourite confectionery in a milk drink.’’ In addition to offering PMPs, retailers should stock noadded-sugar formats of milk drinks to broaden consumer choice, advises the company, which recently introduced noadded-sugar variants of its Mars Caramel, Galaxy, Milky Way and Maltesers flavours to its 350ml milk drinks range (rsp £1.29). Mars Chocolate Drinks & Treats recommends that dairy drinks are positioned with other chilled drinks and included within meal deal promotions to boost sales. The company’s dairy drinks are ambient, meaning they can be stored outside the chiller and have an extended shelf life compared to fresh. Sales of the products are handled by SHS. FrieslandCampina has added a limited-edition Choc Mint flavour to its Yazoo range. The new variant, which comes in 400ml bottles with an rsp of £1.15, was voted by consumers as the flavour they would most like to try as a milk drink (TNS). Richard Duplock, Yazoo marketing manager at FrieslandCampina, says: “As the No.1 brand (IRI) we want to continue driving growth in the flavoured milk category. Yazoo is outperforming the category at +11.6% v +4.4%, and with 14% of category sales coming from new flavours (IRI), Yazoo Choc Mint opens up a brilliant opportunity for extra growth.” He continues: “It’s clear that our target market of 16-24 year-olds are experimenting more and more with different flavours, and Yazoo Choc Mint offers them a fun and tasty option.” FrieslandCampina is supporting the launch with a social media, digital advertising and PR campaign. Also new in the flavoured milks category is a 900ml bottle (rsp £1.50) of FRijj in the brand’s two most popular flavours, Strawberry and Fudge Brownie. Additional flavours from the existing 400ml on-the-go range may be introduced in the future, reveals brand owner Müller. 34

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The introduction of the larger pack size follows the success of the reformulated FRijj recipe launched last year, and the recent move to on-the-go 400ml portions. Michael Inpong, chief marketing officer at Müller, says: “Milk drinks are seen as a major area of opportunity for the dairy industry, and it’s our job to constantly re-evaluate our portfolio and improve it to meet the changing needs of the consumer. Our research found that consumers wanted a larger shareable portion and an on-the-go 400ml portion, and we’re excited to have both. “With FRijj, which is the Official Milk Drink of British Athletics, we’re targeting new consumption occasions, offering zero added sugar alternatives, creating inspiring on-pack promotions and since last year, we’ve also brought FRijj back onto UK TV screens after five years away.” Pritchitts, a Lakeland Dairies company, has introduced Moovers, a flavoured milk in a convenient on-the-go carton with a straw. Primarily aimed at school children, the new product comes in Chocolate, Strawberry and Banana variants, packed in cases of 12 x 200ml (rsp 39p). Moovers is said to be ideal for picnics, lunchboxes and the store cupboard, and is made with fully traceable, semiskimmed milk with added vitamin D. Naturally gluten free, it is school-compliant, low in fat, low in lactose, naturally high in protein, a natural source of calcium, and contains no artificial colours or preservatives. The product is best served chilled but has a long, ambient shelf life, reducing the need for chilled storage as well as the risk of short-dated stock for independent retailers. Simon Muschamp head of marketing at Lakeland Dairies, says: “The launch of Moovers into retail follows on from our success and experience gained after a decade of supplying the leading brand of flavoured milk (Viva) into foodservice.” The company has announced its intention to extend the Moovers brand into at-home consumption with the launch of one-litre milkshakes in Chocolate and Strawberry flavours, packed in cases of six. Stock will be available to cash & CCM carries and delivered wholesalers shortly. .

For further information: Boost Drinks (0113) 240 3666 FrieslandCampina (01403) 273273 Grace Foods (01707) 322332 Mars Chocolate Drinks & Treats (01256) 471500 Müller (01355) 244261 Pritchitts (0845) 130 0307


[ PRODUCTS & PROMOTIONS ]

Kepak brings breakfast offering to convenience

Upgrade offer

Kepak Convenience Foods is launching a new product to target the increasingly popular breakfast occasion. The Rustlers All Day Breakfast Sausage Muffin has an rsp of £1.50 and is backed with support for retailers. “We’re recommending that retailers launch the product in their food-to-go fixture in order to capitalise on the opportunity to target the high street,” says Adrian Lawlor, marketing and business development director. The new product has been developed following Kepak’s largest-ever shopper study, which showed a gap in the breakfast consumption occasion. ”The study highlighted that Rustlers competes with high-street foodservice operators for a number of consumption occasions, in particular lunch, helping our retail partners to win footfall from

the quick service restaurants (QSRs). Breakfast gives us the opportunity to build on this, as it’s an occasion that is performing exceptionally well on the high street,” says Lawlor. “We wanted to launch a product concept that was well established in foodservice and would be competitive, from a value-for-money perspective, with the leading players in the sector.” Kepak (01772) 688300

Kettle Foods is running an on-pack promotion this spring to increase sales across its singles range. The ‘Upgrade Your Lunch’ campaign offers consumers the chance to win a trip to Los Angeles complete with star treatment, a VIP tour of Universal Studios and a helicopter ride over Hollywood. Every purchaser can also get a digital film in HD from Chili Cinema for £1 via an online code printed on-pack. The activation runs until the end of June and is featured on 17 million bags across the entire Kettle Chips 40g range. Marketing support includes PoS for wholesalers, retailers and the on-trade, and consumer-facing activity. The holiday prize draw is open until the end of July, and the film offer runs until the end of the year. Kettle Foods (0800) 616996

Meat-free market

Frozen & fruity

Modern match

Marlow Foods is continuing its activity for its on-trend Quorn brand with new celebrity partnerships. This comes as part of a £14 million support package throughout 2018, following sales growth of £19 million last year. The brand is showcasing the benefits of eating less and better meat with a short film featuring Ben Fogle, while footballer Jermain Defoe focuses on protein and sport, and performance benefits of reducing meat intake. The Lawn Tennis Association has also renewed its partnership with the Quorn brand for a further five years. Marlow Foods (01642) 717254

Froneri has added three new lollies to its Nestlé Rowntree range. Fruit Blaster (rsp £1.20) has a lolly stick that be used as a water pistol, while Watermelon (rsp £1) has a high juice content and contains chocolate ‘seeds’. The third new product, Rowntree’s Fruit Pastilles Push-Up (rsp £1), comes in strawberry, tropical and blackcurrant variants, capitalising on the popularity of the flavours within the confectionery range. The NPD is supported by a £400,000 marketing investment including in-store activity and PoS material. Froneri (01677) 423397

Republic Technologies (UK) is relaunching its matches range, modernising its core brands, and reflecting the growing appeal of sustainability and demand for eco-friendly matches. The activity includes the introduction of a pocket-size Swan match, brand packaging updates for Ship, Swan Vestas, and Bryant and May brands, and a celebrity chef partnership with Tom Kerridge alongside a Cook’s Matches packaging refresh. The relaunch is backed by a major consumer PR and marketing programme throughout the summer. Republic Technologies (01494) 492233

PRODUCT OF THE MONTH

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A thirst for healthy hydration

[ BOTTLED WATER ]

Bottled water is fuelling soft drink sales, with a demand to provide for health-conscious consumers. Shoppers are changing their habits, and water is now the largest volume contributor in the soft drinks category (Nielsen). As such, wholesalers and their customers are being advised to make room for the growth of this booming segment.

W

ith all the changes in the soft drinks industry, it seems that water is going to continue to benefit from the current call for consumers to make healthier choices. Add to that the innovations that big – and smaller – suppliers are making in the category and it’s an area that is set to flourish in convenience this summer. Market penetration is up by 11% year on year and now stands at 57.1% (Kantar). At Nestlé Waters UK, a strategy of “working closely with retail partners to encourage shoppers to consider bottled water a must-have in all shopper missions” is driving category growth, according to Silika Shellie, head of category & shopper development. “There has been a significant focus on the water category recently and the role that water plays in maintaining a healthy, balanced diet, which has helped to drive sales within the bottled water market,” she adds.

‘Water should be given 20% of the total soft drinks space’ Silika Shellie, Nestlé Waters’ head of category & shopper development At the moment, water represents around one in four soft drinks in volume terms, with a slight drop to 18% in convenience (IRI). With consumer interest in the category on the rise, it’s important for retailers to ensure that adequate space is set aside in the chiller to offer the correct range for a diverse consumer base. “Water should be given 20% of the total soft drinks space in front of chillers and it should be clearly segmented into still, sparkling and flavoured,” says Shellie. “We understand the need to offer shoppers the right product at the right

Supplier and retailer partnerships are being strengthened to make the most of increasing water category opportunities.

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price, which is why each of our brands is targeted at different audiences and meets varying consumer needs.” The category itself has evolved as suppliers focus on brand activity and NPD, with sub-categories now offering even more choice to shoppers. “Across our portfolio, we offer a variety of formats in both sparkling and still water, with the added option of spring or mineral water. Our bottled water range includes Buxton, Nestlé Pure Life, S.Pellegrino, Perrier and Acqua Panna,” says Shellie. “Thanks to a marketleading portfolio of brands, Nestlé Waters is continuing to perform strongly, driving share up to 26.2%.” AG Barr is a supplier bringing an expanding water portfolio to the chillers. Again, the onus is on wholesalers and retailers to use their space to incorporate the most effective range possible. “In order to maximise sales of bottled water, wholesalers and retailers need to give the space it warrants on fixture whilst also offering consumers the choice they’re seeking,” says Adrian Troy, marketing director. “By stocking trusted, quality water brands – such as Strathmore, which is growing at 13% (IRI) – wholesalers and retailers can maximise the opportunity for sales within this space.” Emphasising the provenance behind the Scottish water brand, AG Barr has enlisted team GB Scottish athlete Laura Muir to promote Strathmore this year. “Joining World Champion T53 wheelchair racer Samantha Kinghorn and Commonwealth gold medal swimmer Ross Murdoch on Team Strathmore, Laura will help the brand to deliver its ongoing ‘Do More’ campaign, which aims to inspire more people of all ages and ability to try to take up entry-level exercise such as running, swimming and cycling,” explains Troy. “Strathmore water has a longstanding reputation for supporting mass-participation events across the UK.” Strathmore Botanics is a new range to cater to consumers looking for a water as a soft drink alternative. The NPD is made with spring water infused with natural botanicals and fruit flavours, and has no calories and no added sugar. It comes in Orange & Mandarin, Apple & Elderflower, and Pear & Elderberry variants, in a 500ml PET bottle (rsp 99p) In taste tests, more than 70% of shoppers said they would buy the product. “Water consumption is on the rise, with the category growing by £148 million in the last two years (IRI), driven by an increase in the number of consumers making choices


GroceryAid is the trading name of the National Grocers Benevolent Fund. A registered Charity Reg. No 1095897 (England & Wales) & SC039255 (Scotland). A company limited by guarantee, registered in England & Wales no 4620683

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[ BOTTLED WATER ] based on health,” says Troy. “We have developed a product that is genuinely new and exciting for the category, and we look forward to working with wholesalers and retailers to drive incremental profits from their water fixture.” AG Barr also caters to shoppers wanting a healthier soft drink with its £25 million-plus Rubicon Spring brand, a combination of spring water and juice. “Consumers confirm that when they are looking for something healthier, they look at the water fixture in the chiller,” Troy says. “AG Barr recommends that Rubicon Spring is positioned between carbonates and water.” Nichols’ flavoured water comes from its brand Feel Good, which was extended with the Infusions range last year. “The soft drinks levy is good news for the water category. As more consumers seek healthy alternatives, those that can offer great taste and low-calorie, low-sugar water drinks are winning,” says Ed Jones, senior customer marketing manager. “Our Feel Good Infusions product is driving phenomenal growth of the brand, with sales value up 20% (Nielsen).” Clearly Drinks has relaunched its flavoured water portfolio, following the recent introduction of its own sparkling, juice-flavoured water range, Perfectly Clear Whisper. “It’s a time of change for the UK water market,” says Amelia Parker, brand marketing manager. “Sugar taxes on soft drinks are having a big impact both here and in the US, where flavoured water sales growth has recently overtaken soft drinks sales growth for the first time ever.” The brand-wide refresh includes Perfectly Clear Whisper, Perfectly Clear 1.5-litre still and sparkling, 330ml kids, and 500ml still and sparkling. New to the range is Perfectly Clear 500ml Sparkling Elderflower. The supplier’s activity is continuing, with investment in an integrated campaign including a new website launch, and new PoS and promotional materials. In addition, the company is expanding its sales force and plans to reach, and hopefully exceed, growth of 30% in value for the company. “The cash & carry sector is hugely important to producers like Clearly Drinks; it accounts for over one-quarter of all Perfectly Clear sales,” Parker continues. “At the heart of the sector are the small and independent retailers, and cash & carries allow these important customers great access to Perfectly Clear products.” Highland Spring Group has also brought out redesigned packaging, with a new-look glass bottle for the Highland Spring brand. In the wake of its 2017 PET range refresh, the full glass range has undergone a brand update that highlights the brand’s provenance and quality. “The refreshed bottle has been designed to create further standout on shelves in a fiercely competitive and fast-growing category,” says Carol Saunders, head of customer marketing. 40

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The supplier advises retailers to consider their range with proven best-sellers in mind, as more brands are seeing the opportunities from the growing water category. “There is a high proliferation of water brands in the category, including those from secondary and tertiary players,” she points out. “This has sometimes seen retailers choose these over the leading must-stock brands, which can result in category devaluation. We would recommend stocking top-selling brands that consumers know and trust. With 13.8% value and 17.6% volume growth (IRI), Highland Spring is tracking ahead of the wider plain water category.” Saunders adds: “Branded sales account for 77.5% of plain water value sales and 59% of volume sales (IRI).” A changing consumer mindset is strengthening water’s position in the soft drinks category, and looks set to continue in 2018. “The increasing consumer and media focus on health, as well as the imposition of the sugar tax, continues to be a major driver of product choice in the category and is a significant consideration for consumers when choosing between drinks,” she explains. “Wholesalers should consider increasing space to make the most of increasing demand and sales opportunities – including warmer months. This shouldn’t mean diminishing the focus placed on bottled water during the rest of the year, but simply being flexible to cater for the extra demand. This may involve adding additional still water lines and larger bottle formats for the picnic and BBQ season.” Highland Spring has introduced a campaign to drive sales into the summer, with its H2Oomph on-pack promotion running on still 500ml flat cap and 750ml sports cap bottles (singles and multipacks) until June. The instant-win mechanic offers prizes that are “experiences with added oomph”, such as aqua assault course tickets, a weekend break in an unusual location and 4D cinema tickets. The promotion is reinforced by in-store activation, out-of-home and digital advertising, and PR and social media activity. Lucozade Ribena Suntory is another soft drinks supplier with its promotional activity based on the appeal of healthier lifestyles. Its latest campaign for Lucozade Sport Fitwater, which was launched last year, was unveiled in March. The activation, featuring brand ambassador Anthony Joshua, incorporates outdoor creatives to attract consumers and is supported by a £3.5 million spend. “With the


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[ BOTTLED WATER ] campaign’s striking advertising reaching 86% of adult shoppers at least 16 times, retailers should stock up on Lucozade Fitwater now to ensure their chillers are ready for the additional sales opportunities this will present,” advises Lucy Grogut, brand director. As celebrity endorsements for brands go, Hollywood stars and musicians are a powerful marketing tool, and bottled water is no exception. Elbrook C&C is the official distributor and importer for Aqua Hydrate – an electrolyte water brand from the USA in which Mark Wahlberg and P Diddy have invested – and Elbrook is looking to extend the brand’s reach in the wholesale channel as the water segment continues to grow. From the same sub-segment of the water market comes Actiph, an ionised water with added electrolytes. Having performed well in America, the product is forecast to boost the growing sub-category as the US trend for alkaline water reaches the UK. Available in 600ml (rsp £1.39) and one-litre (rsp £1.99) formats, Actiph water is supported by a campaign including PR, influencer marketing, social media activity and experiential sampling. Navson’s water brand Saka, which has a low sodium content and pH 8.2 alkaline level, again supports a healthy lifestyle. The award-winning brand is used to promote active living, family wellbeing and community engagement, and investment is made into causes and events that support that ethos. The natural mineral water, from the Koroglu mountains, has been awarded the three-star ‘exceptional’ rating by the International Taste & Quality Institute for three consecutive years.

The plastic problem Last year, the issue of plastic waste exploded in the media and as a result is now very much on the radar of many consumers. As shoppers are influenced by more than just price, so are suppliers concentrating on addressing ethical and environmental concerns. Soft drinks supplier Radnor Hills is focusing on waste this year, with activity centred on the introduction of a 50% recycled plastic bottle. “We are very aware of our environmental responsibilities,” says William Watkins, managing director. “This includes our commitment to ensure that we minimise our packaging requirements and work towards a system that recycles our bottles and packaging. “We are currently working with our suppliers, government bodies and trade association to increase the level of recycled material that is available so that we can introduce recycled material into our bottles,” he adds. 42

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“We are launching a spring water bottle made out of 50% recycled material and will increase the distribution of this product as supplies of recycled PET increase. This will be greatly helped by a deposit return scheme, which we fully support.” This focus is in line with Radnor Hills’ programme of the last 10 years of ‘lightweighting’ its packaging. It also has a fully recyclable line-up of plastic and glass bottles for its drinks portfolio. Similar activity has been a priority for Harrogate Water, whose bottles now contain 50% recycled PET (rPET). The company has focused on environmental concerns for some time – its glass bottles contain 50% recycled glass, no company waste goes to landfill, and last year a consumer campaign encouraging responsible disposal of bottles was launched in partnership with Keep Britain Tidy. “It is not an inevitability that plastic bottles end up in our rivers and oceans,” says James Cain, CEO. “The more we recycle, the greater the availability of rPET and the closer we get to a truly circular economy,” he adds. “PET plastic used to make beverage bottles is the most environmentally efficient of all packaging solutions, providing it is recycled – it uses less energy in manufacture, produces fewer greenhouse gas emissions and is one of the best examples of easily recyclable packaging. The introduction of rPET represents a significant investment for the business.” As packaging waste is such a major cause for concern, it is imperative that bottled water manufacturers highlight how consumers and suppliers can address the issue in a way that isn’t detrimental to the rising bottled water sales figures. “There is a significant amount of publicity about plastics and the damage they are reported to be causing to the environment. However, much of this is ill informed – particularly in relation to PET bottles – and these misleading headlines could actually contribute to reducing recycling,” says Rob Pickering, sales & marketing director. “As such, we would like to help in establishing the key facts with regards to PET bottles and highlight the great work which puts Harrogate Water CCM at the forefront of tackling the issues raised.”

For further information: Actiph 0131-297 0092 AG Barr (01204) 664200 Clearly Drinks 0191-516 3300 Elbrook Cash & Carry 020-8646 6502 Harrogate Water (01423) 730000 Highland Spring Group (01764) 660500 Lucozade Ribena Suntory 020-3727 2420 Navson (0845) 644 0992 Nestlé Waters UK (01923) 897700 Nichols (01925) 222222 Radnor Hills (01547) 530220


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C&C Management April 18  
C&C Management April 18