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JUNE 2013

EXCLUSIVE: Charles Wilson on his plans for Booker Convenience sector to grow by 30% over next five years Asim Sarwar leads United past ÂŁ200m milestone Implications of Scottish independence in question

The business magazine for cash & carry/delivered wholesalers





*than most chocolate milk drinks




A good deal for our sector Few would doubt Charles Wilson when he says Booker with Makro will have sales of £6bn by the end of 2017 (see pp.12–14). As he has turned the near-bankrupt company that was Booker in 2005 into the flourishing business it is today, then revitalising Makro and extracting the expected synergies should be simple by comparison. However, the companies who are battling with Booker and Makro for business may not see this as good news. In a tough economic climate the last thing you want is increased competition and customers tempted to try a new or rejuvenated alternative. Nevertheless, this growth will be positive for the sector. Competition can have a beneficial effect on healthy businesses because it encourages a renewed focus on improving efficiency and the service provided. And with the wholesale sector and convenience retailing outperforming the multiple retailers, a resurgent Booker will encourage suppliers already considering providing more support to our sector because it offers the best growth opportunity. And remember that while Booker Group is increasing its turnover, there is still plenty in retail and catering/foodservice to go after. According to the latest report by IGD (see p.4), the convenience sector alone will grow by an average of 5.3% a year until 2018, reaching a total of £46.2bn. Wholesalers’ customers dominate that market, meaning there is a huge opportunity.

Extra to come at Booker ... see pp.12–14


P&H negotiates a £300m loan ... see p.5




fwd update






in focus


scottish independence


ethical sourcing & sustainability


customer cares food & beverages on the move cereal bars

24 26–28 30



products & promotions


supplier strategy ryo tobacco & accessories

Managing Editor

Kirsti Sharratt


John Wood

News Editor

Mervyn Gilbert

Features Editor

Amber Aitken

Media Sales Manager

Clare Phillips

38 40–46

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4,560 July 2011–June 2012 John Wood editor

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Cash & Carry Management

• June 2013 • 3

news IN BRIEF Landmark rise Landmark Wholesale’s turnover for the year to the end of April rose by 10.5% (no financial figure disclosed). And ownlabel, boosted by a 20% lift in April alone, finished 8% ahead. Managing director Martin Williams said: “It’s good to be well ahead of the market in these continuing times of austerity.”

Costcutter jobs Costcutter Supermarkets, with which Palmer & Harvey has signed a buying agreement (Cash & Carry Management: March), has named Daniel Quest, formerly with Budgens, as its new retail director and Matthew Dashper-Hughes as interim managing director of the Rhythm & Booze off-licence division, prior to the appointment of Angela Barber in this role. David Thompson becomes Costcutter customer services director.

Nisa meat As part of a £10m investment in price cuts and promotions, Nisa is to develop its fresh meat and poultry with a range of packs guranteeing a minimum 30% margin. The programme will cover both branded products and the Heritage in-house selection. The group says it is committed to supporting British Farm Assured standards.


Brighter forecast Against a background of austerity for the food trade, the Institute of Grocery Distribution has produced data which suggests better things to come for the C&C/wholesale channel’s retail customer base. According to the trade body, the UK food and grocery convenience market is set to be worth £46.2bn by 2018, increasing by around 30% from the current value of £35.6bn. It will grow by an annual average rate of 5.3% over the next five years, says the IGD. By far the greatest contributors to convenience sales are symbol operators, accounting for just over 40% with £14.78bn (up 8.4%) in the year to April 2013. And this was the fastest growing segment. Non-affiliated independents amassed £6.53bn

Symbols take the lion’s share.

(down 0.5%); convenience multiples £6.26bn (up 11.1%); convenience forecourts £3.98bn (down 3.7%); and co-operatives £4bn (up 2.3%). The IGD adds that unaffiliated independents still have the highest number of c-stores with around 18,800, although this declined by 2.1%. And while the number owned by multiples has grown the fastest, it currently represents under 10% of the sector. Symbol groups have also shown strong growth in store

numbers – up 3.2% over the year to nearly 17,000. Convenience forecourts had over 7,500 outlets (down 5.2%); convenience multiples more than 3,300 (up 9.6%); and co-operatives more than 2,630 (plus 2.9%). This produced a grand total of 49,207 (marginally up at 0.1%). Commenting on these statistics, David Gilroy, Bestway Wholesale’s operations director, said: “We are highly encouraged by this. Good symbol retailers or those in clubs should thrive. “We have all the components to enable retailers to make the most of the opportunity, with our Best-one symbol group, Xtra local retail club, extensive fresh offering, retail development programme and online and delivered service.” Tel: IGD (01923) 851924.

Two join Confex group Two more businesses have signed up with Confex: Birkenhead-based Smylie and Ashton Sweet Mart, which trades as ASM Cash & Carry in Ashton-under-Lyne. Smylie, whose entire business is exporting, has a 15,000 sq ft depot. In six months’ time it will relocate to a new 28,000 sq ft purpose-built warehouse at Bromborough, 10 minutes’ drive away. Sales director Chris Smylie told Cash & Carry Management: “Our main markets are the Far East, Middle East and the United States, but we also do some trading with parts of Europe and South America. “We handle a wide range

• Cash & Carry Management • June 2013

Exporting is Smylie’s modus operandi.

of branded groceries, frozen and chilled food, and have joined Confex because we think it can help improve our pricing and ranging.” Smylie turnover in 2012 was £11m and this year it is hoping to make £14m. ASM, which specialises in oils, as well as Indian rice and spices, has a turnover of around £3m and a staff of 20. The 20,000 sq ft building operates as a wholesale

depot, retail food store and vegetarian restaurant. Manager Ritesh Sachdev said: “Until six years ago, we were members of NisaToday’s for a very short time. But we only gained some advantage in frozen foods. “In wholesale, we don’t do much delivery. It’s more a case of customers phoning in their orders and then coming here to pick them up.” Tel: Confex (01608) 649000.


Makroisation begins! Having finally gained approval from the Competition Commission, it’s now all systems go for Booker in its integration of Makro, which is expected to sustain an operating loss of £16m this year. The programme of change begins with the Makro Sheffield branch, where 35% of the space will have a Booker concession, the same amount will be devoted to Makro food, 10%

will be allocated to non-food and the remaining 20% will be utilised for deliveries. Booker chief executive Charles Wilson said this split would not necessarily be the format for all Makro outlets earmarked for adjustment, including Enfield and Edinburgh. The percentages might be tweaked if the locations demand it. “Sheffield will be changed in the summer, and we will review the situation within

two months before proceeding elsewhere.” Wilson added that the pattern would not be onesided. Because Makro is considered to be stronger in such categories as deli, fish and frozen food, this expertise would be utilised in some Booker C&Cs. The joint Booker-Makro business currently has a turnover of around £4.7bn, but it is felt that could grow to £6bn by 2017.

P&H takes £300m bank loan Palmer & Harvey has negotiated a £300m facility with a syndicate of banks co-ordinated by Barclays and including HSBC, RBS Group, Santander and GE Capital. The three-and-a-half year loan will enable the wholesaler, whose turnover is more than £4bn, to proceed with a five-year expansion programme.

P&H recently announced the transfer of its symbol retail business to Costcutter, gaining a long-term contract for the supply and distribution of products to the whole of that company’s retail estate, along with a number of other large supply contracts. It is also engaged in a wide-range distribution project to the foodservice sector.

Group finance director Jon Moxon said: “The refinancing allows the company to continue to develop its core business and to capitalise on the considerable opportunities available. “The level of support shows a strong commitment to our business model and growth potential.” Tel: P&H (01273) 222100.

Quick return for Sonia Mike Sonia (pictured), one of the ‘elder statesmen’ of the C&C/wholesale trade, who recently left Sugro UK after 12 years as head of trading, has come out of retirement to join Kitwave. The Newcastle-based wholesale and distribution group was established in 1987 as a vehicle for the acquisition of confectionery wholesaler, M&M Value, of North Shields, a Sugro member. Since then, under chief executive officer Paul Young, it has acquired other Sugro member wholesalers: Boltonbased Turners & Wrights, FW

Bishop & Son, of Bradford, Westones Wholesale, of Telford, and Automatic Retailing, of Cramlington, (Northumberland). The group also owns Huddersfield wholesaler,

Teatime Tasties. Its turnover has grown to around £200m over the past two years following a capital investment by NVM Private Equity. Sonia, whose food trade experience spans 40 years, with spells at Booker and M6 Cash & Carry, will focus on Kitwave’s buying and marketing activities. Commenting on his appointment, Young said: “Mike Sonia provides a level of expertise that we can benefit from hugely over the coming years.” Tel: Kitwave Group 0191259 2277.

Wilson: Adjustable format.

Presenting the annual trading figures in London last month, Wilson said that pretax profit (excluding Makro) for the year to 29 March rose by 13% to £101.4m on sales up by 3.5% to £4bn. Delivered sales increased by 9.5% to £1.15bn and internet orders grew by 10.9% to £704m. Wilson commented: “We are on track to achieve group synergy benefits of around £26m this year.” Tel: Booker Group (01933) 371000.

Sales up 2.8% SPAR International’s worldwide retail sales grew to 32bn euros in 2012 – 2.8% up on the previous year. The symbol group has retail operations in 34 countries, encompassing 12,322 stores. That geographical spread will increase later this year when the first SPAR supermarkets open in Qatar and Lebanon. During the year, China and Russia both broke through the 1bn euros sales barrier, while Austria remained by far the largest SPAR country on 5.56bn euros. The UK came fourth with 3.15bn euros. Tel: SPAR UK 020-8842 3700.

Cash & Carry Management

• June 2013 • 5


Highlands beer deal Loch Ness Brewery has announced the appointment of Sutherland Brothers as its exclusive sales and distribution partner for beer in the Highlands and Islands. While the brewery will be able to utilise the resources and infrastructure of the Landmark Wholesale member to satisfy the high demand for its products across the region, Sutherland Brothers can add a growing range to its own drinks portfolio. Loch Ness Brewery director George Wotherspoon said: “We are excited to be partnering with Sutherland Brothers as we expand and solidify our distribution footprint in the Highlands. “Customers at every level will benefit from increased product availability, both on and off premise, and this will enable us to focus on generating brand awareness and continued development of new, high quality beers.”

Costco rise Third quarter sales for Costco’s international division (including the UK operation) rose by 4%, resulting in a 6% uplift for the year so far. For the business as a whole, headed by the US/ Puerto Rico, with 449 branches, the latest quarterly sales figure went up from $21.85bn to $23.55bn, bringing the 36-week total to $71.1bn ($65.54bn). As reported last month, Costco UK is about to open its 25th store – in Farnborough, Hants. And in a new initiative, it is offering non-members the chance of shopping on line. Tel: Costco UK (01923) 213113.


Wider range for Scottish wholesaler.

Sutherland Brothers’ managing director David Sutherland commented: “Loch Ness Brewery brings us unique, premium cask beers which complement our widening portfolio perfectly. “As we have seen with the significant growth of our existing keg business, the same trend is emerging with casks and we are glad to be working with one of the companies at the forefront of this growing category.” Founded just two years

ago, Loch Ness Brewery has an extensive range, including: redNESS, described as a ‘deep red fruity bitter’ (4.2% abv); wilderNESS ‘amber ale with a peach and passionfruit nose’ (3.9%); darkNESS ‘rich black stout with huge coffee and chocolate notes and a dry finish’ (4.5%); and lochNESS – ‘hopped sparingly to preserve the big malty flavours’ (4.4%). Tel: Sutherland Brothers (01955) 605070. David Sutherland is in the Spotlight ... see p.15

Approval for Brakes Brakes Group has been approved as a supplier for the Soil Association’s Food for Life Catering Mark scheme – a best practice system for wholesalers, ingredient suppliers and food producers in the catering sector. Over 600,000 Catering Mark meals are served daily in schools, hospitals, universities, nurseries and staff restaurants. The mark guarantees that the food served is freshly prepared, free from undesirable additives and better for animal welfare. Wayne Tessier, Brakes’ business unit director, said: “The Food for Life Catering Mark serves as recognition that our products reflect the best practice in healthy and sustainable food.” Tel: Brakes Group (01233) 206000.

Wilcox to replace Parfett Steve Parfett will step down as Landmark Wholesale chairman in the autumn and will be replaced by vicechairman Sam Wilcox, managing director of Blakemore Wholesale. The impending change was announced by managing director Martin Williams, addressing over 250 delegates at the group’s ‘Customer Insight for Growth’ 40th anniversary conference last month in San Francisco. He said: “Steve has served the group with great passion and commitment and will be missed by all of us. “However, Sam will make a great group chairman and we are all looking forward to

• Cash & Carry Management • June 2013

L to r: Present chairman Steve Parfett, chairman-elect Sam Wilcox and group md Martin Williams.

working with him to achieve our long-term objectives and maintain our pattern of growth over the next few years. “2012 was a good year for us, despite incredibly tough trading conditions, and we have had a very positive start to 2013. We are still recruiting new members, and yearon-year sales continue to grow.” Parfett, who stepped

down from his role as md of Parfetts Cash & Carry last October, commented: “I have taken great pleasure and pride in helping to lead the group for the last 18 years but the time has come to hand over the baton. “I am delighted that Sam Wilcox is taking over. He and Martin Williams will make an outstanding partnership.” Tel: Landmark Wholesale (01908) 255300.


Ordering made easier Palmer & Harvey has launched an iPhone application to facilitate ordering for its customers. The ‘Easy Order’ app – downloadable from the wholesaler’s website – is for use by retailers who have pre-registered for online ordering. Having a mobile app, said Martyn Ward, managing director commercial & sales, allows customers to check prices while on the shop floor and then order stock without having to leave a counter or other post unattended.

It also enables speed up the users to check or ordering procompare prices cess, but also while mobile. ensure retailers He said: “We get the most are at the forerelevant promofront of retail tions.” innovation. With Angela Lewis, more and more IT service desk of our retailers & operations Ward: ‘P&H is at the ordering online manager, said: forefront.’ and using smart“We’ve already phones, the time seen more than was right for a mobile order100 downloads of the app ing app. since it was launched several “Our app is among the weeks ago.“ first in our sector to offer Tel: Palmer & Harvey (01273) order capture. It will not only 222100.

New SWA president Asim Sarwar, managing director of Glasgow-based C&C/wholesaler United Wholesale (Scotland), has been elected president of the Scottish Wholesale Association. He will take up the post at the Association’s annual conference at Crieff later this

month, succeeding George Benson. Commenting on Sarwar’s appointment, Benson said: “Asim will be an articulate and effective figurehead for the SWA.” Tel: SWA 0131-556 8753. Asim Sarwar on his plans for United ... see pp.16–17

natural body care items, vitamins and supplements. The 60-user system encompasses BCP’s complete Accord software suite – from purchasing through sales order processing to financial, manufacturing and voice WMS. “It has really transformed our business, bringing us into the 21st century,” Ryan added. He said the key benefits included data accuracy, visibility, scheduling and efficiency. Tel: BCP 0161-355 3000. Tel: The Health Store (0115) 976 7200.

Dusseldorf-based Metro Group, whose Makro UK is now owned by Booker, saw global cash & carry sales for the January-March quarter drop by 2.8% to 7.1bn euros. Pre-tax losses declined from 31m euros to 25m euros. Every C&C region except for Asia/Africa posted a drop in income. That included Germany, the rest of Western Europe, as well as Eastern Europe. Sales from Metro’s delivered arm rose by 16%.

Race day charity Bestway has partnered with Dyslexia Action for its 19th Royal Ascot charity race day on 21 June. Each year the cash & carry operator selects a charity for the event, raising more than £1m for good causes since the scheme began 19 years ago. Last year the company

‘Healthy’ response “The most seamless implementation of an ERP system I’ve ever seen,” said Tim Ryan, managing director of Nottingham-based health food wholesaler The Health Store after the company’s installation of BCP’s Accord ERP (Enterprise Resource Planning) solution and Voice WMS (Warehouse Management Software). The supplier specialises in natural and organic products sold to the independent health food trade in the UK, Ireland, Europe and the Far East. The range includes organic seeds, nuts & pulses,

Metro C&C declines

donated £60,000 to The Royal Marsden Cancer Charity. One in 10 people are affected by dyslexia to varying degrees. Zameer Choudrey, group chief executive, said: “Dyslexia Action does vital work in ensuring those affected by dyslexia and other literacy difficulties receive the support they need.” Tel: Bestway Group 0208453 1234.

Landmark prosecco Santa Loretta is a new light, dry, sparkling white wine being marketed by Landmark Wholesale. The prosecco, from Northern Italy, has an abv of 11.5% and comes in 75cl bottles. At an rsp of £7.99, the profit on return is 20%. The group’s trading

controller for wines & spirits, John Fergusson-Cooper said: “Prosecco is currently the most popular Italian sparkling wine, having seen sales over the last few years increase to more than £25m.” Tel: Landmark Wholesale (01908) 255300.

Cash & Carry Management

• June 2013 • 7


All smiles at Irish wholesaler Northern Ireland wholesaler and retailer Henderson Group last year increased turnover by 6% to £620.4m and pre-tax profit by 15% to £15.6m. Based in Mallusk, it owns the SPAR, EUROSPAR, VIVO, VIVOXTRA and VIVO Essentials franchises in the province and supplies over 400 stores. The total payroll of almost 2,500 stretches across foodservice, wholesale, retail and property. The company continued to reinvest by spending

Paddy Doody (left) and group finance director Ron Whitten.

£7.7m; a further £11m is earmarked for the present year. Henderson Foodservice

Reduced wastage JJ Food Service has enhanced its IT systems with RELEX ‘forecasting and purchasing optimisation’.

Dual launch Bestway has launched BestIn Vanilla Gold Stimulation Drink with a 35p price mark. It coincides with the introduction of a Caribbean range (black grape, fruit punch and mango variants) in two-litre bottles and 330ml cans. Retailers buying 24 x 250ml cans of the vanilla drink at £3.49 will see a 50% profit on return during the introductory period. Tel: Bestway Group 0208453 1234.


The system is aimed at reducing wastage and improving product shelf life – particularly of fresh and chilled foods. Other benefits are improved stock levels and better management of promotions. Helsinki-based RELEX, which opened a UK office last year, claims to have helped clients reduce food spoilage by over 40%. JJ’s chief operations officer Mushtaque Ahmed (left) said: “It’s not the high turnover, big volume items that let us down most of the time; it’s the more peripheral lines so we can offer a onestop shop service. That’s what drove the decision to bring in the forecasting and optimisation that our existing ERP (enterprise resource planning) didn’t include.” Ahmed said another goal is to automate repetitive re-ordering tasks to allow managers to use their skills to better effect. Tel: JJ Food Service (01992) 701746. Tel: RELEX 020-3318 7246.

• Cash & Carry Management • June 2012

alone achieved a 22% sales increase, 10% of this relating to income from the Country Range brand. A £14 million central foodservice distribution warehouse and hq was opened in Newtownabbey in 2011. Further investment is planned at this site. Wholesale sales & marketing director Paddy Doody, commenting on the latest figures, said: “Experiencing growth of any sort in these stringent economic times is testament to the commitment of our retail partners, our workforce, continued investment, training and innovation within the Henderson Group.” Tel: Henderson Group (02890) 342733.

Bestway wealth Bestway Group chairman Sir Anwar Pervez OBE saw his personal fortune rise to £1.03bn last year, making him the richest Pakistani in the UK, according to the annual Sunday Times Rich List. He was also ranked the ninth richest Asian in the UK, a table headed by the Hinduja Brothers. In the year to 30 June, Bestway Group’s pre-tax profit rose by 45.5% to £173.2m and turnover grew to more than £2.5bn. Sir Anwar’s nephew, and group chief executive, Zameer Choudrey has joined the list of the UK’s 30 richest Asians at No.24, with a personal fortune in excess of £350m. Four other members of the Bestway board listed among the richest Asians in this country are: Younus Sheikh, wholesale managing director (£172m), Abdul Khalique Bhatti (£204m), and Adalat Khan Chaudhary and his son Arshad Mehmood Chaudhary (together, £204m). Tel: Bestway Group 0208453 1234.

Metro C&C closures? Unconfirmed reports in a leading German newspaper suggest that Metro Cash & Carry is to pull out of Bulgaria, where it has 14 branches, Egypt (two), Japan (nine) and Kazakhstan (eight). While the Bulgarian and Japanese operations are well established (1999 and 2002 respectively), the first Egyptian unit was opened just three years ago and that

in Kazakhstan in 2009. Withdrawal from these countries would follow soon after the sale of the German Metro Group’s Makro UK to Booker. Metro C&C is currently located in 29 territories, headed by Germany with 107 sites, France (93), Russia (68), China (64), Italy (49), Poland (41) and Spain (37). See Metro C&C annual results: p.7

From the UK’s No.1 cider brand1, STRONGBOW Dark Fruit is a refreshing 4% ABV flavoured cider, cut with blackcurrant and blackberry. STRONGBOW Dark Fruit fills a gap in the market for a more masculine, powerfully refreshing flavoured cider that is designed to be consumed in everyday, low energy occasions. Different from the other flavoured ciders in the market that are generally a lot sweeter in taste, NEW STRONGBOW Dark Fruit smashed the benchmark in concept and taste tests meaning your shoppers will want to try it and will buy it again2. The flavoured cider category is worth £112.6m and has rapidly grown 54% in the last 12 months1. STRONGBOW will bring scale and repeat purchase to continue to grow the flavoured category3 therefore increasing your sales. Launching in summer 2013 with a range of skus to suit your shopper, STRONGBOW Dark Fruit will be supported by a multimillion pound marketing investment plan to grow visibility and awareness nationwide.

Dont miss out – Stock new STRONGBOW Dark Fruit Flavoured cider just got bigger

Over 18s Only Source: 1- IRI Total Off Trade Excl Spec Value sales 52 w/e 19th Jan, 2- TNS Strongbow Dark Fruit Simulated Test Market, March 2013, 3- Kantar Aug 2012


Bidvest sees the Light BFS Group, parent company of Bidvest and 3663, has signed an agreement to be the new principal partner of Sunderland Association Football Club. The deal, which comes into effect next season, will see the Johannesburg-based multinational sponsoring the team’s shirts, appearing on perimeter advertising at the club’s Stadium of Light, and becoming involved in local community projects. BFS chief executive Brian Joffé said: “Sunderland is the perfect partner for us in the UK, where we deliver food and drink to over 50,000 businesses each week. “The support that Sunderland AFC offers to its local community, setting up the Foundation of Light and now supporting development

Sunderland AFC chief executive officer Margaret Byrne and BFS Group director Alex Fisher.

of initiatives further afield, mirrors the Bidvest spirit of investing time and funds back into the markets in which we operate.” Chief executive of the club, which champions

activities in Africa, is Margaret Byrne, who said: “BFS Group’s credentials in terms of community support are akin to our own.” Tel: Bidvest UK 020-493 4733.

Sandwiches a hit with kids SPAR has raised £100,000 for ChildLine through sandwich sales in its north of England stores, serviced by regional wholesaler, Preston-based James Hall & Co. The group first began making a 5p donation to the NSPCC/ChildLine on six varieties of sandwich and two wraps in October 2011. Chicken salad, the most popular sandwich, has raised over £18,000 alone. All the food is produced by James Hall at its Blackpool sandwich factory. Trading director Andrew Barnes said: “Sandwiches are a huge seller for us, with the average store selling up to 160 units a week. We are continuing with donations for the foreseeable future.” Tel: James Hall & Co (01772) 706666.


James Hall’s Preston hq, which opened two years ago.

System reinstalled Alfa Wholesale, the Glasgow-based operator which recently reopened after a fire forced the business’s closure a year ago, has reinstalled the wholesalespecific tilling solution from STL Technology Solutions. Director Atif Rashid told Cash & Carry Management: “Our customers are tight for time and money, and trust is everything. We needed a modern solution to help us speed up the checkout process, without loss of accuracy and transparency, and ensure we remain competitive. Our trust in STL was well placed.” Tel: Alfa Wholesale 0141248 6283. Tel: STL Technology Solutions (0844) 472 4727.

Two silvers SPAR UK won two silver medals for its own-brand spirits at this year’s International Spirits Challenge. The awards were for London dry gin and Imperial vodka – the No.1 vodka and gin sold in group stores. They are priced at £11.49 for 70cl. Tel: SPAR UK 020-8426 3700.

Spices & herbs from Fairway Fairway Foodservice, the £494m turnover group of 20 wholesalers, is expanding its own-brand portfolio with a range of spices and herbs. Chief executive officer Chris Binge said: “In offering great quality, high flavour ingredients, we provide chefs with a cost-effective way of adding flavour to a

• Cash & Carry Management • June 2013

dish, enhancing meals and negating the need to add high amounts of salt, or larger quantities of a less flavoursome ingredient. “All the spices and herbs come in reusable poly pots which can be refilled.” The range includes chilli powder, garlic powder, ground black pepper,

paprika, parsley and curry Mild Madras. Tel: Fairway Foodservice (01422) 319100.

fwd update

Growth potential The Federation of Wholesale Distributors’ annual conference, which takes place at the Belfry, West Midlands, on 11 July, is all about the opportunity our sector presents to suppliers.

by James Bielby

PRICE-MARKED PACKS The July 2013 issue of Cash & Carry Management will include a feature on Price-marked Packs

Entitled ‘Wholesale: The Route to One Million Customers‘, the event will consider the ability of our members to open up business sectors that brand owners can’t reach by any other means and highlight the value we add in helping the small businesses we supply. We will be challenging the assumption that the independent retail sector is complicated and hard to control by demonstrating how excellent partnerships with a wholesaler are lifting standards among small and medium enterprises and helping ambitious business owners provide a bespoke, valued service for their customers and communities. We will also be exploring the possibilities outside convenience. That’s the wholesale heartland, and no-one knows it better than the FWD membership, but the scope to expand beyond those 40,000 stores is the most exciting opportunity available to brand owners in the year ahead. Our members between them service more than one million small businesses, in retail, foodservice, on-trade, and hospitality. There is

massive potential for suppliers to find new routes to the consumer – to put their products on shelves and menus in every shopping parade, leisure centre, school, sandwich bar and pub. Also at our conference, wholesalers will reveal how they are driving value through the supply chain and using technology to streamline distribution and gain new business. I’m particularly looking forward to the presentations from Nikkita Mulchandani of Imperial Cash & Carry, Simon Hannah of Filshill and Tim Adams of 3663 – three wholesalers who are doing exciting work in different sectors. Charles Wilson will explain how Booker’s continual growth is achieved, and Spar UK’s Debbie Robinson will outline the support that wholesalers offer to their retail partners. We will also hear from retail and foodservice customers about what they think of the service they receive. Tel: Federation of Wholesale Distributors (01323) 724952.

To advertise in this issue, contact David Ford on (01342) 712100 FEDERATION OF WHOLESALE DISTRIBUTORS

Cash & Carry Management

• June 2013 • 11


Booker has now revamped 145 of its 172 cash & carries under the Extra plan and further updates will be carried out this year.

A strategy for £2bn growth Booker Group chief executive Charles Wilson talks to John Wood about his expansion plans. With a deal as big as Booker taking over Makro, it is inevitable that some misinformation creeps into the coverage, so Booker chief executive Charles Wilson is keen to dispel any myths from the start, saying: “A number of people have said we are going to merge the two but this is not true.” One of the reasons he intends to maintain the Makro


• Cash & Carry Management • June 2013

brand is because the two businesses are so complementary. “A total of 96% of Booker’s income comes from trade – retailers and caterers – while Makro serves trade and small businesses, and only 35% of its income comes from retailers and caterers. Also only 6% of Makro customers shop at Booker and 10% of Booker customers shop at Makro. This shows they are different businesses.” One of the factors that may have led to confused reports is that Booker intends to move a handful of its branches into Makro depots. Exact numbers have not been finalised, but it is liable to be around half of the 30 Makro depots Booker acquired, and the final tally will depend on the results of a trial in Sheffield. Wilson explains: “The lease has expired at the Booker in Sheffield so we will be moving it into the Makro space in July. There will be a separate door for Booker, which will be orange and white, and all the colleagues from Booker will remain unchanged. We will have a separate door for Makro, which will be yellow and blue, and we will also have a delivered area, which we are building.” About 35% of the depot will house the Booker premises, and will be restricted to trade customers, with 45% for the Makro depot and 20% devoted to Booker’s delivered businesses. This will deliver products from the two cash & carries and for Premier customers, but will also handle business for its other delivered operations: Chef Direct, Ritter-Courivaud and Classic Drinks. Wilson expects that eventually Booker and Makro depots will co-habit in about 15 locations, but in all the Makro depots there will be big delivered areas. He adds: “Booker’s delivered sales have grown from £170m in 2007 to £1.2bn this year, and using this spare space in Makro is an important part of the plan. So we keep Booker, we keep Makro and in some locations we bring them together physically, but it doesn’t affect any of the colleagues, and we grow the delivered capacity.” While some companies have rushed into takeovers and

interview suffered the consequences, Booker is clearly willing to take and suggest the deal is not such good news for them, but the time to get it right. It is putting a three-year time frame on Wilson insists that is not the case. He says: “Back in 2008 the entire process. Wilson insists he cannot be precise about Booker was doing £3bn of sales; in 2012 we were doing £4bn when the Sheffield blueprint will be ready to be rolled out of sales. Of that, £940m was like-for-like growth. There is as it depends on the feedback from customers, which is nobody in wholesale who has been growing at that sort of expected in the autumn. rate over the last few years. With Makro we get about £700m, Once it is ready to go, he says the company is looking forwhich takes us to £4.7bn, and then with the combined beneward to bringing Booker into new locations, such as Belfast fits of Booker and Makro we think the group will grow to – Booker is not currently in Northern Ireland – and he sees about £6bn by 2017. So suppliers will see a lot of growth. big opportunities where it is under-represented, such as in “Another benefit for the supplier is we are very low risk. Liverpool and parts of London. There will also be sites where We have the best balance sheet in the wholesale sector, and leases are maturing and it makes Makro was a business that was in sense to bring the two together. trouble, so we are making sure While the company expects to that business flourishes. Also there extract synergies from the deal is no-one who is more efficient at worth about £26m this year, one moving cases around the country area of expenditure it is not cutting to the diverse set of customers back on is staff levels. It has that we serve, and we give the pledged there will be no redunsuppliers very good information, Charles Wilson, chief executive, dancies at Makro’s Manchester HQ so they will see a lot of benefits and all ’colleagues’ at the depots Booker Group from growing their business with will be retained. Wilson comthe Booker Group.” ments: “Booker’s got really good people, Makro’s got really With Makro’s former parent company Metro now holding good people, and they will continue to grow our business in a stake in the business as a result of the Makro deal, Wilson Sheffield, so we will need all of them.” also sees potential benefits from them sharing expertise. One person who has cut back his hours, however, is forHe says: “Metro is a huge cash & carry business operatmer Booker director Bryan Drew. He was brought in as maning around the planet. We will be going through some of the aging director of Makro while the Competition Commission frozen ranges they have, some of the fresh and chill, so that scrutinised the deal, and Booker was not allowed to influence will be a great addition.” He says there are also opportunities Makro. As soon as the deal was given the go-ahead, howfor co-ordination on sourcing by the two companies. ever, Makro operations director Steve Blan moved into the He dismisses the possibility of a conflict in India, where hot seat, reporting to Wilson, and Drew is currently doing both companies have operations, saying: “They are in India two days a week consultancy to help with the handover. but, like in the UK, they are doing far more with small busiSome suppliers may point to the savings of £7m-£12m nesses, while we are working more with Kirana stores [small that Booker expects to make on ‘cost of goods improvements’ local shops], so the two businesses are quite different.”

‘With the combined benefits of Booker and Makro we think the group will grow to about £6bn of sales by 2017’

Booker’s delivered businesses will all benefit from facilities at Makro depots, with Classic expanding to national coverage.

Cash & Carry Management

• June 2013 • 13

interview All the interest in the Makro deal has tended to overshadow the performance of the rest of the Booker Group, which last month announced its sixth straight year of growth, with turnover nudging £4bn and pre-tax profit just above the £100m mark. All of the company’s delivered businesses reported strong figures and Wilson says using space at the Makro depots will boost them substantially. The two businesses Booker bought in 2010 – speciality food supplier RitterCourivaud and Classic Drinks – are both flourishing. Classic has increased turnover by about £20m since it was acquired, to about £50m, and a Ritter fresh concept has been launched in depot. “Now, with the extra capacity of Makro, we are looking to take Classic to full national coverage,” he says. The newest addition, foodservice arm Chef Direct, was launched last year from a depot in Didcot and has become a multi-million pound business. “We have done well in the catering market and the next logical step was to move into foodservice with some of the multiple accounts,” he says. “We are expecting it to grow by 2017 to be a £300m business, with deliveries from several Makro depots.” The internet also played a part in delivered, with sales up 10.9% from £635m in 2012 to £704m this year, and Wilson points out that the internet customers are nearly all individual traders as Booker deals direct with its larger corporate customers using their EDI systems. The cash & carry operation remains the bedrock of the business, and here the revamping of depots with the Extra format has reached 145 of its 172 depots. Wilson says there will be some new Extra conversions this year in depots that

Booker has been working to improve its fresh produce.

are not affected by Makro locations. He adds: “We will be improving fresh and chill, and we will be retro-fitting those improvements into the earlier Extra stores, so there will be quite a lot happening on that front too.” Even after the Makro deal, Booker finished the year with £77m in cash, but further acquisitions seem unlikely. Wilson says: “Our number one, two and three job is to get Booker and Makro to offer better choice, price and service…I am not expecting we will be looking at much other stuff because that will keep us busy for a while.” And after seven and a half years as chief executive, not counting a previous stint in the job, this new challenge is maintaining Wilson’s interest. When a top job at a major retailer comes up, press speculation usually links him with the position but he says: “I’m not going anywhere.”

Where Booker and Makro depots co-habit, there will be separate entrances and a trade-only policy for the Booker premises.


• Cash & Carry Management • June 2013


Enjoying the challenge This month’s article features David Sutherland, managing director of Sutherland Brothers. bike or on a training run. (Sutherland is a very accomplished triathlete. He has represented Great Britain 10 times in six World Championships and four European Championships – all consecutive. He also completed Ironman Austria in 2006.) Phones are a necessary evil of modern life but I’m not too obsessive about checking emails. What most frustrates you in business (and in life generally)? Lateness, and people who waffle on without getting to the point. If you were able to retire tomorrow, would you, and if so, how would you spend your time? I have no plans to retire. I enjoy my work too much! Every morning, when I get out of bed, I know I will have new challenges to meet and new opportunities to grasp. If that stops, then I’ll pack it in. What advice would you give someone starting his/her first job? Get the basics right. Be on time. Be smart. Be polite and respect others. Oh, and work hard! What type of business would you have gone into if it wasn’t C&C/wholesale? I’d be a marine biologist and travel the world studying the sea.

David Sutherland is a successful triathlete. He has represented GB 10 times and has completed an Ironman (2.4-mile swim, 112-mile bike and a marathon).

What has been the major milestone or turning point of your career? No real turning point, just steady, consistent progress. Who has been the biggest inspiration to you? I used to be a big fan of Lance Armstrong until news of the doping scandal broke. More recently, all the gold medallists from the London Olympics/Paralympics inspired me. In business I always admired Margaret Thatcher – she turned the country around when it was in a terrible mess. How do you maintain a work/life balance and how have developments in technology affected this? I tend to be strict with my time. I try to avoid long work days, and leave time for sport and other leisure. I spend around 40 hours per week at my desk but work is never far from my thoughts. I find myself thinking about work while out on my

If you had a million pounds to invest in business, how would you spend the money? Renewables would be a good bet.

U-turn after glandular fever David Sutherland began his career 40 years ago as a message boy for the family firm, Sutherland Brothers, during school holidays and at busy times. In his first year studying geology at university in Edinburgh, he got glandular fever and returned to Wick to recuperate. His father made a proposal for him to join the business, so he took a year out to give it a go. Recognising that the prospects were good, he stayed and did the whole gamut of jobs, covering the warehouse, office and transport. He then worked as a rep for three years before being promoted to his current role of managing director in 1985 at the age of 29. Sutherland Brothers delivers to 900 customers in the Highlands and Western Isles, an area of 400 square miles.

Cash & Carry Management

• June 2013 • 15

in focus

Investing and innovating Asim Sarwar, who will become president of the Scottish Wholesale Association later this month, reveals ambitious plans for his own business, United Wholesale (Scotland). “If you stand still, you actually go backwards because everyone else moves on,” insists Asim Sarwar, managing director of Glasgow-based United Wholesale (Scotland) and incoming president of the Scottish Wholesale Association. “You have to look at ways to innovate and to lead. You must be prepared to go the extra mile. That is no different for the SWA as for any individual business.” At 31 years old, Sarwar will be the youngest ever president when he is inaugurated at the Association’s conference later this month, but his youthfulness belies his experience of the wholesale industry. He was just seven years old when he started helping his father in the company’s Maxwell Road branch, cleaning the toilets and scrubbing the floor. A decade later, having worked in every section of the cash & carry, he was appointed depot manager. He subsequently took charge at West Street, and turned it around from making a £250,000 loss to £100,000 profit within 12 months. Developments in the intervening years have included selling West Street for a substantial sum and investing in the 170,000 sq ft former Linpak depot at Queenslie, first launching it as a distribution centre and six months later adding a cash & carry facility with a comprehensive product range, including groceries, impulse lines, soft drinks, toiletries and licensed drinks. Last year United passed the £200 million turnover milestone and Sarwar, who is renowned for his verve and determination, is confident of additional growth this year.

Expansion work under way at the 18,000 sq ft Maxwell Road depot will be completed by April 2014, allowing the company to sell beers, wines and spirits from the site. Phase one, which entailed extending the car park and tobacco room and building new offices, was finished in the spring. Phase two started in May and will see the warehouse more than double in size to 40,000 sq ft. “This will enable us to offer a full catering and on-trade cash & carry/delivered service,” says Sarwar. “We already serve some licensees and caterers from our Queenslie branch, but Maxwell Road is just a few minutes from the city centre so really couldn’t be better placed to capitalise on this type of business. We are investing £2 million in our Maxwell

United is investing £2 million in its Maxwell Road operation, enabling it to offer a full catering and on-trade service.


• Cash & Carry Management • June 2013

in focus Road operation but we should achieve payback within two to three years.” United is also concentrating on developing its DayToday customer base. Of the 255 retailers signed up to the symbol group, around half sport the standard fascia and half the Express banner. A further 10 have the black Day-Today fascia, designating them as elite members. Although most Day-Today operators are located in the central belt, a growing number can be found in Edinburgh, Fife and as far south as Dumfries. A new ‘elite’ store will shortly open in Wallyford, East Lothian. “It will be the best convenience store in Scotland,” vows Sarwar. “I designed it myself and it’s a belter.” United, which has a total of 175 employees, recently recruited four merchandisers to help its Day-Today customers realise their full potential. Although it will continue to use a third party to refit the shops new to the group, its in-house team will aim to create a bit of theatre and improve the layout within existing stores.

‘We may be experiencing difficult economic conditions but there are plenty of opportunities to expand. You have to innovate and lead’ Asim Sarwar, managing director, United Wholesale (Scotland)

Already, many of United’s promotions focus on the communities that the retailers serve. For instance, its ‘Great Local Online Deals for Local People’ campaign, which was named the 2013 Scottish Wholesale Achievers Best Marketing Initiative, took the Groupon concept one step further, increasing sales and footfall in the shops, as well as adding value for consumers. The wholesaler’s website offers online ordering and allows retailers to print posters, shelf talkers and tickets for over 7,000 lines. The website also has regular updates from the Scottish Grocers’ Federation and planograms for all types of stores. Sarwar applauds the Scottish Wholesale Association for its work in helping wholesalers educate retailers about their legal responsibilities, citing the booklets and apps produced by the SWA on the tobacco display laws and the Alcohol Act. “We also take advantage of the training, and one of our employees is participating in the mentoring programme,” he says. “United has been represented on the Association’s council for several years by impulse grocery director Ali Afsar, who is also a judge for the Achievers award Project Scotland. “I am very excited about becoming president,” he comments. “I need to get my feet under the table and see where we are as an Association before I set my objectives, but I firmly believe the SWA is a real asset to wholesalers in Scotland.” Back in his own business, Sarwar reveals that a newlylaunched export division, headed by former grocery buyer Bobby Gill, is already showing great promise, with grocery and impulse lines being shipped to customers in Nigeria and the Middle East. “We may be experiencing difficult economic conditions but there are still plenty of opportunities to expand,” he concludes. “I grew up in this business and love the cut and thrust as much as ever.”

Promotional compliance among United’s symbol members presently stands at 85% and it is looking to increase that figure by investing £1 million in mobile point-of-sale technology. This is designed to give the retailers a better understanding of margins and stock control. It also means that proThis article appears in the Scottish Wholesale Association’s yearbook. motions can be uploaded directly to their tills. MPoS has the added benefit of providing data that United can use to add weight to its dealings with both retailers and suppliers. Some 30 customers have already implemented the MPoS package, and United is aiming for another 40 by the end of the year. As an incentive, it is covering 50% of the cost and allowing the retailer to pay the balance over three years. Further support for its customers will come with the imminent launch of United’s own charity ‘It’s a Good Day-Today’. Suppliers involved will donate 1p per bottle or pack of their product sold, and the retailers will be able to choose how it is spent in their local area, subject to the charity’s approval. “The strapline is ‘Supporting Scottish Communities’ and every single penny raised will be spent on good causes in Scotland,” says United has 265 Day-Today members, including 10 with the black elite fascia. Sarwar.

Cash & Carry Management

• June 2013 • 17

scottish independence

Implications yet to be defined A debate on Scottish independence will kick off the Scottish Wholesale Association’s conference later this month. Cash & Carry Management asked some of the leading wholesalers in Scotland how they intend to vote in the referendum on 18 September 2014. Should Scotland be an independent country? This is what people north of the border will be asked in the referendum on Scottish independence next year. Simon Hannah, managing director of JW Filshill, of Glasgow, has already decided that he will vote against independence. “I am always one for detail and how things will actually work – whether that be in a business environment or any other environment. My fear is that this debate will be all about people’s emotions as opposed to the practical arguments on both sides of the discussion. “From a purely business perspective, I am yet to be convinced that all the variables have been debated and answers have been provided to those variables. The vast majority of our suppliers, for Simon Hannah: against instance, are based outside of Scotland. If Scotland is to be an independent country, how will our suppliers and their brands be treated? “What will future taxation look like, for example? If there is an imbalance between taxation systems, this will create a cross-border culture similar to what happens in Ireland. There is nothing currently that suggests it will be a more favourable trading environment for business. The Scottish Executive is already looking to have specific taxation powers being devolved directly to Scotland – Airport Passenger Duty is a good example of this. If it is to be successful in this quest, will this money be ring-fenced to provide greater investment into making Scotland more accessible or just a method of putting some funds into ‘the pot’? “What about HMRC resource, current shared criminal intelligence? Unfortunately, criminals are happy to apply their trade in areas and countries where there is a disjointed approach, and I am fearful that this would further displace legitimate trade to the hands of criminals. This is already a big problem. “In recent years there have been a number of plans that have come out of Holyrood that have created, or will create, an imbalance between what happens in Scotland and how it is dealt with in England. These include the Licensing Act Scotland 2010, tobacco display, tobacco registration and minimum unit pricing of alcohol (45p vs 50p per unit). “My issue here is that there are already signs of Scotland doing things that make life more difficult for wholesalers – and particularly retailers – with the powers that Scotland


• Cash & Carry Management • June 2013

currently has. It is my opinion that this would only increase. “I have not seen anything that convinces me that independence would be a good thing for our business. “The difficulty is that the people who are in favour of independence seem to be screaming from the rooftops about it, while those not in favour appear to be saying nothing. People in Scotland are looking for leadership from people they trust (not necessarily politicians or banks!) to help them reach their own decisions. We all have a responsibility to try and show leadership to assist the people who trust us, to help them make an informed decision. “The last thing that Scotland needs to be doing is figuring out how this might work after the vote – it is essential we know the answers to the detail before we make a decision that will be with us forever. I look forward to watching this all unfold.” Julie Dunn, operations director of Dunns Food & Drinks, based at Blantyre in South Lanarkshire, also intends to vote against Scottish independence, “mostly because I very much like being part of the United Kingdom and I like London as our capital. “However, practically, I am struggling with questions on the infrastructure. I cannot work out the currency argument which is reasonable given that members of the Scotland ‘yes’ committee are at odds with each other over Julie Dunn: against it as well. Pension funds, existing pensions, taxation, and national insurance – I don’t feel that questions about any of these things have been satisfactorily answered.” George Thomson, managing director of Forth Wines, which operates from Milnathort in Kinross-shire, also opposes independence. “I believe that independence will fundamentally weaken Scotland as a nation. Scotland is strong as part of the union. “The United Kingdom is, in fact, the first ‘common market’ to be a success and benefits from a common currency which still has significance in international markets. George Thomson: against “A country that is 10% of

scottish independence the scale of the United Kingdom will have minimal impact on the international stage, whereas we benefit in terms of UK ‘power’ in a political sense. “We have a strong voice within the UK parliament and I believe we benefit from devolution in that we have our own parliament considering pertinent local matters. Within the EU we would be an insignificant bit player amongst a group of countries dominated primarily by Germany, France and the UK. Why would we choose to marginalise ourselves? “The UK has the presidency in 2013 of the G8 group of countries. An independent Scotland would be lucky to be in the G108. “Scotland as a nation has given much to the UK but we should not fool ourselves into believing that this was all a one-way street – the benefits of union are manyfold.” David Sutherland, managing director of Wick-based Sutherland Brothers, is undecided as to how he will vote in the referendum. “I am sitting on the fence until I hear what the actual financial implications are. A Glasgow-centric government could well be worse than London, with more extreme David Sutherland: undecided socialist views.

“How will the national debt be split up? What resources will Scotland have? How business-friendly would an independent Scotland be? Right now, all I hear is propaganda from both sides, and I am especially wary of the slant of media affiliations.” Also as yet undecided is Iain Johnston, partner and operations director of Shetland and Orkney wholesaler JWG. “It has come to light over the last few months that the SNP has failed to address, knowingly or otherwise, several issues should the referendum on independence be successful. These include pensions, defence, taxation Iain Johnston: undecided (business and personal), North Sea oil ownership, the National Health Service, EEC membership, and the benefits thereof. “In Shetland we also feel that controlling our own affairs should be done without interference from Edinburgh and more within our own council chamber. To quote our MSP recently, ‘It’s no your oil, it’s wirs!’” The Scottish Wholesale Association’s ‘Big Debate’ on Scottish independence takes place on 14 June at Crieff Hydro.

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For further information: tel: 01342 712100

Cash & Carry Management

• June 2013 • 19

ethical sourcing & sustainability

‘This is what we believe in’ Being transparent about food sources and their association with certified organisations has never been more important for manufacturers. Premium biscuit manufacturer Bahlsen has furthered its stance on sustainability by taking steps to ensure complete traceability of its raw materials in a bid to improve welfare in developing countries. It already uses 100% free range eggs and RSPO (Roundtable on Sustainable Palm Oil) certified sourced palm oil, while 95% of the wheat it uses comes from controlled contract farming. The company is now working to ensure all cocoa used across its portfolio comes from UTZ-Certified sources, thereby guaranteeing that it is ethically obtained. Marketing manager Jon Dance says: “Sustainability is not just about being environmentally aware; it is about social awareness too. Bahlsen believes that great quality means great responsibility – a commitment established from the company’s conception. “Unfortunately, the key raw materials required for the manufacture of our products, such as palm oil or cocoa, are cultivated in developing regions in the world, where human rights are not always fully respected, abusive child labour remains a problem and living conditions are poor. “In keeping with our stance on sustainability, we want our raw materials to be obtained from ethical sources, and for us to commit to improving conditions in those regions.” For years, company representatives have been visiting cultivation areas in West Africa to establish relations with co-operatives and get to know the situation of the farmers and their issues. As a result, the business developed a relationship with a co-operative in the Ivory Coast in 2011, which sees members gain financial support from Bahlsen. Dance comments: “This isn’t a box-ticking exercise to comply with a sustainability programme; the commitment filters down from the very top. Cocoa production is a very fragile industry and our owner, Werner M Bahlsen himself, travelled to the Ivory Coast six months ago to see how the company’s actions were progressing in helping improve conditions for the farmers and their workforces and understand the impact they’ve had on the region as a whole. “A key part of that commitment is that we have pledged to purchase up to 1,000 tonnes of cocoa from sources in the Ivory Coast.


• Cash & Carry Management • June 2013

“UTZ-Certified is a foundation for the worldwide implementation of a baseline standard for responsible coffee, cocoa, tea and rooibos growing and sourcing. We made the first move towards switching to 100% UTZ-Certified cocoa last year, with Choco Leibniz being one of the first products in the world to make the switch. “There has been an increase in the quantity and quality of cocoa and improved conditions for those who produce it,” Dance adds. The Choco Leibniz range is available in five variants: milk chocolate, dark chocolate, orange milk chocolate, caramel and double chocolate. Over time, it is intended that all the cocoa used in Bahlsen biscuits will be UTZ-Certified.

Coffee commitment Kenco, part of Mondelez International, was one of the first mainstream coffee brands – in 2005 – to source 100% of its beans from Rainforest Alliance Certified farms, helping operators and customers to choose an ethically sourced hot beverage without any compromise on quality. Refill packs have been central in helping customers to reduce their impact on the environment by cutting back on packaging. Kenco Rich and Smooth eco refill packs now have a total value of £9.1m in the UK, of which more than £1m is in impulse. The 150g packs have 97% less packaging weight than Kenco jars. And the rsp of the refills is less per gram of coffee than that of either 100g or 200g jars. Trade communications manager Susan Nash says: “We continue to work towards reducing our packaging and wastage. We have also launched the Kenco Rewards Club, which allows consumers to collect for great rewards, all with the environment in mind, such as an Eco kettle, Jamie Oliver recycled glasses, Kenco ‘terracycle’ bag and Jamie Oliver herb pots.” Nash says that Cadbury Dairy Milk was the first major confectionery brand to achieve Fairtrade certification and has shown this link on its packs since 2009. Additionally, the entire Cadbury Hot Chocolate portfolio is Fairtrade certified. Data AC Nielsen 17/11/12.

Public support Lynn Little, Nescafé ingredients lead at Nestlé Professional, cites recent research (Carbon Trust) which suggests that 55% of consumers would remain loyal to a business they believed operated under an environmental policy. As such, she tells cash & carry/wholesalers: “Make sure you are aware of the policies and practices of your suppliers and communicate these to your customers so they can tell their own sustainability story.”

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ethical sourcing & sustainability She adds: “Coffee companies the world over are actively playing their part to develop a socially responsible global coffee market through the likes of sustainable farming initiatives and education programmes for farmers. “At Nestlé, we work with agricultural experts from the Rainforest Alliance, Sustainable Agriculture Network and 4C (Common Code for Coffee Community) as part of the Nescafé Plan, under which we have pledged to invest approximately £213m in coffee projects worldwide and distribute 220 million coffee trees by 2020. “Operators who communicate these stories back to their customers stand to gain.” A spokesman for Nestlé Waters claims that its Buxton and Nestlé Pure Life brands have seen significant advancements in reducing their environmental impact following the investment of £35m to build a new factory in Buxton, Derbyshire.

More net profit Carisma UK, which supplies line-caught MSC (Marine Stewardship Council) frozen-at-sea cod and haddock, is offering caterers the chance to win 20kg of cod fillets in order to raise awareness of sustainable fishing and dispel what it describes as ‘some of the myths surrounding this often misunderstood subject’. Managing director John Hancock says: “Most people have grasped the concept that frozen peas offer premium

quality and are often ‘fresher than fresh’ when they reach the kitchen. “The same principles apply to fish frozen at sea. Some of the ‘fresh’ fish caught by a fishing vessel that is out on a seven-day trip is essentially seven days old by the time it gets to market. “Then it has to be processed and delivered to its final destination. All of this can result in inconsistencies in supply and quality.” Hancock points out, however, that frozen-at-sea fish is caught and frozen within two to three hours of it coming on board. “This locks in the nutrients and upholds the best qualities of the flesh. It’s all a question of education and sharing our knowledge with chefs and caterers in order that they can make informed buying decisions.” He adds that all the fish Carisma supplies is caught on a long line, which is environmentally better for the sea beds and for the fish.

For further information: Bahlsen (01753) 889822 Carisma UK (01472) 240240 Mondelez International (08702) 400861 Nestlé Professional (0800) 745 845 Nestlé Waters (01923) 897700

For the 10th year running, Cash & Carry Management is recognising the efforts of the best suppliers to the wholesale trade by publishing a league table of the Top 25 Suppliers in England, Wales and Ireland. To start the process, wholesalers are asked to nominate their Top 25 Suppliers by emailing a list to or by completing the form opposite and posting it to Winlove Publications.

Last year’s winners are pictured with Martin Lovell (left), publishing director of Cash & Carry Management, at Cliveden House in Berkshire, the impressive setting for the 2012 Top 25 Suppliers awards lunch.


• Cash & Carry Management • June 2013


Please email a list of your Top 25 Suppliers – in no particular order – to or post this page to: Winlove Publications Ltd FREEPOST NAT 15060 PO Box 366 East Grinstead RH19 4BR

your nominations Top 25 Suppliers

Simply list your Top 25 Suppliers and post the entire page to the address above (no stamp needed) or email a list to

Guidelines Please consider the following when assessing your Top 25 Suppliers:

• • •

Operations: deliveries, supplier contact, admin support, complaint handling Support: marketing and promotional activity, advice on merchandising and ranging, customer development Wholesale focus: right products, competitive pricing, appropriate packaging, understanding of wholesale marketplace

NB The judging guidelines have been drawn up in such a way that wholesalers with central distribution can still participate. Simply assess your own relationship with each supplier. Any queries, please contact managing editor Kirsti Sharratt on (01342) 712100

Name ............................................................................ Company ...................................................................... Address ........................................................................ ...................................................................................... ...................................................................................... Date ..............................................................................

customer cares

sponsored by

Cost conscious This month, John Wood is in Leicester to talk to traders about the wholesalers they use. Ameer Latif Apna Supermarket Wholesalers used: I’ve been going to the cash & carry for about 15 years and I use Bestway, Gilsons and Booker. They are the only ones that are left that have a decent variety and are nearby. I can’t afford to travel outside Leicester. I go every couple of days because I don’t have a big stockroom. I don’t have a main cash & carry because each of them has some cheaper lines than the others. Also, none of them stocks everything I need. For instance, Gilsons stocks some lines because it knows Bestway doesn’t, and even though it is a small independent it competes with them on price. Booker has mostly English products – it doesn’t have so many ethnic lines.

Plus points: We’ve only been going a few months and it’s taken a while to find the right suppliers. First Choice and Holdsworth both provide really good products at the right price. They supply different products and if one of them could do them all I would prefer just to use one. Suggestions for improvement: They never seem to be able to get the order right or the invoice right. There are missing items and they substitute lines for ones that are out of stock without checking with me first. Also their telesales ring me every other day, usually at the most inconvenient time, even though I’ve told them I would prefer to ring them with my order when it’s convenient for me. They don’t specify a delivery time and they used to turn up at the busiest point just as we were serving lunch. However, they seem to have got the message and are coming a bit earlier now.

Plus points: I like to run two-week promotions and each of them has different lines on offer. Nowadays you have to shop around for the best price. The staff are quite helpful but you don’t really need them except when they move things around like they did in Bestway a couple of months ago and you can’t find things, or when the shelves are empty. Suggestions for improvement: Their promotions aren’t brilliant because we can’t compete with the big supermarkets. Sometimes the multiples are selling at less than we can buy at. They will charge £1 for an item and we can’t get it for less than £1.10 or £1.20. I don’t have the time, but I know a lot of shopkeepers from around here go to Morrisons and ‘buy one get one free’ and then sell it in their shops. Retailers generally are not happy with wholesalers. They need to bring their prices down so we can compete, otherwise there is not a future for independents, especially with all the overheads we have. Also Bestway should try harder to get feedback from its customers to find out what they need from it.

Steph Berrington Cuppas of Rothley (coffee shop) Wholesalers used: I have two main delivered suppliers that I get my food from: First Choice Wholesale Foods and Holdsworth. I also use Makro for items like napkins and I pop into Tesco on the way to work to pick up milk. I do a run to Aldi about once a week to get products like vegetables and salads because I like to see what I am buying and choose them myself.


• Cash & Carry Management • June 2013

Bharat Acharya finds the staff at Booker very helpful.

Bharat Acharya Mayur Convenience Store, Blaby Wholesalers used: Booker is the main cash & carry that I use but I also shop at Gilsons and Bestway. Plus points: I’ve been going to the cash & carry for 39 years. I visit every day and I like Booker because the staff are very friendly and helpful. I know the people there and when I wasn’t very well they helped to load up the car. Booker is a little bit expensive but so what? I have known them for years. I like the promotions on Happy Shopper and lots of other products. Booker has everything I want except for certain cigarettes and wine. I use Gilsons and Bestway because Booker does not do half cartons of cigarettes. I also go to Bestway for wine that some regular customers like that I can’t get anywhere else.

• INTRODUCING A NEW SILKIER FEEL AND SHAPE • Permanent new product launch of Honeycomb Crisp 40g • DRIVING SALES THROUGH REINVIGORATING THE BLOCK CATEGORY AND BRINGING IN NEW CONSUMERS Audrey Hepburn™ © 2013 Sean Hepburn Ferrer and Luca Dotti. All rights reserved. ®Galaxy, Smooth Milk and Honeycomb Crisp are registered trademarks. ®Mars 2013

food & beverages on the move

Fast developing market Meeting the needs of on-the-go consumers delivers sales. Morning fuel is an essential part of today’s demanding lifestyle yet according to public research, 46% of people skip breakfast (Kantar World Panel usage 2011). Busy consumers are turning to Mondelez International’s Belvita Breakfast, the UK’s number one breakfast biscuit (Nielsen MAT to w/e 26 January 2013), which releases carbohydrates over four hours. For a caffeine boost, Kenco Millicano combines a blend of premium freeze-dried coffee with finely milled roast and ground coffee beans, delivering a taste that is closer to roast and ground with the convenience of instant. Kenco Millicano is also available as part of the Kenco 2Go range – the ideal solution for serving hot drinks on the go. Now available in a new 500g tin, it is aimed at busy operators who want to serve a quality coffee without having to invest in equipment or staff training. The core seven chocolate singles from Cadbury – Twirl, Wispa, Double Decker, Crunchie, Cadbury Dairy Milk, Boost and Cadbury Dairy Milk Caramel – all meet the consumer demand for that pick-me-up to combat the ‘afternoon dip’.

is growing at 49.6% (Nielsen MAT to 30 March 2013). Monster Energy is supporting its wholesale and retail customers with a repeat of the ‘Win a Year’s Supply’ promotion. The brand is also offering consumers the chance to win exclusive Monster Energy team gear via an on-pack linkedpurchase promotion. And more than 100 retailers will again have the opportunity to win a 12month supply of Monster Energy drink across a large number of wholesale depots nationwide. To enter, retailers must purchase six cases of Monster during the promotional period. Flavoured waters are one of the fastest growing areas in impulse, worth £50.2m and increasing by 3.7% year on year. CCE’s Glacéau Vitaminwater is growing at 34.3% (10.8% in impulse) as consumers buy functional drinks to fit in with their active lifestyles. All Glacéau Vitaminwater variants contain a new stevia-based Strong core range. and naturally-sourced sweetener but are still made with spring water, all-natural flavours and no artificial colours. The reformulation trims calories by 30 per bottle and cuts sugar by 30%. All eight variants also feature a revised blend of vitamins and minerals.

New and improved

The new 500g tin.

Energy boost Functional drinks remain a booming business as on-themove consumers look for drinks with added benefits. CocaCola Enterprises’ energy portfolio (Relentless and Monster) is worth £68.7m in impulse. Relentless Energy Drink has brought a revamped range to the market with the launch of a 250ml can format of Relentless Origin at a competitive rsp of 79p. CCE has also introduced Relentless Lemon Ice – a sparkling energy lemonade drink. The company will also be incorporating a new £1 price-mark on 500ml cans of Relentless Origin, Apple & Kiwi, Lemon Ice and Sugar Free in the wholesale sector at certain promotional periods throughout the year. CCE reports that, since being launched in the UK four years ago, Monster Energy has become a £83m brand, and


• Cash & Carry Management • June 2013

The overall soft drinks category continues to perform well in the impulse channel, growing at 1.6%. CCE is bringing Vanilla Coke back to the UK market in both immediate consumption formats (330ml can and 500ml PET bottle) and future consumption formats (6/8 x 330ml cans and 1.5-litre PET bottle). It will also come in a range of PMPs designed specifically for the convenience channel. Sprite has been reformulated with the introduction of stevia across the regular Sprite range. The improved taste and reduction in calories are being communicated on pack with ‘Now most refreshing taste ever’ and ‘30% less sugar’ messages. Sprite Zero remains available for consumers that prefer a zero-sugar, no-calorie alternative. Nick Canney, vice president, sales & marketing, said: “As the number one lemon and lime flavoured soft drink (Nielsen total coverage MAT to w/e 20 October 2012), Sprite is in an ideal position to lead the way with its updated formulation that provides the ultimate refreshment.” Fanta is refreshing its range with the addition of two new flavours available across all channels, as well as updating all packs to create a rainbow colour effect in store, providing better shelf stand-out across the whole portfolio.

R e f re s h y ou r s a le s w e y n e l h d t i e W oM g n Ma

Also available in ÂŁ1 PMP Oasis is worth a massive ÂŁ64 million* and our fantastic Drink Now formats are growing by 2.1%** Major marketing support in 2013 to really refresh your sales

*Source: Nielsen Total Coverage MAT to 1.12.12, added as a footnote **Source: Nielsen Total Coverage YTD to 1.12.12, added as footnote Oasis is a registered trade mark of Atlantic Industries

food & beverages on the move Fanta Peach & Apricot is available in all pack formats, as well as 6 and 8 x 330ml can multipacks. Fanta is also rolling out previous customer-exclusive variant Fanta Red Fruits to all trade channels. It is available in two-litre and 500ml PET bottles and 330ml cans. Last year’s limited-edition Mango & Passion Fruit flavour is now a permanent addition to the range. The launch of 500ml Oasis Mango Medley is part of a wider brand relaunch that sees new striking graphics across the Oasis range. This new look will also feature on shrinkwraps in depot for added stand-out, and Mango Medley will join the existing range offered to retailers with a £1 PMP option, as well as a plain pack. The Oasis brand continues to invest in marketing support and has renewed its sponsorship of Celebrity Juice, providing exposure with the core target audience. Additional activity will include digital, PR and sampling of new Mango Medley. Data: Nielsen MAT 29 December 2012 unless otherwise stated.

Hunger moments Kepak Convenience Foods has launched its ‘Give the Ref a Break’ advertising campaign to remind consumers to purchase Rustlers – the number one microwaveable brand – at key ‘hunger moments’. The tongue-in-cheek 20-second ad goes live 48 hours before key sporting events and links with the brand’s ‘One Finger Food’ campaign, reaching over two million core consumers across digital and mobile platforms including YouTube, Sky Sports and ESPN. Marketing director John Armstrong says: “Rustlers is now a £83 million brand and is growing at 27% (Nielsen 52 w/e 29 December 2012). “This growth is being driven by our highly targeted marketing activities, like the hunger moments campaign, that reach our core consumer of 16-34 year-old men at relevant key times throughout the day.” Rustlers has broken into the UK’s Top 100 FMCG brands for the first time.

Handy pack sizes for on-the-go snacking.

Savoury snacking Produced by Euro Food Brands, Jack Link’s is the authentic meat snacks brand perfect for on-the-go snacking. Available in 25g and 75g pack sizes with rsps of £1.59 and £3.49 respectively, the new product provides a ‘tasty, healthy alternative to traditional savoury snacks’. Shane Angus, brand manager, says: “Jack Link’s is naturally high in protein and low in calories, making it the perfect snack for those health-conscious consumers looking for something a bit different to traditional snacks that can often be high in calories and fat. Healthy snacks can also sometimes be perceived as bland, but with flavour options like Sweet & Hot, Flamin’ Buffalo Style and the new Curry Chicken Bites variant, the Jack Link’s range is the perfect solution.” The introduction of Jack Link’s Curry Chicken Bites follows extensive consumer research in which 76% of consumers said they would purchase the product (Ifuma Consumer Research Great Britain 2010). “Research has also indicated that chicken is the largest opportunity for growth in the meat snacking category,” Angus states. “And taking into account the UK’s love of curry, we believe the launch of Jack Link’s Curry Chicken Bites can add significant incremental growth and profit to the meat snacking category.” Research has shown that Jack Link’s Beef Jerky is preferred above key competitive brands on taste, texture and overall appearance, with 60% of consumers saying that they would buy Jack Link’s Beef Jerky ahead of competitive jerky products (Tesco independent sensory benchmarking). The Jack Link’s selection of clip strips means the products can be multi-sited, offering an incremental sales and margin opportunity. Both formats can be displayed next to crisps and snacks and the clip strips are perfect for positioning next to soft drinks and alcohol.

For further information: Coca-Cola Enterprises (08457) 227222 Euro Food Brands (01604) 821200 Kepak Convenience Foods (01772) 688300 Mondelez International (08702) 400861 Rustlers is now a £83 million brand.


• Cash & Carry Management • June 2013

Share A Helping to grow sales for… For the first time ever, we’re replacing the famous Coca-Cola script on over 100 million packs of Coca-Cola, Diet Coke and Coke Zero with 150 of the UK’s most popular names. Share a Coke is designed to create new purchasing opportunities as your customers share packs with their friends, family and loved ones this summer. The massive four month marketing campaign will be supported by heavyweight TV advertising, outdoor, digital advertising and a nationwide consumer sampling tour. Consider secondary displays to make the most of this incremental purchase opportunity.

Coca-Cola, Coke, the design of the Coca-Cola Contour Bottle and the Dynamic Ribbon device are registered trade marks of The Coca-Cola Company.

cereal bars

Health credentials A competitive snacking landscape demands a lot from a cereal bar. The £2bn take-home snack market is growing at 8.3% year on year, but consumer demands are changing. The Frank Food Company found that whilst an estimated 45% of the population suffers from a food intolerance, a further 30% of the nation plans to avoid gluten in their diets during 2013. This increased the company’s ambition to offer ‘free from’ products to the market. The Frank bar claims to be the only product available in its class to have all the attributes of being gluten, nut and dairy free with no additives, preservatives, colourings or salt added. The range is also suitable for vegetarian and vegan consumers, who make up 6% and 1% of the UK population. Managing director Richard Wilson comments: “We believe that the market is looking for an ‘honest’ and healthy bar that is a genuine ‘free from’ product, made using 100% natural ingredients. The Frank bar has only a very small percentage of added sugar, which itself is an unrefined coconut sugar with a low glycaemic index. The rest of the sugar in the bar is naturally occurring from the fruit in there, which itself brings added nutritional benefit.” As an ‘Energy Smart’ accredited product, the Frank bar offers sustained energy over a prolonged period, while still delivering one of the lowest calorie contents in the sector.

artwork has been enhanced to further appeal to its audience and drive greater standout on shelf. Bep Dhaliwal, trade communications manager, says: “We are delighted to be introducing a new flavour and new brand design to the popular Tracker range, which has become a staple family favourite in UK households over the years. The biscuit category remains one of the largest snacking groups and we are delighted to be reigniting the nostalgia of Tracker to the nation once again.”

Lower-calorie alternatives

New variant

Launched by Mars Chocolate over 25 years ago, Tracker is bringing a new flavour to the brand’s collection: White Chocolate Chip. The new variant joins the rest of the Tracker range, including Chocolate Chip and Crunchy Peanut. With nearly 4,000 Tracker bars eaten every hour in the UK (IRI data, 52 w/e 23 February 2013), the brand continues to be one of the nation’s favourite snacks. Tracker Milk Chocolate multipack sits in the Top 20 cereal multipacks and the Milk Chocolate single ranks number eight in cereal bar singles. Tracker has also announced a brand redesign. Whilst the logo, slogan and colour palates remain consistent, the


• Cash & Carry Management • June 2013

According to Kellogg’s, the success of its Special K cereal and snacks range is proof of how the healthy snacks market has picked up over the last 12 months. A consumer shift towards healthier, lower-calorie alternatives has contributed to this upturn. Breakfast biscuits are considered to be in the ‘healthier biscuits’ category which explains their increasing popularity too. Kellogg’s new Nutri-Grain Breakfast Biscuits come in three flavour variants: cereal and milk, oats and honey and fruit and fibre. With 35% more wholegrain than the leading breakfast biscuits, as well as slow-release carbohydrates, calcium, six B vitamins and iron, they contain the goodness of breakfast cereal in a biscuit. At 99 calories per two biscuits, Special K Biscuit Moments offers health-conscious consumers a tasty treat with good intentions. Each biscuit contains a soft fruit filling topped with a vanilla drizzle. The first biscuit available from Special K, Special K Biscuit Moments is available in two flavours: strawberry and blueberry.

For further information: The Frank Food Company (0800) 612 8780 Kelloggs 0161-869 2000 Mars Chocolate (01753) 550055

Cereal & k l i M : avours nnamon fl t a e r g • 2 with Ci e l p p A d an 6 x 50g

:1 • Case size

s r a b & s t i u c s i b f o e g n a r t a e x r i g b a a t e h t e W Wi m o r f

ble in a l i a v a e Bars ar mited period! t h g i L n nd Alpe n to 39p for a li a s r a B n Alpe ed dow c i r p , 4 2 cases of Look out for these great value biscuits & bars in your local wholesaler!


Lighter, fresher options Blossom Hill from Percy Fox & Co is the nation’s favourite wine brand (Nielsen Scantrack total off-trade w/e 5 January 2013). Blossom Hill Vie – a reduced alcohol wine-based drink – will suit the 52% of wine drinkers interested in the idea of a reduced alcohol Blossom Hill option (The Grocer’s Top 100 grocery brands 2012). Lower alcohol wine is still a fairly new category in the off-trade yet it’s worth £28m and growing at 21% (Nielsen, 4%–5.5% abv brands, MAT December 2012). At 5.5% volume, Blossom Hill Vie is available in white and rosé. Blossom Hill recently extended its bestselling Classics range with the introduction of two new variants: a ‘Fresh and Juicy’ white wine and a ‘Smooth and Spicy’ red, delivering the Blossom Hill philosophy of accessible flavour profiles and easily identifiable packaging cues. Both products are proving popular, with over 64% of shoppers saying that they would buy them in addition to their current purchase (Nielsen Scantrack total off-trade w/e 5 January 2013). Marketing manager Rachel O’Shea comments: “The ‘something for tonight’ mission has become even more crucial and now accounts for 93% of convenience trips (Shopper understanding research with HIM & Kantar Worldpanel 2011), so retailers should ensure there is plenty of stock refrigerated at all times.” Blossom Hill has launched a website – – which allows consumers to browse and Reduced alcohol wine is proving select their wine by popular. taste, not grape. The site is designed to encourage drinkers to try new flavours and explore different wines from across the Blossom Hill range.

Award-winning Due to the success of the Shorn brand (winning both the Harpers Wine & Spirit Gold design award and a Silver Medal at the 2013 IWC), Legacy Wines is extending its New Zealand Shorn range to include both rosé and red partners in addition to its current Sauvignon Blanc offering. The company’s Board Meeting and Juicy Grape brands


• Cash & Carry Management • June 2013

Award-winning brand.

are also going from strength to strength, with strong cash & carry listings and excellent consumer feedback on both the quirky packaging and high quality wines.

Double-digit rise Pernod Ricard, which offers some of the UK’s leading premium wine brands, including Jacob’s Creek, Brancott Estate and Campo Viejo, reports that premiumisation continues to be a growing trend in the off-trade as consumers seek to recreate the entertainment of an evening out at home. “Nearly 60% of wine shoppers (PRUK segmentation based on willingness to spend £7+) are willing to purchase premium wine, contrary to the suggestion that consumers are purchasing value wines in these challenging economic times,” says Chris Ellis, commercial director for wines. Within premium wine there is a consumer demand for light, fresh wines as evidenced by the category’s growth in most major wine markets. Recent products from Pernod Ricard, such as the Jacob’s Creek’s Cool Harvest and Moscato ranges, have been developed to tap into this opportunity. Sparkling wine is proving popular with consumers in the off-trade, showing growth of 6.7% volume and 9.9% value (Nielsen Scantrack, total off-trade data to 5 January 2013). Brancott Estate has developed Brancott Estate Sauvignon Blanc Brut NV, which is also in line with the trend for light, fresh wines. New sparkling wine propositions from Jacob’s Creek include Cool Harvest Sauvignon Blanc Cuvee and Sparkling Moscato and Moscato Rosé. Campo Viejo is outperforming the total Rioja market, up 24.7% in volume and 20.5% in value against 6% and

wine 9.8% respectively (Nielsen total off-trade MAT w/e 5 January 2013). The brand is introducing a new varietal in September: Campo Viejo Garnacha 2012, a fresh, light style.

British wines According to Nielsen statistics, Continental Wine & Food’s (CWF’s) Silver Bay Point brand is in the number one spot in the British wine category, with a 33% market share across total off-trade volume sales. As the British wine category shows itself as a “star category performer”, CWF will be investing in marketing and promotional support for Silver Bay Point, which includes a red, white and rosé, all 8% abv, available as 75cl bottles or three-litre bag-in-box options. The demand for British wine has increased by 42% over the past 12 months. There’s also been growth in lower alcohol wines, with the market generating revenue of £22.7m over the past two years. The CWF range of Harvest Fruit wines has a lower abv of 10% and initially comprises three flavours: Fruits of the Forest, Orchard Fruits and Cherry. CWF has launched The Straw Hat, featuring a red, white and rosé of premium 11% abv British wine. Each 75cl bottle is competitively priced, and the range lends itself well to ‘3 for’ promotions. “Italian wine sales continue to thrive within both the on and off-trade,” says marketing spokesperson Julie Ingham. “Much of this growth has been on the back of the classic Pinot Grigio wines which have flooded the market over recent years.”

Consistent growth The major brands from Accolade Wines are in growth. Hardys retains its position as leader in the Australian category. Echo Falls continues to grow across all sectors and is the third largest wine brand in the UK (second largest wine

BUYER’S VIEW FROM HQ Neil Govind, senior buyer at Imperial Cash & Carry, says: “Trading in the wine category is always a challenge – from negotiating the best possible cost for our customers, or managing allocations set by suppliers, to the nightmare situation of outof-stocks by suppliers. “The prospects for summer are fantastic if the sun keeps shining and retailers remain stocked up. Wines from old-world regions like France, Spain and Italy are excelling. Prosecco is performing exceptionally well within our business too.”


• Cash & Carry Management • June 2013

The Echo Falls range is in growth across all trade sectors.

brand within the convenience channel). And Kumala maintains its number one spot as the leading South African brand. Accolade Wines will continue to support independent retailers through its ‘Winning with Wine’ website, providing category advice and promotional ideas for retailers to implement in-store, as well as a free PoS service. “We will be working hard to promote consistent growth within the cash & carry sector and amongst independent retailers,” says marketing controller Amy White.

Sporting sponsorship The Wolf Blass brand from Treasury Wine Estates has signed up as partners of the Sky Sports broadcast of the next two Ashes Cricket series between England and Australia. The new deal covers this summer’s series starting on 10 July, coupled with this winter’s Ashes in Australia. As co-sponsors, Wolf Blass will feature on sponsorship idents throughout each day’s play on Sky Sports, during replays and also on catch-up TV. The deal will also see advertising on Sky Sports News, as well as a significant digital presence on the Sky Sports website. Andrew Carter, managing director, told Cash & Carry Management: “This deal provides the perfect platform to showcase one of Australia’s best quality wine brands, a brand that has great appeal to male wine drinkers who love their wine and love their sport.”

For further information: Accolade Wines (01483) 690000 Continental Wine & Food (01484) 538333 Legacy Wines 0161-333 4300 Percy Fox & Co (01279) 713400 Pernod Ricard 020-8538 4000 Treasury Wine Estates 020-8843 8400

• INTRODUCING A NEW SILKIER FEEL AND SHAPE • Permanent new product launch of Honeycomb Crisp 40g & 114g and Nut Crunch 114g • DRIVING SALES THROUGH REINVIGORATING THE BLOCK CATEGORY AND BRINGING IN NEW CONSUMERS ®Galaxy, Smooth Milk, Honeycomb Crisp and Nut Crunch are registered trademarks. ®Mars 2013

products & promotions Pitcher offer

Sweet price SWIZZELS MATLOW – The makers of Love Hearts, Parma Violets and Drumstick Lollies have launched a new ‘Flashback to 10p’ collection. The recession-proof range contains a host of iconic brands that were previously priced at 13p, including: Drumstick chew bars and lollies, New Refreshers chew bars, Fun Gums, Rainbow Drops, Wine Gummies and Fizzy Wine Gummies and Mega Rainbow Dust. The products feature updated bold designs with the new price point clearly visible. The Drumstick range, established in 1957, has been refreshed with a modern twist while maintaining the iconic colours and feel of the original logo. The single-coin purchase collection is “perfect for all consumers as a lowcost treat or pocket-money essential”, says the company. Tel: Swizzels Matlow (01663) 744144.

PMP promotion ENCO PRODUCTS – Nurishment Original, the UK’s best-selling nutritionally enriched milk drink (IRI nutritionally enriched milk drink category – unit sales 52 w/e 27 October 2012), is available in limited-edition price-marked packs. Available exclusively via the cash & carry/wholesale trade, the £1 PMPs feature on Nurishment Original’s four best-selling flavours: vanilla, strawberry, chocolate and banana. “We know how popular pricemarked packs are with today’s costconscious consumers and this limitededition range will give another boost to Nurishment,” said head of marketing Nyree Chambers. Tel: Enco Products (01707) 322332.


BACARDI BROWN-FORMAN BRANDS – Southern Comfort is introducing new promotional packs to support its Lime variant, with the opportunity for consumers to claim a free branded pitcher when purchasing a bottle. The spirit brand is also bringing back its popular price-marked packs for 70cl and 35cl of Southern Comfort Original (£16.99 and £9.49 respectively) and 70cl of Southern Comfort Lime (£14.99). Available to convenience retailers through the wholesale channel, the added-value packs highlight the Southern Comfort Lime and lemonade serve via eye-catching on-pack imagery, which is designed to deliver on-shelf stand out. Tel: BBFB (01962) 762200.

Winning chance BRITVIC SOFT DRINKS – The soft drinks manufacturer is launching a new marketing campaign for the number one kids’ drink brand Robinsons Fruit Shoot (Millward Brown Research, March 2013), giving children the opportunity to try new activities and increase their skill base. The campaign, called ‘Get Your Skills On’, includes TV advertising and media partnerships with Nickelodeon and The Sun, an on-pack promotion, an experiential roadshow, as well as PR and social media. The activity aims to celebrate the enjoyment and self-expression that children get from learning a new skill. An on-pack promotion (four and eight multipacks) will also give consumers a chance to win skills gear every hour. Tel: Britvic (0845) 758 1781.

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Single-pack snack DAIRY CREST – Chedds, the 100% real cheddar kids’ snacking brand, is introducing its Cheese & Toasties in a new convenience-sector specific format. The single pack, which consists of six slices of mild Cathedral City Cheddar and six pieces of Melba toast, will be available in cases of 12. The introduction of Chedds in 2011 brought new shoppers to the category, encouraged weight of purchase and persuaded existing shoppers to trade up (Kantar w/e 23 December 2012). The Cathedral City Chedds brand is worth over £8m, growing rapidly at the rate of 161% value and 190% volume (Nielsen 52 w/e 02 February 2013). The Chedds range also includes Chedds Shapes, Chedds Towers and Chedds Nibbles. Tel: Dairy Crest (01372) 472200.

Crunchums MONDELEZ INTERNATIONAL – Cadbury, the nation’s number one chocolate brand (AC Nielsen value sales 52 w/e 20 April 2013), has launched Cadbury Crunchums – a snack of crispy cereal bites coated in Cadbury chocolate. Cadbury Crunchums will be supported by a £1.3m UK marketing investment, including outdoor advertising, sampling, PR, social media, digital campaigns and in-store activity. Mondelez International is performing strongly in the chocolate bags category, which is growing at 16.5% year on year (Nielsen, value MAT to w/e 13 April 2013). Cadbury Crunchums are available nationwide and the new 105g bag has an rsp of £2.03. Tel: Mondelez International (08702) 400861.

products & promotions Premix

WKD price SHS DRINKS – Special price-marked £4.99 promotional stock of WKD has been made available throughout 2013. Packaged in shrinkwrapped trays of 6 x 4 x 275ml bottles, the WKD pricemarked four-packs of WKD Blue, Iron Brew and Purple are prominently flashed with the ‘Only £4.99 Result!’ logo, and are available exclusively in the cash & carry/wholesale/convenience trading channels. The WKD PMPs provide independents with an exclusive offer in a strong value-for-money multipack format which delivers good cash margins and meets the growing consumer demand for, and retailer interest in, pricemarked offerings. Tel: SHS Drinks (01452) 378678.

Publici-tea TATA GLOBAL BEVERAGES – Tetley has stepped up its marketing activity with a £2.1m television advertising campaign. Tetley Blend of Both will be featured in adverts at prime time on ITV, ITV2, Channel 4 and E4. The campaign will reach 80% of Tetley’s target shoppers. Base sales of Tetley Blend of Both increased by 40% following the last run of adverts and Tetley expects a similar performance for the brand this time round. The adverts complement two highprofile television programme sponsorships, ITV’s Saturday Farm which Tetley sponsors with Tetley Estate Selection, and Channel 5’s Sunday Family Movie. Tel: Tetley (0800) 387227.

DIAGEO – The drinks business has announced the launch of a new campaign for its premixed drinks portfolio called ‘From the Bar’, which will be supported by a £2 million marketing spend. The campaign is designed to drive penetration in premix by educating consumers on the quality of Diageo’s drinks and the convenience of the premix format. Natasha Chapman, shopper marketing manager, said: “Premix is the fastest growing alcohol segment in the UK, up 22% in value and 17% in volume year-on-year (Nielsen total offtrade MAT data to w/e 2 February 2013), so there is a real opportunity for retailers to increase sales by stocking premix drinks from well-known brands such as Gordon’s, Pimm’s and Smirnoff.” Tel: Diageo 020-8978 6000.

Fruity flavour HEINEKEN – Following on from the success of Strongbow Pear (voted the number-one selling long alcoholic drink of the year in the everyday cider category in 2012), Heineken has launched Strongbow Dark Fruit. The new variant offers a combination of Strongbow cider cut with blackcurrant and blackberry juices. Available exclusively through offtrade distribution channels, Strongbow Dark Fruit will be supported by heavyweight marketing activity, including out-of-home advertising, press, in-store sampling and point- of- sale material. The 4% abv cider is presented in a variety of formats. These include 440ml and 500ml cans and 500ml bottles (available in August). Tel: Heineken 0131-5281000.

Royal tin UNITED BISCUITS – In anticipation of the forthcoming royal birth and the 60th anniversary of the Queen’s Coronation, the biscuit and cake manufacturer has launched a McVitie’s limited-edition Celebration Tin. With a striking Union flag design, the eye-catching tin has good stand-out on shelf and provides the ‘perfect keepsake’ to remember the royal occasions for 2013. The Celebration biscuit selection includes an assortment of plain, chocolate, creams and jam McVitie’s biscuits. The 475g tin has an rsp of £5. Sarah Heynen, marketing director of sweet biscuits, said: “Last year’s McVitie’s Diamond Jubilee Tin achieved nearly £1m worth of sales in the two months it was on sale, highlighting the incremental sales opportunity the limited-edition tin will offer retailers this year.” Tel: UBUK 020-8234 5000.

Mars mission MARS CHOCOLATE – The brand’s ‘Sweet Sundays’ promotion is back, with free cinema tickets for consumers redeemable with the purchase of four core-size or two large-size special packs across Mars’ best-selling Bitesize portfolio. The campaign, fronted by the red and yellow M&M’s characters, but also including Mars’ favourites Minstrels, Maltesers and Revels, will run until November, well-timed for the summer’s cinema blockbusters. The 2012 campaign attracted 37% new shoppers to the Mars brand. This year, with 20% more participating cinemas and the introduction of mobile technology to redeem tickets, the ‘Sweet Sundays’ promotion looks set to be bigger than before. Tel: Mars (01753) 550055.

Cash & Carry Management

• June 2013 • 37

supplier strategy

Catering for a complex market AG Barr is using its understanding of the market to help drive sales in the C&C/wholesale sector. A deep understanding of how regional the soft drinks market is in the UK is one of the keys to driving growth for AG Barr, according to head of marketing Adrian Troy. He says: “One of the things that separates us out from other suppliers in soft drinks is we are a regionally-focused business and that plays very heavily into what we do. One size does not fit all. “Our ranging and our focus in London is around Rubicon, KA and Rockstar. In Scotland our focus is very much on IrnBru, Barr and then Rockstar. Consumers around the country are very different and we look to reflect that. “You go into an independent shop in London versus an independent in Manchester or Glasgow and the range will be so different, but in a high street chain it won’t be because it is all standardised.” The differences in consumer preferences are not only regional but also ethnic, and Barr’s ownership of the Rubicon brand has given it a clear understanding of the potential of catering for this market. “The ethnic population has doubled in size since 1991 and now stands at nine million, up from 4.5 million in 2001,” says Troy. “The ethnic population is expanding rapidly and the ethnic shopper base is now significant right across the country. By 2021, ethnic shoppers will make up nearly a quarter of the population.” Troy says this increase in Rubicon’s core consumers has helped annual retail sales of the brand grow to £100m, equating to £40m profit for retailers and wholesalers. Around 70% of the turnover is in the independent sector. And while there is clearly still great potential with its core ethnic consumers, sales of Rubicon are also being boosted by growing adoption by mainstream shoppers. In the last 12 months, the brand attracted more than 9,000 new mainstream consumers every day, with nine million now drinking it (TNS Omnibus/Ethnibus, August 2012). “As a result,” says Troy, “Rubicon is not only a core ethnic brand, but also a fast growing mainstream national brand.” Troy claims that Rubicon has led the way in the creation of a new exotic drinks category, which has increased by 40% over the past two years. To capitalise on this, AG Barr is investing £2m in brand support spearheaded by nationwide TV advertising, targeting both ethnic and mainstream shoppers, backed by product sampling and a makeover for the packaging. The national TV campaign will be on air during July and August and will complement advertising on 10 ethnic TV channels covering Pakistani,


• Cash & Carry Management • June 2013

A national TV adverting campaign will support Rubicon.

Indian, Sri Lankan and Bangladeshi audiences. This started in March and will run until December. The campaign will be supported by online and digital activity. In addition, Rubicon’s 500ml stills range has delivered more than £2.5m retail sales in the six months since it was launched, according to Troy. To build on this success, a Lychee variant has been added to the range. “Lychee is Rubicon’s fastest growing flavour at 15% MAT,” he says. Sampling is also important for Rubicon. AG Barr has introduced more than four million consumers to Rubicon via sampling campaigns over the past five years, with more than 50% of people going on to purchase. This summer 500,000 samples will be distributed. Across AG Barr’s wider portfolio, long-term use of pricemarked packs has worked well, says Troy, with Nielsen Scantrack reporting year-on-year sales increases of 14% for Rubicon, 15% for Ka, 7% for Irn-Bru and Barr, and 75% for Rockstar. AG Barr is also investing in a six-month programme of support for Irn-Bru, with three new TV commercials. The £5m ‘Irn-Bru Gets You Through’ campaign is on air now and features special packs, dedicated PoS, a new website and social media support. In addition, Irn-Bru is giving consumers the chance to win one of over 5,000 prizes every day, including cash amounts of up to £100 and thousands of pairs of bespoke Bru shades. The Bru-skies promotion is featured on SKUs including 500ml and two-litre bottles and multipacks of 8 x 330ml cans and runs until the end of August. Troy says Bru-skies follows the success of last year’s Bruisland on-pack promotion, which resulted in a 11% year-onyear sales increase over the summer months. He adds: “Bru-skies is set to be our biggest ever on-pack promotion. With over 5,000 opportunities to win, it will be driving shoppers to the fixture in record numbers in the search for winning packs. “Retailers will be able to generate excellent visibility in-store with the PoS we are providing, helping to capitalise on the increased demand Bru-skies will generate.”

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Tobacco’s star performer With one in three smokers now choosing to smoke RYO tobacco, the sector is booming, and the rapid expansion is helping to drive sales of accessories too. While trade in most tobacco accessories is unrestricted, rollyour-own (RYO) tobacco is covered by the increasing weight of legislation bearing down on other tobacco products, the most recent of which was the tobacco display restrictions. After being introduced at intervals over the past year across England, Wales, Northern Ireland and Scotland, they have placed new burdens on wholesalers, but little has emerged of the hoped-for upside for the wholesale sector and its customers. With large stores facing restrictions immediately, while the smaller stores served by wholesalers have until April 2015 to comply, it was hoped there would be a migration of business to the smaller shops. However, Jeremy Blackburn, head of communications at JTI (Gallaher), says: “Early indications are there has been a minimal shift of footfall.” Plans for new plain packaging restrictions appear to have been headed off, as they were unexpectedly omitted from the Queen’s speech to Parliament outlining plans for the next session. However, Blackburn urges caution. He says: “The lobbyists for the measure will continue to push very hard and we are still waiting for the report of the consultation that took place in April last year.” He says JTI believes plain packaging will do nothing to achieve its stated aim of reducing under-age smoking, and will help the illicit traders who have no scruples about selling to minors. Despite the restrictions, sales of RYO tobacco have climbed steadily to £1.9bn and the growth rate is currently standing at about 15% a year. Blackburn says one in three smokers choose to smoke RYO tobacco and it is the biggest sector of the tobacco category by volume. He says JTI’s Amber Leaf, with a 10.6% share of the tobacco market by volume, is the number one seller in the entire tobacco category, including cigarettes. Capitalising on Amber Leaf’s status, in October JTI launched Amber Leaf Blonde, which uses a pale coloured cigarette-like blend of Virginia tobacco to provide a smooth taste. Blackburn says: “It is popular with both existing adult RYO smokers and with the growing number of existing adult dual smokers looking for an RYO product to switch to.”

As of April 2013, Amber Leaf Blonde had a 1.9% volume share of the mid-price RYO market, according to Nielsen, and a 1.1% volume share of the total market. The growth in the RYO sector has been driven by cash-strapped consumers who are seeking a lower cost way to smoke. Even within the sector there is a move by cash-conscious smokers to lower cost products. Sterling is recognised as a value brand in the cigarette sector and in January 2012 an RYO version was

Category management advice With trends changing fast in the tobacco category, JTI has launched a category management approach called ARTIST to help depots maximise tobacco profits. ARTIST stands for Availability, Range, Training, Innovation, Sales and Technology and can be applied to a wholesaler‘s tobacco room and retailer‘s gantry. Availability – it‘s vital that the tobacco room remains well stocked. Review stock levels daily, prior to peak trading times. Out-of-stocks will lead to lost sales. Range – offer a wide choice of cigarette, RYO and cigar brands. A range of pack sizes, as well as price-marked and non-price-marked packs, will demonstrate to retailers they are getting the best possible choice. Training – ensure tobacco room staff are well trained on the law. Visit for further information. Innovation – support new tobacco products and pack innovations. These have been developed in line with trends in the market place. Contact your JTI representative for point-of-sale material, such as branded floor mats and free-standing display units (FSDUs). Sales – make sure you know which areas are in growth, what the most popular pack formats are, and what sells well in your region. Technology – use EPoS data to monitor your range and availability.

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More information on ARTIST or specific advice for your depot is available via the JTI Customer Careline on (0800) 163503.


• Cash & Carry Management • June 2013

* Actual Price Mark may vary. Tobacco smugglers stealing your business? If so, contact: Customs Hotline 0800 59 5000

ryo tobacco & accessories launched and it now has a 1.9% volume share of the RYO market. However, Blackburn points out: “It’s not just about value. Mid price with 58.5%, and premium at 24.8%, hold a substantial share of the RYO market.”

Brand updates Imperial Tobacco has made significant changes to its RYO range with updates for its Golden Virginia and Golden Virginia Smooth brands. Golden Virginia is now known as Golden Virginia Classic, with a new design intended to appeal to the discerning RYO adult smoker whose preference is for a premium RYO offering. Rsps for Golden Virginia Classic remain unchanged, and Imperial Tobacco says it is also maximising profitability with high POR margins of between 10.9% and 11.4% for retailers. Golden Virginia Classic continues to be available in 12.5g, 25g and 50g pack sizes, with papers included in the 50g pack. The 12.5g Handy Pack includes papers and tips to offer consumers added convenience. Imperial Tobacco Golden Virginia brand manager Ryan Hopkins comments: “In terms of white stick equivalent volume, RYO accounts for 26% of the tobacco market and is a key category. Golden Virginia Classic is the UK’s number one premium RYO tobacco brand. It defines rolling tobacco for refined adult smokers and the new design reaffirms Golden Virginia Classic as the best brand in the roll-your-own market.” The other major change is that the new GV Smooth range has replaced Golden Virginia Smooth. Imperial Tobacco estimates that the UK RYO retail market is currently worth £1.75bn and that the smooth market has grown by 16% in volume terms in the last year, with Golden Virginia Smooth volume up 24% year on year. Women are increasingly entering the RYO category and now account for 55% of smokers choosing to make RYO their preferred tobacco choice. Imperial Tobacco says Golden Virginia Smooth has significant appeal to females and adult smokers aged 18-35. Hopkins comments: “The new, vibrant GV Smooth pack has been designed specifically with the modern RYO consumer in mind. It provides a clear identity and differentiation within the Golden Virginia family. The new portrait design will also make it easier for retailers to merchandise and provides a clear differentiation to other RYO brands.” GV Smooth continues to be available in 12.5g, 25g and 50g pack sizes, with papers included in the 50g pack size. The 8g Handy Pack, which incorporates papers and tips, offers consumers added convenience as well as a low outof-pocket price of £2.50.


• Cash & Carry Management • June 2013

BUYER’S VIEW FROM HQ Matthew Norbury, trading manager, Parfetts How is the market compared with last year? RYO sales are up year on year and continue to grow each month because consumers who wish to smoke are moving out of the cigarette market and into RYO due to the rising costs. What are the trends? There is a trend to low-cost brands – this is primarily driven by the retail price point. What do you think the prospects are for the summer? The weather does have an impact on tobacco sales in general, but the biggest problem facing retailers and wholesalers is the amount of smuggled tobacco that is getting into the UK market at the moment. Which RYO brands are your best sellers? Amber Leaf and Golden Virginia. Are there any brands in decline or struggling? Golden Virginia is struggling simply due to its price point. Which are the most supportive suppliers? All of our key suppliers support us throughout the year. What are the best current deals or promotions? £3 off Sterling RYO 25g and £8 off Sterling RYO 50g.

The rsps for GV Smooth remain unchanged, offering retailers POR margins of between 11.1% and 11.9%.

Outperforming the market The RYO market increased by 5.7% in the UK in terms of volume in the full year of 2012 versus 2011, according to Nielsen, with BAT UK outperforming the overall market, growing by 8.6% over the same period. Ronald Ridderbeekx, acting head of corporate and regulatory affairs at BAT UK&I, says: “BAT UK’s RYO brands have grown particularly well in independents, with volume up over 10% in 2012 compared with 2011. “In particular, Pall Mall RYO saw incredible volume growth of 71% in independents in the full year of 2012 versus 2011. Offering the right brand, the right blend, at the right price, Pall Mall RYO meets the growing need for value for money quality tobacco from an internationally recognised brand.” Ridderbeekx says the economic downturn has also driven an increase in the popularity of price-marked packs, which astute retailers recognise as a growing trend.



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ryo tobacco & accessories PMPs have accounted for 30.1% of total RYO volume to date in 2013, compared to 26.1% over the same period in 2012. In independents and symbols the value of PMPs is even more pronounced, moving to 58% of volume to date this year compared with 51.9% over the same period in 2012. Wholesalers need to recognise that the RYO category has changed, says Ridderbeekx, and they should not assume that offering the same range they have had for years will maintain their sales. The category is evolving and they must regularly review sales rates and growing trends to ensure they are offering the right mix of products. More and more smokers are choosing RYO products and this should be reflected in the space allocated. BAT also recommends that retailers stock as full a range as they can afford, and wholesalers should reflect this in their tobacco rooms. For example, it is important to stock Virginia blends, such as Cutters Choice and Pall Mall RYO, and Halfzware blends, such as Samson. This will allow retailer customers

to make an informed decision from a comprehensive range of products. BAT also urges wholesalers to take advantage of the sales insights available from their trade representatives to help them identify the best products to stock as well as category trends.

Value-for-money products “Last year we saw growing consumer demand for value-formoney products throughout the tobacco industry and we expect this to continue in 2013 and beyond,” says Alan Graham, head of marketing at Scandinavian Tobacco Group (STG UK). “For many RYO tobacco smokers, price is a key factor when deciding which brand to purchase so delivering this value to consumers is essential in the current economic climate. Consumers are now taking more time to consider their purchases, often comparing prices of brands or weighing up promotional offers before making a decision.” In addition, price-marked packs are becoming a more trusted way of delivering visible value for money. In line with this, STG UK has just introduced its lowest price point for its Salsa brand with the launch of a £3.15 PMP. Graham says: “The new PMP positions Salsa as the cheapest RYO product in the convenience and impulse channel, offering excellent sales margins for independent retailers and incredible value for consumers. Available to buy now in


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ryo tobacco & accessories a half outer of 5 x 12.5g packs, the new Salsa £3.15 PMP provides wholesalers with the perfect product to allow their customers to take advantage of this growing demand for value RYO products. “With this new price point, not only are we delivering this visible value that consumers are looking for but we’re also offering the greatest value with the cheapest RYO product for independent retailers. “As well as being extremely attractive to consumers with its low price point and, as a result, benefiting from a strong rate of sale, the Salsa half outer has the cheapest out-ofpocket spend for independent retailers on a 12.5g RYO variant. With this in mind, any wholesalers looking to make the most of the growing demand for value RYO should ensure they stock up on the new £3.15 Salsa PMP while stocks last.” Graham says there is also a growing trend developing among consumers for natural or additive-free products, especially in the case of the Natural American Spirit (NAS) brand, for which STG UK took over the distribution rights a year ago. He adds that NAS was the first additive-free tobacco range sold in the UK when it was launched in 1997, and is still the number one selling additive-free tobacco range in the UK today.

“Its presence provoked a different way of thinking for many smokers and since then, this trend for discerning consumers looking for high quality additive-free tobacco has continued to grow year-on-year,” Graham told Cash & Carry Management. “In line with this, we’ve seen the NAS brand significantly grow its distribution in convenience stores to emerge with double-digit growth in the RYO variant.”

RYO growth fuels filter sales The filters category is matching the star performance of the RYO sector, with the market now valued at £62.4m and growing at 12.3%. Swan continues to dominate this sector with a volume share of almost 90% (Nielsen, February MAT 2013, Market Track). Republic Technologies (UK) is contributing to the development of the RYO accessories market with the launch of a Swan branded Ultra Slim Filter. “The Swan Ultra Slim filter is a premium, quality product aimed at the more discerning RYO smoker,” says Eleni Koulara, marketing manager of Republic Technologies (UK). “One of the reasons people choose RYO is that it enables them to make thinner cigarettes which in turn means they smoke less. Size of filter is becoming more important

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ryo tobacco & accessories

in the RYO sector, particularly among people looking to reduce smoking for health or cost reasons, and the Swan Ultra Slim filter is the product that addresses those specific consumer needs.” The new Swan pack contain 126 filter tips and has an rsp of 95p. Launch support includes a digital media campaign focusing on the key areas of sport and music. Rolling papers are also in growth, up 2.9% and valued at £124m, with Republic Technologies’ Zig-Zag brand increasing its market share to 4% (Nielsen February MAT 2013, Market Track). In that context, Republic Technologies is intent on increasing Zig-Zag’s share of the market and is launching a major sampling campaign that will reach more than 100,000 consumers. Meanwhile, Koulara is urging cash & carry depots to focus on proven, market-leading brands to drive growth in RYO. She says: “Retailers recognise that RYO smokers are looking for brands they know and trust and if their preferred choice isn’t available, they’re likely to buy elsewhere.” She also advises: “The key for wholesalers’ customers is to stock major growth lines such as multipacks and combipacks. These provide smokers with the choice and premium quality they’re seeking at affordable prices. In particular, combi-packs have grown by 19.6% in 2012 (versus 2011) in the impulse market.” Koulara advises cash & carry depots to look beyond what they regard as the key volume drivers. A good example is menthol filter tips, which now account for one in 10 of all filter tips sold, and combi-packs which are likely to be bought by seven out of 10 smokers, if stocked. Meanwhile, lighters and matches continue to perform well, with the £69m lighters market up 3.3% in value and the £13m matches market up 10.3%, boosting profits from the tobacco accessories fixture.

‘Huge opportunity’ Foster’s Distributors supplies a wide range of tobacco products and accessories to the wholesale market, and managing director Andrew Armstrong says it is currently focusing on the development of two of its newest products. Karma papers and filters are both big sellers, but he says


• Cash & Carry Management • June 2013

margins are being squeezed, adding: “Now the products driving the business forward are our eKarma e-cigarettes and Lone Star wraps.” He says: “There is a huge opportunity in e-cigarettes, but there are a lot of cheap, poorly-designed products out there which are being churned out in Chinese factories. I am 100% confident that eKarma is the best product in the market. “The category is one that we’ve been looking at for some time, but have never been able to source a well-made, welldesigned product. Eventually we found a product in America that had been developed by a tobacco company rather than electronics engineers. “The first thing we liked was the look and feel of the product. It looks and weighs more authentic, more like a real cigarette than its peers. It’s safer too – with most electronic cigarettes the vapour is drawn over the battery creating a potential danger to the consumer should the battery leak; eKarma has a separate battery compartment so the vapour is isolated from any potential harmful contamination.” Armstrong says product reliability is second-to-none and is proven by a very low level of returns in the US. He adds: “Nearly all the e-cigarettes imported into the UK come by sea. However, eKarma is shipped by air in padded containers to reduce the chance of breakage or breakdown in use and to give the user a fresher battery as battery life is crucial.” There are three eKarma variants – regular, light and menthol – all of which are disposable. Each electronic cigarette gives the user an equivalent of more than 40 smokes and comes individually boxed, which Armstrong says emphasises the superior quality and expresses a real point of difference to poorly-made, blister-packed alternatives. The electronic cigarettes have an rsp of £4.99 and are packed 12 to a high-visibility display outer. Armstrong adds: “Because it is a tobacco replacement product, wholesalers and retailers can be working on five or 10 times the margin they would be earning from tobacco.” The second new product, tobacco leaf wraps, is another trend from America. These are a similar size to king size papers, but made from tobacco and flavoured. They come in sealed packs of two and with flavours such as blueberry, grape and strawberry. Armstrong says: “They give a different slant on rolling. In the States they are massive, they outsell papers. It’s a young trendy cultural thing. It’s also another great product where the wholesaler and retailer make great margins.” Armstrong predicts they are about to take off in the UK and reveals that the company has just obtained a listing for four flavours of its Lone Star wraps with Nisa. He says many retailers do not yet know about wraps, but the ones who do really like the 50% margins.

For further information: BAT UK (01296) 335000 Foster’s Distributors 0161-246 6066 Imperial Tobacco (0117) 963 6636 JTI (Gallaher) (0800) 163503 Republic Technologies (01494) 533300 STG UK 020-8731 3400


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C&C Management June 13  

C&C Management June 13