Better Wholesaling Insight - March 2021

March 2021

In-depth analysis, insight and advice for convenience and foodservice wholesalers

Shaped by the storm: One year on from the first Covid-19 lockdown – how the wholesale channel transformed forever and how to take advantage now

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CONTENTS LEADER An evolving industry requires a publication that will guide it through this changing landscape

Paul Hill

I

Editor

’ve been reporting on the wholesale channel for more than two years now and can safely say that it’s not a boring industry. Since my arrival at the start of 2019, the sector has evolved beyond recognition.

Mergers, game-changing legislation, takeovers, diversification and breakaways have all become regular occurrences and transformed the industry on a level never seen before.

One common trend I picked up on throughout this period is those wholesalers that innovate and reassess their operations are the ones that have sustained a profitable business.

Better Wholesaling is no different to these companies with one eye always on the future, and this is why we have evolved, too. Having listened to our audience, we have changed to serve you better, and the result is Better Wholesaling Insight.

This quarterly publication will include the same level of editorial excellence and offer unrivalled data and analysis, with an overarching theme of advice you will be able to improve your operation with.

What better way to start than by reviewing the most innovative year for wholesale in memory and offering advice that will set your operation apart as we head towards the light at the end of the Covid-19 tunnel.

I hope our evolution will help strengthen an industry that has been neglected by the government, and, as the wholesale sector modernises, Better Wholesaling Insight will guide wholesalers as they engineer new paths for themselves.

I look forward to helping you grow your sales and hope you’ll be able to let us know your thoughts with a short online survey we’ve sent out.

EDITORIAL

SALES

Editor Paul Hill

Director of sales & marketing Matthew Oliver 020 7689 3367

Printed by Acorn Web Offset Ltd, Loscoe Close, Normanton Industrial Estate, Normanton, West Yorkshire, WF6 1TW

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Account director Natalie Reeve 020 7689 3372

Newtrade Media Limited, 11 Angel Gate, City Road, London EC1V 2SD Tel 020 7689 0600

Editor in chief (maternity cover) Tan Parsons Head of design Anne-Claire Pickard Production editor Ryan Cooper Sub editor Jim Findlay Designer Jody Cooke Production coordinator Nadeem Masood Contributors Helena Drakakis, David Gilroy, Tom GockelenKozlowski, Toby Hill, Charles Smith

Account manager Adelice Tatham 020 7689 3366 Account manager (new business) Jimli Barua 020 7689 3364

Better Wholesaling Insight is published by Newtrade Media Limited, which is wholly owned by NFRN Holdings Ltd, which is wholly owned by the Benefits Fund of the National Federation of Retail Newsagents.

Reproduction or transmission in part or whole of any item from Better Wholesaling may only be undertaken with the prior written agreement of the Editor. Contributions are welcomed and are included in part or whole at the sole discretion of the editor. Newtrade Media Limited accepts no responsibility for submitted material. Every possible care is taken to ensure the accuracy of information.

REPORT P3-6: Feature & timeline The story of the year that shaped the future of the industry P8-9: Gilroy viewpoint A glimpse into what a postCovid wholesale sector will look like P10-11: Data & insight KAM Media interprets a transformed customer landscape P12: Data & insight TWC analyses the habits of online consumers P14-17: Case studies Lessons from the past 12 months from across the industry P18-19: Data & insight RNF analyses what wholesalers should be stocking P20: FWD viewpoint Advice on all of the key events and legislation in 2021 P23: SWA viewpoint Predictions of what the next year will look like in Scotland P24-25: Tips & summary A seven-step plan on how to take advantage of this new world CATEGORY ADVICE P26-30: Sector review An in-depth overview of the breakfast category P32: Industry spotlight An introduction to energy drink manufacturer Kingsley Beverages P34-35: One-minute depot manager Refresco offers some advice for its Emerge brand P36-45: Sector review A deep exploration of the soft drinks and sports energy sector

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REPORT

The story of a year that shaped the future of the wholesale industry Helena Drakakis

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n 2021, living with the coronavirus pandemic has become a day-to-day reality, but few in wholesale could have predicted that, 12 months in, the industry would still be facing extreme challenges.

Hope, in form of a vaccine, is here, but wholesale has continued to adapt at speed just to remain viable.

As successive lockdowns have closed or restricted sales to restaurants, pubs and cafés, not to mention recurrent school closures,

foodservice wholesalers continue to be dealt the heaviest blow. Convenience wholesalers are fairing better, as people adapt to living more locally.

Back in March 2020, the Federation of Wholesale Distributors (FWD) was quick to highlight that the raft of initial government support packages did not work for wholesale, with its unique burden of high overheads and cash-flow pressures.

Following months of campaigning, it achieved an important win.

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REPORT Timeline: The storm that shaped wholesale The first nationwide lockdown of pubs, cafés and restaurants is announced from 20 March.

Wholesalers rise to the challenge of feeding the nation, but as pressure mounts on ontrade and foodservice wholesalers, appeals to government to include wholesalers in its rescue package grow.

March 2020

April 2020

The FWD warns 33% of its members could face financial ruin. It calls on government for tax relief on wasted stock, plus business rates relief and local authority grants to be made available to wholesalers.

Meanwhile, convenience distributors profits see a significant upturn.

May 2020

Calls for an urgent cash injection into the sector continue.

Meanwhile, Brakes and Bidfood join forces to deliver care boxes to Britain’s most vulnerable during the crisis. Many other wholesalers rapidly adapt, with several opening doors to the public.

Last October, local authority discretionary grants addressed the needs of the sector for the first time, albeit minimally.

However, five months on and additional support remains uncertain. Business rates relief, handed to multiples and hospitality outlets, has still not been forthcoming for wholesale, with the organisation recently launching a petition to bring the plight of the channel to the government’s attention.

FWD chief executive James Bielby says: “We are asking the government to extend business rates relief to include foodservice wholesalers, and for an Excess Stock Grant to help wholesalers recover money from stock lost from Covid restrictions and Brexit no-deal planning.

The pandemic year has brought into sharp focus the need for wholesalers to be ahead on digital

“We believe the government should consider regulatory alignment with the devolved nations, and instruct local authorities to prioritise grant funding for foodservice wholesalers in urgent need of financial support,” he adds.

Yet, despite the ongoing challenges it faces, wholesale has proved itself to be resilient and adaptable in numerous ways.

B2B becomes B2C Almost overnight, many wholesalers adapted their offer to include direct-to-consumer home delivery.

Brakes launched its home Food Shop service via its website, with Savona Foodservice and Creed Foodservice following suit. JJ Foodservice also optimised its website to attract more household

customers. It’s direct-to-consumer sales currently stand at 5%.

As well as setting up a direct-to-consumer department in response, JJ Foodservice has also invested in dozens of smaller vehicles to expand to a same-day home delivery in London. Head of operations at JJ Foodservice Sedat Kaan Hendekli says: “Our smaller vehicles are more urban-friendly and help our drivers to navigate narrow residential streets and cul-de-sacs.”

Optimising digital The pandemic year has brought into sharp focus the need for wholesalers to be ahead on digital, including enhancing e-commerce websites and mobile app technology. Buying group Sugro quickly

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As lockdown measures ease, the sector welcomes chancellor Rishi Sunak’s Eat Out to Help Out scheme, which subsidises 50% of restaurant meals.

Meanwhile, wholesalers continue to adapt online, with wholesaler Dee Bee beating sales targets with a virtual trade show.

June 2020

July 2020

MPs support the calls for government to re-examine its support to wholesalers. Unitas managing director Darren Goldney writes to the chancellor calling it a “betrayal” that multiples are receiving business rates relief, while independent wholesalers are excluded.

launched its digital customer With lockdowns curtailing ordering app which can be cusphysical trade events, wholesalers tomised to each wholesaler. were also quick to move trade Meanwhile, Unitas officially fairs online. Last June, Hull and launched its new initiative, the Grimsby-based Dee Bee became Digital Excellence Academy, one of the first to host an online with its first webinar event trade event, exceeding attracting more than 80 its target and taking delegates from 24 £120,000 of orders Unitas wholesalers. on the first day.

“The event Dee Bee’s online focused on best Double trade event firstpractice for B2B the force day takings wholesale transacUnprecedented times tional platforms for have called for innowholesalers serving retail vation, and long-term rival customers, and covered the impor- wholesalers Brakes and Bidfood tance of e-commerce, and what joined forces to ensure vital food retail customers really want from supplies reached the country’s a wholesaler’s website or app,” most vulnerable. explained Aaron Green, digital Both companies’ robust inframanager at Unitas. structure and reduction in orders

£120,000

More wholesalers, such as JJ Foodservice, move to a B2C model as a permanent feature.

New restrictions are placed on restaurants to close at 10pm prompting further calls for sector-specific support, in particular business rate relief.

August 2020

Wholesalers focus on digital transformation. Others, such as confectionery wholesaler Hancocks, close depots as they move to online ordering.

The Foodservice sector is buoyed by the consumer Eat Out to Help Out scheme, but the FWD continues to push for top-down support.

September 2020

In Scotland, the SWA welcomes a £40m support package from Holyrood primarily aimed at wholesalers supplying shortlife goods. However, Scotland’s hospitality industry mounts a legal challenge on further lockdown restrictions. South of the border, the FWD calls local authority discretionary grants that give wholesalers specific support a “great win”. A second lockdown is announced in England on 31 October.

October 2020

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REPORT

Retail wholesalers continue to be the pandemic success story with more demand across grocery. Meanwhile, Bidfood launches Bidfood at Home – a consumer shopping platform for restaurant-quality food.

November 2020

December 2020

A further blow is delivered to wholesalers as a third full nationwide lockdown is announced on 4 January.

With many more working from home, convenience wholesalers continue to thrive, but with schools closed, and hospitality and leisure venues shut, wholesalers warn months without support will take its toll.

January 2021

February 2021 Ahead of the March Budget, the FWD continues calls to extend business rates relief to wholesalers, among other measures. It reports that over the year, it has briefed more than 400 MPs on the threat to wholesale. In evidence to a parliamentary committee, the FWD’s James Bielby calls it a crisis. A roadmap is announced shortly after that will see the country slowly return to normality by July.

Wholesalers reiterate the need for business rates relief as multiples, such as Tesco, hand millions of pounds in rates relief back to the Treasury. As the virus’s second spike becomes a reality, foodservice wholesalers take another hit under the government’s new Tier 1-4 lockdown system, with many forced to close or offer only takeaway.

The UK fully exits the EU, as the transition period comes to an end on 31 December.

from hospitality customers meant they were well-placed to support the government-led Shield Pack initiative. Operating from a combined 52 depots nationwide, five million packs were delivered across England, Scotland and Wales between March and August 2020. These included tea, biscuits, fruit, potatoes, pasta, and canned vegetables and fish.

Reflecting on the experience, Tim Adams, Bidfood’s director of marketing and corporate sales, says: “It was a privilege to work alongside Brakes, and I think together we’ve proved that regardless of us being competitors, joining forces at a time of national crisis to support the country’s most vulnerable people was a really positive experience.”

Other links have also been forged, for example between Creed Foodservice and the food waste charity Fareshare, following calls from footballer Marcus Rashford for companies to donate short-dated stock to help end child food poverty.

Adapting supply lines As wholesalers have adapted to B2C, and consumer habits have

changed, many have tailored their supply lines accordingly.

While stocking key lines became crucial at the start of the pandemic, other trends have emerged over time. For example, home-baking has seen a dramatic rise, and at the end of 2020, Thomas Ridley reported an increase in sales of bread mix.

The company also reported selling around 12,000 bags of bread flour per week plus a dramatic increase in takeaway packaging as lockdown limited restaurants’ offers.

Meanwhile, wholesalers have enhanced their relationships with suppliers as consumer trends have shifted to take-home packs and a broader basket range from local convenience stores.

In January, Premier Foods, owners of brands Mr Kipling, Bisto and Oxo, reported branded sales increased by more than 12% in the final quarter of 2020, with grocery brands a significant contributor to the performance.

Chief executive officer Alex Whitehouse says: “Looking to the remainder of the year, out-ofhome eating is likely to remain restricted and we expect high levels of demand to continue.” l

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THE UK’s

No.1 CIGARILLO

1

*RRP effective 16th November 2020. Retailers are free at all times to sell JTI products at whatever price they choose.

1 IRi Market Place, Volume Share, Total Cigarillo Category, Total UK, Dec 2020.

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REPORT

Gilroy’s Viewpoint: A post-pandemic future

David Gilroy is the founder and managing director of Store Excel

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t’s 14 March 2020, and maybe, like some of you, I’m asleep at the wheel. I am enjoying a meal out with friends at a local pub, with the usual banter and bonhomie. Little do I know this will be my last ‘normal’ eating-out experience for over a year. Meanwhile, Covid-19 is creeping across the UK and the first lockdown is only nine days away. So started the most disruptive peacetime year any of us have witnessed.

The pandemic has been all of devastating, uplifting and insightful for everyone, but is it now time to accept that ‘normal’ is precisely not normal, and to gear up for a new Covid-19inclusive world?

For wholesalers to thrive, three vital elements must be accepted and addressed – customer service and operations, reach and ranging.

Customer service & operations Data taken from tech firms shows 218 billion apps were downloaded in 2020 – up by 7%, while £105bn was spent in the app store, which is a 20% increase.

Furthermore, mobile advertising spend also increased by 26% to £175bn. It is clear successful trading is dependent on having an effective online and

app capability, and that technically advanced propositions, such as Ocado, Amazon and Moonpig, have enjoyed phenomenal growth. Consumer attitudes to home delivery have shifted and the grocery retail industry has responded impressively.

The case for wholesalers to be tech- competent is now beyond argument. All ordering channels have to be enabled, and these must include click & pick-up options as well as delivered services. There is empirical evidence to show that wholesale customers spend more online and on apps than they do when shopping in the warehouse. These options go hand in hand with operational excellence in speed of service and consistent reliable stock availability.

Speed and agility are crucial. We have seen many small retailers successfully starting a delivered service using apps such as Snappy Shopper, while new food delivery companies Getir and Weezy are gearing up in the UK. They have 10-minute delivery operations from dark stores in dense urban areas.

Getir is a well-financed, proved business model, tested in the hustle and bustle of Istanbul, and it beats anything on offer right now in the UK. Its motto is: ‘Speed is our currency’ – could something like this be emulated by wholesalers?

Prior to the pandemic, many wholesalers were operating on skinny margins, so any opportunity to increase revenues should be exploited, and there are new revenue opportunities online and through ordering apps.

Targeting promotions, offers and brand campaigns to specific groups of customers is now an established advertising strategy and is available to wholesalers at an affordable cost.

The three vital areas of focus for wholesalers now: * Customer service and operations * Reach * Ranging

I have seen these types of campaigns return astounding results and I have seen substantial revenues generated.

Wholesalers understand customer relationships in store and face to face, but they need to extend those skills by engaging constantly through online and apps. If wholesalers take the leap, technology also offers cost savings.

Reach I have always been a proponent of wholesalers opening their memberships to a wider audience. Since Tesco acquired Booker Wholesale, the unofficial rules on demarcation have been rewritten. All markets are fair play for wholesalers, and they should be going for them big-time.

‘Trade only’ is primarily a UK obsession – an alien concept in most other countries. Costco is a great example of this hybrid approach attracting a vast range of customer types under the business umbrella, and JJ Foodservice has successfully adjusted its business to recruit a significant consumer audience.

We are seeing it both ways with retailers such as Morrisons going for

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218bn apps were downloaded in 2020

small retailers with bulk-purchase options – so the gloves are off. The pandemic has opened many trading possibilities with buyers looking for value from a range of sources they were previously unaware of.

Market platforms are taking off across the world and present another way for wholesalers to connect with new customers, expand their ranges through reseller programmes and generate new revenue streams through commissions.

Platform and drop-shipment operator Mirakl predicts digital ecosystems will account for more than $60tn of revenues by 2025.

Ranging Over the past 12 months, we have seen significant changes to ranges and sales mixes driven by Covid-19 lockdowns, the consequent changes to working methods and consumer attitudes. This is another area in which speed of response is paramount.

In the first lockdown, we saw consumers returning to traditional grocery with sales of canned and packet goods

in big demand and remaining strong.

Consumers had more time to scratch cook at home, triggering substantial uplifts in home baking ranges – eggs and flour were in short supply for weeks. This trend has also precipitated a reduction in ready meal sales.

Nielsen reports a shrinkage in sales of £75m in this category.

As reported in the Financial Times, Unilever was slow to join the boom in plant-based proteins but now wants to increase sales of the meat and dairy substitutes fivefold to £900bn per year in five-to-seven years.

Alan Jope, Unilever chief executive, says brands with a social or environmental purpose are growing up to three times faster than the rest of the Unilever portfolio. Other companies, such as Procter & Gamble and Reckitt Benckiser, are following the same trajectory.

Tesco recently announced more than a 30% growth in its ‘Veganuary’ sales, and we can see plant-based products moving firmly into mainstream. The same is true for the take-up of lowand no-alcohol ranges alongside large

sales increases of established alcohol brands as consumers increase their inhome consumption.

This may be what is prompting Parfetts to launch their new ‘Local Beers, Wines & Spirits’ fascia formats.

The local off-licence, which previously looked in serious decline, is now reborn. The upside of all of these trends is they present brilliant retail opportunities in that consumers have rediscovered their local stores. Shops must, of course, do a great job – stock availability must be consistent, prices fair, and ranges reliable and offered in bright, clean and well-run settings.

This represents an opportunity for wholesalers, too, provided they make the appropriate range and merchandising adjustments. l

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REPORT KAM Media delves deep into the transformed consumer landscape wholesalers should take advantage of in 2021 Paul Hill

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ven before coronavirus hit the world, we were living in interesting times for consumer habits, with choices and tastes evolving faster than they ever have before. The pandemic has only manged to accelerate these further, and KAM Media’s research displays the evolution and the need for wholesalers to evolve along with it.

Consumers were already becoming more health-conscious, and the current crisis has accelerated this, with ‘fear for my health’ now the number-one reason

people didn’t return to foodservice outlets when they reopened in July 2020.

Also, despite most consumers not being seriously hit by a change in financial situation, many are becoming more cautious of what they spend. It’s likely they’re worried about their future economic situation or job security, while many are simply getting used to spending less.

Furthermore, meal delivery is moving quickly into its next phase. Pre-lockdown, only 7% of UK consumers were using delivery apps on a weekly basis.

That figure rose to around 24% after the first lockdown. These ‘hospitality at home’ options are likely to stick around and present a huge opportunity, not only for foodservice wholesalers, but convenience specialists as well.

Buzzwords from 2019 have also come back into the mainstream and look set to stay.

Remember sustainability? Plantbased? Low and no? Once society moves out of survival mode, many of these will be very much back on the agenda. These trends have not gone away, but have simply paused. l

FOODSERVICE INDUSTRY

82%

43%

of hospitality operators don’t expect their customer numbers to reach prelockdown levels for at least six months (KAM)

Source: UK Hospitality Future Shock report unless stated

of venues that have not reopened since first lockdown won’t ever reopen

£53.3bn 27%

The loss of sales in hospitality in the past year

of multi-site business leaders predict their groups will be unviable if current support levels continue within the first six months of 2021

Only

18%

of multi-site business leaders are confident about prospects for the next six months

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How wholesalers can take advantage of the evolving post-Covid consumer

1. Re-examine your low- and no-alcohol range 2. Check your operations and products follow a sustainable framework 3. Constantly evaluate for new and profitable diversification options 4. Maintain an open mind about your ranging in depot 5. Reassess your traditional premium and snacking decisions

CONSUMER LANDSCAPE

35%

33%

have been treating themselves to more indulgent food and drink

19%

have been treating themselves to more expensive brands

42%

say they’ve been snacking more

54%

of UK adults say they’re making an effort to eat more healthily in 2021

of UK adults will be thinking more carefully about how they spend their money

26%

35%

17% 20%

are making a conscious effort to eat less meat

of UK adults say they are spending more carefully on food and drink

of UK adults say sustainability is important to them are now teetotal

16%

24% 50%

have been buying food more in local shops versus pre-Covid

use local shops and businesses more than they did pre-Covid consumed a lowor no-alcohol drink in 2020

Source: KAM Media

32%

have been experimenting with cooking new things

For more information from KAM Media, please visit kam-media.co.uk

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REPORT TWC has analysed the habits of online consumers and the opportunities a B2C service presents to wholesalers Research shows a thriving market as we head into a post-pandemic world

A

s the pandemic pushed UK e-commerce to new heights, it’s estimated that UK consumers spent around £140bn online in 2020 – a 34.7% increase on the previous year. E-commerce now accounts for more than 30% of total retail sales in the UK for the first time, and a section of that figure has come from the opening up of wholesalers’ product ranges to the general public.

In May 2020, 42% of UK digital buyers said they’d shop more digitally in the future. By August, that proportion had risen to 55%.

Furthermore, as Covid regulations continue into 2021, the growth of e-commerce is set to continue, with a thriving and growing market out there for wholesalers to work with and take advantage of. Gone are the days where they can only serve businesses.

According to Tom Fender,

ONLINE CONSUMER METHOD TWC asked 1,052 consumers how comfortable they were with specific devices to order online

42%

Consumers who are comfortable with the use of ‘bots’ when going online to answer questions

78%

Consumers who said they are comfortable ordering online from a desktop

67%

Consumers who are comfortable ordering from a smartphone or tablet

73%

Consumers who are comfortable using apps

development director for TWC, it takes six weeks to make – or break – a habit. He said: “Habits that consumers formed during lockdown look set to endure.

There is often reticence, certainly in the over-65s, to adopt new technology and to make changes in behavioural patterns.

“However, there has been a reinforcement of digital shopping trends among UK consumers, over 65 and otherwise, as 2020 progressed, and this intent to shop

digitally has strengthened even when shops opened during the middle part of 2020 and through into the further lockdowns.”

Fender says the UK has some of the most tech-savvy consumer populations in the world. This is why technology has come of age during the pandemic, enabling wholesalers to deliver safer, faster solutions for their customers.

“Those who are not investing digitally enter the risk of being left behind,” he said. l

THE GROWTH OF E-COMMERCE The rise of online ordering in the UK

£140bn UK consumer online ordering spend in 2020

34.7%

YoY spending increase last year

55%

UK digital buyers who said they’d shop even more online in the future

30%

E-commerce’s contribution to total retail sales in the UK in 2020

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REPORT

Lessons from the industry Leading wholesalers from across the channel give their take on the most disruptive year in memory Paul Hill

Coral Rose

Sedat Kaan Hendekli

Managing director, Country Range Group

Head of operations, JJ Foodservice

We have learned the government doesn’t understand the work we do, and doesn’t care about wholesale. It’s been a horrific year for the sector with myriad obstacles to tackle and little wholesale specific support forthcoming from the government. Wholesalers have very much been left to sink or swim, so it’s a credit to our members and the sector as a whole that they are continuing the fight and showing creativity and innovation to survive. As a business, we have had to be more flexible in everything we do.

No one was aware what was about to hit us in March with the lockdown. It is not possible to predict the future, but businesses cannot take anything for granted and sometimes your ‘plan B’ may not be enough. Reinventing your business, creating and relying on robust systems, and being flexible rather than rigid will be crucial.

Product availability and quality will be key elements, alongside accurate and efficient delivery services and an increase in the importance of customer service.

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Dawood Pervez

Paul Hargreaves

Managing director, Bestway Wholesale

Chief executive, Cotswold Fayre

We learned our cash and carry service filled a gap that couldn’t be serviced through deliveries, and although we made gains in most categories, we also found we had to balance this against decline in other areas. Working closely with our suppliers became even more of a focus when we were tested against supply shortcomings and when consumer panic-buying had a major effect. We have learned how critical it is to remain strong and focused on our core offering – the backbone of our business. Twelve months on, we are driving efficiencies harder and simplifying our range and stock, alongside the rigorous management of our supply chain.

The main changes for us are connected to growth. There has been huge growth in our chilled operation, and particularly strong growth within the convenience sector. Of our customer base, convenience, butchers and farm shops seem to have benefitted most from changes in customers’ spending habits. While these are less pronounced now than they were last spring, there is still significant extra business for all these businesses – we are up by around 45% year on year. The companies that have come out of the pandemic the strongest are those that have strong teams united around a clear purpose.

Tim Adams

Ian Jacombs

Director of marketing and corporate sales, Bidfood

Director, CTC Wholesalers

People have always been our greatest asset. Of course, infrastructure and technology are incredibly important, but our people have needed to move and respond at the fastest pace they have ever had to, while needing to be flexible, pragmatic and resilient to deal with the constantly changing landscape. Along with this, the importance of clear and timely communication around any changes has been vital in helping us to achieve record employee engagement results. We’ve learned to be agile. Don’t disregard all long-term planning, but certainly be prepared to adapt and adjust in the short term to whatever the changing landscape throws at you.

Possibly the biggest change was our focus on keeping staff safe by introducing a Covid-19 risk assessment, implementing social distancing, and providing our staff with adequate and continuing supplies of face masks, sanitiser and bacterial wipes. Limiting visitors to the building and temperature checking were all new to us. We reviewed our operation, amended warehouse opening hours, delivery schedules and field sales staff journeys to visit customers. While we stocked hand sanitiser previously, a full range of PPE products have now become a standard part of our ranging and operations.

Chris Binge Chief executive, Fairway Foodservice

I have learned from working with foodservice wholesalers how entrepreneurial privately owned businesses are in the face of adversity, and how much that contrasts with the civil service. Despite three lockdowns with little or no notice, the closure of the majority of the members’ customers, the complex and changing tier systems, changing rules for workplace, health and safety, and very little direct government help for the businesses, each has found new markets, new customers and changed working practices to survive. The government has little or no understanding of industry outside of the big companies and cannot organise any project to work to an agreed timetable or budget.

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REPORT Craig Brown

Steve Whitwam

Chief sales & marketing officer, JW Filshill

Commercial director, Harvest

We introduced our click & collect facility in summer 2019, and in the run-up to Christmas that year it proved extremely popular, leading to significant sales increases for us during the key pre-Christmas trading period. Our customers really embrace technology and were ready to use it to its full advantage when Covid-19 arrived. Delivered customers experiencing an uplift in sales as their customers pulled away from the supermarkets and shopped locally, used click & collect for top-up supplies and to meet what was often unexpected demand. Our business through this channel has continued to grow, and that is one of the biggest changes for us.

Our systems and processes for B2B were not well suited to B2C. Yet, after some great work, the percentage of our online order capture increased from about 17% pre-Covid-19 to in excess of 50%. We recognise we have an over-dependence on hospitality and need to diversify our customer base and think outside the box a bit more. We adapted very quickly to offer a home delivery service that had more than 14,000 new customer registrations – at its peak, the run-rate for home deliveries was £5m per year. We have retained a sizeable proportion of that trade, and it’s clear there is still an appetite for the general public to buy from wholesalers.

David Cattrall

Derek O’Reilly

Managing director, Harlech Foodservice

Managing director, O’Reilly’s Wholesale

Stock has been extremely difficult to manage when you consider the significant write-offs and the support to food banks. Our business is too large for the government to fully support and too small to get a response. Yet, we still needed to be there for customers who do trade.

Because of that, we restructured in all areas. We strengthened our digital interface and increased our digital marketing; we introduced efficiency improvements such as new routing software; we focused more on health, care and education, and broadened our geographic reach. We also introduced transparent prices so all customers can browse our range and buy at competitive prices.

We have learned resilience, to seize opportunity, to be agile and forward thinking, and to pivot quickly when we see that what we have may not be all our customers require. We saw the appreciation in our employees that they were the fortunate ones and their jobs were safe. We learned that our people were our wealth, and that, now more than at any other time, we needed to place our trust in them, look after them and recognise that without them there would have been no growth, no expansion, no deliveries and, ultimately, a business on its knees. The phrase ‘our people are our wealth’ has never rung louder.

Video calls have now been normalised in the channel

Kiera Campbell

Justin Slawson

Sales director, Henderson Foodservice

Chairman, Mevalco

In general, we’ve become much more adaptable to meeting the ‘here and now’ needs of our customers. In practical terms, the main changes have been the implementation and successful rollout of remote working, the complete integration of companies Foodco and BD Foods into Henderson Foodservice, and launching a new e-commerce website and new product information management system.

I think it’s now important to communicate effectively and regularly with all your stakeholders and keep everyone informed and updated – from suppliers and other customers to colleagues, staff at all levels, local councils and government departments.

At Mevalco, we learned very quickly to be adaptable and give anything a try. Before the pandemic, our business was firmly planted in B2B; since Covid-19, we’ve created a solid B2C platform, which has been a good challenge. We’ve also learned the power of collaboration, whether that be across our customers, our suppliers, and our peers. Shared knowledge has a real value in the face of adversity. As we moved our business model to B2C, we reviewed our product formats and, working closely with our supply partners, have created retail packs, which has opened up the retail sector for us. We are now much more diverse and adaptable.

16

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18/03/2021 13:33

Guy Swindell

Mike Morgan,

Retail director, Parfetts

Managing director, Savona Foodservice

I’m immensely proud of my colleagues who pulled together and worked hard to ensure our customers were supported through the pandemic. It was ‘all hands to the pump’ to maintain service levels, and we’ve had some fantastic feedback from retailers who appreciated our efforts. Parfetts is uniquely positioned to support its retailers because it is employee-owned. We had the flexibility to maintain promotions, opening hours and delivery throughout 2020.

Our focus on the customer has seen a leap in the membership of both Go Local and the retail club. The focus is now on the customer and anticipating their changing needs.

Honesty with our team is the best policy – we shared everything and hid nothing. Frustratingly, I have also come to realise that the press and public in the main have no idea what our industry is or does, and that we have been left exposed by central government with no real desire to understand our plight – we’re on our own.

I suggest the industry now makes sure it is ready for the future.

If you are judging the performance of your business on what you used to do, then I suggest you turn through 180° and look forward.

The ability to react quickly is crucial, and our customers’ expectations will only increase with time.

Debbie Harrison

Giles Simon

Joint managing director, Pricecheck

Team member, Suma

We were always on a growth trajectory, and the pandemic hasn’t changed many of our plans – maybe just the timelines and priorities. Certain categories and accounts have become busier than we possibly thought.

Our e-commerce and digital offering have certainly exceeded expectations, and we’ve reached 300 team members, which was our target for 2025. I’d suggest to not be afraid to try something new, and to invest in the next generation. I predict the younger generation will be hit hard on the recruiting front, so consider looking at paid internships, apprentices and graduates, and invest in that next generation of talent.

Like most people have found in their everyday lives, the pandemic has confirmed to Suma, as a wholesaler, that what matters most is people. We’re a worker-owned co-op, so we’re all about Suma workers anyway.

But this has really been amplified over the past 12 months.

Whether it’s been protecting people with health conditions or vulnerable family members, finding ways to reduce the stress of those dealing with a lot on at home, or bearing a lot of responsibility at work, we’ve put measures in place to make it a safer workplace for everyone.

We’ve done a lot to support our entire workforce.

Neil Turton

Darren Labbett

Managing director, Sugro

Managing director, Woods Foodservice

Business grew by 12% in 2020. Sugro is not – on the whole – exposed to foodservice and the very tough conditions those wholesalers have faced. We do have some members who have a profile serving hospitality and leisure who have done less well.

We have tried to support and serve them as well as we can. All of our staff have worked from home since March 2020, and that has worked very well. We have embraced online events and digital trade shows, running several during the year and enabling 700-plus member/supplier meetings during the largest one. Our digital app has also been vital in helping our wholesalers’ trade.

I have learned the foodservice/wholesale food suppliers are largely forgotten by the government. It seems we are completely overlooked because we are hidden away on industrial estates rather than being glamorous and highly recognisable on the front line. I think some serious PR needs to be done to make the public aware of wholesale. I have also learned complacency is not an option, and companies in this industry must diversify and reinvest profit to ensure not only that they survive, but are also in a position to take advantage of any opportunities that arise from any future economic crisis. l

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18/03/2021 13:34

REPORT Data from RNF’s b2b.store offers an insightful overview of what sold well last year, and what wholesalers should be stocking as we head out of lockdown Paul Hill

R

NF’s b2b.store has seen a marked shift towards digital wholesaling since the arrival of Covid-19 to our shores, signing more customers to its e-commerce platform since March 2020 than it did in the preceding seven years.

Rob Mannion, founder and chief executive, said: “When the pandemic arrived last year, we were able to see an increase in sales within a few hours of lockdown being announced.

“The total value of retail and grocery transactions we processed in March 2020 went up by 50% in a single month, and these figures are consistent with the current lockdown, where sales are again

up by 54% in January 2021 versus the same month last year.

“Some of this is about existing customers using the digital channel more and some of it is down to more customers having made the shift to digital wholesaling using our platform. Crucially, being able to see what is happening in real time means wholesalers are able to react more quickly when it comes to adjusting stock levels to meet demand,” he added.

The big category winners through digital channels have been alcohol and cigarettes. RNF also saw a huge uplift in non-food items during the first lockdown, with sales increasing by 607% in March 2020 compared to the previous month.

Alcohol Alcohol sales increased 66% in March 2020 compared to Feb 2020 and continued to increase every month until July (when lockdown was relaxed), reaching a peak in June where they were 89% higher than March 2020 itself.

Sales dropped back between July and November, as restrictions were loosened, but increased again in December. While dry January has affected alcohol sales in 2021, as it does every year, they remained 42% higher than they were during January last year.

previous month, as the first lockdown kicked in. Tobacco sales declined by 12% in January 2021 versus December 2020 – typical of the ‘new year health-kick trend’, but these figures were still up by 36% compared with January 2020, which suggests Covid-19 isn’t deterring smokers.

Tobacco Tobacco sales increased by 35% in March 2020 compared with the

What wholesalers should be investing in as we head out of lockdown The wholesale industry is used to predicting which products will prove popular, driven largely by flagship or annual calendar events, but the repeated lockdowns of the past 12 months have made things more unpredictable.

What has become clear during the Covid-19 pandemic is that every time we have gone into lockdown, purchases of products that can be consumed at home have gone up significantly.

With restrictions expected to remain to a greater or lesser extent well into the summer, these products are likely to remain popular, although the split may change as restrictions lift. For example, sales of alcohol to consume at home have risen significantly during each lockdown, but may fall from current levels as and when pubs and bars reopen. l

The Lockdown Effect Tobacco Feb ’20 – Mar ’20

+66%

+35%

Source: RNF data - Total Transactions

Alcohol Feb ’20 – Mar ’20

Overall transactions

+50%

Feb ’20 – Mar ’20

+54%

Jan ’20 – Jan ’21

Frozen food Lockdowns have also had an effect on frozen food sales, with sales up by 44% in March 2020 compared with the previous month, with a further 63% rise in April compared with March.

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p18-19 RNF Data & Insight.indd 19

Tobacco Grocery

Ja 20 n 21

Chilled & fresh

D 20 ec 20

Non food

O 20 ct 20 N 20 ov 20

Confectionery

Se 20 pt 20

Alcohol

A 20 ug 20

J 20 ul 20

M 20 ay 20 Ju 20 ne 20

A 20 pr 20

M 20 ar 20

F 20 eb 20

Ja 20 n 20

D 20 ec 20 Ja 20 n 21

N 20 ov 20

O 20 ct 20

S 20 ep 20

A 20 ug 20

J 20 ul 20

Ju 20 n 20

M 20 ay 20

A 20 pr 20

M 20 ar 20

F 20 eb 20

Ja 20 n 20

D 20 ec 19

N 20 ov 19

O 20 ct 19

Source: Data from RNF’s b2b.store

Categories

D 20 ec 19

O 20 ct 19 N 20 ov 19

Se 20 pt 19

Amount (sum) Amount (sum) Revenues by data and category £4M

£3M

£2M

£1M

0

Soft drinks

Revenues of the retail sector

£30M

£25M

£20M

£15M

£10M

£5M

0

19

18/03/2021 14:56

REPORT The FWD offers its advice to wholesalers on each key area of focus this year Paul Hill

W

e’re into the second year of Covid-19’s influence on the wholesale sector, and the first full year of post-Brexit trading with the European Union (EU).

After 12 months of dealing with little other than these two issues, the government has taken some tentative looks at the wider legislative agenda. As wholesale’s representative body in Westminster, it’s the Federation of Wholesale Distributors’ (FWD) job to anticipate the impact of policy on its members’ businesses and communicate their concerns to ministers and departmental officials. Here, the trade association takes a look at some potentially significant changes on the horizon.

Covid restrictions

FWD chief executive James Bielby writes: The next few months could make or break some of the foodservice and on-trade wholesalers among our members. What they need from government is clarity on the reopening schedule for hospitality, and an assurance plans won’t change at the last minute, leaving them with excess stock.

Having been denied the bespoke financial support other sectors have had, wholesalers would like the government to give them priority for local authority grants.

EU trade

We’re still in the early stages of post-Brexit trading with the 27 member states of the EU. Import volumes in January and February were low, giving little indication of the potential stress on our ports

and borders. The requirement for full customs documentation begins in April, just as we expect demand in hospitality to recover, so there’s potential for delays in supply there.

Similarly, when vehicle checks are introduced in July, we will get a fuller picture of the scale of disruption at the ports. There is a lot of detail still to be agreed in the import and export process, and we are working with the government to iron out the many significant barriers to trade with the EU and with Northern Ireland.

Health

The prime minister has signalled his personal interest in tackling obesity through regulation that affects our sector. A ban on buyone-get-one-free deals and new rules on display in stores larger than 2,000sq ft is expected in 2022-2023, and mandatory calorie labelling for larger businesses for items prepared for immediate consumption is imminent. Natasha’s Law, which requires food prepared

and packaged on site to carry a full ingredients list, also comes into effect in October.

Environment

A second consultation on extended producer responsibility opened in March. This looks at changing how costs are managed to be consistent with ‘polluter pays’ principles, and could add enormous costs to wholesalers that have previously been exempt.

A tax on packaging made from less than 30% recycled plastic comes into effect from April 2022.

The deposit return scheme for drinks containers now seems to have slipped back on the timetable for Scottish and UK enforcement.

Transport

An announcement is expected this year on the phase-out of petrol and diesel commercial vehicles. For passenger vehicles, the deadline is 2030. A ban on the use of red diesel in delivery vehicles comes in next year – although not a

road fuel, it is still used in trucks’ refrigeration systems.

We will also see more cities – including Birmingham and Bath – introducing and expanding clean air zones in which vehicles are charged for entry.

Business

We expect the National Living Wage to continue to rise above the rate on inflation. For foodservice wholesalers, there is a potential threat to the universal free school meals programme, and retail wholesalers would be affected by the possible extension of supermarkets’ Sunday trading hours.

That’s a whirlwind tour of the legislative landscape – no doubt more will emerge, and some may be shelved. It’s the FWD’s job to keep its eye on all this so wholesalers have input into this agenda, are not disproportionately affected by policy and have clear notice of what’s required of them. l

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18/03/2021 10:16

REPORT The SWA looks back at the past year and predicts what the rest of 2021 will look like for Scottish wholesalers Paul Hill

A

t the start of the pandemic, it became apparent to the Scottish Wholesale Association (SWA) that members needed help, guidance and clear advice – and needed it quickly – as many wholesalers saw their customer base disappear overnight with the hospitality industry shut down.

In some instances, SWA members lost up to 95% of their business at the flick of a switch, and chief executive Colin Smith was quick to ramp up communication with key Scottish government ministers and officials.

The biggest breakthrough for the SWA came mid-December when the trade association’s persistence paid off. “After months of discussions and hard work to highlight the importance of wholesale as the ‘wheels to Scotland’s food and drink industry’, and therefore a critical component of the supply chain, the Scottish government established the £5m Scottish Wholesale Food and Drink Resilience Fund,” said Smith.

“This meant that qualifying wholesalers affected by coronavirus restrictions could apply to a sector-specific fund for a grant to cover fixed costs for a six-month period from October 2020 – a real lifeline for many of those wholesalers selling to hospitality, on-trade or public sector clients who had seen sales fall by 20% or more since March.” But even so, not everyone got what they wanted (see box).

It is clear the Covid-19 pandemic has refocused Scottish wholesalers’ priorities in terms of their

approach to business and their digital activity. Many Scottish wholesalers selling to hospitality businesses switched to online sales direct to the consumer.

The pandemic also shone a spotlight on consumer demand for local and Scottish products.

In 2019, the SWA set the scene for a local sourcing project that started with a mini-exhibition at its annual conference that year to provide a platform for 20 Scottish producers and suppliers to meet buyers, decision-makers and the buyers from SWA member wholesalers.

Collaborating with industry organisation Scottish Agricultural Organisation Society, the SWA has created a member sub-group to develop this project in 2021.

Part of its focus is to help develop the Scottish food and drink marketplace by educating both producers and wholesalers, connecting the regional food groups and delivering a strong wholesale route to market – both to retail and foodservice.

“Clearly, our sector will continue to face significant challenges due to the closure of most of hospitality and the ongoing coronavirus restrictions in place at any given time,” Smith continued. “But the one certainty about Covid is that things will get better, and it’s those who have adapted, pivoted, shored up their assets and identified their own route maps out of this who will be in the best position.”

He added: “This is an industry truly divided, with retail-based operators having had a good year, but the sector’s strengths have traditionally been its agility

SCOTTISH WHOLESALE

• Ninety-two per cent of SWA members that applied to the Scottish Wholesale Food and Drink Resilience Fund received some level of grant funding, but, according to Smith, its £5m pot wasn’t big enough, and few applicants got what they asked for.

• Average turnover in the foodservice marketplace is currently 30% of pre-Covid levels. Retail eased back from the dizzy heights of 2020 and is now in high single-to-low double-digit growth.

• Eighty-three per cent of wholesalers surveyed in a recent Local Sourcing Survey say they actively want to support local producers and suppliers.

• More than 55% expect to see demand for Scottish/local products increase within the first half of 2021, driven potentially by the EU exit, but also Scottish government policy and the focus being given to this through the SWA’s strategy.

and ability to adapt quickly to fast-moving circumstances and for people to work collectively where they can, which is something we’ve seen in practice during the past year. I’m confident we’ll continue to see this throughout 2021 as our resilience and adaptation in the face of adversity endures.”

So, it’s been a bittersweet expe-

rience for Scottish wholesale – big investment for differing reasons.

Retail has had to cope with increased demand and invested in improved digital ordering capture systems to deal with this, while foodservice operators have had to change their operating model, find new markets and invest in digital ordering capture systems to deal with a new type of customer. l

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18/03/2021 12:29

REPORT

A seven-step plan for taking advantage of the changing wholesale landscape Charles Smith Charles Smith is a journalist with experience writing for the UK's grocery and foodservice wholesale industry

1. Improve your website

Make websites easy to navigate, with strong functionality, especially if you sell to consumers in addition to trade.

Keep your website information updated and content refreshed.

Unitas’s Digital Excellence Academy and others provide insight into best practice.

Connect with social media to collect customers’ details, rather than make them fill out account forms. Integrate payment methods like Apple Pay to make shopping easier and encourage repeat orders.

With convenience retailers placing more frequent, larger orders to serve their local communities, make sure your websites and apps cover a range of core retail-related business activities, including ordering, price checking and delivery tracking.

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18/03/2021 11:54

2. Create an e-commerce culture

With so many e-commerce platforms available, be careful to choose the right one for your business, ensuring you protect your data.

Today’s shopkeepers, chefs and other foodservice customers are consumers, too, and love buying online, but e-commerce isn’t the end of cash and carries.

Many retailers prefer to research wholesalers’ websites then click & collect, allowing them to visit the depot and eyeball the promotions. Online ordering and delivery still works better for busy caterers.

Sell customers your online offer as a major benefit, saving time and improving health and safety in your depot. Click & collect gives smaller wholesalers instant extra capacity.

3. Modify your delivery systems

Foodservice wholesalers pivoting into B2C home delivery are picking and providing smaller orders in bigger quantities. Robust ERP systems help ease the increased burden on all parts of the business.

As minimum order levels change, review vehicle usage: foodservice wholesalers serving city-centre customers should use long wheelbase vans: shops buy much more stock, so for convenience wholesalers delivering to small stores, three- and seven-tonne trucks are more practical.

As foodservice outlets’ home deliveries continue growing, wholesalers should strengthen their supply arrangements with transport management and fleet utilisation systems, and look at using third-party logistics to cut vehicle ownership overheads.

4. Strengthen supplier relationships and improve availability

After the enormous sales uplifts convenience retailers have seen in the pandemic, wholesalers are better placed to negotiate with national grocery brands. Retailers feeling sore following the first lockdown stock diversions will feel more appreciated if these brands offer generous promotions. World-food and impulse-product suppliers have less appeasing to do, having built their businesses around wholesalers and small shops and being more even-handed with stocks.

Collaborative supplier relationships and robust joint business plans are crucial to keeping wholesalers stocked with fast-moving items like soft drinks. Openness about sharing sales data is essential to forecast peak requirements accurately.

After the enormous sales uplifts convenience retailers have seen in the pandemic, wholesalers are better placed to negotiate with national grocery brands

Safeguarding the mental health and well-being of your staff – including furloughed workers – comes down to empathy and good communication

5. Look after your staff’s mental health

Safeguarding the mental health and well-being of your staff – including furloughed workers – comes down to empathy and good communication. It’s vital to check in regularly – implement regular video team meetings to ensure everyone feels connected, but beware of fatigue from video calls. Avoid letting depot staff work seven-day shifts for long periods as prolonged continuous overtime can cause burnout. Encourage sales people to do more calls from home.

GroceryAid offers advice and support, including online wellbeing resources, to everyone in grocery, including wholesale, and has extended its services to foodservice wholesale colleagues.

Other recommended sources of help and advice include acas.org.uk, mind.org.uk and hse.gov.uk.

6. Explore new markets and categories

As new categories emerge in retail and foodservice, wholesalers should guide customers about core ranging and stocking. Similarly, buying groups should support growth categories, working with suppliers to provide insights to wholesalers and customers.

Exports are a growing business for wholesalers. Following Brexit, we can now trade freely with countries worldwide. E-commerce offers the easiest entry – great.gov.uk provides advice, support and finance.

In foodservice, wholesalers should partner suppliers in developing signature products. Retail wholesalers should embrace vegan, the fastest-growing grocery category. Not all wholesalers sell world foods, but these are booming as stay-home consumers seek new tastes and explore local specialist convenience stores.

7. Improve your health and safety procedures

It’s difficult to stop people entering cash-and-carry buildings via open areas, but wholesalers can control visitor numbers with barriers and ID cards. If they haven’t checked in, they can’t check out.

Encouraging customers to click & collect also reduces pedestrian traffic.

Daily steam cleaning is expensive but improves hygiene and boosts visitor confidence. Restrict pallet movements in public areas during opening hours: make staff wear steel toe cap boots and highvis jackets.

Finally, Citation’s online services offer wholesalers an excellent reference point for updates on health and safety and employment law.

The monthly subscription includes access to a 24-hour helpline. l

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18/03/2021 12:40

SECTOR REVIEW – BREAKFAST

Breakfast Toby Hill

B

reakfast has always been an important category for independent wholesalers, as rushed commuters and sugar-craving schoolchildren hustle into convenience stores and cafés looking for an easy meal.

But breakfast is a sprawling sector, encompassing everything from French pastries to bacon rolls – so what are the key trends wholesalers should be aiming to harness through the rest of 2021? How will loosening coronavirus restrictions shape sales – and will the pandemic leave a lasting mark? We’ve investigated these and other key questions for the mornings ahead.

“Breakfast is big business and a growing sales opportunity for retail and foodservice customers.

More than half (55%) of people eat breakfast every day in the home, according to Mintel, but it will be interesting to see the updated figures for 2020 bearing in mind the time people spent at home,” explains Louise Reynard, commercial manager for St Pierre Groupe, which includes the St Pierre and Baker Street brands.

This opens up new opportunities for retail and foodservice breakfast opportunities away from the classic fried breakfast. Think soft pastries, such as St Pierre’s ambient croissants or pains au chocolat, or inspire your catering accounts to tempt their own customers with brioche French toast topped with fresh fruit.

many other options; meanwhile, the ever-increasing penetration of continental pastries and other alternatives also stole sales away.

However, the coronavirus pandemic has led cereal to experience something of a renaissance, according to Darryl Burgess, head of sales at Weetabix.

“Consumers have returned to cereal because of its versatility

– it’s quick and convenient, and lends itself to additional toppings and different milks, which taps into the trend for personalised breakfasts,” Burgess says, noting sales of Weetabix Minis Chocolate rose by 44% last year.

In particular, the pandemic has seen a rise in fun-starved customers looking to treat themselves wherever possible, adds Matt

Goddard, wholesale trading director at PepsiCo. “Treat cereals have been one of the fastest-growing segments, and treat flavours are a popular way to gain the attention of retailers,” Goddard says. “We are seeing that chocolate is the best-performing flavour in the cereals category, especially with younger, pre-family shoppers.”

Cereal renaissance Cereal is a classic British breakfast, but through the decade before the coronavirus outbreak, it had taken a bit of a hit. As an increasing number of Brits chose to breakfast on the go, a bowl of cereal was less convenient than

26

p26-30 Breakfast.indd 26

18/03/2021 11:59

GROW YOUR

CEREAL SALES WITH 1. Must stock lines

Weetabix 12’s

Weetabix 24’s

STOCK US IN THE CHILLER

Weetabix Chocolate 12’s

Minis Chocolate

Alpen Original

Alpen No Added Sugar

Weetos

Ready brek

Weetabix On The Go

2. Merchandising tips Focus on a core range of best-sellers to make it an easy choice for your customers

Put the biggest sellers on the middle shelves to help your customers find them easily

Include a range of PMP’s to help communicate value to your customers

3. 2m Planogram Make it easier for your shopper to find what they need Family OTG & Hot Muesli and Granola Healthy Living Tasty

4. No1 Cereal products Best Sellers in Impulse Channel* *80% of total cereal sales in the market come from only 3% of products *Nielsen Total Impulse MAT 52 w/e 30th January 2021

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12/03/2021 10/03/2021 10:38 21:18

SECTOR REVIEW – BREAKFAST He suggests stocking PepsiCo’s recently launched Quaker Oat So Simple Velvety Chocolate flavour as one way for wholesalers to harness this trend.

Healthy living While treating has been boosted by the pandemic, it has also served to sharpen people’s awareness of health issues – and given many plenty of time to chew over their own habits. With the restrictions about to lift, manufacturers anticipate a spike in healthy eating as customers seek to lose weight while remaining conscious of health and immunity.

One trend that is expected to gather pace is fibre, following substantial media attention including a BBC documentary on the role it plays in boosting immune health.

“We believe fibre will be an important nutritional trend in the years ahead,” says Burgess, pointing to Alpen – in the form of cereal

and cereal bars – as a good source of the nutrient.

Over at Cambridgeshire-based Glebe Farm Foods, director Rebecca Rayner also anticipates a strong year ahead for sales of healthier breakfast products.

“Health, nutrition and vegetarian or vegan options continue to be a major focus for breakfast,” Rayner says. In particular, she predicts a coming surge in the popularity of oats, advising wholesalers to stock up on oat-based products.

“Whether it’s in an oat drink, porridge or granola, the humble oat packs a powerful nutritional punch and can be grown on UK farms,” Rayner says.

Convenient times While working from home has led many people to take longer over breakfasts during the pandemic, this will shift as normal life resumes. Moreover, trends towards

SUPPLIER VIEWPOINT Joe Liquorish, customer category manager for wholesale and convenience, Nestlé

Convenience shopper missions are changing as we continue to spend more time at home, with both the main shop and planned top-up shops becoming more important in the channel, leading to larger basket sizes and higher spend in convenience stores. However, this also means that shoppers are more likely to purchase large pack formats, so wholesalers should provide these for their customers.

Another big trend in the coffee category is lifestyle changes, with many shoppers choosing dairy alternatives or buying into decaf to control their caffeine intake. These trends can boost wholesalers’ sales

if they understand the opportunity to cater for more coffee buyers.

Another tip is to sell products for the breakfast occasion in the same area in the depot. Therefore, if someone is stocking up on their cereals, you can also sell them other breakfast products like coffee, tea, jam and baked goods.

Then, while the customer is in a breakfast mindset, they may make incremental purchases for related items. This is simple merchandising, but wholesalers could take it a step further by running promotions across categories with products that fall under the breakfast occasion.

PRODUCT NEWS

Gleve Farm’s Pure Oaty – Vegan and dairy-free lifestyles have exploded in popularity in recent years, with oat milk selling well, meaning products like this have become must-stocks.

Utterly Butterly – As more people breakfast at home, sales of butters have surged in recent months, with convenient but flavour-filled options like Utterly Butterly leading the way.

Lamb Weston Hash Browns – This new line provides a delicious and sustaining base for breakfast ideas everywhere, whether on the high street, as take-out, or at home.

Alpen Light White Chocolate, Raspberry & Shortcake – Preference for convenience combined with growing demand for fibre options mean products like this are primed for growth.

Weetos – Cereal sales have surged through lockdown, with the population staying at home. This makes it worth wholesalers’ time to consider revisiting old classics, such as Weetabix’s Weetos.

Brioche Pasquier’s Pains au Chocolat – Combining convenience, sweetness and sophistication, French pastries are more popular than ever in the UK, making these a perfect solution.

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Better Wholesaling - Quaker RN Full page ad.indd 1 full page.indd 1

15/03/2021 13:53:11 15/03/2021 16:14

SECTOR REVIEW – BREAKFAST

quick and easy breakfasts are so well-ingrained that simple solutions – whether cereal bars, drinks, biscuits or pastries – remained strong sellers even throughout the past virus-riddled year.

Many firms have sought to position products on the market that meet this demand for effortless morning eating.

One of the most successful has been BelVita, from Mondelez.

Susan Nash, trade communications manager at Mondelez International, explains: “The idea behind BelVita is the insight that one in three people in the UK skip breakfast during the working week, and the main reason for this is lack of time.

“Breakfast biscuits tap into the consumer need for a convenient and nutritious breakfast that slots into their busy daily lives.”

Mondelez has also sought to meet demand for healthier products by launching two Seeds & Berries formats and a 30% reduced-sugar version.

Another growth area is breakfast drinks, now worth £5m in impulse. Weetabix has targeted this with its Weetabix

On The Go, which is the UK’s biggest-selling breakfast drink, while Red Bull UK also highlights “the boost that consumers need before a long shift at work” making breakfast a key period for energy drinks sales.

The rebirth of the on-trade No consideration of breakfast’s future would be complete without considering the on-trade.

While sales have been pummelled by lockdown restrictions, trends were already strongly moving towards takeaway options before coronavirus shut down the nation’s cafes.

“Before the pandemic hit last March, the ‘off-site’ aspect of breakfast sales was growing seven times faster than the ‘on-site’ aspect,” says Gordon Lauder, managing director of frozen food distributor Central Foods.

As a result, the on-trade can expect a strong resurgence through the rest of the year, buoyed by trends towards takeaway food and an influx of customers excited they can return to eating in. This will give a huge boost to struggling foodservice wholesalers.

TAKEAWAY POINTS 1. Post-pandemic healthy eating – As the pandemic comes to an end, health food trends are expected to gather pace, as people retain an awareness of immune health while looking to lose some of their lockdown weight. Within this, two sub-trends are likely to be important – eating fibre for immune health, and a continuing shift towards vegan and low-meat diets. Wholesalers should ensure they are well stocked to meet both demands, offering high-fibre products such as Alpen cereal or cereal bars, as well as vegan alternatives such as oat milk.

2. Clamour for convenience – Coronavirus restrictions have seen more people eating breakfast at home – and just eating breakfast in general.

However, even this hasn’t suffocated demand for convenient solutions, with sales of breakfast biscuits such as BelVita and French pastries such as Brioche Pasquier’s Pains au Chocolat remaining strong through the past year. Such demand for convenience is sure to accelerate as restrictions lift and the commute becomes a daily reality for many more people. Wholesalers could consider making a distinct ‘breakfast on the move’ display to flag this coming demand to retailers, bringing together cereal bars, breakfast drinks, ready-to-eat pastries and similar items.

3. The on-trade returns – In fact, the on-trade never went away. There were already strong trends towards takeaway hot breakfasts before the pandemic, and, in the UK at least, many cafés and restaurants have continued to offer such services through most of the lockdowns. The lifting of restrictions will bring a new wave of demand, however, as people look to treat themselves – not to mention to get out of the house and enjoy the summer sun after a year stuck indoors. Wholesalers should therefore prepare to make the most of this demand, with trade experts recommending offering the components of indulgent US-style options such as chicken and waffles, or bacon and maple syrup. l

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INDUSTRY SPOTLIGHT

Kingsley Beverages FAST FACT Lee Fretwell, head of sales & marketing BWI: Tell us about Kingsley Beverages’ journey to the UK. LF: Founded in South Africa in 2007, Kingsley Beverages is a privately owned business that has grown rapidly to produce, market and distribute its own range of soft drinks brands and now enjoys more than 25% of the market share in its sector in South Africa. Following this success, the business looked to grow geographically, and plans for facilities in Dubai and Cambridgeshire were born.

Manufacturing in the UK commenced in late 2018 with a stateof-the-art PET line, followed by a high-speed can line in late 2019. We have capabilities across a range of formats and soft drinks categories, and pride ourselves on our manufacturing excellence and our BRC AA rating.

Dragon Energy is the

No.1

energy brand in South Africa

How has Kingsley Beverages been portant to make savings on groceries affected by Covid-19? and 39% concerned about the impact The last year has been Kingsley Brexit will have on overall grocery Beverages’ first full year of proshopping due to rising prices. duction, and, as such, the We are also supporting local effects of the disruption food banks and Covid-19 are hard to judge, as it vaccination centres is an assessment of the with free canned water impact of what might through our Aquafria The company’s have been. brand, which offers soft drinks However, we have a great product in a market share in South Africa seen some clear trends plastic-free container. towards larger formats, as consumers purchase to How can soft drinks mandrink at home and a corresponding ufacturers like yourselves support decline in the out-of-home/food-to-go customers and consumers, with the formats, such as canned water. threat of recession ahead?

Looking ahead, post-Covid consum- It is Kingsley Beverages’ mission to er concerns include financial worries, bring to market premium products that with 91% of people saying it’s imhave sustainable credentials, using

25%

locally sourced ingredients wherever possible. Our brands offer quality and value to consumers (low prices with no compromises on quality), excellent margins for the retailer and wholesaler, due to our low-cost operating model, supported by our Brexit-friendly UK manufacturing facility.

Furthermore, we continue to invest in areas that our customers have highlighted as important for them and, as a result, we are looking to launch our isotonic drink, Isorade, later this year.

What advice would you give wholesalers looking to grow sales in the category?

Consumers today are becoming more savvy, and will be even more price conscious post-Covid. Kingsley believes there are clear gaps in soft drinks for a branded, value option.

Our full range of Dragon Energy, Aquafria, Aquafria Hints, Isorade and Mulberry Creek Mixers will offer credible alternatives to recognised brands on taste and appeal, deliver retailers and wholesalers strong cash margins and POR, and give consumers great on-shelf offerings.

What products are you launching in the wholesale channel this year?

Dragon Energy is the number-one energy brand in South Africa.

Our launch in the UK with this great-tasting product, standard and sugar-free, has been well received by customers and consumers alike, demonstrated by the initial successful launches, with its premium cues of a matt finish, coloured tabs and ends, together with iconography to educate the consumer about Dragon Energy’s benefits.

We offer standard and PMP formats, 250ml at 59p and 500ml at 89p.

This provides wholesalers with the opportunity to offer their retailers products that deliver market-leading cash margin. l

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ONE-MINUTE DEPOT MANAGER

Emerging ahead of the pack Refresco’s Emerge brand is looking to evolve further in the wholesale channel The Emerge brand is now more than 15 years old and a mainstay of the UK’s energy category. Emerge was created following the boom in energy drinks when consumers were seeking out a cost-price alternative to big brands, and is now set for further evolution in the convenience channel.

WHERE TO STOCK When it comes to placement, it is recommended to place Emerge front and centre, as it is a high-turnover item with a fantastic price – price-marked 50p – meaning it is quickly snapped up by retailers and consumers. Wholesalers should also bear in mind the brand will be showcased across live T20 and Rugby Union events this year, bringing it even more into the public eye, with more retailers set to search for it in depot.

WHEN TO STOCK Due to their flexible use, there’s no need to tailor when and how you market these to consumers. They’re practical, not only throughout exercise, but also afterwards as a means to refuel. Treat the product as a ‘must have’ that has the same prominence in store as other staple RTDs and water ranges.

The brand has also allocated its all-time biggest trade budget spend for 2021, aiming to engage more consumers than ever.

WHY STOCK IT Despite 2020 being difficult for everyone, especially from a business perspective, the Emerge brand finished last year extremely strongly and is now in a great position to offer great promotional activity to all current and new customers, and continued demand for the range, with the launch of Cherry isotonic NPD during last year’s lockdown showcasing consumer appetite as the flavour performed well despite unprecedented times.

PRODUCTS This year Emerge is welcoming a new look and feel for across its energy and isotonic products. While the brand’s great taste and price remain, its new branding has been created to respond to consumers’ current wants and needs. In total, the Emerge range now contains five isotonic flavours: Cherry, Tropical Berry, Orange, Mixed Berry and Citrus, alongside five functional energy varieties: Zero Sugar, Original, Juicy Berry, Tropical and Coffee.

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In partnership with

Retail price is

10p less

than other mid-tier energy brands

SUPPLIER VIEWPOINT

WHOLESALER VIEWPOINT

Nick Partridge,

Ashleigh Ritchie,

commercial manager, Refresco UK

trading controller, Unitas Wholesale

Emerge is a brand that continues to offer great value, alongside the same great taste as premium energy brands. We’ve always had a history of innovating and pushing boundaries in new sub-categories within energy. Communication is so important to our team and we offer many ways to support wholesalers in being more flexible, regardless of the challenge or time.

Emerge is a key brand partner to Unitas and plays an important role for many of our members. Therefore it is great to see it placing strong and carefully considered investment behind their rebrand, taking the time to research exactly what consumers want. This will help to drive growth within our members and we are excited to work alongside this exciting opportunity.

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SECTOR REVIEW – SOFT DRINKS & SPORTS ENERGY

Soft drinks & sports energy Tom Gockelen-Kozlowski

B

oris Johnson may have charted the path out of lockdown, but when it comes to analysing the current soft drinks market – and identifying major opportunities for wholesalers to increase sell-through – reacting to the impact of Covid-19 remains vital.

The immediate effect of the pandemic on the soft drinks market has been a shift in the formats consumers are looking for.

“Local restrictions have meant shopper behaviour has fundamentally changed, which has had an impact on the way they shop the category,” says Mike Buckland, consumer marketing controller at the Highland Spring Group.

Buckland adds: “‘Drink now’ is the largest subsector within bottled water, but with more people working from home, the out-of-home lunch occasion has shifted to in-home, meaning fewer shoppers are taking advantage of the impulse opportunity.

“As shoppers stay at home for

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SECTOR REVIEW – SOFT DRINKS & SPORTS ENERGY longer periods, the opportunity has emerged for retailers and wholesalers to cater to more inhome occasions.”

Highland Spring has seen 3.7% value sales growth during the past 12 weeks of larger bottles and multipacks. Similarly, some manufacturers have brought multipacks of key brands to the channel for the first time.

Meanwhile, Lucozade Zero, the zero-sugar range from Suntory, is adding a twist to depots with the launch of a brand-new drink: Lucozade Zero Tropical.

“This is the brand’s first flavour exclusive to the Lucozade Zero range. Available now, it is the latest addition to the £21m Lucozade Zero range, and is available in 500ml bottles and in 4x380ml multipacks,” says Matt Gouldsmith, channel director for wholesale at Suntory Beverage & Food GB&I.

Lucozade previously tapped into the no- and low-sugar trend last year with the launch of Lucozade Revive.

Sweetened with stevia, the sub-brand is designed to offer a different type of energy. “It’s not a boost or a buzz – it’s a naturally inspired uplift that makes drinkers feel revitalised and back in the groove,” adds Gouldsmith.

Zero energy Red Bull Zero was relaunched into the market in early 2020 with a “reformulated taste profile”. The brand has since sold more than one million cans, making it one of the biggest NPD contributors of growth in the overall sports and energy category. Due to this success and trade and shopper demand, the company has now launched Red Bull Zero 250ml in a fourpack format.

PRODUCT NEWS

Boost – Now a staple of the convenience channel, Boost Energy Original 250ml comes in a 59p price-marked can and is also available in 500ml and 1l bottles.

Volvic Touch of Fruit Sugar Free Lemon & Lime – Fitting in with the healthier consumer trend, this still natural water drink also comes in a number of other flavours.

Ribena Sparkling – Ribena has brought its taste to flavoured carbonates with the launch of new Ribena Sparkling in two flavours. Both are available in bottle and can formats.

Dragon Energy – Launching in April and May via Unitas, Kingsley Beverages’ Dragon Energy brand arrives with standard and sugar-free PMP variants in 250ml and 500ml formats.

Emerge – Refresco UK’s Emerge brand joined the energy drinks market in 2020, capitalising on the sports and fitness trend. Further product innovation is promised for 2021.

Rubicon Spring – Barr Soft Drinks’ sparkling flavoured water brand offers a ‘full-taste, low-calorie alternative’, the firm says. Flavours include Orange Mango and Black Cherry Raspberry.

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SECTOR REVIEW – SOFT DRINKS & SPORTS ENERGY

SUPPLIER VIEWPOINT Ian Patefield, wholesale director (GB), Britvic

The soft drinks category has been affected by the varying degrees of lockdown and tier systems that the UK has experienced. The economic hardship that has occurred as a rippleeffect from the pandemic has caused considerable changes in the way consumers behave and value products. This has changed shopping missions, purchases and overall basket spend, with many people now more mindful about their spending.

Looking to the months ahead, the rollout of multiple vaccinations against Covid-19 offers some hope of a not-too-distant recovery and some semblance of normality. As people start to feel more confident about returning to variations of their old day-to-

day routines – whether that be attending small social gatherings or heading to parks for picnics – wholesalers will need to prepare to ensure retailers stock a range of soft drinks that cater for the latest consumer needs.

There is also a growing desire to look and feel good, and, as a result, wellness is one of the latest soft drinks segments to come under the spotlight, with 31% of shoppers interested in premium soft drinks that contain additional functional benefits.

As a result, wellness drinks are now more prevalent. The offering of ‘added benefit’ products, that contain naturally sourced ingredients, fruit juice and provide added health benefits, is also on the rise.

Meanwhile, Carabao’s ‘Taste of the Nation’ report revealed 71% of shoppers said they would probably purchase an energy drink if it tasted great, yet only 8% agreed that the energy drinks on offer did taste nice, while 48% perceived energy drinks to be unhealthy and 18% thought them too expensive.

Another effect of the pandemic has been to make many consumers strive to make healthier choices, suppliers say.

Ed Woolner, Feel Good general manager at Nichols PLC, says: “Now into the nation’s third lockdown, health and well-being is even more important than ever. It is important wholesale customers offer healthier alternatives when it comes to soft drinks, including low- and no-sugar or [products containing] sweeteners. Drinks with natural ingredients and added health benefits, meanwhile, are becoming much more popular.”

Feel Good has recently been relaunched by Nichols PLC in three flavours: Peach & Passionfruit, Rhubarb & Apple and Raspberry

& Hibiscus, each containing 15% real fruit juice, no artificial flavours, added sugar or sweeteners, and less than 27 calories per 330ml can.

Sugar levy aftermath In a post-sugar levy market, the health and well-being trend means one beneficiary is the waters market. For Coca-Cola European Partners (CCEP), sustainability is an important way to differentiate its Glacéau Smartwater brand.

Amy Burgess, the company’s senior trade communications manager, says: “We know consumers are looking to make greener shopping choices – especially young adults. In 2020, we moved our Glacéau Smartwater range into bottles made from 100% recycled PET plastic.”

Glacéau Smartwater was the first major water brand to make this switch across its full range.

The change has helped to remove more than 2,800 tonnes of virgin plastic from circulation in 2019, the company says.

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SECTOR REVIEW – SOFT DRINKS & SPORTS ENERGY Flavoured waters, meanwhile, offer a bridge between the waters market and the more traditional soft drinks sector.

Ian Patefield, wholesale director (GB) at Britvic, says: “Our Aqua Libra brand – the best-performing infused sparkling water brand in terms of value rate of sale – plays perfectly into this, offering a truly healthier alternative to full-, low- and no-sugar drinks, and a more flavoursome option than plain water.”

This spring, Britvic is further investing in the Aqua Libra brand with the launch of a new Raspberry & Blackcurrant flavour.

Heavy investment Another key brand contributing sales to the flavoured waters market is Rubicon Spring, which brand owner Barr Soft

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Drinks says sees sales double during the summer. Flavours in the range include Black Cherry Raspberry, Lemon Lime, Orange Mango and Strawberry Kiwi.

Highland Spring is also investing in the flavoured waters sector, bringing together the trend for low-calorie soft drinks options and the demand for multipacks in the independent channel.

Highland Spring’s Flavoured Sparkling Water range is available in both individual 330ml cans and in a 330ml four-pack format from April. At fewer than 35 calories per can, the three Highland Spring flavours contain no added sugar or artificial sweeteners.

Flavours include: Pear & Elderflower, Blackberry, Plum & Hibiscus as well as Rhubarb & Ginger.

The company says canned sparkling flavoured water has seen growth of 40% to a total value of £4.9m during the past 12 months.

Another pandemic impact is economic uncertainty and

04/03/2021 15:33 13:14 18/03/2021

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SECTOR REVIEW

UL L RE D B

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ADDING

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TAKEAWAY POINTS

MORE CHOICES. MORE SALES.

0M £9

them and their retailers such as Dragon Energy.

“At Kingsley, we have a lowcost operating model, supported by our Brexit-friendly UK manufacturing facility. This means we can deliver wholesalers competitive pricing and additional support locally in depot and in retail,” he adds.

We’ve all become used to hearing about the challenges related to the pandemic – particularly in the independent channel, which has become such a vital amenity for Brits living under lockdown conditions.

Yet, when it comes to the soft drinks market, it is clear these challenges are driving innovation and opportunities for wholesalers to boost profits in 2021. l

D

Kingsley Beverages is launching the latest budget energy drink brand, looking to offer consumers a lower-priced option and wholesalers a lower-risk brand in the vital energy drinks market.

Dragon Energy is being launched in the coming weeks in Unitas-affiliated depots with PMPs of 69p and 89p for 250ml and 500ml formats, respectively.

Head of sales and marketing at Kingsley Lee Fretwell says: “With a recession threatening, retailers need to find ways to replace their lost revenue and cash from Covid-19.

“One simple way is to remove the products that are not selling and also replace existing lines where a replacement brand offers a better financial return for

TH

E C AT E G O

1. Multipacks are now must-stocks – As Britain has got used to working from home, many impulse purchases have been replaced by demand from customers for at-home formats such as multipacks and bigger bottles. With uncertainty remaining about when and if workers will be returning to the office full time, this shift in demand seems set to define soft drinks sales well into the middle of 2021 if not for longer. Red Bull and Highland Spring are among the brands to react to this trend with new multipack formats.

2. Boost your range of healthier options – Whether it is as a direct result of health concerns linked to the pandemic or from the additional time we have had to focus on improving our lifestyles (with the help of Joe Wicks), healthier products have seen a further boost over the past 12 months. This has seen innovation from soft drinks manufacturers in the low- and no-calorie market, and in sub-sectors such as flavoured waters. As summer gets closer, expect more Brits to return to the gym and concentrate on being body beautiful for the new normal, further increasing sell-through of products catering for this trend.

3. It’s not all about Covid-19 – Millions of Brits may have given up their commutes and busy office work environments, but this has not affected the fast-growing energy drinks market. The arrival of brands such as Emerge and Dragon Energy underline how manufacturers still see the energy drinks market as an area that’s worth investing in and, in a crowded field, retailers will be looking for guidance on which brands are worth stocking and which might collect dust in the chiller. Similarly, the long-term trend for budget options and PMPs continues, with economic uncertainty caused by the pandemic only likely to increase demand from stores and shoppers for strong promotions and lower-priced products. Luckily, manufacturer activity is only increasing the options wholesalers have to tailor their ranges to this demand.

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*SOURCE: NIELSEN SCANTRACK, SPORTS & ENERGY, LATEST 26 WEEKS TO W.E. 16.01.21

18/03/2021 15:34

Technology in-depth: How to take advantage of transformational trends in wholesale • The benefits of moving to a digital framework • Step-by-step guide for wholesalers moving online • B2C versus B2B • Working with suppliers to get their products online and up to date • How to preserve impulse purchases • Technology options in review

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In the June issue of Better Wholesaling Insight:

For more information about Better Wholesaling Insight, please contact Simon Joseph on 020 7689 3363 Better Wholesaling Insight: stay informed and get ahead

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