Supplying the restaurant and catering trade is an ambition shared by many growers who are attracted by long-term partnerships and price stability. But although ever-expanding, the eating-out sector has its own set of challenges. To find out more FPJ caught up with Andy Farnworth, sales and marketing director at Fresh Direct, Rachel Sewter, merchandising manager for fresh and frozen produce at Brakes, and Andy Weir, head of marketing at Reynolds.
Are caterers putting more of a squeeze on prices these days or is it a better industry to supply than retail?
Andy Farnworth: Retail is difficult for us to comment on as our business is primarily foodservice. But in regard to pricing, the market is as competitive as ever, margins are tight across the industry and commodity costs and key cost drivers such as fuel, packaging and utilities have increased significantly over the past 18 months. This is putting pressure on all areas of the industry and further driving the need to look at efficiencies and ways of reducing costs.
Rachel Sewter: It’s no secret that the entire industry is under strain, with increasing food inflation and fewer consumers eating out. We work with our customers to give them the best produce for the best possible price. Our Price Saver lines allow us to work with chefs to offer high quality fresh produce, tailored to their specific needs. For example, we’d recommend using Red Tractor-accredited Price Saver carrots, parsnips and swede in a casserole or stew, which will help protect margins.
Andy Weir: Price increases are never going to be welcomed by our customers, so with food inflation being the way it has been, the last year or so has been challenging. As a business we must make sure that we explore any opportunities to reduce unnecessary costs in the supply chain, for example by reducing packaging or consolidating deliveries to make sure we haven’t got a vehicle delivering one pallet when it can deliver four. Is it a better industry? I guess so, for many reasons, but our standards are just as high, if not higher, than major retailers’. What we offer our clients (and suppliers) is long-term relationships and stability. Caterers need price stability so that they can guarantee their food margins so we’re not about switching around supply or going to suppliers and demanding promotions. It’s about agreeing a fair price for all parties; transparency is the key word. Another reason is that the UK eating out market is set to grow significantly over the next decade.
Many of our customers are expanding at a fantastic rate as well. We’d like to think that we’re helping to contribute to that growth.
Why should growers look at this market rather than retail?
AF: The flexibility and development opportunities in the foodservice industry should be appealing to the grower base. There is an opportunity for the grower to engage with the end user and specifically develop a variety or concept that will ultimately allow the customer to deliver the right product on their menu for a fixed time period. With the right culture and desire this can prove to be particularly beneficial over the long term, rather than being committed to short-term price-driven volume contracts.
RS: In dealing with foodservice, growers are dealing with caterers and chefs who have a passion for food. Now more than ever, hotels, cafes and restaurants want to plan their menus seasonally and make a statement by offering fresh, in-season British produce to their customers, to create selling messages.
AW: With the economy the way it is, the next 12 months for foodservice are going to be tough just like in retail, but the eating-out market is set to grow so I would encourage any fresh produce supplier to get involved.
What are the key things to get right in order to succeed in this market?
AF: For me the key point is people; the pre-requisites of supplying in this demanding sector are quality, service and reliability. However, in order to develop your business further in difficult trading times, you need to be willing to take risks, diversify and challenge your teams to have a flexible approach to delivering what the customer requires. Without great people and the right philosophy and approach it will always be challenging to develop your business.
RS: To be successful in this market, strong relationships throughout the supply chain are a necessity. It’s important to provide traditional high quality products, but to offer a service which is modern and innovative. For example, we have introduced QR (quick response) codes which enhance customer service and knowledge. Customers can quickly access provenance and traceability information using their smartphones, providing information regarding who grows our produce, where it is grown and the methods they use. We are continuously speaking to chefs, evaluating our service and produce offering and looking at ways to improve.
AW: Be prepared to work for the long term. Reynolds is not a business that changes its supply base from month to month, as consistency is so important, but at the same time you have to be prepared to be competitive and offer a product that is fit for purpose. The key word is value for money. It’s about getting the balance right between quality and price. The ‘one-size-fits-all’ mentality is not what the foodservice industry is about. We supply to the entire spectrum - from the top end towards the more price-conscious end and all parts in between - so having a variety of options is important.
What is your advice to suppliers wanting to get into the industry?
AF: Do your research! There are lots of businesses out there that do a great job in this industry. What is different about your business - your unique selling points - and why will you attract the right customers in a new sector?
RS: The main piece of advice I could give is to really know your market. We have a team of chefs on board and invest a lot of time and resources speaking to them and understanding their needs so we are able to offer products made by chefs, for chefs. We also provide our customers with knowledge and know-how through our website with a useful set of tools designed to plan menus, make the most of seasonal produce and keep on top of what’s happening in the supply chain.
AW: It’s a tough climate out there, so everybody has to be vigilant that costs and waste are at a minimum. Energy and food costs have both risen in recent years but at the same time consumers have got more discerning and have less disposable income. What that means to our customers is that they have to offer superior value compared to their competitors because otherwise those consumers won’t come back. Our customers have always been looking for consistency and 100 per cent availability of fresh produce. If we don’t deliver it, they can’t serve it. Also, what customers demand these days is a more proactive approach on our part and that of our suppliers. That might mean product and menu re-engineering, making sure that customers are using the most fit-for-purpose product. Operators need to get the best value for money from their produce and minimise wastage. -
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