Nothing stands still in the wholesale trade and, with Redbridge Produce & Flowers finding its way into the Total Produce fold in January, the firm has started on a process of transformation.
The changes afoot will make the set-up unique in the wholesale trade, says Total Produce chairman Denis Punter, and this year will be a very exciting time for the business. “Redbridge Produce & Flowers had grown dramatically in the last 12 years and we were very innovative in what we were doing, with unique brands, new working practices, investment in facilities and a focus on distribution - and we achieved this on a national level,” he says. “We acquired 20 businesses from 1995 to 2006, which was a process of looking for companies - both wholesale market operations and distribution firms - that would improve our position in local markets or that would be a good addition to the existing business.”
Redbridge Holdings was worth £100m in 1995 and was valued at £250m when it was acquired by Total Produce in January. “There needs to be more consolidation and further investment in facilities and technology - scale is what you need,” says Punter. “But we must do what’s right for our customers. The last thing we want to do is to make change for change’s sake.”
The merged business has acquired a number of firms since January, including a 33,000 square foot depot in Edinburgh, and this trend is set to continue. The wholesale arm of Total Produce is now made up of 18 wholesale market businesses and 10 free-standing distribution operations. “There is a very strong possibility that more consolidation will come about this year,” Punter says.
The majority of the wholesale business will now operate under the Total Produce banner, although the Redbridge name will continue to be used in some markets where it has a strong identity and a good standing, such as Gateshead and Bristol. Punter says: “Redbridge Produce & Flowers, as it was, will eventually evaporate. Total Produce has its own identity and, with that, there will be a new look.”
But Punter insists the name change will not affect the business. “The name of the door doesn’t matter in wholesale, it’s the service that counts,” he says. “It’s a people business.”
This year will see Total Produce and Redbridge continue to come together, Punter says, and this will be followed by further expansion. “But we have to continue to be focused - we don’t want to acquire turnover for the sake of it, it has to enhance the business.
“The management team that we have here is very strong,” he adds. “They have a good understanding of the industry - they are always banging on my door saying we should do this and that, they know what the business needs.”
But with a merger of this scale, it is inevitable that challenges will be thrown up. “We have two different cultures and two different philosophies, but that is to be expected when you merge two large companies, and you have to decide which approach you want to adopt,” Punter says.
“Redbridge is a relatively new business with a centralised approach to management, while Total Produce, on the other hand, is managed on a local basis. We are working to find something that sits between the two.
“But the process is more straightforward than one might think,” he insists. “The wholesale traders recognise the need for consolidation and, with the kind of industry that this is, most people know each other so it has not been as difficult as it might be. But we have had to manage it very carefully.”
The merger will be complete by the end of the year, according to Punter, and in the right shape. “The common thread is the consumer and the service we provide, as well as the focus both companies put on the people in the business,” he says.
The strategies that drive the wholesale arm can be traced back to the 1994 Strathclyde report, Punter says. “Much of the report was exactly right and, in the last 12 years, we have been pursuing that sort of strategy,” he explains.
“In some ways the markets are stuck in a time warp and are the same as they were in the 1970s - the same people, the same faces, but with fewer customers,” he adds. “The majority of the markets around the UK are old and past their use-by date - they need to make a move to new facilities, but it’s almost impossible to give a timeline as to if or when this will happen.
“But the definition of the wholesale market is changing. The roles of the markets and the distribution depots are becoming blurred. All our businesses now deliver and, as well as market-based operations, we have free-standing outlets that only deliver.”
An increasing number of customers want their orders direct to their door, says Punter, but he insists that this will not replace traditional markets. “We are finding that our retail customers want to stick to what they are best at - running their shops - and they can trust us to deliver to them,” he says. “The service we offer is critical and national deliveries are an important part of what we can offer.”
So how has the wholesale trade responded to Total Produce as a new industry heavyweight? “The wholesale trade is about relationships with customers and some might say that big businesses like Total Produce will lack the personal touch,” Punter admits. “But it’s how you apply the size that counts.
“In the last few months, since Redbridge and Total Produce came together, a lot of our customers have been asking us what we are now in a position to offer, which has been very encouraging,” he says.
“The coming together of the companies has meant that we have an extensive national distribution network, stretching across the UK. A key strength, which is based on the scale of the business, is the ability to supply nationally. A lot of wholesale customers want to be able to buy on a national basis, but like the concept of local deliveries - and we are able to offer a more comprehensive service,” he adds.
The scope of the business means that it also plays an important part in the retail sector and, according to Punter, this offers advantages for the wholesale arm. “Fifteen years ago in retail, traceability, due diligence and food safety became important issues, but at the time, this would have been laughable in the wholesale trade,” he says. “Nowadays this is all part of our obligation to the wholesale customer - after all, their end consumer is the same.”
Quality is the watchword of the Total Produce wholesale business, says Punter, and the standard of the product available matches that on the shelves at the multiple retailers, he adds. “There used to be a market for poor-quality product and, in the past, wholesalers were used as a dumping ground for sub-standard or rejected product, but there has been a reduction in that side of the market,” he says. “Our business is on a different platform.”
Punter says the secret to success in the wholesale trade is to offer customers consistent quality in a broad range of products. But the wholesale trade, as a whole, must respond to changing consumer demand, says Punter, if it is to stay in business. “A change is afoot on the consumer side - people are becoming more conscious of what they eat and where it’s come from,” he says. “The retailers will seize this opportunity - Whole Foods Market is about to open its doors in London and most other retailers have already started with local initiatives - and they will need to be supplied. We are very aware of this. The question is whether the rest of the wholesale sector is ready to respond.”
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